AMCHAM’S Rec­om­men­da­tions for De­vel­op­ing Thai­land’s Dig­i­tal Econ­omy

Thai-American Business (T-AB) Magazine - - Contents -

IN­TRO­DUC­TION

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

data pro­tec­tion

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

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

Mo­bile in­fra­struc­ture

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.

CON­CLU­SION

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.

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