Thailand ranks third in SME digital readiness in region

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The digital transformation of Thai small and medium-sized enterprises (SMEs) was ranked third out of six countries surveyed in Asean, following Malaysia and Singapore, according to a study commissioned by Cisco Systems.

Cisco partnered with the Office of Small and Medium Enterprise Promotion (Osmep) to increase the digital capabilities of 200,000 local SMEs, which partly contributed to SMEs generating 43% of Thailand’s GDP in 2019 so far.

“Local SMEs were ranked third in Asean and 11th out of 14 countries in Asia-Pacific in terms of digital readiness,” said Vatsun Thirapatarapong, managing director of Cisco Systems (Thailand).

The “Cisco APAC SMB digital maturity index” was conducted by IDC and surveyed 1,340 SMEs in 14 economies.

The index ranks four stages of digital maturity.

Stage 1 is a digitally indifferent, reactive market with no automation. Stage 2 is a digital observer that has begun efforts towards digitization but remains in transit.

Stage 3 is a digital challenger who has already implemented many digital strategies and stage 4 is a digital native or digital data-driven, with integrated digitisation strategies and continuous innovation.

“Thailand and four other countries in Asean ranked in the first stage, while nine countries ranked in stage 2. Singapore is the only country in Asean that ranked at stage 2,” said Mr Vatsun.

The main reason SMEs in Malaysia and Singapore do well is government support at the national level, a factor that is lacking in Thailand, he said.

“If the new government continues pursuing a digital economy policy, it should lead to consistent improvements to the overall economy,” said Mr Vatsun.

Thai respondents to the survey said cloud IT software, hardware upgrades and cybersecurity are the top three investment technologies for local SMEs at 13.3%, 12.1% and 11.7%, respectively.

They said the hurdles to digital transformation were lack of customer data (17.9%), lack of digital skills and talent (15.7%) and lack of a digital mindset (14%).

To help SMEs, Cisco is collaborating with Osmep to increase digital capabilities by offering online courseware, in particular heat-map analytics of visitors for retail, and Internet of Things for manufacturing.

Cisco in Thailand has 7,000 active, larger SME customers and aims to boost its smaller SME numbers to 50,000 customers.

“Cisco’s collaboration with Osmep will enable at least 200,000 SMEs to increase digital capabilities in 2019,” said Suwanchai Lohawattanakul, Osmep director.

Osmep’s SME Connext is a mobile application launched four months ago that brings SMEs online for business-to-business (B2B) sales, training updates and activities.

The agency received a budget of 1.2 billion baht to support SMEs in 2019 and aims to make a difference by increasing revenue to support SMEs to 6 billion in the future.

Thailand has 3 million SMEs that are expected to generate 43% of the country’s GDP in 2019, up from 42.7% in the first quarter.

Osmep also plans to help 2.3 million micro-SMEs that have revenue of less than 1.8 million baht per year to be empowered digitally, increasing their combined revenue to 2.3 trillion baht within five years.

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