317th Meeting - Tuesday, November 10th 2009

 Science and Technology Park Development in Northern Thailand

A talk and presentation by Martin Venzky-Stalling

 
Present: David James, Mangkhoot Worapong, Joop Schillemans, Christophe Burckard, Tony Kidd, Dianne and Mark Barber-Riley, Bill Lung, Bodil Blokker. An audience of 9.

 
Martin Venzky-Stalling has almost 20 years of strategy consulting (PricewaterhouseCoopers, Ovum, etc) and business management (PCCW, Eureka, etc) experience in Europe, the Middle East and Asia. He is fluent in written and spoken Thai and studied Thai in Bangkok (AUA, Thammasat and Silapakorn) and Hamburg (Hamburg University). His focus is on business management and technology and he has advised SME, multinational corporations, multi-lateral agencies and governments on a range of issues - from strategy development, privatisation, marketing, transformation, start-up, regulation and policy. Earlier in 2009, he moved from Hong Kong to Chiang Mai to advise the Chiang Mai University (CMU) on setting up a Science & Technology Park. The project is similar, (though smaller scale) to the Thailand Science Park in Klong Luang, Pathumthani, on the outskirts of Bangkok.

 Synopsis

Thailand's competitiveness has been falling or is not good compared to countries such as Taiwan, Singapore etc. One of the key drags on the competitiveness ratings is the low level of R&D spent as a percent of GDP (ca 0.3 percent only, compared to Korea, Taiwan, EU, etc (well over 2 percent). This is a nationwide problem. However, Northern Thailand has some additional problems: a low level of industrialization, few medium and large companies and a high dependence on two sectors (food/agro-industry and tourism). The questions are: How can these sectors remain competitive? How can new clusters be promoted? And how can nascent clusters be strengthened? Science Parks are tools that are often used to these issues - they promote regional economic growth; revitalize industry; and strengthen the regional innovation system. A Science and Technology Park is planned in the North. Before such a Science and Technology Park can be really successful, university-industry linkages need to be promoted and become more widespread (universities are the main sources of knowledge in the regions). Universities such as CMU have to become more industry focused and entrepreneurial. For Chiang Mai University, a Technology Development Centre (TDC) is envisaged to help achieve this by becoming internal and external one-stop point of contact regarding cooperation between the university and industry. The TDC would also form a bridge to the Science & Technology Park.

This summary of Martin’s talk is based on his PowerPoint presentation:

Promoting Regional Economic Growth

By Martin Venzky-Stalling

General problem…. Issues with competiveness and limited investment innovation/R&D… plus specific problems for Northern Thailand……

Thailand: Weak Competitiveness

A cross-country comparison reveals that Thailand’s overall competitiveness in 2006 was lower than some of its key regional competitors. Malaysia, China, Taiwan, Japan, Singapore and Hong Kong all had higher rankings in most of the areas: Economic Performance, Government Efficiency, Business Efficiency, Infrastructure. Only Korea, which suffered a big drop in 2005, was ranked lower.

Problems of the North

·        Limited industrial base, mostly small companies, portion of national GDP small, slightly below average.

·        Main industries are tourism and agro-industry ... others include IT & software, ceramics, wood, textile, handicraft, jewelry, construction, healthcare.

·        Electronics, but mainly in Northern Industrial Estate (NIE), NIE not integrated in local economy

BOI Promoted Projects in the Upper Northern Region

Agro-Industry

·        Dried fruit and vegetables and frozen fruit and vegetables

·        Grading

·        Snacks, potato chips

Fashion

·        Garments and Jewelry

Electronics and ICT

·        Transistor, capacitor, transformer, etc.

·        Software

Services

·        Hospitals and hotels

Other

·        Parawood furniture

·        Sewing machines

·        Mold

·        Metal parts

Approved Projects in the Upper Northern Region

The vast majority of investments are made by Japanese companies. But there has also been a sizeable investment activity by companies from the US, Europe and Australia. Areas of investment have included: Service, Chemical, E & E, Auto, Light, Metal, and Agro.

The North’s share of GDP in 2007 was 8.2%. Its GRP per capita was the second lowest in Thailand.

Research and Development is too low

Public and private sector R&D as a percentage of GDP (2006)

Thailand =        0.25%

Malaysia =       0.63%

Taiwan =          2.64%

Korea =           3.35%

Thai companies buy their technology, but there is a structural problem…

·        A developing country such as Thailand could enter the manufacturing sector and prosper for as long as a few decades by exploiting natural resources and low wages before it faced a serious structural crisis triggered by fiercer international competition and external factors. To avoid this, investment in R&D and innovation is important.

