Digitalising rural MSMEs: Thailand’s agriculture and tourism sectors

Topic :

Thailand faces a dual challenge of havingto swiftly navigating the disruptions caused by COVID-19 while also needing to enable sustainable and inclusive development. Building resilience and enhancing productivity of Micro, Small and Medium Enterprises (MSMEs), which form the backbone of its economy is a critical step for achieving these objectives. Mobile, digital and frontier technologies have a key role to play in this process,

Despite the industrialisation of the country in recent decades, agriculture and tourism remain as key sectors of the economy, especially as it relates to providing livelihoods for entrepreneurs in rural communities. However, the agriculture sector suffers from low productivity and in addition, farming households in the country have low resilience and response capacity to unexpected shocks; the majority of smallholder farmers reported negative impacts on sales and over a third struggled to pay back debts during the COVID-19 pandemic. The tourism sector has taken a much more disproportionate hit from the COVID-19 pandemic with over a million and a half tourism jobs lost in 2020, and a significant reduction in tourism activities.

While there are ongoing government-led digital transformation initiatives in Thailand, many MSMEs, particularly those operating in rural communities are experiencing challenges such as a lack of expertise and skills. Also, they often do not consider investment in new technology solutions or services as worthwhile or beneficial, given the small scale of activities.

This research report therefore highlights the opportunities for fast-tracking the adoption of mobile and frontier technologies, in supporting the development, success and resilience of rural MSMEs in Thailand’s agriculture and tourism sectors. The report highlights the barriers that smallholder farmers and rural accommodation businesses in Thailand still need to overcome, and ecosystem challenges that need to be addressed in order to drive technology adoption. It further details recommendations for key stakeholders, including the need for more extensive public/private partnerships for digital upskilling of MSMEs, and on how to enhance data integration for real time information that can guide operational planning, research and development, and decision making.

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