Statement by H.E. Gen. Prayut Chan-o-cha during the Leaders’ Discussion on “Transforming Nations through Creativity and Innovation” International Conference on Blue Ocean Strategy16 August 2016, Putrajaya International Convention Centre, Putrajaya

I wish to congratulate the Government of Malaysia for its initiative in hosting the International Conference on Blue Ocean Strategy.  I also wish to thank his Excellency the Prime Minister of Malaysia for inviting me to attend this conference.

The Leaders’ Discussion on “Transforming Nations through Creativity and Innovation” under the framework of Blue Ocean Strategy is indeed timely.  As we are seeing a slowdown in global economic growth, there is a higher likelihood of a return to competition-based Red Ocean Strategy, particularly as we are experiencing a period of uncertainty.  Complexity and the rapid pace of change have become the New Normal, while at the same time living in a Connected World means that various countries face shared challenges in Global Commons, whether in the form of climate change, haze, international terrorism and cross-border crime.  In this regard, in today’s world we all share in both happiness and sorrow.

In an Interdependent World in this age of globalisation, all countries must learn to think outside the box in order to create new ideas.  Rather than competing in similar industries in a common market, we should move from cut-throat competition under a Red Ocean Strategy to calmer waters under a Blue Ocean Strategy by developing innovative thinking that does not lead to win-lose competition.  If we were to focus on meeting the challenges and needs of new markets by turning “values” into “profits” through innovating new business models, developing the grassroots through applying cultural and local knowledge to create distinct and identifiable innovations, this would meet the needs of consumers in a very real manner and help lead us out of the traditional competition-based strategies of the past.

I consider that today’s Conference represents a good opportunity for leaders to exchange ideas and experiences, in their own contexts, regarding challenges and opportunities in adapting economic, social and cultural infrastructures within their countries in order to enable them to address new global challenges.  We should also discuss guidelines for cooperation to ensure that the Blue Ocean becomes an ocean of calm waters, prosperity and abundance, namely the Blue Ocean of Hope and Opportunities, which will help support country development and enable all countries to grow stronger and move forward together without leaving anyone behind.  (It is my belief that this goal is a shared one for many countries that are attending today’s conference, such as Malaysia, whose Vision 2020 complements the Blue Ocean Strategy in moving towards innovative and constructive thinking and cooperation involving stakeholders from all sectors.)

Directions and Policy for Thailand’s Development

In Thailand’s case, we are presently facing a number of challenges, such as 1) labour shortage and an aging society; 2) capabilities of Thai labour, which is still lagging behind in terms of manufacturing technology; 3) new businesses in Thailand still lack the ability to find new sources of investment; 4) important markets such as the United States, Europe and China are experiencing a period of decline; 5) relocation of manufacturing bases from Thailand to countries with lower labour costs; and 6) disparities in society, public health, natural disasters and environmental degradation stemming from inequitable development. Thailand is therefore in the process of reforming our country in order to lay a strong foundation that can weather the aforementioned challenges by focusing on development the country in terms of security, prosperity and sustainability based on the principle of shared growth and not leaving anyone behind.

The Royal Thai Government is well aware of the need to reform the country’s economic model in order to rise out of the “middle income trap,” from “Thailand 1.0” that emphasised the agricultural sector, to “Thailand 2.0” that emphasised light industry, to “Thailand 3.0” that is currently emphasising heavy industry, and finally to “Thailand 4.0” or a “Value-Based Economy.”  My Government therefore initiated the the 20-Year National Strategy (2017 – 2036) and 12^th National Development Plan (2017 – 2021) to develop the country towards “Thailand 4.0” guided by His Majesty the King’s people-based Sufficiency Economy Philosophy (SEP), in tandem with innovation to develop manpower, strengthen society, strengthen economic growth, ensure a more equitable distribution of wealth and opportunities, and enhance the quality and accessibility of public services.  This will enable Thailand to achieve the Sustainable Development Goals (SDGs) of the United Nations under the “4 S’s”, namely “Saved the Planet,” “Secured Peace,” “Sustainable Growth,” and “Shared Prosperity.”

“Thailand 4.0” has 3 elements, namely 1) enhance the country’s standing to become a High Income Country through becoming a knowledge-based economy based on research and development, science and technology, creative thinking and innovation; 2) moving towards an Inclusive Society with equitable access to the fruits of prosperity and development; and 3) Sustainable Growth and Development, in order to achieve economic growth and sustainable development without destroying the environment.  The Royal Thai Government has combined Public-Private Partnership and “Thailand 4.0,” particularly with financial institutions, in supporting SMEs, whether in development research or entering the global market, including appointing “Technology Consultants” to give advice and solve problems for factories, including supporting finance and technology for SMEs’ productivity and innovation.

