AMCHAM’S Recommendations for Developing Thailand’s Digital Economy
The American Chamber Of Commerce In Thailand ( AMCHAM) applauds the Thai government’s prioritizing of the digital economy as a foundation to Thailand’s continued progress and success on the global stage.
A digital economy encompasses all economic activity enabled by IT hardware, software and services through a telecommunications network and which is either intrinsically digital or replaces established physical services. Now more than ever, information and communication technology ( ICT) is a part of all aspects of life – social, educational, professional - and its importance will only continue to grow, opening greater opportunities for ICT businesses, big and small, local and international.
It is imperative that Thailand is prepared to facilitate ICT with secure, reliable, and transparent governance that encourages international trade. We believe that this is the best path if Thailand is to maintain and enhance its position as a major player in ASEAN and the world.
LEGISLATION AND REGULATIONS
AMCHAM believes that certain topics are central to a successful data protection law that will offer security without compromising good business practices: • Cross- border issues: Strict physical geography constraints ( i. e. all data from Thailand must stay in Thailand) will discourage companies that maintain data centers across many locations from operating in Thailand.
• Data sharing: Like the cross- border is
sues, a line must be drawn regarding data sharing within and between organizations. For example, if an organization shares customer data internally for information purposes, should the required consents be as stringent as if the data is for marketing purposes? Overly broad requirements will hinder workflow.
• Data privacy and security: The law must require service providers to maintain continuous compliance with up- todate global industry standards ( e. g. ISO) on data privacy and security.
Recommendation: We recommend that the legislation be consistent with the apec Privacy Framework, and its Cross- Border Privacy rules should be adopted to allow for consistent treatment of cross- border data. the law must be clear about security requirements for data that is shared across borders, both within and between organizations. there must be transparency and a guarantee of due process in the language and enforcement of the law, as well as clarity regarding consents to collect and to use data. Compliance with international standards for data privacy and security must be required.
Computer related offenses ( cyber- crime)
It is a major imperative to protect all those involved in the digital economy from illegal and criminal activity. However, service providers in the digital economy are often an unintentional conduit for those breaking the law. If the law uses vague definitions when determining liability, service providers, such as cloud based data operators, may be reluctant to allow access to Thai customers.
Laws governing access to digital records must strike a careful balance between law enforcement and users’ reasonable expectations of privacy for personal data stored online. Safeguards must be put in place to ensure that processes are not abused and that legitimate privacy interests are not violated.
recommendation: the law must be clear when defining terms such as “illegally accessing”, “illegally discloses”, “illegally commits”, and “illegally damages” and what it means to “allow” these actions when establishing liability for punishment. subpoenas should be relied on for accessing data about a user, but court orders must be required before law enforcement can obtain data created by a user.
intellectual property rights ( ipr) protection
Thailand will benefit from a more robust “homegrown” software industry with well- paying jobs. However, intellectual property protection in Thailand has historically been weak. This is one of several factors limiting Thailand’s attractiveness as an ideal home for creative industries such as computer software development.
recommendation: ipr protection and enforcement is required to provide a level of confidence to investors.
Electronic transactions, storage, and verification
Central to a productive and progressive business landscape is the application of digital economy concepts to what were once, and unfortunately often still are, paper- driven processes. The following alternatives to physical documentation allow information to be stored and accessed reliably and safely while lessening cumbersome logistical requirements.
• Digital signatures: Physical documents to fulfill legal and regulatory requirements is inconvenient and costly. Digital signatures and electronic authentications would vastly increase efficiency across all industries, easing trade and transactions between Thai and international firms. The decreased operating costs and increased consumer convenience will encourage growth.
• e- documents, e- advice, and e- statements: Electronic reporting can help regulators and companies lower or eliminate processing and storage costs. Resources can be refocused on business development, helping grow the overall economy. Digitizing paperwork will also encourage product innovations, such as online and mobile applications.
• e- payments, or a check- less environment: Encouraging the use of electronic payments instead of checks will not only reduce tedious and labor intensive paper transactions, but will also help increase engagement in the above- ground economy. Ideally, anyone in Thailand should be able to make payments seamlessly whether online, on a mobile device, or at an ATM.
recommendation: all government agencies must agree on implementing regulations that accept and encourage paperless processes for transactions in the public and private sector, across all industries.
INVESTMENT: DOMESTIC AND INBOUND
Board of investment
Thailand’s Board of Investment ( BOI) does a superlative job offering incentives and promotions for foreign invest- ment in Thailand. We believe that a slight shift in its focus is needed to embrace the opportunities offered by the digital economy.
