Thailand will remain mired in the middle-income trap for another 10-20 years and Vietnam's economy will eventually eclipse the country if it fails to upgrade its workforce to keep pace with technological changes, warns Thailand Development Research Institute (TDRI).
Yongyuth Chalamwong, advisor on human resource policy at TDRI, said the World Bank has spent 15 years urging Thailand to reform its labour policies by shifting from labour-intensive industries to technology-intensive sectors.
However, Thailand continues to employ more than 4 million low-cost migrant workers, despite having a domestic workforce of around 40 million, supporting labour-intensive industries because migrant workers are less than half the cost of Thai workers and are easier to recruit, he noted.
Thailand also emphasises university education, with more than 200 universities producing graduates whose qualifications often exceed the needs of industry (a vertical mismatch). Moreover, many graduates possess skills that do not match industry demand.
As a result, more than 300,000 new graduates are unemployed each year, representing an opportunity cost exceeding 10 billion baht annually, noted TDRI.
Many countries do not heavily subsidise higher education, instead providing greater support for students pursuing polytechnic education. For example, China encourages roughly half of its students to enrol in polytechnic institutions.
But in Thailand, vocational education is often regarded as second- or even third-class education.
Mr Yongyuth said Thailand has nearly 1 million vocational students, of whom around 400,000 attend private vocational schools. Yet many vocational graduates do not study technical fields, instead pursuing social sciences or accounting and business administration.
The Thai government allocates very limited funding to vocational education, even though polytechnic training requires costly equipment and tools that must be continuously upgraded to keep pace with technological advances. For example, electric vehicle (EV) technology evolves rapidly, with new models being introduced on a regular basis.
The workforce development model adopted in the Eastern Economic Corridor should be promoted, said Mr Yongyuth. Under this model, industries sign memorandums of understanding with vocational schools to develop and supply workers directly to industry.
In addition, vocational schools should produce skilled workers through a work-integrated learning approach, which combines classroom instruction with practical workplace experience, he said.
A 50:50 balance would be appropriate, which means for a four-year programme students could spend two years studying and two years undertaking internships in factories, noted Mr Yongyuth.
During their internships, students would receive wages, helping to ensure that workforce development aligns with industry needs.
Thailand can no longer rely solely on broad, long-term workforce planning because technological change is occurring too rapidly, he said.
Instead, workforce development should respond to market demand. For example, as the EV industry expands, every subdistrict should have at least one qualified EV technician. Similarly, with drones now widely used in agriculture, each subdistrict should have at least one drone repair technician.
Regarding highly skilled talent, Mr Yongyuth noted many Thais who pursue advanced technology education overseas do not return to work in Thailand because there are few suitable employment opportunities.
Advanced industries are typically located in the countries that own the underlying technologies, such as Samsung in South Korea or Huawei in China. Wages in Thailand remain significantly lower than in those countries.
