Agriculture and food stagnant in tech adoption, far from 4.0

Only 3% of the agricultural and food processing industry is considered part of the digitally-focused 4.0 era, despite being a crucial component of the economy and employing 15 million people, according to the University of the Thai Chamber of Commerce (UTCC).

Most of them are still considered 2.0 or 1.0 based on their lack of adoption and use of modern technologies, said UTCC director Saowanee Thairoongroj.

A survey of 1,219 small and medium-size enterprises (SMEs) from Nov 5-19 found 72.3% of the SMEs surveyed were considered to be in the 2.0 era, being labourintensive and using small machinery, while 22.8% were considered to be in 1.0 era, being mostly labour-intensive.

Only 1.97% were considered to be in the 3.0 era, using machinery for production, and only 2.87% were considered to be in the 4.0 era, using technology, R&D and innovation for production.

Thanavath Phonvichai, vice-president for research of UTCC, said agriculture and food processing industries employ 12 million people in the agricultural sector and 3 million in food processing.

In the past three years, the government has attempted to push these industries to become more reliant on technology and R&D, he said, but they have not made significant progress.

Mongkol Leelatham, director of SME Bank, said the joint survey by SME Bank and UTCC found that of 5.2 million SMEs in the country, about 2 million are small and micro-SMEs. Most SMEs are still in the 2.0 era.

To support SMEs to adapt to increasing competition, SME Bank has formed an advisory group consisting of 1,000 consultants to raise the SMEs level from 2.0 to 3.0, then 3.0. to 4.0.

Mr Thanavath said the likely interest rate adjustment by the central bank could affect SMEs if rates rise too fast during the economic recovery. SMEs that are recovering could be affected by the shock.

He said the interest rate should remain at the same level until the first quarter of next year. Inflation remains at 1.5%, so inflation is not likely a reason to raise the interest rates, rather the US interest rate is the motivating factor.

As for government measures to encourage spending during the year-end season, Mr Thanavath said the government should focus on entrepreneurs in the provinces, such as small businesses.

Where expenses can be deducted, the government should let small businesses use simple tax invoices for tax deductions, he said.