Deep Tech: Startup for the future

Digital technology companies around the world are now turning into ‘Deep Technology’ (Deep Tech) or advanced technology but they need long time and in-depth research and development as to gain competitive advantages in a long run.

Presently, technologies that are considered ‘Deep Tech’ include Internet of Things (IoT), Artificial Intelligence (AI), robot, quantum computing, nuclear or renewable energy technology, space technology and medical technology.

A research from Boston Consulting Group’s, a leading global management consulting firm, reveals that investors and organizations are now turning to be ‘deep tech’. In 2017, global investment in biotech was valued at US$7.9 billion, a remarkable increase from US$1.7 billion in 2014. Meanwhile, Augmented Reality (AR), Virtual Reality (VR) and drone could raise capital worth upto US$3.5 billion in 2015, comparing to a mere US$104 millionr in 2011. Global ICT and digital companies are also making more investment in strategic innovation like deep tech. For example, Google has developed Google Life Science which is now known as Verily. Also, Facebook, Amazon, IBM and Microsoft are now partnering with AI researchers to develop ‘deep tech’. Uber is also introducing driverless vehicle while Apple, Google and Facebook are making thier investmentห in AI, drone and virtual technologies.

Accelerators which previously focused on digital technology are also becoming ‘deep tech’ startups such as  Y Combinator. The company previously focused on partnering with software companies like Dropbox and Airbnb, but it has recently turned to incubate startups which invest in chemical substances and natural gas. In 2016, Y Combinator incubated a total of 192 startups, and 32 of them based on ‘deep technology’. Out of these, 9 are biotech startups, 4 specialize in drone development, and 3 invested in advanced hardware.

Dr. Pan-Arj Chairatana, the Director of Thailand National Innovation Agency (NIA), a Public Organization, said in order to make Thailand a global startup destination, it has to build ecosystem that can inspire startups to become ‘deep tech’ startups and focus more on doing researches making use of advanced technologies, rather than focusing only on digital technology.

However, increasing the number of deep tech startups requires quite a long time and huge investment capital, as well as highly-skilled personnel. Thai startups can become deep tech startups using their existing technologies. For example, they can use IoT, drone or AR to do precision farming, advanced medical tech, herbal medicine production that can add value to medical and healthcare industry, or hardware which Thailand has deep tech that can do chip set in spaceship.

Mr. Pathai Padungtin, Founder and ex-Chairman of Thailand Tech Startup Association, viewed that for Thai startups to get success quickly, they should not repeat or copy others’ business models but should rather be deep tech startups as to differentiate themselves from others so others can not compete easily.

As for existing startups, they should make ‘deep tech’ a part of their businesses if they want to survive sustainably. They do not need to invest in deep tech by themselves but should coordinate with educational institutes which have skillful researchers who know about advanced technologies. Builk One Group is one such example. The company gets support from Chulalongkorn University and Sirindhorn International Institute of Technology Thammasat University to do researches on AI and data analysis to expand the company’s business in the next couple years. The idea is to use technology to do rating of suppliers within the supply chain. Such technology will help turn it into a ‘Fintech’ of construction business.

Deep Tech in Food Business

Mr. Krating Poonpol, the manager of 500 TukTuks Fund, said it is seeking to expand investment of its second fund in deep tech startups as well. The company will not focus only in Thailand but also look for the opportunities in Indochina such as Vietnam which is becoming more interesting due to a good number of deep tech engineers. The areas of deep tech he is interested in making investment include biotech, AI, AR, VR, food and healthcare.  For Thailand, deep tech can help strengthen food and agricultural sectors and confirm Thailand’s position as the kitchen of the world. Deep Technologies include data analysis to do precision agriculture, manufacturing, harvesting, from farm to table traceability, urban farming and plant-based meat.

U.REKA to lead Deep Tech

Mr. Orapong Thien-Ngern, Chief Executive Officer of Digital Ventures Co Ltd, a corporate venture capital of Siam Commercial Bank (SCB), said Thailand’s research and development in deep technology are now facing many challenges comparing to countries which are global innovation hubs like United States, China or Japan. Those countries have several supporters to drive innovations such as state agencies, private sector, and educational institutes. In addition, their people also have entrepreneur mindset as well as investment capital.

As to enhance capabilities of Thai startups in deep tech, the company has thus initiated U.REKA project with the aim to be a part that drives the country’s innovation development in the long term.

The project wants to encourage the group of instructors, university students, researchers and those who are interested in advanced technology to join hands among each other and set up startups and present the ideas in applying high technologies such as Artificial Intelligence (AI), blockchain Cloud & Security, Big Data & IoT, VR & AR and Quantum Computing to develop innovations that can serve the needs of major businesses and industries.

Initially, it put emphasis on retail sector, tourism, transportation and financial services as to expand and develop into innovative products and services that can be commercialized in the future.

Deep Tech to support Smart City

Mr. James Yenbamrung, founder of Mu Space, the first Thai satellite startup and Asia’s first company which joined Blue Origin, the company initiated delivery of satellite for space tourism, said the Thai startup industry is still in its infancy stage but growing very rapidly. Thailand has the potential to be the base for startups, venture capitalists, accelerators, and incubators with the support of Thailand 4.0 policy which will be the fast track to transform the country into digital economy. The government’s policy also helps Thai startups to do businesses in Thailand more easily through its financial support and its effort to promote innovation hub through Digital Park Thailand.

In addition, Thailand is entering the urbanization era, with half of the population are moving into the city. This is the major growing trend that will tranform the society throughout South East Asian region.

“We can deploy new technologies and turn the society into a sustainable smart city through deep technologies such as AI, IoT, robots and so on. For example, we can use smart lighting system to save energy, use close circuit to ensure road safety by using streaming function through wireless internet, use smart car parking system that inform drivers of the available space in the parking areas; and collect traffic data and make analysis to help drivers choose the less-congested routes.

However, to enable deep tech startup to commercialize their ideas requires a lot of time and huge investment capital. Proper ecosystem is thus required to support deep tech startups so that they can be successful.

So far, Thailand has gone through an important step of attracting startups but we need to ‘speed up’ especially modernizing existing policies to enhance the country’s competitiveness and to facilitate investors. newly-established startups, and Deep Tech specialists from overseas in order to make Thailand a premier destination for digital innovation in Southeast Asia.