Reap the Benefits of a Booming Digital Economy: Thailand's Software and Services Sectors are on the Rise!
Thailand Embraces Digital Evolution: Intensive Efforts to Amplify Software and Digital Services
Thailand's burgeoning software and services industries are set to kickstart a wave of economic growth and create a multitude of new jobs, reveals an insightful government report. Despite their current modest contributions to the nation's GDP and employment, findings from the Trade Policy and Strategy Office (TPSO) under the Ministry of Commerce indicate that these sectors hold immense potential.
In 2023, the value of Thailand's software and digital service businesses tallied an impressive 567,057 million Baht – a robust 9.79% increase year-on-year.
The TPSO has identified three lucrative segments poised for sustained growth and high profitability: Software and Software Services, Digital Services, and Digital Content. These areas will be instrumental in fueling Thailand's digital transformation and powering its broader digital economy.
In this era of global digital domination, artificial intelligence, software, and online platforms are indispensable tools for businesses around the world. Global spending on IT services has seen a growth of 3.8% in 2023, reaching a staggering US$4.9 trillion, according to Gartner. The figure is expected to surge to US$5.3 trillion in 2024 – a 7.5% increase.
Data from TradeMap further spotlights the consistent expansion in global trade for telecommunications, computers, and information services.
Although Thailand's information and communication sector contributed 2.82% to the national GDP in 2023 (accounting for 4.63% of the service sector's GDP), this revels significant scope for growth.
Poonpong Naiyanapakorn, Director of the TPSO, sheds light on the key groups with potential:
- Software and Software Services: With a value of 215,191 million Baht in 2023, this segment marked a 12.80% year-on-year expansion and saw the highest average revenue growth in the past five years (2019-2023). Out of 7,877 active legal entities, all regions are profitable.
- Digital Services: With a value of 307,630 million Baht in 2023, this sector grew by 9.28% year-on-year and houses 19,235 active legal entities.
- Digital Content: Despite a modest 0.01% growth in 2023, this sector is worth keeping an eye on. With 6,370 active legal entities generating total revenue of 109 billion Baht in 2023, it continues to offer rapid and convenient access to consumers.
However, challenges persist in Thailand's software and digital service businesses: intellectual property ownership issues and limited funding for smaller enterprises. To tackle these hurdles and elevate the sector's competitiveness, the TPSO has proposed a strategic four-pronged plan:
- Building a digital innovation foundation, such as expanding Digital Park Thailand and improving internet speed and secure servers.
- Enhancing funding efforts for digital entrepreneurs.
- Boosting digital IP protection measures.
- Positioning Thailand as an ASEAN digital investment hub to stimulate revenue and boost Thai service businesses, establishing them as a new economic pillar.
Stay tuned for more updates on Thailand's digital economy – the best is yet to come!
Extended Insights:
- Rapid digital transformations and growing demands for digital tools are anticipated to drive Thailand's digital economy, aiming to contribute 30% of GDP by 2030[5].
- AI and data centers are emerging as crucial components, with substantial investments in AI-focused data centers and cloud services[2][5].
- Government initiatives include investments in data centers and cloud services, totaling 90.9 billion Baht[2]. Notable projects from international companies like Google and Amazon Web Services are underway[2].
- The growth of Thailand's digital economy, as seen in the software and services sectors, is expected to significantly contribute to the nation's economy, creating numerous job opportunities.
- The value of Thailand's software and digital service businesses in 2023 was 567,057 million Baht, marking a 9.79% increase year-on-year.
- Global spending on IT services in 2023 reached a staggering US$4.9 trillion, and is forecasted to surge to US$5.3 trillion in 2024, a 7.5% increase.
- To boost Thailand's software and digital service businesses, the Trade Policy and Strategy Office (TPSO) has proposed a strategic four-pronged plan that includes building a digital innovation foundation, enhancing funding for digital entrepreneurs, boosting digital IP protection measures, and positioning Thailand as an ASEAN digital investment hub.
