Scenario Planning Workshop
Thip-Ubol and Subongkoj Rooms
Anoma Hotel
Rajaprasong, Bangkok
September 3-5, 2003

The Electrical and Electronic Institute's Technology Foresight for Electrical, Electronic, and Software Industries Planning Project sponsored a three-day scenario planning workshop from September 3-5, 2003, in Bangkok.

The first day focused on identifying critical trends that defined the context within which the Thai electrical and electronic components and software industries will function in the next five years and potential events that, if they occurred, would change the future of the industries.

Trend Exercise

We divided into four groups; each group included representatives from each industry. The trend exercise surfaced a number of critical issues and events as well as trends.

Group 1

1. Electrical and electronic (EE) imports increasing (particularly from China and Korea)

• Thai EE industries market share decreasing
• EE products are cheaper
• Many Thai SMEs fail
• Unemployment increases

2. Number of governmentally imposed environmental regulations increases

• Healthier environment
• EE industry costs increase

3. New product life cycles are shorter (perhaps should specify products)

• Stimulates more rapid disposal of products
• Greater competition for innovative products
• More new product launches
• More natural resources required
• More electronic waste
• ICT bridge

4. International free trade (event)

• Greater worldwide product competition
• Greater cooperation and networking with international partners
• Thai SMEs adversely affected
• Thai SMEs apply more modern management tools

Group 2

1. China is a major force affecting Thai EE industries (issue/driving force)

2. Number of non-tariff products increasing

• Rationale for trend: products are accepted by many countries because they have met international criteria, not local country criteria
• More Thai SMEs conform to ISO standards

3. Internet access increasing worldwide

• Business-to-business commerce increases

4. Number of people employed in R&D functions decreasing

• Thai EE industries are less competitive

Group 3

1. Alternative energy (solar cells, fuel cells, bridge, cellulose, wind) applications increase

• Replace conventional energies

2. Increased use of computers in appliances and products (e.g., remote control, interface cards, laundry washer, sensor toilette diagnosis, etc.)

• Opportunities for development of new electronic and software products

3. Foreign direct investment (FDI) in Thailand decreases

• Decrease in Thai electrical appliance industries because they are not able to compete against products from China and Vietnam.

4. Increase in bio-electronics and Nano-electronics

Group 4

1. Environmental sustainability issues

• WEEE
• RoHS
• IPP (Integrated product policy)
• Modification of raw materials and production processes
• Restriction of imported waste
• EMC (Electromagnetic compatibility)

2. Increased application of ICT

• Increased demand for PCs
• Strengthening of SMEs, both hardware and software
• Cheaper software
• Increase in IPOs, SCMs, and e-Procurement
• Intensive demand of human resources

3. Chinese products gain market share

• Price competition while maintaining quality
• Accelerated development of Industrial Standard
• More innovation for products differentiation
• Anti-dumping measures
• Co-operation with government

4. Product life cycle/shelf life decreases

• R&D costs increase
• Stimulates "just-in-time" procedures
• Stimulates product innovation and differentiation
• Requires continuous market monitoring and forecasting

Event Exercise

The second exercise focused on identifying potential events that, if they occurred, would change the future of the electrical, electronic components, and their supporting software industries.

The results of the events exercise are as follows:

Events

Group 1

1. Government regulates mandatory EE standards

Signals

1. Mandatory EE standards are being discussed in the national legislative committee
2. Mandatory EE standards are being discussed in the press and trade association meetings
3. International trade committees are discussing such implementations

Implications

1. Product costs will increase
2. Higher quality Thai products
3. Government will promote better products
4. Increased opportunity for Thai testing businesses
5. Increase in Thai export opportunities

2. All government procurement and operation conducted via ICT

Signals

1. Establishment of ICT Ministry, which is developing an action plan
2. Under discussion by government

Implications

1. Better service to citizens
2. ICT imported 
3. Increase in governmental efficiency and responsiveness, which contributes to national competiveness
4. ICT market expands
5. Criminals may hack into government ICT system