What are Science Parks … tools to address innovation problem and promote regional development….

What is the concept of a Science Park?

·        A tool to promote regional economic growth, stimulate the regional innovations system

·        Innovation is a driver for productivity gains, differentiation, value added, cost reduction, etc - innovation creates long-term competitive advantage and hence economic growth

·        To be an R&D Hub and grow a critical mass of industrial research manpower

·        To be a sprouting ground for tripartite collaboration between university-government-industry

·        To be a centre for technology transfer and commercialization of technology

·        To be an incubator for local start-ups and a magnet for foreign investment in R&D

Science and Technology Park: Key Stakeholders and Benefits - Triple Helix

CMU - Research and teaching quality and capacity, knowledge, and revenues

Government - Regional economic growth, investment, employment, tax revenues

Industry - Innovation, services, and competitiveness

What is different about a Science and Technology Park?

Conventional Industrial Zones

Science and Technology Parks

Away from the city

Urban or semi-urban

 

Low aesthetics. Unpleasant

High aesthetics. Pleasant

 

Low maintenance of common areas

 

Good maintenance

 

Indiscriminate access. (no requisites)

Discriminate access

 

No environmental concern

Environmental concern

 

Low zone management

 

Management intensity

 

No network

 

High networking

 

Few value-added services

 

Value-added services

 


Examples of Science and Technology Parks:

Techno-Z Salzburg, Austria

www.techno-z.at

Total Area: 42 Rai

Total number of tenants and institutions: 200

Agro Business Park A/S, Denmark

www.agropark.dk

Total Area: 93 Rai

Total number of tenants and institutions: 22

Main activities: Agriculture, Biotechnology, Environment, Food Science and Technology

NOVI Science Park, Denmark

www.novi.dk

Total surface (area) of the Park (including built areas, green areas, roads, etc) 40 Rai

Tenants: 75

Technologie Park Dortmund, Central Germany

Total surface (area) of the Park (including built areas, green areas, roads, etc): 250 Rai

Tenants: 280 (excluding incubator)

Employees: 77

Investment: 236 Million Euros

ICICI Knowledge Park, India

www.iciciknowledgepark.com

Total surface (area) of the Park (including built areas, green areas, roads, etc): 250 Rai

Tenants: 18

Main activities: Biotechnology, Chemistry / Chemical Technology, Life Sciences / Medical Science and Technology / Health, Materials / New Materials, Pharmaceuticals

Thailand Science Park

Area: 80 acres

Space: 140,000 sq m (200,000 sq m for whole project)

National Research Centres: BIOTEC, MTEC, NECTEC, NANOTEC

Space for private sector: Incubator units, multi-tenant buildings, long-term leased land

At present:     62 companies in operation

>10 companies in the pipeline

By 2010 and beyond

-          35,000 sq m available for private sector

-          200 companies

-          4,000 knowledge workers

-          Turn over of US$ 100 million/year

Regional Science Parks in Thailand

Thailand plans to develop regional science parks. There is a North Eastern Science Park Project, a Southern Science Park and a Northern Science Park Project. The South and the Northeast are currently managed by the NSTDA. The North is managed by TISTR. TISTR and NSTDA are both organizations under the Ministry of Science & Technology. NSTDA is already running the Thailand Science Park.

What Services should be provided by Science and Technology Parks?

Common Services

Value Added Services

Auditorium

Access to venture/seed capital funds

Meeting rooms

Brokerage

Banking

Corporate relocation assistance

Cafeteria, restaurant

IP consulting

Transportation

Lab facilities / equipment

Secretarial services

Management support services / consulting

Catering

Internationalisation services

Facilities maintenance

Commercialisation of technology

Hotel

Training

Kindergarten   

Networking services

Medical care services

Incubation and pre-incubation

Security

Logistics services

Video-conference

Certification, testing, labelling

Travel agency

Shared / common laboratory

 

Office space

 

Wet and dry lab space

 

Land for development

Services in Thailand Science Park

·        World-class Facilities, Research Laboratories and Pool of Knowledge Workers

·        Open-land Policy for new buildings by the Private Sector

·        Open-Lab Policy for Serving SMEs

·        Incubator services

·        Multi-tenant Buildings

·        External Financial Services

·        Financial Programs (loans and grants)

·        Tax-Incentive Program for R&D expenditure

·        Board of Investment full privileges

·        Intellectual Property services

·        Technology Licensing Office

·        Industry Technology Assistance Program (ITAP)

·        Technology Transfer (training)

·        Hub for Centers of Excellence around the country

·        Quality System Services

·        Unique internship Program for students

·        NSTDA Network

 Planned Location of Science and Technology Park in Northern Thailand

Chiang Mai University plans its own Science and Technology Park to complement the Northern Science Park of TISTR. Both will be based on CMU’s Sri Bua Baan (Lamphun) campus. Located about 55 kilometres south of Chiang Mai on a 1,890-acre site close to the Lamphun industrial centre, this campus is currently under development.

