How did Software Park Thailand get started?

There have been software companies in Thailand for 35 years, but they weren't sufficient to support domestic demand. Originally, many multinational IT companies entered the market but failed, which highlighted the need for local collaborators with sufficient skills to coordinate the technology with conditions in Thailand. So, in 1986 a national IT committee began a 10-year study on how best to promote the software industry. One of its outcomes was the Software Park, planned along the lines of software parks in India and Taiwan. But it was not until Intel gave us US$125,000 in 1998 that the momentum for further development started to build.

How has the role of Software Park Thailand developed?

In the beginning our focus was on technology: a high-tech incubation center, high-tech industrial promotion, technical professional skills, training of trainers. No one had ever done anything like this before in Thailand. Then about 2-3 years ago we recognized weaknesses in project management skills and a big gap between technical people and the management people who didn't understand IT. We now do things like CIO training, IT strategic planning and IT architecture for the private sector and government.

We also recognized that IT plays a crucial role in most every industry, and now its part of our mandate to make software industry growth relevant to other sectors of the economy. A report last year produced by Michael Porter and a Harvard Business School team confirmed that Thailand's key sectors are under-automated. Our goal is to make IT an enabler for every aspect of industry and business. 

The first group to come to us was the textile industry. The only way they could compete with low-cost countries like China was to have value- added: design, speed of operations, specialized and customized services, all of which require IT support. We have been working with them for three years and have attracted numerous software and hardware companies to assist this sector. The same is happening with other industries: automotive, medical care, tourism, and agro. For instance, we work with software companies to meet the demand from EU countries for food traceability.

What is the current status of the Thai software industry?

Software in Thailand now is categorized into 3 areas: enterprise and embedded software programs; digital content and multimedia; and, support services such as consulting, localization and customization. We are still in a fledgling stage, but have good potential. Thailand has about 350 IT companies of various sizes and 35,000 technical people, primarily programmers. Multimedia specialists and animation graphic artists add an additional 10,000. The Thai government is establishing multiple clusters of software parks in Bangkok, Samui Island, Khon Kaen, Chiang Mai, Phuket, Songkhla, and Khorat. But the governments view is not to work just within Thailand, but also to explore the advantages of working with the bloc of ASEAN countries.

What attracts software investment to Thailand?

Many companies at Software Park are from outside Thailand. I wont say we have the best technical advantages here, but its the combination of everything - ease of doing business, cost of living, the people - that makes us a good investment destination. Reuters Software Development Center, which includes R&D, bases one of its two global centers in Bangkok.

What difficulties do software companies face in Thailand?

Even though I said we need multiple activities to happen in parallel, not all of them are happening. More progress on the governments ICT Master Plan is needed. Infrastructure for telecom and internet has much improved, though its not yet good enough. Another problem is funding for startup and growing companies. There are only about six venture capital investors in Thailand. Nevertheless, we have been successful in connecting with outside investors. Close to 24 companies we work with now have access to larger capital - about 10 have raised amounts in the tens of millions of baht.

What is the direction of the Thai software industry?

Creativity and multimedia seem to be really promising, and we are attracting more outsourcing work. Another area is mobile applications such as PDAs and mobile phones, for the simple reason that we have 27 million mobile phones and use almost all platforms in the world, including GSM, PCN, CDMA. This makes us very attractive as a test base location.