Thailand’s SMEs Struggling with Innovation Amid Rising Global Competition, ETHRWorldSEA

Thailand’s small and medium-sized enterprises (SMEs), which employ over 12.9 million people, are under mounting pressure from sluggish innovation, rising global trade tensions, and weak production competitiveness, according to the World Bank’s Thailand Economic Monitor, February 2025. The country ranks lowest among ASEAN peers in process innovation (11.9%), new product development (8.2%), foreign technology use (5.6%), and R&D investment (1.1%).

These shortcomings have translated into real workforce consequences. Nearly 24,000 SMEs deregistered in 2024, and over 1,200 manufacturing factories closed, resulting in the loss of over 35,000 jobs. Many of these closures were attributed to an inability to meet evolving customer demands and a lack of technological adaptation, as highlighted by NESDC Secretary-General Danucha Pichayanan.

With the Philippines, Vietnam, and Malaysia far ahead in innovation metrics, Thailand’s structural lag in R&D and digital adoption has emerged as a critical threat to business continuity and employment. The NESDC has urged urgent reforms, calling for expanded access to finance and stronger innovation policy to help SMEs modernise, improve output, and stabilise job creation amid rising market volatility.

Boosting SME competitiveness, the council notes, is essential not only for business survival but for protecting livelihoods across the nation.

• Published On Jun 16, 2025 at 06:30 AM IST

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