When complete, this campus also will provide additional training and research facilities for the Faculties of Nursing, Architecture, Engineering, Humanities, Social Sciences, Agro-Industries, Agriculture, Pharmacy, Veterinary Medicine, Science, and the Graduate School.

Way of Working: R&D and services but for the sake of commercial deployment

Within the Technology Park

·        Companies + CMU and other universities: Collaborative research, development, etc.

·        Companies: Locate inside TP. TP and companies in the TP provide service to external companies

·        CMU and other universities: Locates institutions, facilities inside TP. Forms private company to manage TP.

·        Northern Science Park (and other) invited to be part of Technology Park

 Science and Technology Park - Funding & Ownership

Together with universities, regional and local governments fund and own two thirds of all

Technology and Science Parks (worldwide) – see details below. However, in Thailand it is difficult to create this kind of funding and ownership structure. This has delayed the development of regional science parks. The Ministry of Science & Technology has commissioned a study to develop a viable governance and ownership structure.

 STP Public ownership breakdown (worldwide)

·        Central Government – 18%

·        Regional Government – 21%

·        Local Government – 25%

·        Public universities – 18%

·        Chamber of Commerce – 8%

·        Public bank – 4%

·        Other public ownership – 2%

 Some slides on CMU plans, first promote university-industry linkages, set up a Technology Development Center and then open a Technology & Science Park….

 What are University-Industry Linkages?

·        Contract and collaborative research projects

·        Technology and knowledge transfers as well as technology licensing, allowing industry to commercially deploy and utilize university knowledge, patents, and copyrights.

·        Work experience programs for undergraduate students during their course of study.

·        Industry research projects for graduate and doctoral students.

·        Mentoring opportunities for students. The partner firms could provide internships.

·        Consulting and training activities, including market studies, business plan development, business case for financing, etc.

·        Custom-designed management and technical education programs

 CMU Plans for Strengthening University-Industry Linkages

Phase 1: Years 1-3+

 

Phase 2: Years 3-5+

Build on Existing Activities

 

Set up Technology Transfer Office

 

Use Technology Transfer Office to promote Technology Park at Haripoonchai

 

Current CMU UNITS

 

Technology Transfer Office

 

Technology Park

 

TLOUBI

Manages and promotes UIL and TP internally and externally

 

Hub and space for R&D activities of companies and research institutes, as well as services providers

 

STRI and other research institutes

 

Other technology and knowledge transfer services

 

Good facilities, environment, infrastructure, rental and lease space, services

 

Faculties

Heart of TSP and TSP’s bridge to CMU

 

Role of university is key

STSC

 

Incorporates TLOUBI & provides space for others such as RAC, NSP, etc.

 

 

Expand, scale up

 

 

 

Add contract and collaborative research

 

 

 

UIL/UUL

 

 

 

Consulting and training

 

 

 

                                                                         

Planned Services for Industry by CMU Technology Development Center

·        Be a central point of contact for industry and provide one-stop service to industry

·        Business development, marketing and information dissemination (make industry aware of CMU knowledge)

·        Provide legal/IP and contract advisory services, support during discussions and negotiations

·        Support on funding opportunities for R&D and UIL projects and assist with acquisition of funding

·        Provide training, consulting, and networking services for private sector companies to enable them to make better use of new technology innovations

·        Provide an additional, centralized point of service for access to technical services that CMU can already provide.

·        Provide project definition, monitoring, and coordination services

 Some slides about Chiang Mai University….a strong research partner

 Area and Location of Chiang Mai University

Chiang Mai University has several sites, covering a total of ca.3,490 acres, the three key campuses are:

·        Main Campus (Suan Sak) 725 acres: of which 110 acres are the Health Sciences Complex (Suan Dok)

·        Mae Hia Campus 865 acres

·        Sri Bua Baan Campus 1,890 acres

·        The main campus is situated on Huay Kaew Road. This is where the CMU Technology Center will be based. The Technology Center will be the one-stop point of contact for industry.

