Dr. Pichet Durongkaveroj
Minister of Science and Technology
Thailand is transitioning from a resource-intensive to innovation-based economy, mainly through innovation within the science and technology industry. Dr.Pichet Durongkaveroj, Minister of Science and Technology, discusses the innovation climate in Thailand, the formation of the AEC, and intellectual property.
"We want major players to come into play as they have the financial means and the human resources needed. We will [also] focus on the SMEs, young entrepreneurs, innovators, and startups. We are in the process of creating policy facilities in helping these groups, like a law to the cabinet and then to the parliament that will enable any intellectual property, that has been realized through the funding of the government, to be utilized or make use of by those who can."
FDI Spotlight: Thailand is at a point where it is looking to move further towards innovation, research and development to create that culture in the country and obviously the ministry will have a huge role to play in that. Could you outline how your Ministry fits into the overall goal of Thai development and what your responsibility to the nation will be?
A country’s development depends upon not only its economic development but it must also move into social development, as well as doing well environmentally. So we need to have a good balance. Keeping that in mind is one major picture guiding the country. Another major point is also when we talk about science and technology or innovation, we are not just talking about the sector itself. We are also talking about the applications in other sectors. So, we talk about science and technology in the service sector, in manufacturing, agriculture, and you also have to talk about fundamentals such as graduates of science and technology, human resources, the infrastructure needed, laws and regulations that are conducive to the government. What I have been telling the Thai public is that when we touch upon the role of science and technology, we must also talk about the role of science and technology in all 20 ministries, otherwise we will not have a complete picture of where we are going. So we have a macro picture of a well-balanced development, the specific picture about the role of science and technology, and we must talk about the two combined and where this journey is taking us.
For the past eight months we have been quite clear in our direction and intentions. From the point of view of science and technology and innovation, we want to create a situation where STI (Science, Technology and Innovation) would be a major instrument to move the country forward. That is the goal that we envision and we would like to strive towards that goal. To do so, we must address at least five pillars of development. We must look into how we can create use for STI in economic development, secondly for social development, thirdly for energy and climate change, fourth is human resources, and last but not least I would call it science and technology infrastructure as well as its enabling factors. So if we can have these 5 pillars, we will be able to achieve a society of innovation, a knowledge based society, moving towards a high income society. Let me very briefly talk about each pillar.
At the moment we are creating and implementing many policies in order to lay down the groundwork for future governments and to be able to work on a strategy platform of economic developments through innovation. For example, since last year when this new government entered into the picture, we had to make sure that the level of investment in research, especially research in science and technology, was raised to 1% of the GDP. At the moment there is a good sign of improvement as this figure is now hitting about 0.47%, up from 0.25%. We are still not satisfied with this figure. Striving to 1% is one thing, always contributing to 1% is another. So it is also a government policy that the private sector must lead in this and the government must facilitate as much as it can. At the equilibrium level, we would like to see 70% from private investments and 30% from public investment in research. At the moment the ratio is about 50/50 so the target is clear. But a clear target is not enough, we need real measures as well.
For the past seven months we have had a good road map set by the government and STI is also inclusive. The political process is moving forward so we have a good roadmap for the development of STI. And this road map will pave the way for us to initiate many items of policy that would lead us to all these road map items. For example, in the end of last year we endorsed a program where private sectors can enjoy a 300% tax deduction if they invest in research. This will be open to international companies operating in Thailand as well as multinational companies. And for the first time we also included the notion of tax exemption for innovation work. In the past it was only science and technology. I will talk more about this idea later on.
We want major players to come into play as they have the financial means and the human resources needed. On the other hand, we will focus on the SMEs, young entrepreneurs, innovators, and startups as well. We are in the process of creating policy facilities in helping these other groups. For example, we are now submitting a law to the cabinet and then to the parliament that will enable any intellectual property, that has been realized through the funding of the government, to be utilized or make use of by those who can. In the past, by law only the public agencies who are certified research funding agencies, will own those intellectual properties. So this law will relax this obligation. And then universities or companies that are involved in this research may not be able to own the IP, but will be allowed to use these IPs and to commercialize on them. So this is currently going through the process to be completed.
We also have another law in the process of being passed which allows for a sort of a mutual fund to be set up to help finance startups. As you know startups have a lot of risk and have never been that successful overall in Thailand before. Now we are realizing it through the mechanism of this mutual fund whereby it will not only be financed by the private investors, but the government will also contribute to show its willingness to support and in due course will allow tax deductions on these startups. If it turns out to be successful and make profits, then the dividend would not have to pay tax, or if they are successful and they want to sell or transfer their portions of investment to others, then the capital gain will not be taxed. So with this pre condition we will get more investment from various sources. These are some of the laws and regulations on the way.
