CREATING THAILAND WITH A BCG ECONOMY
Faced with the challenges posed by the uncertainty in the world economy, technological disruptions and the impact of the global pandemic, the Thai government is focused on enhancing the country’s technology capacity to develop targeted industrial sectors as part of the Bio-Circular Green Economy (BCG) Model.
In a framework that will apply from 2021 to 2026, the Thai government will strengthen the country’s capacities in science, technology and innovation to increase the competitiveness of actors in the agriculture and food, health and pharmaceutical, bioenergy and biomaterials, and tourism and sectors Boost creative industries.
In essence, the BCG economic model aims to drive the country’s economic growth from within by achieving the United Nations Sustainable Development Goals1 while maintaining competitiveness in the global economy and with increasing global awareness of the principles of the circular economy and catching up with the green economy. By recycling waste, regenerating natural systems, switching to greener products, and investing in energy efficiency and renewable energies, the Thai government expects the circular and green economy to create new investment opportunities for small and medium-sized businesses and communities.
Healthcare demand is fueling the bio-based economy
With improved staffing capacities and competitive access to raw materials, Thailand has continued to attract solid investments in bio-based businesses, particularly in functional foods, medicine and healthcare, and biochemicals. In the first quarter of 2021, the Board of Investment approved incentives for five new advanced biotechnology projects with a total investment value of approximately $ 78 million2.
These projects included the production of amino acids as raw materials for use in pharmaceuticals and of human milk oligosaccharide (HMO), a prebiotic used as raw material for milk powder for infants and adults. In addition, a company founded by local doctors developed and produced an innovative treatment for patients with acute lymphoblastic leukemia (ALL) using (CAR) T-cell advanced therapy drugs (ATMP).
Another company received BOI incentives for manufacturing PHA (polyhydroxyalkanoate) bioplastic and its compound developed from organic waste. The company will use PHA bioplastics to make a wide range of packaging products for food and medical supplies.
Meanwhile, a Thai startup received approval for a project to develop and manufacture biopharmaceuticals, including herbal vaccines and therapeutic proteins, using molecular pharming technology.
Thailand’s investments in research and development for organic products have also increased with the increasing threat of pandemics and rare diseases. These products, also known as biologics, are developed from living cells such as bacteria or plant and animal cells as an innovative approach to treating many diseases. Data from Thailand’s Food and Drug Administration (FDA) showed that the country’s spending on biologics increased significantly from $ 0.5 billion in 2009 to $ 1.7 billion in 2018, with the majority of the additional expenses attributable to imports.
The BCG economy aims to reduce the import value of drugs and vaccines through intensive capacity building of technology and human capital in research and development as well as clinical research and product registration of drugs and medical devices. With the aim of developing preventive and targeted health care, Thai BCG policy will also include facilitating the use of genetic data and clinical research by researchers and industry.
To drive research and development, innovation and commercialization in the medical and healthcare sectors, the Thailand Center of Excellence for Life Sciences (TCELS) recently partnered with the private sector to develop and manufacture herbal and conventional medicines from cannabis and hemp extracts.
Increase in agricultural productivity and food innovation
An important pillar of the strategies to promote the BCG economy is to increase the productivity of the agricultural sector and the economic value of agricultural products, which benefits the majority of the Thai population and takes into account the global trend of increasing health and environmental awareness.
As part of the BCG economic model, the development of the local agricultural sector requires greater use of digital technologies such as agritech and the improvement of the standards and value of the country’s major agricultural products such as rice, sugar cane, rubber, tapioca, palm, corn, fruits and vegetables, Shrimp and dairy cattle, and promoting goods that add value like herbs, fish, and alternative protein.
Thailand is seizing opportunities from the increasing demand for plant-based meat and protein from insects, especially crickets, as global consumers become aware of the enormous carbon footprint of animals grown for meat and dairy products.
Although alternative protein is still a fledgling industry in Thailand, the growing demand should bring a boon to farmers who grow crops that are high in amino acids such as soybeans and grains. The National Science and Technology Development Agency extensively promotes modern insect breeding and processed proteins from it.
The Thai government is also stepping up its support for innovators of novel foods for groups such as patients and the elderly, as well as functional foods. With these measures, the government aims to see the food industry contributing 5% of GDP or $ 28 billion in 2024, up from 4% or $ 20 billion in 2019.
Reducing the carbon footprint
To encourage Thailand’s transition to a low-carbon economy, the latest national energy development plan aims for the country’s renewable energies to be 30% of total energy production, or 17 gigawatts, by 2037, doubling from the current 15%. The projection reflects the government’s policy of promoting rooftop solar panels, large-scale private sector renewable energy projects, and waste incineration and biomass in local communities under the Energy for All program.
Thailand’s energy master plan also requires state-owned companies to spearhead investments totaling around $ 6.35 billion in smart grids, energy storage and blockchain to ensure efficient and resilient power transmission that connects power generation from communities.
As the world’s leading supplier of sugar cane and cassava, Thailand also attracts investments in biodiesel and bioethanol, as well as biochemicals, particularly in the Eastern Economic Corridor3, the country’s pilot high-tech special economic zone that offers state-of-the-art R&D complexes and facilities. For energy and biochemicals, the BCG model aims to promote ethanol production standards to achieve industrial and pharmaceutical grades, as well as the manufacture of ethanol fuel cells for electric vehicles.
To promote the circular economy, the government will support recycling of waste such as sugar cane leaves and rice straw in each region. It will also reduce food losses and food waste, and support greener building and smart urban development.
Linking tourism with the creative industries
Since tourism has long been a major engine of the Thai economy and employment, the BCG Economy tries to connect tourism with target markets such as tourism for wellness, food culture, ecotourism, art and sport.
The country also intends to make the tourism sector more sustainable through efficient tourism management, monitoring the impact of tourism, and conserving natural resources and cultural heritage. It also aims to promote less visited cities by improving transport networks and using digital platforms.