Thailand’s Innovation Economy: From Production-Based to Knowledge-Based

About Documents

Thailand’s economy and trade have shown steady signs of recovery in recent years, driven mainly by exports of processed agricultural products, electronics, and electric vehicles. These sectors align with global trends that are shifting toward green and digital technologies. At the same time, Thailand has been developing its “innovation economy” through policies that support research, as well as the use of digital and biotechnologies in manufacturing and services. The goal is to reduce dependence on natural resources and increase value through knowledge.

Global trends such as the rapid adoption of artificial intelligence, the shift to clean energy, and the rise of a borderless digital economy present both opportunities and challenges. Thailand must act quickly to close gaps in skills, infrastructure, and data to move toward an innovation-driven economy that is competitive and sustainable in the global value chain.

According to the Global Innovation Index 2025 by the World Intellectual Property Organization (WIPO), Thailand ranks 45th globally. This ranking is “in line with its level of development” as an upper middle-income country. In other words, Thailand is progressing as expected but still lacks standout performance compared to neighboring countries like Vietnam (ranked 44th) and the Philippines (ranked 50th), both considered “innovation overperformers.”

Thailand’s clear strengths lie in its ability to absorb technology and its role as a manufacturing hub. This is reflected in its high rankings in high-tech exports (8th) and creative goods exports (7th). Thai businesses also invest heavily in R&D, with the highest share of business-funded R&D among comparable countries showing strong private-sector readiness to leverage innovation.

However, there are still key gaps that need attention:

1. Human Capital Gap: Low education budgets affect future workforce quality. There is also a lack of advanced skills in areas like AI and data science skills the UNCTAD identifies as critical to closing the innovation gap.
2. Knowledge Creation Gap: Despite high private-sector investment in R&D, research output remains low. This suggests that research is not effectively turning into valuable intellectual property with commercial potential.
3. Startup Investment Gap (VC Gap): Venture capital investment in Thailand is low. This shows that high-tech startups that can attract foreign investment are still in the early stages of development.

To address these gaps, Thailand should act urgently in three main areas:

1. Reform human capital and R&D by improving education, providing reskilling and upskilling programs for the current workforce, and supporting stronger links between research and industry to increase real-world application of research outcomes.
2. Build a sustainable AI ecosystem by investing in open data infrastructure and creating support mechanisms to help startups and researchers access and develop their own AI models.
3. Adopt AI augmentation strategies to enhance the workforce in key sectors like smart manufacturing and precision agriculture, in ways that fit Thailand’s national context.

If Thailand can successfully close the gaps in human capital and research commercialization, and use AI smartly to boost capacity, it can move from a country that “meets expectations” to one that “outperforms” and become truly competitive on the global stage.

Author:
Mr. Kamol Panmuang
Senior Researcher
International Institute for Trade and Development (ITD)
www.itd.or.th
Publication: Bangkok BIZ Newspaper
Section: First Section/World Beat
Volume: 39 Issue: 13021
Date: Wednesday, Oct. 29, 2025
Page: 8 (bottom-left)
Column: “Asean Insight”