Recently we have presented a proposal to enable universities that have a lot of laboratory outputs, which have been on the shelf, to be able to create a spin off situation and monetize it. It was very difficult in the past since there was no interest, but now we are creating incentives to draw all these underutilized labs successes into commercialization. So you see we are now moving not only to international and multinational companies but also towards smaller companies, such as entrepreneurs and startups, which are basically the backbone of the economy.
We also have another program, the industrial technology assistant program, where there will be a matching of funds helping the SMEs improve their productivity. Lately, we have introduced the concept of industrial technology advice to help small companies identify their factory problems and inefficiencies by seeking experts who can help the factories. If there are no domestic experts then international experts will be found. This has been successful for the past 15 years but the scale is too small so we are requesting ten to twenty times of what we have been doing. For many companies, large and small, they are now looking to invest in their research and development. Some of which have recently created not only laboratories, but also research centers and research institutes. For example companies like Thai Union Group, Science Event Holding, and PTT all are doing a lot by pumping up their research work for innovation. One of the big problems they have is they are short on capable researchers. In the past they paired up with universities on projects. The projects did not go very far as they need a longer term research personnel and more dedicated projects that can be sustained longer, including intellectual property protection.
In February, our ministry submitted a proposal through the cabinet announcing a program on talent mobility. This program allows public workers and public researchers from universities to work in the private facilities, both part time and full time. They will be able to work as if they are working for the government so that their public service years are counted. For those who are under scholarships and have to pay back their time, this time in the private sector will also be counted. Once they have completed their work in the private business, they can come back and bring their result of what they have achieved and be promoted in their universities. With this incentive and relaxed scheme, we see more mobility from the public sector to the private sector. There is no point in separating the two sectors because one is making economic addition to the value and the other has a lot of human resources. So it is very healthy at the moment. I think it is one of the models that many countries are looking into, as when I took trips overseas and had meetings, a lot of them were very interested in this scheme.
FDI Spotlight: How would you say is the level of collaboration and dialogue between the education sector and industry in Thailand?
Let me address two entities, rather than just one. One is what you have just mentioned, higher education. The other is public research institutes. These two go hand in hand. They are working jointly in the private sector sometimes as well. Up until now there have been a lot of networking among them, but it has mostly been in terms of project based relationships so companies may join certain universities, or certain public research projects. That is good but not good enough. What we want is to create a better platform, a larger platform so they can work together not only for the long term result, but for a more focused outcome. Universities do not have the culture for “in time” project results where as private companies do have this orientation. It is about dollars and cents. A lot of times there are controversies over the intellectual properties as to who owns the output of the research. How will they divide it if it becomes profitable and if it is a joint investment how do they split the intellectual property? Lately I have been preaching to some universities about how they shouldn’t worry so much about their intellectual property, and instead to focus on a project and give their rights to the private sector on a given project and see what happens. I bet they will have more projects than they can handle. Even if they own their intellectual property, there is not much to be done with it. To commercialize is a challenge, their professorship relies not on commercialization but on publications.
So we have been talking a lot about the challenges regarding the gap between basic research and commercialization. I have also mentioned how start-ups can have a better eco system. We are in the process of creating the so called special innovation zone, to help bridge this gap and to have cumulative research activities in different areas. You may have heard of the governments’ initiative on special economic zones, but this is a physical area based zone. For us, the innovation zone can be anywhere, it can be in Bangkok, it can be in Chiang Mai, it can be anywhere that there can be innovation. We can create packages to let them do it freely, collectively and let them enjoy certain privileges. So we are in the process of developing a full program. We may start with a project where we can package a certain area, network them, enhance their activity and intertwine private business into those areas. For example, Kasetstart University has lots of research personnel, laboratories, and services but lacks private business because they don’t offer any incentives. So our job is to use the facilities, use the people they have, put in more people from the private sector, create collaboration, incentives, joint research projects, investment, and relaxed government regulations. It is easy to import foreign experts and acquire funding for these areas.
As you have mentioned we are still an agricultural society. The food industry and agricultural sector are some of the areas that are immediate targets and we are heading there. Apart from that, other major industries are the electronic and hard disk industry. Each year our export for hard drives alone is 500 billion Thai Baht. We are now working with the industry and looking to enhance their research capabilities and strengthen them. We would like to get them into more research activities so that they will have new stations to produce new miniature hard disks in order to be more globally competitive.
FDI Spotlight: Speaking of being globally competitive, what does ASEAN, the creation of the AEC, mean for these industries and for the scientific and technological development of Thailand?
You must know ASEAN very well but the ten countries are less similar than they are different. We are all friends and colleagues who agreed to live together. There are over 600 million people, which is a good market for everyone now. Transforming the 70 million people of Thailand to become 600 million by the end of the year, this makes a lot of sense. We anticipate that there will be a free flow of many things. The science and technology community will grow and in turn accelerate the mobility of researchers, talents, and knowledge. The mobility of industry and services will also follow. So when you look at the ten countries, you will see the difference between them.
