Thailand ranks lowest in ASEAN for business innovation, World Bank finds

This innovation gap may have contributed significantly to the wave of business closures in 2024, during which nearly 24,000 SMEs deregistered, and over 1,234 factories—mostly small and medium-sized—shut down. 

These closures affected more than 35,000 workers, with the majority of the closed factories being in the manufacturing sector, where competitiveness remains a serious concern.

In response, the NESDC recommends expanding access to financing for Thai SMEs, enabling them to adopt innovation and technology to improve production processes, reduce costs, and maintain competitiveness in an increasingly volatile market. 

Currently, SMEs employ over 12.9 million people across Thailand. Strengthening their competitive edge would not only stabilise employment but also boost incomes for millions of workers.

The World Bank’s latest survey on innovation activity among ASEAN businesses reveals that the Philippines and Vietnam lead the region in terms of innovation engagement, significantly outpacing Thailand, Indonesia, and Malaysia. 

The findings, published in the Thailand Economic Monitor – February 2025, rank the five countries based on the prevalence of innovation in production processes, the introduction of new products and services, foreign technology adoption, and research and development (R&D) expenditure.

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