Mechanisms to Develop towards “Thailand 4.0”

In order to steer the country towards “Thailand 4.0,” the Royal Thai Government emphasises 2 important issues, namely 1) supporting innovation, the Government has initiated policies to enhance the quality of research and development to enable the private sector to build innovation in 4 sectors, SMEs, major companies, multinational corporations, and startups; and 2) converting to a Digital Economy through investing in Digital Infrastructure, such as building a national broadband network and promulgating Cyber Laws that cover both cyber safety and electronic crime, as well as supporting the construction of Smart Cities in a concrete manner in order to bridge the development gap between urban and rural communities.

The Royal Thai Government has a policy to support investment in First S-Curve industries in 5 areas, namely automotive, smart electronics, high- and low-end tourism, agriculture and biotechnology, and future foods.  In addition, my Government supports New S-Curve industries in 5 areas, namely robotics, aviation and logistics, bio-fuel and biochemistry, digital, and medical, through tax incentives in order to attract investment in these industries.  In this regard, adding value to First S-Curve industries will increase income for the population by 70 per cent of the target, while the other 30 per cent will come from important new industries (New S-Curve), which will enable the creation of a multitude of various “New Start-ups.”  (Presently, the number of start-ups will rise from around 1,000 – 2,500 to 4,000 – 5,000 in 2016, and we will push for an increase to 10,000 by the year 2017).

The Royal Thai Government has a policy to build innovation cities that are linked with First and New S-Curve industries previously mentioned, beginning with the Food Innopolis at Thailand Science Park, the objective of which is to develop agricultural products processing (of which Thailand has an abundance) to have High Value added, focusing on high-value and high-profit foods such as geriatric nutrition, patient nutrition and functional foods, as well as Halal foods.  In this regard, the Food Innopolis will support investment by world-class food producers, whether local or international, that have an innovation chain link to SMEs, as well as Food-based Start-ups.

In tandem with the policy to support New S-Curve industries that are supported by innovation and technology, the Royal Thai Government has a policy to support businesses and industries connected to “Culture and Creative Economy” by transforming the value of Thai people’s Cultural DNA (comprising 5 F’s, namely Fun, Flexibility, Friendliness, Flavouring an Fulfilling) into 5 F’s of Creative Champions, which is comprised of Fighting, Festivals (such as Songkran), Food, Fashions, and Films, Animation and Games.

In addition, Thailand has initiated the Talent Mobility project in anticipation of the needs of researchers from the private sector.  The Government will facilitate public sector researchers in universities and research institutions to work with the private sector to the fullest extent in order to build innovation and enable such researchers to return to impart their experiences to students.

In order to intensely expand international cooperation for effective development of both country and region to the greatest capacity, the Royal Thai Government has partnered with ASEAN under the Krabi Initiative in science, technology and innovation in 8 areas, namely Food Security, Energy Security, Water Management, ASEAN Innovation, Biodiversity, Digital Economic, New Media and Social Networking, Green Technology, and Science and Innovation for Life.  In addition, there has been cooperation with ASEAN member states, such as with CLMV countries, Malaysia and dialogue partners such as China, Japan, the Republic of Korea an India, in order to develop supply chains in the region, as well as cooperating with important stakeholders and other countries.

Moving Towards the Future

In this regard, I consider that, amid an atmosphere of competition, various countries are able to cooperate to make the Blue Ocean an ocean of calm waters, abundance and prosperity, an ocean of hope and opportunities, through innovative partnership, as follows:

(1) Identifying each country’s strengths and supporting each other in research, development and creative economy.  For example, ASEAN countries could cooperate to study each other’s strengths and weaknesses in order to jointly develop goods and services under the ASEAN brand to support health, tourism, food, environment, energy, goods, lifestyle markets whether within or without the region.

(2) Thailand follows the Thailand + 1 policy and supports trilateral cooperation between high-income countries, middle-income countries and low-income countries in order to assist friendly countries both within and without the region that are interested in cooperating to achieve the Sustainable Development Goals.  For example, were African countries or Pacific Island countries to be interested in exchanging knowledge or learning from Thailand’s best practices, whether in terms of Sufficiency Economy Philosophy for Sustainable Development Goals (SEP for SDGs), innovation, green economy and creative economy, or other areas of strength or interest, Thailand is ready to cooperate.

I believe that the Blue Ocean is vast, so that all countries can prosper and develop their economies through innovation and creative thinking according to their needs, and have constructive roles to play in making this Blue Ocean the Blue Ocean of Hope and Opportunities.  Thailand wishes to play a part and have a constructive role in cooperating to create such an ocean of the future.

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