Starting from the differences of the stage of development, differences in cultures, and differences in the way they do things. Even Thailand is strange to other countries, in the way we behave and the way we do things. I have been involved in the ASEAN circle, especially in science and technology for over a decade and I can tell you that we still need to do a lot of work of enhancing both the bilateral and the multilateral corporate relations in the region. Partly because we are not as strong as APEC, but APEC has some major players and a big pool of central funds. More importantly, there are two groups in ASEAN in science and technology. One is well advanced in the ASEAN sense and the other still requires a lot of capacity building. The two are trying to merge. We went last week to Laos to help them with their science awareness fair. Next month may be the astronomy fair for them, so ASEAN helps ASEAN. It is one of the schemes.
The way I look at it, if ASEAN must be stronger in innovation, we must do a few things. First, we need to have a more pragmatic policy and action plan for ASEAN to work together, something that we are now working on and supposed to be finished this year by the time the ASEAN leaders meet. Secondly, we need to look into the exchange of personnel within the region, which is very fundamental. If you have quality human resource then you can do something. Thirdly, we need to put some focus on certain issues that we have mutual interest and mutual benefits in. So if we have a good plan by the end of this year and if the initiative proposed by Thailand under the scheme Called ASEAN Thailand Mobility is realized we will be very successful in working together. I will give you a good example, roughly four years ago I initiated for ASEAN Ministers to come to Krabi Island and work on something called the Krabi Initiative. At that time all ASEAN Ministers of science and technology agreed to work on eight thematic tracts covering food security, energy security, biodiversity, green technology, water management systems, science awareness, digital economy, and innovation for the global market. That kind of blue print will lead us to be more focused, and at the moment we are doing too many things, with approximately 100 projects without much success.
FDI Spotlight: What do you believe Thailand can offer to the potential international investor or academic research partner? What would you like to see the world offer to ASEAN and Thailand at this time?
I will talk about Thailand first and then Thailand in the context of ASEAN. I think Thailand has good potential. It is my hope and estimation that we will be stable. We will become a society where people have better hope, are inspired, and innovative, in the past we have suffered a lot. The government now has a clear direction on the matters of politically motivated activity and corruption. They will not be tolerated and we have shown this through our actions. More importantly, the government has set a clear roadmap since last year and we have been sticking to that plan. I am not going to talk about other elements but science and technology is part of that road map.
There are 3 steps. The 1st step was achieved last year in terms of putting a stop to violence: keeping the society in order, no fighting, and no bloodshed. The 1st phase was a military action and we are now entering the 2nd stage which is a government stage. The government stage has been very active for the past 6 months to address those areas that have affected the livelihood of the people in many aspects, including science and technology. We have not finished our work, we may have months to go but we will accomplish at least two things. One is to put forward real policy and measures. I am not going to say we are going to be doing a lot of great things, because we don’t have much time, so with the rest of the time I have I will be laying down foundations so that the future government can carry on. There is no guarantee but the people are the guarantor. It is important for us to do something so we have the trust of the people, agreeing with our policy. If it is not good enough, tell me. I will do better. I have so many colleagues who know a lot but never engage much and now they come to help because they want to see a positive future for Thailand. We are going to have a number of foundations created in the months to come so I am not only hopeful, but I am quite sure that we will have a better setting from now on. I am certainly hoping what happens in the future will also reflect upon the work that we are doing now and the people will benefit from what we have laid as foundation. For the past eight months we have not neglected the international community and have been very active.
I went to give a speech in Geneva in early May and talked to the Secretary General and the committee on science and technology for development, which consisted of about 45 countries. We discussed the future of Thailand with regards to science, technology and innovation. I showed them the road map we have, told them what we have done, and what we will be doing. The response was very good, not only from close friends but also from significant others like The United States, Canada, Australia, Germany, Finland, Singapore, and The Philippines. That not only made me happy, but confirmed that what we have been doing is correct and in the right direction. What I am referring to is that we are quite attached to the international community. We have been very active in ASEAN and have been working with many countries around the world to better prepare for the community that is coming. We have been working with the European Union on the horizon 2020, with The UK on the Newton Fund, closely with Japan on many scientific joint researches as well as the rail system both with China and Japan. We certainly would like to help bridge the global community to ASEAN as well, in any area that we can be of help.
As a bridge to connect to a dialup partner, we have ASEAN +3, ASEAN +6 and US and ASEAN, and so on. Let me finish by saying we have initiated a program called Science Diplomacy. Science Diplomacy is a platform whereby Thailand will be more prepared and proactive in doing STI work with our partners wherever they are in the world. This will help us to have a good map of our strategic partners and the incorporated science, technology, innovation, involvement and collaboration, especially the focus we will have bilaterally and multilaterally. For example, bioenergy with Brazil, agriculture with The United Kingdom, rail projects with China and Japan, satellites with many countries and so on. So I think we are in good hands having a solid platform for the future in a balanced way.