·        The CMU Technology Park will be based at the Sri Bua Baan Campus (Haripoonchai Education Centre) in Lamphun, 10 minutes from Lamphun city centre and the Northern Industrial Estate (55 kilometres south of Chiang Mai city centre).

·        The university services the North and is at the centre of the Greater Mekong Subregion which includes Southern China, Laos, Myanmar, Vietnam and Cambodia

 CMU - A strong research university

In 2008 Chiang Mai University’s total research budget was 967.1 million Baht, or almost 40 million US Dollar.

·        CMU has recently been announced by the Thai Government to be one of 9 National Research Universities, and is receiving incremental annual research budgets of between 300-500 million Baht over the next 3 years.

·        Chiang Mai University is ranked third amongst Thai Universities. Nationally and internationally it ranks high in Life Science, Biomedicine and Immunology; and Material Science (including Nano Technologies). It also has a strong food/agro-industry focus (QS.com, Scopus, etc).

·        CMU’s strengths are complemented by more than 150 Collaborative Agreements and MoUs with foreign universities, institutes and international organizations in 28 countries and working agreements with national government and private sector organizations

·        Various specific research centres have been established: National Excellence Centers; University Research Centers and Institutes; Faculty Research Centers; Research Centers of Faculty Departments

Focus for Collaborative/Contract Research and UIL

·        CMU is now actively promoting contract and collaborative research partnerships with national and international research institutes and industry

·        Research excellence, lower costs, access to unique natural resources, leading life and nano sciences

·        Based on CMU’s strengths as well as other factors such as policy support and strengths of the North

Sectors

·        Food, food safety, and agro-industry - Consistent with BOI priorities (food processing, Science & Technology, Biotech, logistics, ICT)

·        Life-sciences/medicine, healthcare, cosmetics - Builds on strong biodiversity including herbs

·        Environmental and renewable energy technology - Builds on strengths in food and agro-industry, which also can be used for alternative energy

·        Material science (including nanoscience)

·        Logistics and IT - Chiang Mai is at the centre of the Greater Mekong Subregion

Some slides on strengths the advantages of Northern Thailand……

Right in the center of the Greater Mekong Subregion (GMS)

The key provinces of the upper North are becoming transport and logistics hubs

2 Routes

·        R3A : Thailand -Lao PDR-China

·        R3B : Thailand Myanmar -China

Cross-border trade and investment is picking up rapidly. China major investor in Laos, industrial estates, resorts, casinos, etc

Chiang Mai has a good airport and excellent road connections - but it is landlocked and the railway is outdated.

River transport, development of Chiang Saen port

Education and Healthcare Hub of the North

Educational Hub

Chiang Mai has seven universities:

·        Chiang Mai University (the first institute of higher education in the North and the first provincial university in Thailand. Ranked No 3 in Thailand)

·        Payap University

·        Maejo University

·        Northern University

·        Far Eastern University

·        Rajaphat University

·        Ratchamongkol University

- At least six International Schools and several English or bilingual programs at Thai Schools

- Statistics suggest that there are about 65,000-100k students are living in Chiang Mai

Healthcare Hub (same slide as previous topic)

Chiang Mai University was originally set up as a Medical School and Service Center, then become a full university

·        The healthcare complex of CMU occupies 110 acres is currently being expanded including plans for a long-term recover facility in nearby Lamphun

·        Maharaj Nakorn Chiang Mai Hospital, known locally as Suan Dok Hospital, is the largest teaching hospital in Northern Thailand, and one of the largest hospitals in Thailand

·        Many other hospitals in Chiang Mai. Chiang Mai has over 6,000 hospital beds

·        Long tradition of alternative medicine

·        Popular retirement and long-stay (Japanese Long-stay Club)

·        Aims to become healthcare tourism hub

·        Many spas

Biodiversity

Thailand in general has an extremely high biodiversity, about 3% of the world’s land area but accounts for 8-10% of plant and animal varieties

·        There is a particularly high concentration in Northern Thailand due to the seasons with fairly wide temperature differences and different altitudes

·        Pharmaceutical and biotech companies are increasingly interested in the medical applications of this biodiversity. Extraction from herbs and plants including fruits are more and more common

Advantages of the North (Summary)

·        Location GMS

·        Excellent road infrastructure, good airport (1 hour to Bangkok)

·        BOI incentives in zone 3

·        Minimum wage cost: 150-168 baht / day

·        Educational Center well qualified and loyal staff

·        2 Industrial Estates

·        Low cost of living

·        CMU and other universities (R&D partners and gateways to the North and GMS)

The evening concluded with a knowledgeable, in-depth question and answer session.