3. Countries will adopt open source operating systems

Signals

1.  Formation of Thailand open source working group
2.  China & Japan governments use LINUX

Implications

1.  Inexpensive software
2.  Increase in ICT city centers throughout Thailand
3.  Increase in Internet/computer usage which will in turn accelerate cultural change
4.  Increased access to information about Thailand will increase tourism

Group 2

1. Thailand becomes center of agritronic products (electronic components used to control and improve quality of agricultural products)

Signals

1. Various organizations both public and private are discussing agritronics
2. Declining competitiveness of consumer products drives a need of new product ideas
3. TESA international road shows feature agritronic product development

Implications

1. Increase in product quality and volume (economy of scale)
2. Better control of productivity outside its season
3. Number of agriculturists may not continue to decline/better livelihood and economy of agriculturist
4. Cost does not increase due to new technology

2. Free access to the Internet

Signals

1. Government policies subsidizing IT use by public
2. Net offers higher advertisement value
3. Access cost decreasing
4. Government supports Internet use in schools and universities  

Implications

1. Increased demand for IT equipment
2. Increased demand for Web application software
3. Increase in e-commerce opportunities

3. Thai government fully or partially subsidizes testing and certification of product quality (e.g., Q Mark)

Signals

1. Government concerned about the violation of intellectual property rights 
2. TISI (Thai Industrial Standard Institute, a national body for standardization) is certifying products now
3. EEI (lab), PTEC (lab) are conducting tests now

Implications

1. Increase competitiveness of Thai industry in world market
2. Faster launch of new products into world market
3. Reduced costs

4. R&D reborn

Signals

1. Thai government provides tax incentives to foreign R&D technicians
2. Local manufacturers are importing retired R&D professionals
3. NECTEC provides matching funds for R&D
4. Some universities provide open lab facilities
5. TESA (Thai Embedded Software Association) road shows in the past year were well received around the country
6. Agritronic product development is becoming one of the main policy of TESA

Implications

1. Number of R&D companies/departments increases
2. More intellectual property available
3. Reduction of import and increase of export
4. Improvements in product quality

Group 3

1. Government funds electrical and electronic R&D (US $1,000 million)

Signals

1. NSTDA and TISTR received a budget for R&D
2. Government supports science park and software park
3. Tax incentives for R&D expenditures
4. Government funds universities that train Thai researchers

Implications

1. E&E industries including software
2. New business opportunities for new products
3. Technology transfer from NSTDA to private sectors
4. Expanding Thai economy into new areas, such as GPS in automobile industries, etc.

2. World economic crisis (episode II)

Signals

1. Increase in worldwide unemployment
2. Increases in oil price
3. Terrorism
4. Chinese economic bubble burst

Implications

1. Collapse of Thai E&E industries
2. High unemployment rate
3. GDP regression
4. Thai agriculture and food industries strengthened

3. Free internet access

Signals

1. 1 baht/hour Internet charges
2. TOT's free 2-hour Internet usage
3. Community Internet services (available at Tambol level)

Implications

1. Increased market for PCs, software
2. Explosion of Internet usage
3. E-learning boom (including improvement in conventional education systems)

4. Thai telecommunication operators launch real 3Gs Service

Signals

1. Progressive new mobile telephone services available
2. 3Gs technologies for standard services available in many countries

Implications

1. Upgrading Thai telecommunication services to equal those in developed countries
2. Projecting Thai citizens into a more dynamic society (virtual communities)
3. Problems related to privacy of personal information

Group 4

1.  EU WEEE implemented/ Thai WEEE established 

Signals

1. Thai WEEE study completed 10/03
2. Thai regulations are in process of being drafted

Implications

1. Increase in production cost
2. Increased investment in DFE (Design for Environment)
3. Import barrier

2.  Free Trade Association/ World Trade Organization implement zero tariff rate

Signals

1. Bi-lateral negotiation
2. Accelerated "fast track" list of tariff reductions
3. Flooding of imported goods

Implications

1. High competition
2. More preparation for newly created NTBs
3. Sustainability of local manufacturers
4. Economy of speed

3. More Nano application

Signals

1. Nano Center established by NSTDA
2. Progress of Nano application development reported in major manufacturers

Implications

1. Pressure on need of future competent HRs
2. Product form & function differentiation

4. Full e-government activities

Signals

1. Government policy
2. Globalization drives
3. Cheaper technology

Implications

1. Huge demand of PCs and peripherals
2. Supporting ICT human resources & software development

Scenario Exercise

We began the scenario construction exercise the second day, Thursday. We used the SRI six-step scenario development model for the exercise. We divided into three groups, each group representing an industry.

