The BCG economic model was conceptualized in Thailand to form a part of the Thailand 4.0 policy as a way to expedite economic and social development. The model integrates bioeconomy, circular economy and green economy and is rooted in Thailand’s strengths in agriculture and its natural resources, diversity and geography. The model aims to assist the nation in transforming into a value-based and innovation-driven economy. Thailand’s BCG conforms with the UN sustainable Development Goals (SDGs) in ensuring the conservation and sustainable use of biodiversity and protection of natural resources and the ecosystem.
The BCG model has become particularly relevant following the pandemic, with Thailand focusing on the model to enable sustainable recovery from COVID-19 and the affects that the pandemic has had on the economy and the nation. The model will bring together government, private sector, academia and society collectively to implement the principles, with the vision of building back a healthier, greener, more sustainable and inclusive economy in the wake of the pandemic.
The name ‘BCG’ encompasses bioeconomy as the production of renewable biological resources and their conversion into value added products, circular economy as the reuse and recycling of resources and green economy as keeping economy, society and the environment in harmony, resulting in sustainable development.
The model focuses on four distinct industries:
1. Food and agriculture
The focus will be on diversifying products and developing value-added premium products.
2. Medical and wellness
This industry will attempt to build capacity for production of drugs and biopharmaceutical items as well as medical devices, precision medicine and to increase medical research.
3. Bioenergy, biomaterial and biochemical
The goal of this sector will be to achieve energy security and convert biomass into high value commodities.
4. Tourism and creative economy
The tourism and creative economy aims to implement sustainable tourism, conserve the environment and connect with other services to create high-quality tourism such as wellness tourism and eco-tourism.
Figure. The BCG Economic Model.
It is expected that these four industries will create value addition in the Thai economy in the coming years. Currently, the combined economic value of these industries is 3.4 trillion THB, around 21% of GDP. It is estimated that with the assistance of the BCG model, this number will grow to 4.4 trillion THB, around 24% of GDP in the next five years.
The Office of National Higher Education, Science, Research and Innovation Policy Council, has described each area of the BCG Model as a ‘pyramid’, with each pyramid representing the supply chain in that industry. The idea is that the largest groups of producers resemble the base of the pyramid, with the higher levels demanding more specific or sophisticated technology that only few producers have the capacity to implement. The BCG model sees the ‘base’ of the pyramid, moving up by adding value to their products, essentially, strengthening the capacity of local communities and allowing the use of new technologies and driving forward the bio, circular and green economy.
The BCG strategy involves four drivers, categorized into sectoral development, talent development, area-based development and knowledge which are to be the focus of the model.
1. BCG Sectoral Development
The model focuses on four industries; food and agriculture, medical and wellness, bioenergy, biomaterial and biochemical and tourism and creative economy.
2. BCG Talent and Entrepreneur Development
The model aims to focus on certain target groups including start-ups, innovation-driven enterprises, smart farmers, high value service providers, deep technology developers and creative entrepreneurs.
3. BCG Area-based Development
The BCG will focus on area-based development. Briefly, these include a focus on food safety and agricultural health standards in the Northern Economic Corridor and a focus on resolving major health issues, evolving insect farming and developing cultural tourism in the North-Eastern Economic Corridor. The Eastern Economic Corridor will develop fruit production and the development of future industries while the Southern Economic Corridor will place its attention on precision aquaculture, halal products and development of tourist destinations.
4. BCG Frontier Research/ Knowledge
There are a number of areas that have been identified as paramount to the growth and success of the BCG model. These include areas such as artificial intelligence, synthetic biology, bioprocess engineering and decarbonization, among others.
The BCG model also incorporates four enablers which are aimed at promoting and developing the model and ensuring its success in Thailand.
1. BCG Regulatory Framework
The Regulatory Framework governs, reviews and amends the projects and developments within the model.
2. BCG Infrastructure and Facility Development
Particular facilities such as pilot plants, computing facilities, high speed internet and national quality infrastructure will be developed and supported as a part of the BCG strategy.
3. BCG Capacity Building
Capacity Building will focus on developing skills and manpower across the different industries and fields. Capacity building is set to have a broad scope from students to current workers.
4. BCG Global Network
Finally, this enabler will collaborate with international partners in terms of research, technology and investment.
FTI Push for BCG Integration in SMEs
The Federation of Thai Industries (FTI) is supporting entrepreneurs and small to medium sized enterprises (SMEs) to adopt the BCG economic model, warning that the post pandemic world is likely to be driven by digital technology and environmental concerns.
To align with the goal of the BCG, SMEs are faced with having to devise innovations to improve their factory operations. Typically, SMEs face barriers when adopting new technological developments and have trouble implementing them. For this reason, the FTI has committed to financially supporting SMEs to adapt to the BCG economic model.
The FTI Innovation Institute is planning to raise 1-2 billion THB with assistance from large companies and the government, to help set up a fund for SMEs to gain access to innovative opportunities and development. An FTI Expo is also planned for early 2022 in Chiang Mai, which is an opportunity for the FTI to promote the potential of Thai industries and facilitate business negotiations worth around one billion THB.
The BCG model offers Thailand a comprehensive strategy for sustainable development. The model promotes balanced development, ensuring growth but not exceeding environmental capacity, in turn, helping reduce climate change, as well as the spread of infectious diseases between humans, plants and animals. The model is expected to substantially reduce consumption of natural resources, by up to two-thirds, as well as reducing pollution and environmental impact from development as it is in the current state.
Thailand recognizes the domestic and global benefits of the BCG model on the economy and has committed to continually collaborate with international partners to share new technological and scientific resources. Through this, the nation hopes to capitalize on the BCG model, particularly in its role in assisting with post pandemic recovery efforts.