Thailand and Japan have recently signed a Memorandum of Understanding (MOU) aimed at enhancing cooperation and promoting investment through innovation in both countries. The MOU seeks to bolster the small to medium enterprises (SMEs) sector in Thailand and Japan, following Japan’s commitment to invest and expand its companies in Thailand, particularly in the technology industry.
Despite Thailand’s economic progress, the corporate culture in the country has been criticized for its reliance on paper-based operations. In an era where digitization has become the norm, many argue that Thailand should have fully embraced digital processes, especially for tasks such as invoicing, to minimize errors and improve accuracy.
Japanese tech firms are now taking the lead from the two governments’ efforts to promote cooperation. Among these companies is Sansan, a prominent player in the technology industry listed on the Tokyo Stock Exchange. Recognizing the growth and potential of Thailand in Southeast Asia, Japanese firms are capitalizing on the country’s expanding digital economy.
Sansan has recently established a representative office in Thailand, adding to its existing regional establishments in other Southeast Asian countries, such as Singapore and the Philippines. This move signifies the company’s commitment to leveraging Thailand’s growing digital economy and fostering closer links between local businesses and Japanese multinational corporations operating in the country.
Thailand’s digital economy experienced significant growth in 2021, contributing 13% to the country’s GDP, amounting to approximately $57 billion. This growth was propelled by the widespread use of mobile devices, the flourishing e-commerce sector, and the government’s support in expediting digital transformation initiatives.
These collaborations and investments are part of a broader long-term trend where global companies are keen to expand their presence in Southeast Asia, given the region’s population of approximately 700 million people. Among the promising markets in the region, Singapore stands out as an attractive hub for companies seeking to establish a strong foothold in Southeast Asia.
Thailand’s fast-growing digital economy presents an attractive market for technology providers seeking expansion in Southeast Asia. Although the United States has a larger digital economy, Thailand’s digital sector is expanding at a rapid pace.
Japan and Thailand have a history of cooperation, with over 5,800 Japanese companies operating in traditional industries such as shipping and logistics within Thailand.
Nevertheless, the influx of Japanese enterprises venturing into cutting-edge industries is on the rise, aligning with Thailand’s dedication to advancing its digital economy.
Thailand’s government recently revealed an ambitious plan for digital transformation, with the goal of positioning the nation as a prominent digital hub in Southeast Asia. This strategy encompasses substantial investments in high-speed internet and 5G network infrastructure.
Given these progressive advancements, I strongly advocate for Japanese companies contemplating expansion in Southeast Asia to recognize Thailand as a pivotal market.