317^th Meeting - Tuesday, November 10^th 2009

 Science and Technology Park Development in Northern Thailand

A talk and presentation by Martin Venzky-Stalling

 
Present: David James, Mangkhoot Worapong, Joop Schillemans, Christophe Burckard, Tony Kidd, Dianne and Mark Barber-Riley, Bill Lung, Bodil Blokker. An audience of 9.

 
Martin Venzky-Stalling has almost 20 years of strategy consulting (PricewaterhouseCoopers, Ovum, etc) and business management (PCCW, Eureka, etc) experience in Europe, the Middle East and Asia. He is fluent in written and spoken Thai and studied Thai in Bangkok (AUA, Thammasat and Silapakorn) and Hamburg (Hamburg University). His focus is on business management and technology and he has advised SME, multinational corporations, multi-lateral agencies and governments on a range of issues - from strategy development, privatisation, marketing, transformation, start-up, regulation and policy. Earlier in 2009, he moved from Hong Kong to Chiang Mai to advise the Chiang Mai University (CMU) on setting up a Science & Technology Park. The project is similar, (though smaller scale) to the Thailand Science Park in Klong Luang, Pathumthani, on the outskirts of Bangkok.

 Synopsis

Thailand's competitiveness has been falling or is not good compared to countries such as Taiwan, Singapore etc. One of the key drags on the competitiveness ratings is the low level of R&D spent as a percent of GDP (ca 0.3 percent only, compared to Korea, Taiwan, EU, etc (well over 2 percent). This is a nationwide problem. However, Northern Thailand has some additional problems: a low level of industrialization, few medium and large companies and a high dependence on two sectors (food/agro-industry and tourism). The questions are: How can these sectors remain competitive? How can new clusters be promoted? And how can nascent clusters be strengthened? Science Parks are tools that are often used to these issues - they promote regional economic growth; revitalize industry; and strengthen the regional innovation system. A Science and Technology Park is planned in the North. Before such a Science and Technology Park can be really successful, university-industry linkages need to be promoted and become more widespread (universities are the main sources of knowledge in the regions). Universities such as CMU have to become more industry focused and entrepreneurial. For Chiang Mai University, a Technology Development Centre (TDC) is envisaged to help achieve this by becoming internal and external one-stop point of contact regarding cooperation between the university and industry. The TDC would also form a bridge to the Science & Technology Park.

This summary of Martin’s talk is based on his PowerPoint presentation:

Promoting Regional Economic Growth

By Martin Venzky-Stalling

General problem…. Issues with competiveness and limited investment innovation/R&D… plus specific problems for Northern Thailand……

Thailand: Weak Competitiveness

A cross-country comparison reveals that Thailand’s overall competitiveness in 2006 was lower than some of its key regional competitors. Malaysia, China, Taiwan, Japan, Singapore and Hong Kong all had higher rankings in most of the areas: Economic Performance, Government Efficiency, Business Efficiency, Infrastructure. Only Korea, which suffered a big drop in 2005, was ranked lower.

Problems of the North

·        Limited industrial base, mostly small companies, portion of national GDP small, slightly below average.

·        Main industries are tourism and agro-industry ... others include IT & software, ceramics, wood, textile, handicraft, jewelry, construction, healthcare.

·        Electronics, but mainly in Northern Industrial Estate (NIE), NIE not integrated in local economy

BOI Promoted Projects in the Upper Northern Region

Agro-Industry

·        Dried fruit and vegetables and frozen fruit and vegetables

·        Grading

·        Snacks, potato chips

Fashion

·        Garments and Jewelry

Electronics and ICT

·        Transistor, capacitor, transformer, etc.

·        Software

Services

·        Hospitals and hotels

Other

·        Parawood furniture

·        Sewing machines

·        Mold

·        Metal parts

Approved Projects in the Upper Northern Region

The vast majority of investments are made by Japanese companies. But there has also been a sizeable investment activity by companies from the US, Europe and Australia. Areas of investment have included: Service, Chemical, E & E, Auto, Light, Metal, and Agro.

The North’s share of GDP in 2007 was 8.2%. Its GRP per capita was the second lowest in Thailand.

Research and Development is too low

Public and private sector R&D as a percentage of GDP (2006)

Thailand =        0.25%

Malaysia =       0.63%

Taiwan =          2.64%

Korea =           3.35%

Thai companies buy their technology, but there is a structural problem…

·        A developing country such as Thailand could enter the manufacturing sector and prosper for as long as a few decades by exploiting natural resources and low wages before it faced a serious structural crisis triggered by fiercer international competition and external factors. To avoid this, investment in R&D and innovation is important.

What are Science Parks … tools to address innovation problem and promote regional development….

What is the concept of a Science Park?

·        A tool to promote regional economic growth, stimulate the regional innovations system

·        Innovation is a driver for productivity gains, differentiation, value added, cost reduction, etc - innovation creates long-term competitive advantage and hence economic growth

·        To be an R&D Hub and grow a critical mass of industrial research manpower

·        To be a sprouting ground for tripartite collaboration between university-government-industry

·        To be a centre for technology transfer and commercialization of technology

·        To be an incubator for local start-ups and a magnet for foreign investment in R&D

Science and Technology Park: Key Stakeholders and Benefits - Triple Helix

CMU - Research and teaching quality and capacity, knowledge, and revenues

Government - Regional economic growth, investment, employment, tax revenues

Industry - Innovation, services, and competitiveness

What is different about a Science and Technology Park?

