Thailand’s manufacturing sector could see incremental growth of US$50 billion (1.6 trillion baht) in productivity gains in 2028 by embracing Industry 4.0 technologies, according to a study by Cisco and A.T. Kearney.
the recent US-China trade war and rise of labour costs and automation in China are opportunities for Asean, in particular Thailand, to digitise manufacturing, attracting overseas factories to migrate here for a connected supply chain.
Naveen Menon, president of Cisco in Asean discloses a study by A.T. Kearney commissioned by Cisco entitled “Accelerating Industry 4.0 in Asean: An Action Plan for Manufacturers” that in 2018, the Asean manufacturing sector was worth $670 billion, or 21% of Asean GDP. The value is expected to be $1.4 trillion by 2028. The impact for Asean’s value-added manufacturing from Industry 4.0 is up to $250-275 billion. Thailand only will have $50 billion in the next decade.
At present, Thailand was the second largest manufacturer in Asean at $136 billion, behind Indonesia. Food, beverages and tobacco, electrical products and electronics, and motorcycle vehicles and parts are the top three largest contributors to Thai manufacturing. Thailand is one of three leading Asean countries, following to Singapore and Malaysia, with readiness to adopt Industry 4.0 as these countries have complex, large and export-oriented industries, with government policy support and technology infrastructure.
Industry 4.0 is underpinned by five emerging technologies being used across the manufacturing value chain. Those are: Internet of Things (IoT), artificial intelligence (AI), 3D printing, advanced robotics and wearables.
However, Asean manufacturers are slow in technology adoption because of lower labour costs, a lack of demand, a shortage of experts, unclear business cases and complex supplier ecosystems.
Mr Meenon said local startups can leverage opportunities in developed connected things like sensors as well as industrial applications and platform.
