Thai govt looks to start-ups to boost economy

It will set aside $117m in funds for new and nimble entrepreneurs seen as bright hope

Central Bangkok has too many cars and too few places to park. Ms Anongluck Lim thinks she just might have the answer. Together with a partner, she started Jord Sabuy, which matches private owners of parking spaces with motorists in search of them.

Within four months, the firm has added some 200 parking spaces to its portfolio and now needs a US$100,000 (S$135,000) cash injection to keep growing. Negotiations with an angel investor have so far not yielded anything. But Ms Anongluck may soon have an alternative - the government.

The Thai authorities will soon set aside 3 billion baht (S$117 million) to fund start-ups in a bid to give some tailwind to the young but growing industry. Three government banks had earlier allocated 400 million baht for the same purpose.

"Start-ups are considered part of the ecosystem that the government is hoping to create to pave the way for the country to transition from labour-intensive industries to knowledge-based industries, from original equipment manufacturers to makers of our own products," Vice-Minister for Finance Kiatchai Sophastienphong told The Straits Times in a recent interview.

The fund was approved in principle by the Cabinet in February and is expected to be ready in a few months, said Mr Kiatchai. The government will also provide training and office space for start-ups that meet its criteria.

WHAT START-UPS REALLY NEED

Innovation doesn't just happen if you give entrepreneurs a whole bunch of money. What start-ups really need - that the community can't provide - is a reduction of red tape, reduction of cost, an increase in talents and labour.

'' MR AMARIT CHAROENPHAN, CEO of Hubba co-working space and a member of the Thailand Tech Startup Association.

These new, nimble and often technology-focused entrepreneurs are seen as a bright hope for Asean's second-largest economy, which has been trying to fire up other sectors as depressed commodity prices dampen farm incomes and spending. Economists have also warned for years that the country has not laid sufficient groundwork for higher-value-added industries even as rising wages erode its competitiveness as a manufacturing hub.

Entrepreneurs say Thailand's start-up scene has until recently largely run on its own steam. According to online magazine Techsauce, more than 71 start-ups managed to attract over US$100 million in funding by April this year, compared with just US$2.1 million for three firms in 2012.

A four-day start-up fair in April showing the best of these new companies in Bangkok attracted about 30,000 visitors. This was followed by another keenly attended event in Chiang Mai earlier this month, with another in Khon Kaen, north-eastern Thailand, slated for next week.

But young entrepreneurs have mixed feelings about the government muscling in on the funding scene. "Innovation doesn't just happen if you give entrepreneurs a whole bunch of money," said Mr Amarit Charoenphan, chief executive officer of Hubba co-working space and a member of the Thailand Tech Startup Association.

"What start-ups really need - that the community can't provide - is a reduction of red tape, reduction of cost, an increase in talents and labour."

Many describe as a sore point how the government suspended the motorcycle taxi-hiring services provided by Uber and Grab in May on the basis that they caused clashes with registered transport providers. Both were run on cellphone applications.

"Some laws do not support the ecosystem," said Jord Sabuy's Ms Anongluck.

Details of the government start- up fund are still being finalised, but entrepreneurs suggested that the money should be directed to fledging companies, which need it most in order to build a track record.

Mr Paijit Sangchai, founder of another start-up that has since expanded overseas, suggested that funds could be directed towards purchasing and testing some of the products created by budding entrepreneurs.

He founded Flexoresearch, which created an enzyme that separates pulp from laminated paper, and then later used its expertise to branch into different products such as high-protein cricket feed.

A version of this article appeared in the print edition of The Straits Times on August 22, 2016, with the headline 'Thai govt looks to start-ups to boost economy'. Print Edition | Subscribe