Techno-Z Salzburg, Austria

www.techno-z.at

Total Area: 42 Rai

Total number of tenants and institutions: 200

Agro Business Park A/S, Denmark

www.agropark.dk

Total Area: 93 Rai

Total number of tenants and institutions: 22

Main activities: Agriculture, Biotechnology, Environment, Food Science and Technology

NOVI Science Park, Denmark

www.novi.dk

Total surface (area) of the Park (including built areas, green areas, roads, etc) 40 Rai

Tenants: 75

Technologie Park Dortmund, Central Germany

Total surface (area) of the Park (including built areas, green areas, roads, etc): 250 Rai

Tenants: 280 (excluding incubator)

Employees: 77

Investment: 236 Million Euros

ICICI Knowledge Park, India

www.iciciknowledgepark.com

Total surface (area) of the Park (including built areas, green areas, roads, etc): 250 Rai

Tenants: 18

Main activities: Biotechnology, Chemistry / Chemical Technology, Life Sciences / Medical Science and Technology / Health, Materials / New Materials, Pharmaceuticals

Thailand Science Park

Area: 80 acres

Space: 140,000 sq m (200,000 sq m for whole project)

National Research Centres: BIOTEC, MTEC, NECTEC, NANOTEC

Space for private sector: Incubator units, multi-tenant buildings, long-term leased land

At present:     62 companies in operation

>10 companies in the pipeline

By 2010 and beyond

-          35,000 sq m available for private sector

-          200 companies

-          4,000 knowledge workers

-          Turn over of US$ 100 million/year

Regional Science Parks in Thailand

Thailand plans to develop regional science parks. There is a North Eastern Science Park Project, a Southern Science Park and a Northern Science Park Project. The South and the Northeast are currently managed by the NSTDA. The North is managed by TISTR. TISTR and NSTDA are both organizations under the Ministry of Science & Technology. NSTDA is already running the Thailand Science Park.

What Services should be provided by Science and Technology Parks?

Services in Thailand Science Park

·        World-class Facilities, Research Laboratories and Pool of Knowledge Workers

·        Open-land Policy for new buildings by the Private Sector

·        Open-Lab Policy for Serving SMEs

·        Incubator services

·        Multi-tenant Buildings

·        External Financial Services

·        Financial Programs (loans and grants)

·        Tax-Incentive Program for R&D expenditure

·        Board of Investment full privileges

·        Intellectual Property services

·        Technology Licensing Office

·        Industry Technology Assistance Program (ITAP)

·        Technology Transfer (training)

·        Hub for Centers of Excellence around the country

·        Quality System Services

·        Unique internship Program for students

·        NSTDA Network

 Planned Location of Science and Technology Park in Northern Thailand

Chiang Mai University plans its own Science and Technology Park to complement the Northern Science Park of TISTR. Both will be based on CMU’s Sri Bua Baan (Lamphun) campus. Located about 55 kilometres south of Chiang Mai on a 1,890-acre site close to the Lamphun industrial centre, this campus is currently under development.

When complete, this campus also will provide additional training and research facilities for the Faculties of Nursing, Architecture, Engineering, Humanities, Social Sciences, Agro-Industries, Agriculture, Pharmacy, Veterinary Medicine, Science, and the Graduate School.

Way of Working: R&D and services but for the sake of commercial deployment

Within the Technology Park

·        Companies + CMU and other universities: Collaborative research, development, etc.

·        Companies: Locate inside TP. TP and companies in the TP provide service to external companies

·        CMU and other universities: Locates institutions, facilities inside TP. Forms private company to manage TP.

·        Northern Science Park (and other) invited to be part of Technology Park

 Science and Technology Park - Funding & Ownership

Together with universities, regional and local governments fund and own two thirds of all

Technology and Science Parks (worldwide) – see details below. However, in Thailand it is difficult to create this kind of funding and ownership structure. This has delayed the development of regional science parks. The Ministry of Science & Technology has commissioned a study to develop a viable governance and ownership structure.

 STP Public ownership breakdown (worldwide)

·        Central Government – 18%

·        Regional Government – 21%

·        Local Government – 25%

·        Public universities – 18%

·        Chamber of Commerce – 8%

·        Public bank – 4%

·        Other public ownership – 2%

 Some slides on CMU plans, first promote university-industry linkages, set up a Technology Development Center and then open a Technology & Science Park….

 What are University-Industry Linkages?

·        Contract and collaborative research projects

·        Technology and knowledge transfers as well as technology licensing, allowing industry to commercially deploy and utilize university knowledge, patents, and copyrights.

·        Work experience programs for undergraduate students during their course of study.

·        Industry research projects for graduate and doctoral students.

·        Mentoring opportunities for students. The partner firms could provide internships.

·        Consulting and training activities, including market studies, business plan development, business case for financing, etc.

·        Custom-designed management and technical education programs

 CMU Plans for Strengthening University-Industry Linkages