Emerging Entrepreneurship in Thailand
The Global Entrepreneurship Monitor (GEM)
Global research conducted in 2007 found that over 26 percent of Thai people aged 18-64 start new business ventures, and over 21 percent of Thai people own established businesses. These are among the findings from the Global Entrepreneurship Monitor (GEM). GEM is an international research survey into entrepreneurship conducted annually by a research consortium coordinated by Babson College, USA and London Business School. The figure shows Thailand’s comparative performance out of the 42 countries in the GEM 2007 research survey.
In Thailand, the vast majority of new businesses are in the economy’s services sector. New entrepreneurs start restaurants, small shops, offer healthcare and beauty services, and other forms of personal consumer services. The research indicates that Thai entrepreneurs tend to focus on domestic markets and a vast majority of these entrepreneurs overlook technology and innovation. Additionally, when compared to other countries, new enterprises in Thailand tend not to create employment opportunities beyond the entrepreneur’s immediate family. However, a new type of entrepreneur is emerging in Thailand. These entrepreneurs are innovative and technology-savvy. They design their businesses with an international scope and are motivated by ambitions to grow.
Thailand’s New Generation of Entrepreneurs
Human Touch, a design and marketing company, was founded in 1998 by three advertising copywriters. Their first product, ‘Think Glass’, was a collection of glassware. Clever wordplay and attractive design gained Human Touch their first overseas customers for their products. This has led to other export markets. Human Touch showcases their products in a lifestyle shop in Bangkok. Apart from the range of glassware, the company product line includes pillowcases, office accessories, children’s toys, and fibreglass chairs.
Established in 1980, TT&K is a Thai-Chinese family enterprise whose main business is print advertising in the carriages of all Thai trains and on posters at the Hua Lumpong Central railway station in Bangkok. In November 2007, Mr. Kajorn Thamsuriya, the eldest son of the family, developed a new form of advertising media in Thailand using table napkins. Clients can choose the most suitable venues to reach their target customers. For example, placing the napkins in a university cafeteria is one of the best ways to reach teenage consumers. Napkins placed in a restaurant in an office building are more likely to reach business people. Current customers of TT&K include the Oishi Japanese restaurant chain and the Wall Street Language Institutes.
Founded in 2001 by two MBA graduates, I+MED Laboratories is a successful technology venture engaged in the development and manufacture of high quality rapid diagnostic tests for pregnancy, fertility, infectious diseases and drug abuse. The two founding entrepreneurs met in an MBA class and, in spite of different professional backgrounds, share the same vision of the future of biotechnology in Thailand. Their first product was a test kit for diagnosing pregnancies. Recently, the company launched the Alpha Thalassimia diagnostic test kit, an innovative product in the global market.
Blue Spice was established in 2006 as an affiliate of Blue Elephant International Plc., the renowned international chain of Thai restaurants. Blue Spice supplies fresh fruits and vegetables to Blue Elephant restaurants in 13 countries. The company also produces products such as red curry, spices, and dehydrated fruits. As well as exporting ready-to-eat meals, Blue Spice distributes ready-to-cook meals for Thai fast food restaurants in Thailand.
Founded in 1999 by two partners, Harnn & Thann began by producing rice bran oil soap. The companies in this group now produce and distribute skincare, spa products, and beauty products to over twenty countries around the world. In Thailand, the products are distributed through 14 in-store outlets and through flagship stores and premium quality spa services in leading department stores such as the Siam Paragon, Siam Discovery, and Gaysorn Plaza.
How These Entrepreneurs Succeed
These entrepreneurs have commitment, persistence, and a keen sense of ambition. Not only do they make things happen, but they have fun doing it. Each of the entrepreneurs overcame business problems with resilience: Human Touch and I+MED succeeded by developing products new to the Thai market, Harnn and Thann developed products new to international consumers, Blue Spice and TT&K developed innovative solutions to perennial business problems. Some of these entrepreneurs took high level risks and developed business ventures outside their earlier professional backgrounds or away from the usual business fields of their families.
The entrepreneurs behind Human Touch did not immediately conduct their business on a full-time basis, choosing instead to remain in their current employment. Only when they had developed a sustainable vision for success did the three partners become full-time entrepreneurs.
From its traditional family business base of advertising on the Thai railway network, TT&K branched out into a new market niche. In a similar manner to Human Touch, TT&K also had a lengthy period of gestation during which the company conducted R&D and market research. The entrepreneur benefited from his parents’ business networks and their openness to new ideas. In this venture, a key factor in the entrepreneur’s success has been his willingness to learn from the experiences of others.
The two entrepreneurs behind I+MED Laboratories also reaped the benefits of forethought and learning. In collaboration with scientific researchers, I+MED developed a new product in a niche market that the large multinationals consider as too small.
Resolving the perennial business problem of obtaining timely supply of quality raw materials helped Blue Spice achieve a lucrative commercial service which is a critical competitive advantage. In industry sectors where quality of inputs (such as food ingredients) has a direct effect of the quality of outputs (such as gourmet meals) supply chain effectiveness is best not left to chance. Blue Spice was able to use excess capacity of the centralised production facility to develop new products and supply these into new markets.
Common Features Aiding Success
One common feature of each of these case studies of entrepreneurship is the ability of the entrepreneurs themselves to develop products and services based on Thailand’s traditional strengths.
For example, Human Touch developed their products by using the acknowledged Thai competence in creativity and design.
Blue Spice developed their business service by supplying fresh Thai herbs and spices to Blue Elephant restaurants around the world. The image of Blue Elephant as a high quality provider of exotic foods from Thailand helps Blue Spice maintain a key focus on its core business services.
Using research into tropical diseases conducted by Thai researchers, I+MED is able to manufacture diagnostic kits that contribute to healthcare in Asia and beyond.
Harnn & Thann used indigenous natural ingredients for their line of beauty and healthcare products. The industry that Harnn & Thann entered is not new (indeed, it is centuries old), but the company nevertheless found an innovative approach to product design and development.
Accuracy and timeliness of market entry has been critical in the success of these entrepreneurs.
Further information about the GEM project can be downloaded from website of the GEM consortium (http://www.gemconsortium.org). The website includes a number of special reports on various issues concerning entrepreneurship.