Step 1. Decision Focus

The first step was to determine the decision focus of the scenarios for that industry. After a good deal of discussion, we agreed that the decision focus of each group was "How can we increase the competitiveness of the industry in the global marketplace?"

Step 2. Key Decision Factors

Electrical appliance industry

Social  

1. How will the Thai brand be received globally?  
2. How receptive will the global market be to "smart" houses?
3. What electrical appliance products with the younger generation want?  

Technological

1. Will we go from C&D to R&D centers?
2. Will our competitors develop total human resource centers?  
3. What will be our competitors' management capabilities?  
4. Will our competitors have "one-stop service" for testing and facilities for exporting?  
5. What will be the state-of-the-art new products?  
6. Will our competitors accelerate their R&D capability by importing experienced engineers?
7. What will be the availability of experienced engineers for Thai companies?

Economic  

1. What is the market for agritronics?  
2. What is the market for meditronics?  
3. What new markets should we seek?

Environmental  

1. Where are international standards going?  
2. What will be the market perception of suitable standards for electrical appliance?   

Political  

1. To what extent will MRAs (Mutual Recognition Agreement) develop in the global marketplace?  
2. Will the Thai government policy regarding customs and procedures change so that exports and imports can be handled more quickly and efficiently?  

Electrical and electronic components industry

1. What are the electronic component global market trends?
2. What are potential technological developments that will affect our industry?
3. What government regulatory policies (current and potential) will affect our industry?
4. What international standards affect electronic components? What will these standards be in the future?
5. What strategies are our major competitors using? What may they develop?

Software industry

1. What types of software will users need in the next 10 years?
2. What software will our competitors be developing in the next 10 years?
3. What innovations in software development will occur in the next 10 years?
4. What are Thai software capabilities now? What will they be in the future?
5. To what extent will the Thai government support the development of the Thai software industry now and in the future?
6. What are the major software developers' pricing strategies now? What will they be in the future? Will they allow "value-added" development?

Step 3: Key Environmental Forces

Electrical appliance industry

[Need to get]

Electrical and electronic components industry

High impact, low probability events

1. Thailand becomes center of agritronic products  
2. Thai government fully or partially subsidizes testing and certification of product quality  
3. Government funds electrical and electronic R&D  
4. World electronic crisis  
5. Full e-government activities  

High impact, medium probability events

1. R&D reborn  
2. Thai telecommunication operation launches real 3Gs service  

High impact, high probability events  

1. All government procurement and operation via ICT  
2. More Nano application

Medium impact, medium probability  

1. Free access to the Internet

Low impact, high probability

1. Government-regulated EE mandatory standard  
2. EU WEEE implemented/Thai WEEE established
3. FTA/WTO zero tariff rate  

Software Industry

1. Thai microchip enters the global market in 2008 (E1, K3)
2. Thai government forces all sectors to use Thai software by 2010 (E2,K5)
3. India's software city collapses (E3,K2)
4. Microsoft is bankrupt (E4,K1,6)
5. Free Internet access for everyone nationwide (E7,K1,5)
6. In 2010, Thai software SMEs will increase tenfold (E8,K6)
7. Software innovation/research will increase 10 times higher (E10,K4,3)
8. International firms assist Thai software development (E9,K-)
9. Software markets will increase tenfold (E11,K)
10. Cyber society will predominate (E13,K)
11. Software (industrial estate) (E14,K)

Step 4: Establish the Scenario Logics

There were three events that each group identified as high impact events: Global economic crisis, development of e-governments (all government business conducted electronically), and R&D rebounds. We chose to use the first two events to develop four scenarios: e-government in a global economic crisis, e-government in a prosperous global economy, government as usual in a global economic crisis, and government as usual in a prosperous global economy.