Nine “Creative Industries” Making Up 10 Percent of Thailand's Economy

A study by the Fiscal Policy Research Institute and the Kenan Institute Asia shows that nine “creative industries” have contributed about 10 percent of Thailand’s economy and could grow quickly with strengthened value chains and better protection of intellectual property rights.

The nine creative industries include printing and publishing, information technology, wooden furniture, medicines, jewelry, research, movie production, movie theaters, and radio and television. Their direct contribution in 2008 was more than a trillion baht, representing 9.53 percent of Thailand’s gross domestic product (GDP). The Kenan Institute Asia is a leading Thailand-based, non-profit organization serving the sustainable development needs of Thailand, as well as Cambodia, Vietnam, and Lao PDR.

Deputy Commerce Minister Alongkorn Ponlaboot said that he was pleased that all related sectors in Thailand attached great importance to the Government’s policy of the creative economy and that the Fiscal Policy Research Institute and the Kenan Institute Asia had been asked to conduct the study.

Speaking at a seminar discussing the study on 27 January 2010, Mr. Alongkorn pointed out that Thailand’s creative industries clearly have the potential to drive Thai economic growth. He revealed that Thailand’s creative industry exports have risen to about 13 billion US dollars per year and were growing at an average rate of 5 percent per year. This, he said, put Thailand behind only some OECD countries, China, and India. OECD stands for the Organization for Economic Cooperation and Development.

Mr. Alongkorn said that the “Creative Thailand” subcommittee that he chairs is working to support the creative economy in four key areas:

•Improving the efficiency of the system in managing intellectual property and building an information and communications technology system that is modern and accessible to the majority of the people;
• Encouraging the development of creativity in the education system;
• Spreading the creative economy to all regions of the country;
• Supporting creative businesses, especially SMEs, with capital, “incubation services,” and efficient regulations.

The 162-page study, released on 27 January 2010 by the Fiscal Policy Research Institute and the Kenan Institute Asia, made both industry-specific and more general recommendations for encourag- ing the development of Thailand’s creative industries. The general recommendations are as follows:

• Develop creative industries together with knowledge-based industries, since knowledge and creativity are closely linked;
• Increase government efforts to strengthen creative value chains;
• Fix weaknesses in the IPR system, including speeding up the patent process and improving enforcement of patents and copyright;
• Build public understanding that piracy of creative products is a form of theft that is detrimental to the development of the Thai economy;
• Make it easier for high-level international creative talent to live and work in Thailand.

The Thai government has a policy to develop Thailand into a creative economy hub in the ASEAN region and increase the share of the creative economy value from 12 percent to 20 percent of Thailand’s gross domestic product (GDP) by the end of 2012.

In his opening speech at the seminar, former Minister of Foreign Affairs Nitya Pibulsonggram said that the objective of the creative industries study was to enhance understanding of the importance of Thailand’s creative industries and the need to improve protection of their intellectual property. He called for more effective action to protect intellectual property and reduce the losses to the creative industries.

According to a press release by the Kenan Institute Asia, the creative industries also provided significant inputs for other industries, especially in the service sector. The study showed, for example, that each additional baht of expenditure in the movie theatre industry induced other industries to create 2.14 baht worth of additional output. The hospital and education sectors were particularly dependent on inputs from the creative industries.

The study stated that piracy undermines the incentive to create and invest. It also warned that piracy supported organized crime and, especially in the pharmaceutical industry, had “direct and dangerous effects on people’s health.” It notes that one test of anti-malarial drugs found that 38 percent of samples in the region were fake. This is likely to have contributed to the emergence of dangerous drug-resistant forms of malaria in the Thai-Cambodian border area.

The report also states that in 2008, Thailand’s creative industries contributed 1.067 trillion baht, about 32 billion US dollars, in sales and more than 325 million baht, about 9.7 billion dollars, in added value. These industries accounted for 9.5 percent of total Gross Domestic Product (GDP) with the value added amounting to 2.86 percent of GDP in 2008.

Revenue from the jewelry industry accounted for 4.7 percent of GDP. In 2008, 875,500 workers, or 2.4 percent of Thailand’s workforce, were employed in the selected creative industries. The IT industry had the highest employment, accounting for 1.2 percent of total employment. The jewelry and related articles industry had the largest value-added contribution to GDP of 0.97 percent. The creative industries, excluding the IT industry, contributed an average value-added of 750,000 baht per worker. The jewelry industry had relatively high value-added per worker of about 2.6 million baht, while the printing and publishing industry had value-added of 2.3 million baht per worker. This is well above the average value-added per worker of almost 310,000 baht, and nearly triple the 786,850 baht value-added per worker in manufacturing.

In terms of international trade, exports of the selected creative industries totaled more than 429 billion baht in 2008, about 7 percent of total exports, and have been growing steadily, according to the statistics compiled by the United Nations Conference on Trade and Development. The main exporting sectors were the IT sector, with exports worth about 192 billion baht, and the jewelry and related articles sector, with exports worth more than 157.7 billion baht.

According to the study, China’s creative industries contribution to its economy was relatively low, at 2.50 percent of GDP in 2006. However, this appears to be growing rapidly. In terms of labor share, Thailand’s current figure is slightly higher than that of Singapore 10 years ago. Statistics show that Thailand’s creative industries are growing faster than the rest of the economy, although they still contribute relatively less than the creative industries in developed countries and the number of jobs created by Thailand’s creative industries is still quite low.

The study indicates that international trade figures also show a positive trend. Thailand’s exports of creative goods reached nearly 13 billion US dollars in 2008 and ranked 17th , with a world market share of 1.29 percent. The creative industries in Thailand clearly have the potential to become an important growth engine for Thai exports. They placed Thailand among the world’s top 20 exporters of creative goods.

It is also significant that these creative exports are growing steadily at more than 5 percent a year, indicating strong global demand for Thai creative goods.

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