Thailand – Pacific Island Countries Forum (TPIF)

Dr. Wimonkan KosumasAugust 9, 2014The Sukosol, Bangkok, Thailand

Constitution of enterprises by size

0.1 %

0.9 %

5 - 10 %

20 %

65 - 75 %

Corporate and multinationals

Large enterprises

Medium enterprises

Small enterprises

Micro enterprises

Source: IFC, 2009.Note: Percentage represent the number of companies.

SMEs

Typology of SMEs by market and technology

CottageEnterprise

s

DomesticMarket – oriented

Enterprises

SupportingEnterprise

s

Export – oriented

Enterprises

LowTech

HighTech

Domestic / LocalMarket

Export

Source: Uchikawa and Keola, 2009.

SMEs

Simplified SME life cycle

Profit

Loss

Years

Start-up

Pick-up

Growth

MaturityDecline

Exit

Grow to large firm

Note: The arrows indicate that different types of support are needed at the different life stages.

SMEs

Why SMEs are important?

SMEs are “Backbone” of the economy.

Create jobs and employment Supplier of large firm Diversify economy Income distribution Providing low-price products for the underprivileged Innovation

SMEs

Entrepreneurial activity in selected Asia-Pacific countries

Nascent entrepreneurs

hip rate

New business

ownership rate

Early-stage entrepreneurial activity (TEA)

Factor - driven economies Bangladesh 7.1 7.1 12.8

Iran (Islamic Republic of)

10.8 3.9 14.5

Pakistan 7.5 1.7 9.1

Average (unweighted)

9 4.8 13.4

Efficiency – driven economies China 10.1 14.2 24.0

Malaysia 2.5 2.5 4.9

Russian Federation 2.4 2.3 4.6

Thailand 8.3 12.2 19.5

Turkey 6.3 6.0 11.9

Average (unweighted)

8.4 5.9 14.1

Nascent entrepreneurs

hip rate

New business

ownership rate

Early-stage entrepreneurial activity (TEA)

Innovation - driven economies Australia 6.0 4.7 10.5

Japan 3.3 2.0 5.2

Republic of Korea 2.9 5.1 7.8

Singapore 3.8 2.8 6.6

Taiwan Province of China

3.6 4.4 7.9

Average (unweighted)

4.0 3.0 6.9

Entrepreneurial activity in selected Asia-Pacific countries (Cont.)

Source: GEM, 2012.

How SME fits into global supply chains:

Source: UNIDO, 2001.

Fourth tier Supplier

(SME)

Fourth tier Supplier

(SME)

Third tier Supplier

(SME)

Third tier Supplier

(SME)

Third tier Supplier

(large firm)

Second tier Supplier

(SME)

Second tier Supplier

(large firm)

First tier Supplier(large firm,

perhaps TNC)

First tier Supplier

(large firm)

Original equipment

manufacturer(large firm,

perhaps TNC)

SMEs

SMEs and The Changing WorldChanging Factors

SMEs and The Changing WorldSMEs Issue:

Type of SME internationalization

Internationalized firms

Born Global

Foreign suppliers Foreign subsidiaries Joint-Research Joint-Marketing FDI Export Born Joint-Venture

Consultancy Services Lab + Testing Legal Firms Software

SME Internationalization

International Business Culture

Foreign Partners

ExportMarket

Investment

Technology

Joint Venture

Foreign Direct Investment

TechnologyTransfer

ReverseEngineering

Website / E-mail

InternationalCustomerRelations

Trade Fair

Participation

OverseaSale

RepresentativeOffice

Consultancy

InternationalAssociation

Membership

SMEs InternationalizationStructure

Number of SMEs Number of SMEs

Number of Activities

Overall image of SMEs Internationalization

Type ADomestic SMEs

Type BGo-global SMEs

International Standard Management

Overseas Representative Office

Export

Learning and Understanding International

Business Culture

Difficulty of Activities

InvestmentAbroad

Comply to International Standards and Practices

Foreigner Business Partners- Joint Venture- Import Technologies- Employ Foreign Experts and/or Workers

International / Regional Supply Chain management- Sourcing raw materials from local resources- Produce goods / services to be used as parts / components in oversea parent company

Source: EIU Study 2012

SMEs in Global

SMEs in Global

AgricultureRaw Materials

Organic ProductsGreen and Clean Processed FoodCertified and Standard Guaranteed ProductsProcessed Food