Currently, the BOI prioritizes manufacturing and physical infrastructure so that businesses centered on ICT hardware are covered, but other facets of ICT are not as vigorously promoted. Physical ICT infrastructure benefits a digital economy, but the services provided through that infrastructure are just as important.
recommendation: BOI definitions should be expanded so that more service- related ict businesses, such as software hosting or remotely delivered business solutions, can also enjoy Boi privileges.
Government procurement can only benefit from the digital economy. Digital technologies can bring a greater efficiency and transparency, leading to greater competition among suppliers. A virtual paper trail can be created to prevent corruption. This will also encourage more multinationals to participate, bringing world- class technology, solutions, and know- how to Thailand.
For the ICT sector, where the procured product is often a more complex solution combining hardware, software and services ( e. g. consulting and systems integration), normalizing all other factors to produce one point of comparison ( price) will not usually result in the best overall, value- based decision. Other major deterrents to direct contracting are the onerous terms in standard government contracts, such as unlimited liability, limitations on subcontracting, and protracted acceptance procedures.
recommendation: the government should evaluate ict projects based on a two- stage bidding scheme with a technical and performance evaluation at the first stage and a price evaluation at the second stage, or a price- to- performance value measurement where the outputs, deliverables, and efficiency are measured against project cost and expenses. Capped liabilities or agreed compensation must replace unlimited liability for any damages caused by failure of the project.
INFRASTRUCTURE: GOVERNMENT AND BUSINESS- DRIVEN
Today, Thailand has 2G and 3G networks and is soon to auction 4G licenses. There is a plan to decommission the 2G network, but the timeline is not clear. The opportunity for innovation and greater productivity on 3G and 4G networks should be the focus for ICT. The ability to leverage network speeds, capacity, and flexibility will be, and already is in many countries, the path to economic success. However, Thailand’s 2G network is still used by businesses with basic data network requirements, e. g. vehicle- tracking systems that use GPS technology but transmit data over the 2G network. When essential equipment isn’t compatible with newer technology, it will not work once the 2G network is decommissioned. Businesses operating in Thailand need advance notice to make important decisions related to their dependence on these networks.
recommendation: network decommissioning plans and new network license auctions and launches must be communicated well in advance.
regulatory and concession- based environment
A strong and independent telecom regulator, with sole responsibility for all commercial frequency allocation and licensing, is a key component to establishing and maintaining an environment which ensures free and fair competition and is structured to encourage both foreign
The government should evaluate ICT projects based on a two- stage bidding scheme with a technical and performance evaluation at the first stage and a price evaluation at the second stage, or a price- to- performance value measurement where the outputs, deliverables, and efficiency are measured against project cost and expenses.
and local investment. A shift in this policy may cause confusion and disputes leading to delays and loss of investment.
The state- owned enterprises ( CAT and TOT) should evolve from a rent- seeking, concession- based mindset and away from retail competition with the private sector. This can simplify the current regime of concessions and will encourage greater competition among private enterprises.
A clear roadmap to frequency allocation and licensing will benefit those who want to invest in developing the telecom infrastructure and the growing number of individuals and organizations who rely on it.
recommendation: the nbtc must continue its role with full authority as an independent telecom regulator, and Cat and tot should move towards being a backbone provider ( e. g. a national broadband network). Plans for frequency allocation and licensing must be not be overly complex and must be clearly communicated.
Human resources: local and foreign
ICT has a unique HR challenge – there is a shortage of people with the required technical skills, and because many ICT projects are designed and implemented on a regional or even a global scale, those that do have the technical skills may not have the required English language proficiency.
Improvements to the ICT legislation, regulation, and infrastructure must go handin- hand with providing and encouraging the needed quality education and skills training, including increased collaboration in research and development activity between universities and the private sector.
If Thailand can attract and encourage foreign ICT professionals to locate here, not only will Thailand become a magnet for international investors, but a climate creating an opportunity for skills transfer will develop so that local ICT professionals will want to stay and help lead Thailand’s way forward in the digital economy.
recommendation: Policies should be implemented which allow for ease of employing skilled it foreigners in cases where locals are not available and to facilitate short- term business visa for visiting technical staff to enter thailand for short- term assignments which do not affect local employment.
A robust digital economy in Thailand will require infrastructure which allows for seamless transmission of real- time information. We are hopeful that Thailand will develop the legal, regulatory and business infrastructure to embrace and anticipate ICT innovations for the comfort and success of the Thai people now and in the future.
To achieve this, there must be cooperation not just from the government and regulatory bodies directly involved with ICT issues. Other government agencies such as the Revenue Department, the Land Department, The Ministry of Labor, the Ministry of Finance, and the Bank of Thailand, as well as the judicial system, must support, adapt to and adopt the digital economy.