New technology can boost the economy. But if people don’t have the skills to use it, any innovation will become a missed opportunity.

Any fancy tech will just be wasted if workers’ skills are not upgraded. Yet, Thailand keeps training workers in old skills. That’s why the economy remains weak and people aren’t living as well as they could be.

If we want new drivers for growth, it’s simple: tech and skills have to move forward together. If one falls behind, the whole thing fails.

To make that happen, the private sector, universities, and the government need to team up. It’s called the Triple Helix. Everyone has a part. Industry adopts and develops technology and builds special skills. Universities and research institutions make new knowledge and foster talent. The government sets the rules, gives funding, and creates an environment for new ideas to grow.

With this three-party collaboration, the economy and better jobs grow. Without it, innovation stalls. That’s what’s going on in Thailand.

Little research, little impact

Weak coordination and thin state support mean less research and little impact on society.

Thailand spends only 1.2% of GDP on research, far below Singapore, South Korea, and China. What’s worse, the government funding accounts for just 21% of all research. In developing countries, governments are supposed to lead the way in building innovation systems. Thailand isn’t doing that.

Meanwhile, nearly 80% of private research spending comes from large firms, while SMEs contribute just 20% because they lack funding and skilled personnel.

The government does offer some help, but it often misses the mark. A 200% tax deduction for research sounds generous, but only profitable companies can use it, leaving small businesses out. Research grants are also small and short-term. The grants from the National Innovation Agency are capped at 1.5 million baht a year, even though new ideas take time to bear fruit.

A newer scheme from the Board of Investment (BOI) offers grants up to 100 million baht. But the strings attached were too tight. Companies have to put in 50 million baht first, making it out of reach for most Thai businesses.

Rigid rules make change harder. Government contracts still reward the cheapest bid, not the best ideas. Getting new products approved is slow and tangled in red tape, which puts businesses off investing in research.

Even when research does get funding, it often fails to deliver impact. Nearly half of more than 80 billion baht in public research funding over the past four years went to basic research at early stages. Without clear ways to use it, it rarely reaches the market.

Also, since researchers’ career advancement depends on publications, their efforts are channeled toward producing papers rather than new products or social impact.

Political support has also been weak. Over five or six years, the National Higher Education, Science, Research, and Innovation Policy Council only met 18 times. The prime minister, who runs the council, only showed up three times. Clearly, they don’t see innovation as a national priority.

When teamwork works

Despite these problems, Thailand has examples of what coordinated efforts can achieve.

In the hard disk drive industry, multinationals like Western Digital and Seagate have worked with Thai universities for decades, supported by talent-mobility programmes and investment incentives.

In the healthcare industry, a Thai startup, Perceptra, developed an innovative chest X-ray system that can detect eight abnormalities, including tuberculosis, with over 94% accuracy. It cuts radiologists’ work by 70% and is now used in over 100 hospitals.

This success comes from teamwork. Bangkok Dusit Medical Services provided funding and direction. Expertise came from Siriraj Hospital and King Mongkut’s University of Technology Thonburi. State agencies supported the research and opened access to the public healthcare system through the National Health Security Office.

These examples show what’s possible. But they are the exceptions, not the rule.

Lessons from abroad

Singapore and Taiwan show what happens when you work together consistently.

In Singapore, the biomedical industry contributes 2.6% of GDP and employs more than 26,000 people. Global firms work closely with local companies and universities, led by the Agency for Science, Technology and Research (A*STAR). The government co-invests, attracts global talent, and supports manufacturing and R&D infrastructure through the Economic Development Board.

In Taiwan, the semiconductor industry accounts for about 15% of GDP. This happened because businesses, universities, and the Industrial Technology Research Institute (ITRI) worked together for decades, with steady joint consultation and government funding.

The lesson is clear. There are no shortcuts. New growth engines take 20 to 40 years to build, and they require steady commitment from all sides.

Thailand lacks this foundation. No shared strategy, no long-term commitment between universities and industry, and no platform for sustained cooperation.

Challenge

One solution may lie in the “Reinvent Thailand” national platform to bring government, industry, and academia together to set clear goals and track progress. Businesses should also team up to build collective strength.

Thailand also needs a dedicated industrial technology research institute, like those in Taiwan and Singapore. No country has built new industries without one. Also, universities must work more closely with the private sector and support researchers to collaborate with industry.

Beyond this, the government must commit to long-term goals: matching research funds, targeted investment, skills development, and regulatory reform.

Skills: the missing half

Reforming the innovation system is crucial, but it isn’t enough. Innovation alone doesn’t create good jobs. Skills do.

Thailand’s labour law lets companies deduct double their training costs from their taxes. Companies with over 100 workers have to train at least half their staff or pay into a fund. On paper, the numbers look good: 3.7 million workers trained last year.

In reality, it doesn’t do much. Almost all trainees, 99.6%, came from companies forced by law to train. They spent only 289 baht per worker, far below the cost of meaningful technical training, which often starts at 3,000 baht. The goal is compliance, not skill upgrading.

Building real skills requires industry and universities to work closely. Without it, curricula fall behind technology, and graduates aren’t ready for work.

But their goals conflict. Academia values publications. Industry values confidentiality and speed. Without better incentives, collaboration stays limited. However, tax breaks, matching funds, and performance measures that reward collaboration can help bridge the gap.

Coordination is another challenge. Firms and universities vary widely in size and capacity. Coordination also means extra expenses.  Apart from shouldering coordination costs, specialised industry institutions can identify shared needs and coordinate training, research, and testing.

In Thailand, these institutions are weak due to insufficient state support. The car industry generates 330 billion baht a year, but its institute receives just 18 million baht. The PCB sector brought in over 200 billion baht in investment, yet the Thailand Electronics and Computer Centre (TECC) received only 150 million baht.

The cost is clear. In the PCB industry, 40 new factories have opened, but there aren’t enough workers. 70,000 more are needed, including 20,000 engineers. To solve labour shortage, TECC, now an ad hoc body, should be made a permanent agency with long-term funding so it can do more in training and curriculum development.

The same approach applies to services. The wellness industry is growing fast and could become a new economic driver. But the industry lacks clear standards for providers, practitioners, and training.

A Wellness Institute, created jointly by industry, professional bodies, and the government, could work together to set standards, oversee certification, and develop training. This is essential if Thailand wants to attract international clients who demand quality and trust.

The way forward

If Thailand gets this right, new growth engines are within reach. This means jobs with stable incomes, adaptable skills, and the security that supports social and political stability.

Link innovation with skills, and both the economy and society will be stronger for it.

Note: Saowaruj Rattanakhamfu, PhD, is Research Director Innovation Policy for Sustainable Development and Nuthasid Rukkiatwong is a Senior Researcher of the Thailand Development Research Institute (TDRI). This article is an edited version of his keynote speech at TDRI’s Annual Conference on Reimagining Thailand’s Development Model, held on November 17.