Ready to eat

Part & Component ProductionAssembly

Reverse Engineering

Innovative R&D- High Technology Gadget- High Technology Equipment

Electronics

Oil Vegetable Oil

Raw MaterialsVegetable oils

Oil for secondary industry

Cosmetics / Pharmaceuti

cals

Chemical[Plastic]

Tourist and Related Industry

Tourist Guide / Sevounir / Restaurant

Tour Package / Rental Services

Halal Tourism / Performing ArtsEnvironmental Tour

Health Care

Hospital / Clinic/ Medical Tourism / Medical Hub

Medical Devices

Herb / Spa

SME Accelerates Promotion Plan for Value Chain

Raw Material / Plastic

Packaging Industry

New Synthetic Material / Nano-polymer

Access to Information and Advisory Services for SMEsSME Service Center Network (Thailand)

Naresuan University

Khon Kaen University

Khon Kaen University, Nong Khai Province Campus

Nakorn Panom University

Ubon Ratchathani University

Ubon Ratchathani University, Mukdahan Province Campus

Surin Rajabhat University

Nakhon Sri Thammarat Rajabhat University

Burapa University

Kanjanaburi Rajabhat University

Prince of Songkhla University

• Service Center for Lower North- Eastern Part and Gateway to Cambodia

• Service Center for Middle North- Eastern Part and Gateway to Middle Vietnam

• Service Center for Middle North- Eastern Part and Gateway to Lower Vietnam

• Service Center for Lower Northern Part and Central Part

• Service Center for Middle North- Eastern Part and Gateway to GMS

• Service Center for Upper North- Eastern Part and Gateway to GMS

• Service Center for Middle North- Eastern Part and Gateway to Lao PDR., Upper Vietnam and Lower China

• Service Center for Lower North- Eastern Part

• Service Center for Industries and Exportation

• Service Center and Gateway to Myanmar

• Service Center for Southern Part and Gateway to Malaysia

Service Center A

Service Center B

Service Center C

Service Center D

SME

SME

SME

SME

SME

SME

OSMEP

Trade and Investment Information

SME Needs

Diagram on how data and information be transferred and collected

Access to Information and Advisory Services for SMEs

Example center in network:

Khon Kaen University has joined into the network since 2010, it had been considered as the first service center in our system. Not only the university has the science park, which provide:

• Workshop• Advisory services• Lab testing• Technologies and tools for incubating and

supporting SMEs, but also well-known as a business

information hub in the northeast region of Thailand and for the neighbor ASEAN member states in the Great Mekong Sub-region; GMS

Access to Information and Advisory ServicesSME Service Center Network (Thailand)

• Khon Kaen University Science Park offers businesses’ technology leverage in One-Stop Service

The specialist consultant services; seeking technology from domestic and foreign, matching technology and business negotiations, R&D searching service, and establishing a linkage to other related services such as low interest loans, the business incubation, intellectual property services, venture capital matching, etc. SPKKU provides technology consulting services and data of research and development, Including, integrate innovations of Both the Ministry of Science and Technology and the university/academia.

 • Business incubation services

Provide services to support individuals from start-up to SME size by promote the innovation and technology adoption in products and services to enhance production in the supply chain and develop products or processes with confident Increasing and trust in the businesses. Service Details are as follows.

- Find information and business networking- Business consulting services- Training to enhance skills for entrepreneurs- Export promotion- Promotion and marketing support services

Example: Khon Kaen University Potential:

Access to Information and Advisory ServicesSME Service Center Network (Thailand)

• Service in intellectual property protection.Provide intellectual property service (IP Service) for various

types of intellectual property protection and licensing of technology (Technology Licensing) to lead to private sector investment.

• financial supportProvide expert advice and financial benefit information of credit

and low interest loans to SME in order to invest in R & D• Metrological service coordination between public and private

Be a coordination center of metrology between public and private sectors by organizing training and seminars on metrology operations. Moreover, there is cooperation with National Institute of Metrology to support the calibration services for instrumentation in various fields and development services in other related areas in order to serve the needs of industries in the Northeastern.

• Expertise servicesProvide a expertise in the business incubation and research in

various subject areas to support and encourage a steadily business growth.

• Laboratory Service CenterProvide a service examination, calibration, training, and advice

in various fields with experienced scientists.• Service in research and development partnership/ research and

developmentBe a partnership between public, private, and universities in

research and serve government agencies that conducts research and development needs of the private sector.

Example: Khon Kaen University Potential:

Access to Information and Advisory ServicesSME Service Center Network (Thailand)

Testing Labs

Seminar & WorkshopBusiness Consulting

Online Information and Database