Tech disruption weighing on CEOs’ minds

Despite a positive economic outlook from chief executives of SET-listed companies this year, technological disruption is seen as the most prominent factor having a longterm impact on business operations going forward, says an academic.

Weerachart Kilenthong, director of research at the Institute for Policy Evaluation and Design at the University of the Thai Chamber of Commerce, said the main risk factor for corporations is technological disruption, which is shaking up traditional operations at financial institutions.

Banks are expected to manage the disruptive changes, as are large conglomerates, Mr Weerachart said.

Small and medium-sized enterprises are the most worrying business segment, he said, as they are likely to struggle in adapting to technological disruption.

“Financial technology is disrupting the services industry, but the impact will be less than the technological disruption affecting sectors such as healthcare and the real sector,” Mr Weerachart said.

“Operators should study and devise plans to handle the coming of new technologies,” he said.

Job losses are an inevitable aspect of technological disruption. For instance, Japan’s Fukoku Mutual Life Insurance laid off employees in 2017 and replaced them with an artificial intelligence system that could calculate insurance payouts.

The insurance firm believes it will ultimately increase productivity by 30%, and it expects to save ¥140 million a year in salaries.

Unskilled labourers in Thailand were estimated at 16.9 million as of last year’s first quarter, accounting for 45% of the total workforce of 38.3 million, according to the National Labour Development Advisory Council. Of that total, 11.2 million are in the farm sector and the rest are in labourintensive industries.

Other factors vexing business executives include labour shortages, declining consumer purchasing power because of household debt, delays in the implementation of public infrastructure projects and domestic political uncertainty.

Based on the 10th CEO survey from a total of 115 listed companies conducted by the Capital Market Research Institute, chief executives remain generally upbeat about Thailand’s GDP expanding by 3.6-4.6% this year, driven by exports and tourism.