BoI upbeat on growth in local R&D

Nine Thai companies applied for investment privileges in research and development (R&D) during the first eight months of the year, with investment worth 530 million baht, says the Board of Investment (BoI).

“This is a good start. It shows a rising trend in R&D investment among Thai investors,” said secretary-general Hirunya Suchinai.

Successive governments have tried to encourage investment in R&D.

But Thai companies, especially small and medium-sized enterprises, have shied away from such investment, as it requires a long time to generate substantial returns.

The current government has strongly promoted high technology and innovation in a bid to help upgrade Thai industry, believing the private sector has a key role to play in that process.

Starting from early this year, private companies have been able to request tax and investment privileges from the BoI for the purposes of investing in R&D.

The measures i nclude tax deductions of up to three times annual revenue for private companies that contribute to R&D projects.

The private sector will further enjoy promotional privileges from the BoI on an individual-company basis, rather than just on an investment project basis.

State enterprises have also been required to set aside 3% of annual profits to support R&D.

The electrical vehicles industry is counted among the industries that have submitted requests to the BoI for investment privileges.

Apart from heavy industry, several companies using biotechnology in their product development have received the BoI’s privileges, including manufacturers of cosmetics, vaccines and animal feed, said Mrs Hirunya.

“Companies are starting to realise that R&D is the solution to growing one’s business in the long run,” she added.

Under its 20-year plan, the government aims to raise average R&D spending to 1% of GDP from 2017-21, 1.5% from 2022-26, 2% from 2027-31 and 4% by 2036 — on par with developed countries.