Thailand’s NIA plans new strategy to boost local startups

The National Innovation Agency (NIA) outlined a new strategy to bolster local startups and align them with global innovation demand. The strategy, Create the Dot — Connect the Dot — Value Creation, aims to increase the number of innovation-based enterprises (IBEs) and propel Thailand into the top 30 leading innovation nations by 2030.

NIA executive director Krithpaka Boonfueng highlighted the need to transform entrepreneurs into IBEs by providing them access to the necessary resources and infrastructure.

This initiative is expected to have a lasting impact on Thailand’s economic and social landscape. There are currently 2,100 startups in Thailand, 700 of which are in the pre-seed funding stage and 1,400 in the go-to-market and growth stage, reported Bangkok Post.

The strategy is based on a 2 reduce, 3 increase approach which aims to eliminate biases related to startups and small and medium-sized enterprises (SMEs) and lower barriers to access and innovation use across all sectors. The focus is on enhancing opportunities to access funding sources, increasing the number of innovators and IBEs offering jobs, and boosting IBEs’ capacity to establish innovative Thai brands.

Despite global uncertainties and a stagnant economy, the number of deals in 2023 saw a recovery, particularly in the first half of the year. Deals in Southeast Asia soared to 488, with a total investment value exceeding US$4.3 billion. In 2024, an estimated 20-30 billion baht is expected to be invested in Thai startups from both local and overseas investors.

Thailand’s startup ecosystem stands out in several areas, one of which is the increasing number of university-holding companies. Business models by Thai startups have become more diverse, particularly among deep technology firms. In addition, local generative artificial intelligence (AI)-based startups are predicted to attract investment by venture capital (VC) funds of approximately 6 billion baht this year.

The NIA expects more AI applications to emerge in Thailand this year, spanning business analytics, market analyses, medical process improvement, education, and job creation. The agency also anticipates the popularity and growth of digital tech businesses.

Startups, foreign investments

Krithpaka Boonfueng identified five rising sectors for startups that are likely to attract foreign investments: agriculture, food and herbs; health and medicine; soft power; climate tech; and tourism.

The NIA has planned various forms of assistance for startups, including financial support for innovative business development, platform support for entrepreneurs, and the promotion of collaborations with Thai and foreign agencies.

However, local startups face several challenges including difficulty in accessing funds, lack of sufficient infrastructure support, and a shortage of highly skilled workers and consultants to help companies progress from the seed stage to the growth stage.

Over the past three years, Thailand has recognised three unicorn startups: Flash Express, Ascend Money, and Line Man Wongnai. The NIA is now planning a ‘unicorn factory’ project to efficiently incubate and promote local startups, seeking VCs and partners for them, and helping them expand in overseas markets.

The startup bill, expected to be implemented soon, could potentially shape the development of the sector. The NIA expects to see Thai startups as the first choice of government and large corporations for their product or service procurement.