Undeterred by a slow start, startups in the land of smiles are growing rapidly and increasingly attractive

According to the Global Entrepreneurship Index 2018 (GEI), Thailand is ranked 71st out of 137 countries (65th in 2017) and 15th out of 28 countries in the Asia-Pacific region (12th in 2017).

The GEI measures both the quality of entrepreneurship and the extent and depth of the supporting entrepreneurial ecosystem.

It identifies 14 components that are essential to the health of the entrepreneurial ecosystems:

1. Opportunity Perception
2. Startup Skills
3. Risk Acceptance
4. Networking
5. Cultural Support
6. Opportunity Perception
7. Technology Absorption
8. Human Capital
9. Competition
10. Product Innovation
11. Process Innovation
12. High Growth
13. Internationalization
14. Risk Capital

In 2018, Thailand scored a 27 per cent on GEI, while the United States leads with 84 per cent, Australia has 75 per cent with Singapore at 53 per cent, Malaysia 33 per cent, Vietnam 23 per cent and Cambodia 18 per cent.

Thailand scores best on Human Capital and Product Innovation and is weak on Internationalization and Technology Absorption.

Having relatively strong entrepreneurial people in the ecosystem, Thailand can move up the GEI ranking by improving the quality of the institutions that support entrepreneurship, which is exactly what is happening at the moment.

Entrepreneurship has been high on the government’s agenda, and there have been numerous initiatives to improve the startup ecosystem.

The latest can be seen at the National Innovation Agency (NIA), as it is overhauling its financial support program for startups to accelerate their progress, facilitating access to THB 44 billion (USD 1408450692) in funding from various sources and targeting one to two unicorns in five years.

This strategy aims to build 3,000 innovation-based startups in the next 10 years and the program will train and network with master’s and doctorate students to help build deep tech entrepreneurs.

There is not one single solution to creating a startup ecosystem.

Ecosystems are formed by people, various startups at different stages, and different organizations with different roles and in different locations (be it physical or virtual), all working together as a system to create new startups.

This system is dynamic and evolves with the external and internal factors of each location, entrepreneurial culture and resources available.

At the heart of any startup ecosystem are the ideas, research and innovations.

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Talented individuals called entrepreneurs will turn these into startups and take it through various stages, from getting mentored in incubation programs to being funded by investors.

The journey turns ideas into businesses and teams into organizations.

Throughout this journey, many supporting organizations and services are involved.

Higher education institutions are the first supporting organization in this journey. Innovations are often born, and talents usually identified within the university compound.

Once the startup is formed, advisory and mentoring organizations are involved along with incubators, accelerators and co-working spaces.

With the scaling stage comes the investor networks, venture capital companies, crowdfunding portals and other forms of funding providers (loans, grants, etc.). Big companies usually come in at later stages as they help create successful growth companies from the startups.

However, the term successful startup can have different meanings for different people.

Some may think of a successful startup as business unicorns like Facebook or Airbnb, while others have a different definition of what being successful means, like being your own boss or making a positive impact on the world.

One thing for sure though, a successful startup is a company that is sustainable, at least in profit terms.

Large Thai companies have also recently become very active in the startup ecosystem.

Beacon Venture Capital, the corporate venture capital arm of Kasikornbank (KBank), has invested US$50 million in Grab for GrabPay service and US$6.5 million in Jitta, a Bangkok based “wealth-tech” startup.

Siam Cement Group (SCG) has embraced open innovation by creating SPRINT accelerator programs that help mentor Thai innovators.

And, the Stock Exchange of Thailand (SET), together with Sasin School of Management, has put together the Sasin Startup Incubator by SET where facilitators are trained, and budding entrepreneurs are put through intensive boot-camps and mentorship programs.

“However, the growth of startups is very limited because they don’t have a global or Southeast Asian perspective, they lack deep technology, and they often cannot access investors nor the market”, said Mr Pun-Arj Chairatana, Executive Director of the NIA.

But that too is about to change.

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SCG has again teamed up with Sasin to hold the SCG Bangkok Business Challenge @ Sasin 2019 where teams from top universities around the world bring their innovations with global applications to compete for investments in this three-day event, held at Sasin from February 21 – 23.

Startup ecosystems often take time to develop and mature.

They also require a significant commitment of resources and support from a broad range of organizations and people.

Despite a somewhat sluggish start, Thailand’s startup ecosystem is now rapidly moving beyond the early stages of development and is attracting attention around the region and throughout the world.

There are even indications that with continued support, Thailand has the potential to become a major entrepreneurial hub in Asia.

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