SIPA: Rapid Progress
with Plenty More to Go

As Thailand races forward in the digital content age, the Software Industry Promotion Agency (SIPA) is quickening the pace of development. SIPA works to promote capability, education and innovation in the country’s software, animation and game industry, sharpening the competitiveness of Thai companies. The Thailand Investment Review (TIR) recently interviewed Dr. Niracharapa Tongdhamachart, vice president of SIPA, at the agency’s headquarters in Bangkok. In the following, Khun Niracharapa provides insight into SIPA’s responsibilities and the industry’s prospects.

TIR: How successful has SIPA been at fulfilling its mission so far?

Khun Niracharapa: Since SIPA was established on 23 September 2003 under the Ministry of Information and Communication Technology (MICT), our mission has been to promote the development of the software industry in Thailand. We have already accomplished a lot, and the funding that we receive from the government is now up to 400 million baht a year.

Going back about 10 years ago, Thailand really did not know much about the digital content industry. We were just starting to hear terms such as multimedia. Then a group of animation and game companies came to talk to the MICT minister and the prime minister and the word was, “okay”, SIPA should do more, especially for software animation and games. Since then, the software animation sector has been growing by more than 10% annually. Today, Thailand has 72 animation companies and 59 game companies, along with 100 freelancers.

SIPA carries out many activities promoting animation and games, including business matchmaking programs. We have been particularly successful in matching Thai companies with Japanese and Malaysian partners. This helps to improve the technical and marketing know-how of Thai companies.

TIR: How important is the software industry to Thailand’s economic and social development?

Khun Niracharapa: Software is a dynamic tool that will affect every industry in Thailand, from manufacturing to tourism. We see great potential for development, especially with the smaller companies. There are 4 million SMEs in the country and they can have a big influence on the GDP. SIPA is promoting the use of software in the operations of enterprises such as hotels, restaurants, factories and logistics.

In just one example, factories can incorporate ERP (enterprise resource planning) software to improve inventory and other functions. Software could also be used in the logistics sector for better efficiency.

TIR: What are some of the exciting new developments in the industry?

Khun Niracharapa: SIPA is establishing a digital content center here in this building to assist animation companies. With an investment of 20 million baht, the center will be about 1,000 square meters in size, featuring incubation rooms, sound and editing studios, motion capture technology, and all the latest legal software. Animation companies whether big or small can come here to use the center, which should open in April or May 2011.

In another key development, the Thailand Board of Investment is offering foreign investors 100 percent ownership of projects and an eight-year tax break. This policy will help strength Thailand’s animation and creative industries by attracting new investment.

Moreover, the Thai government plans to set up a new organization to promote creativity, including design, animation, games and software. About 1 billion baht in funding has been set aside for this “creative agency.”

TIR: What are the Thai software industry’s biggest challenges?

Khun Niracharapa: Human resources and marketing are the two biggest challenges. Frankly, we don’t have enough human resources in the software and animation industry. We need more, in both quantity and quality. Currently in Thailand, there are 25 university programs in animation and they can produce about 1,000 graduates per year. However, that will not be enough. We hope to see more funding so this can increase to 10,000 students in such programs within three years. This is being discussed with the Ministry of Labor. We are confident our goals can be achieved.

Meanwhile, SIPA also conducts industry training, including programs for graduates. For example, we outsource graduates to software animation companies for internships.

As for marketing, Thailand’s software, animation and game industry lacks expertise in this area. To help local companies, SIPA tries to search out potential partners, especially from abroad, for joint ventures to boost their financial and marketing capability.

TIR: How competitive is Thailand’s software industry in regional and world markets?

Khun Niracharapa: Thailand is very competitive in the software, animation and game industry, but I think we still have a long way to go. While we have some big players, don’t forget that 90 percent of Thai software companies are small with fewer than 10 employees and less than 5 million baht in annual sales. The industry still needs promotion and development and SIPA is part of that.

 

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