IMD World Competitiveness Center

Thailand Competitiveness 2016:

The IMD Perspective

Christos Cabolis

Chief Economist, IMD World Competitiveness Center

IMD Definition of Competitiveness

“the extent to which a country is able to facilitate an environment in which enterprises can generate sustainable value,”

…sustainable value creation is the long term capacity of enterprises to remain profitable, create fulfilling jobs, while minimizing the environmental impact of their activities

Overall Ranking 2016Top 10 countries

Economic Performance

GovernmentEfficiency

BusinessEfficiency

Infrastructure

Domestic Economy

International Trade

International Investment

Employment

Prices

Public Finance

Fiscal Policy

Institutional Framework

Business Legislation

Societal Framework

Productivity

Labor Market

Finance

Management Practices

Attitudes and Values

Basic

Technological

Scientific

Health & Environment

Education

OVERALLRANKING

13th

49th

25th

23rd

37

6

28

3

45

43

5

23

26

23

35

42

47

52

52

2/3s Statistics

Competitiveness that can be measured!

The emphasis on HARD FACTS

ensures objectivity and transparency

342 Criteria 20 Sub-Factors 4 Factors Overall Ranking

28thOut of 61

1/3 Survey

Competitiveness as it is perceived!

Over 5,400respondents

Competitiveness Breakdown: ThailandMethodology / Overall Ranking

10

5

33

44

44

Competitiveness Landscape: Thailand2016 & 2015

Thailand 2016 37 6 28 3 45 10 5 33 44 44 43 5 23 26 23 35 42 47 52 52

2015 46 8 34 3 19 14 6 34 51 45 47 8 21 25 24 30 44 47 54 48

+9

+2

+6

-

-26

+4

+1

+1

+7 +1+4

+3

-2

-1+1

-5

+2

-

+2

-4

Do

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Inte

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Inte

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Inve

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Em

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Pri

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Public

Fin

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Fis

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Inst

ituti

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Busi

ness

Legi

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Soci

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Pro

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Effic

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Lab

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Mar

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Fin

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Man

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Att

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and V

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Bas

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Tech

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nti

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Economic Performance Government Efficiency InfrastructureBusiness Efficiency

Overall

4649

2425

2723

1313

3028

Thailand

2016

Thailand

2016

Thailand

2016

Thailand

2016

Thailand

2016

2015

2015 2015 2015 2015

2016 2016 2016 2016

(2015 data, 2016 ranking)

Large214bn US$ (21st)54% GDP, (14th)

Diversified by Product (16th) Computers, rubber, oil, vehicles, electronics, gold, rice

Diversified by Partner (10th)China, largest export partneraccounts for only 12% of total exports

Over-reliance on Region9 of the top 10 export partnersare near neighbours

10%

12%10%

Japan26th

China25th

Malaysia19th

India41st

Australia17th

2%

6%

5%

USA3rd

6%5%

5%Singapore

4th

Indonesia48th

Hong Kong1st

CountryOverallRanking

2016

% of ThaiExports

2014

Thailand28th

Exports of Thailand

Openness is correlated with competitiveness. We argue it is a key driver.

Competitiveness and Trade Openness

Competitiveness and Transparency

Transparency is a key driver of competitiveness.

Competitiveness and Societal Framework

Sub-Factor 3.4 : Management Practices& Selected Criteria

26th

Adaptability of

companies

Ethical practices Credibility of managers Corporate boards Entrepreneurship

Adaptability of companies to

market changes is high

Ethical practices are

implemented in companies

Credibility of managers in

society is strong

Corporate boards do

supervise the management of

companies effectively

Entrepreneurship of

managers is widespread in

business

35

1

11

21

31

41

51

35

1

11

21

31

41

51

35

1

11

21

31

41

51

35

1

11

21

31

41

51

35

28

25

20

32

Korea

Malaysia

Philippines

Taiwan

Thailand

Sub-Factor 3.5 : Attitudes and Values& Selected Criteria

23rd

Attitudes toward

globalization

National culture Flexibility and

adaptability

Need for economic and

social reforms

Value system

Attitudes toward

globalization are generally

positive in your society

The national culture is open

to foreign ideas

Flexibility and adaptability of

people are high when faced

with new challenges

The need for economic and

social reforms is generally

well understood

The value system in your

society supports

competitiveness

35

1

11

21

31

41

51

35

1

11

21

31

41

51

35

1

11

21

31

41

51

35

1

11

21

31

41

51

35

1

11

21

31

41

51

15

12

35

17

33

Korea

Malaysia

Philippines

Taiwan

Thailand

Key Challenges 2016: Thailand

Accelerate investment in infrastructure megaprojects. Inclusive political and social reform for social and economic

stability. Reform education system to align with development needs of the

country. Develop transportation and logistics system to capitalize on the

country’s competitive advantage. Optimize ASEAN supply chain linkage to strengthen

competitiveness.

