Software sector grows 12.8%, hits 215 billion baht
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The software sector experienced a robust growth of 12.8% last year, reaching a valuation of 215 billion baht (US$6.4 billion), outperforming three other digital sectors.
Investment in advanced technologies such as artificial intelligence (AI), data analytics, cloud computing, and cybersecurity bolstered this growth, according to a joint survey by the Digital Economy Promotion Agency (Depa) and IMC Institute. The software sector is expected to continue growing at a rate of 9 to 10% between 2024 and 2026.
The overall value of the four sectors—software, hardware and smart devices, digital services, and digital content—is projected to reach 2.94 trillion baht (US$87 billion) by 2026. This growth is primarily driven by the increasing demand for emerging technologies, especially AI.
Kasititorn Pooparadai, senior executive vice-president at Depa, noted that despite global economic and political uncertainties, the digital industry showed resilience in 2023, posting a modest growth of 3.88% from 2022, bringing the total value to 2.02 trillion baht (US$60 billion).
“Despite challenges, the digital industry has shown significant resilience and adaptability,” said Kasititorn.
The digital service sector expanded by 9.28% to 308 billion baht (US$9 billion), while the hardware and smart device industry saw a 1.76% increase to 1.46 trillion baht (US$43 billion). Digital content, however, grew by a marginal 0.01% to 44.2 billion baht (US$1.3 billion).
Software sector
Looking ahead to 2024 to 2026, the hardware and smart device industry is expected to grow by 11 to 16%, and digital services are projected to gain 13 to 14% between 2024 and 2025 before declining in 2026. Digital content is anticipated to grow by around 3 to 5%.
Thanachart Numnonda, director of the IMC Institute, explained that the survey categorises the software industry into software and software services. The value of the software industry was 81.4 billion baht (US$2.4 billion), with a growth of 4.31%, while software services gained 134 billion baht (US$4 billion), up 18.7%.
In 2023, the value of software produced and used within Thailand was 159 billion baht (US$4.7 billion), marking a growth of 14.9%. However, software exports fell by 1.63% to 2.41 billion baht (US$72 million), while imports increased by 7.55% to 53.3 billion baht (US$1.6 billion).
“The local software market showed strong growth, but exports are lagging,” said Thanachart.
The hardware and smart device sector’s growth was supported by a 5.90% increase in imports, reaching 464 billion baht (US$13.8 billion), while exports declined by 0.07% to 993 billion baht (US$29 billion). The value of smart device imports grew significantly by 52.7% to 176 billion baht (US$5.2 billion).
The global economic slowdown is affecting consumer purchasing power, particularly in the consumer electronics sector, thereby limiting growth in the hardware and smart device industry, according to the survey. The demand for computers reached a saturation point last year due to a concentrated purchase cycle during the pandemic, contributing to a potential slowdown.
“Consumer purchasing power remains a critical factor in the hardware sector’s performance,” noted the survey.
Thanachart also highlighted the growth of the digital service industry in 2023, driven by surging demand for digital services as consumers rapidly adapt to digital tools across various sectors. The survey reported nearly a 10% increase in personnel in the digital services industry, primarily driven by the e-logistics sector, which employed 41,963 people. This aligns with the e-logistics market value, which is the highest among various service types.
“E-logistics has become a major employer within the digital services sector,” he added, reported Bangkok Post.
In contrast, the software and hardware and smart device industries saw little to no change in employment numbers. This stability is attributed to business owners managing hiring practices in response to the global economic and political climate, leading to stagnant purchasing power in the global market.
Business News