Provided by: Thailand Management Association

Key Attractiveness Indicators 2014 - 2016The Top Perceptions of Executives in Thailand

2014 2015 2016

From a list of 15 indicators, respondents of the Executive Opinion Survey select the five that they perceived as the key attractiveness factors of their economy. The chart shows the percentage of responses for the top choices over three years.

Thailand: 2016 COUNTRY PROFILE– Future Trends

Cost Competitiveness

Cost driven exports

Running to stand still

GDP per capita $

Overall Ranking

Ranking Trend

IMD World Talent Report

IMD World Talent Report

Overall Ranking 2016Top 10 countries

Rank 2015

of 61

50Readiness

34

19

25

OverallInvestment &

Development

Appeal

43

19

30

25

21

50

24

34

2011 2012 2013 2014 2015

Factor 1 : Investment and Development

Criteria Value 2015 Rank

Total Public Expenditure On Education Percentage of GDP 4.15 % 39

Public Expenditure On Education Per Pupil (Secondary) Percentage of GDP per capita 37.41 % 2

Pupil-Teacher Ratio (Primary Education) Ratio of students to teaching staff 16.28 ratio 34

Pupil-Teacher Ratio (Secondary Education) Ratio of students to teaching staff 19.91 ratio 55

Apprenticeships Are sufficiently implemented 5.02 Survey [0..10] 21

Employee Training Is a high priority in companies 6.32 Survey [0..10] 19

Female Labor Force Percentage of total labor force 45.48 % 33

Health Infrastructure Meets the needs of society 6.19 Survey [0..10] 28

Factor 2 : Appeal

Criteria Value 2015 Rank

Cost-Of-Living Index Index of a basket of goods & services 79.30 index 26

Attracting And Retaining Talents Is a priority in companies 7.02 Survey [0..10] 22

Worker Motivation Is high 5.86 Survey [0..10] 34

Brain Drain Does not hinder competitiveness in your economy 4.88 Survey [0..10] 28

Quality Of Life Is high 6.25 Survey [0..10] 34

Foreign High-Skilled People Are attracted to your country's business environment 5.86 Survey [0..10] 21

Remuneration In Services Professions Gross annual income including supplements such as bonuses 11,900 US$ 53

Remuneration Of Management Total base salary plus bonuses and long-term incentives 150,451 US$ 38

Effective Personal Income Tax Rate Percentage of an income equal to GDP per capita 4.76 % 6

Personal Security And Private Property Rights Are adequately protected 6.27 Survey [0..10] 36

Factor 3 : Readiness

Criteria Value 2015 Rank

Labor Force Growth Percentage change -2.05 % 57

Attracting And Retaining Talents Is readily available 4.98 Survey [0..10] 46

Finance Skills Are readily available 5.45 Survey [0..10] 48

International Experience Of senior managers is generally significant 5.68 Survey [0..10] 26

Competent Senior Managers Are readily available 5.26 Survey [0..10] 37

Educational System Meets the needs of a competitive economy 3.93 Survey [0..10] 46

Science In Schools Is sufficiently emphasized 3.81 Survey [0..10] 50

University Education Meets the needs of a competitive economy 4.16 Survey [0..10] 53

Management Education Meets the needs of the business community 4.73 Survey [0..10] 52

Language Skills Are meeting the needs of enterprises 3.38 Survey [0..10] 53

Student Mobility Inbound Foreign tertiary-level students per 1000 inhabitants 0.32 number 49

Educational Assessment - Pisa PISA survey of 15-year olds 427.0 Value 44

Thailand: 2016 COUNTRY PROFILE– Future Trends

Cost Competitiveness

Cost driven exports

Running to stand still

GDP per capita $

Overall Ranking

Ranking Trend

More Information?

IMD

www.imd.org

IMD World Competitiveness Center

www.imd.org/wcc

wccinfo@imd.org

Thank you for Your Attention