The Acceleration of Technological Progress Has Created an Urgent Need for a Counter- Ballast : High Touch Experience

• Heart transplants and brain scans have led to a new interest in family doctors and neighborhood clinics

• Jet airplanes have resulted in more face-to-face meetings

Level of Customization

Leve

l of S

ophi

stic

atio

n

High Tech

Low Tech

Low Touch High Touch

Video GamesVideo Games AdvertisingAdvertisingArchitectureArchitecture

ArtArt

CraftCraft

DesignDesignFashionFashion

FilmFilmMusicMusic

Performing ArtsPerforming ArtsPublishingPublishing

R&DR&DSoftwareSoftware

Toys and GamesToys and Games

TV and RadioTV and Radio

The Emergence of Creative Economy

In the Creative Economy, the Most Important Intellectual Property Is Not Software or Music or Movies, it is the Stuff Inside Employee’s Heads

TechnologyConcept

Value

Source: Cagan and Vogel

High

Low

HighLow

Market to Book Value

Sources: CFO Magazine, Feb 2000

3.52.51.5

.50

4.55.56.57.58.5

12.5

9.510.511.5

Airline 1.53

Motor Vehicle 2.75

Specialty Retailers 5.94

Beverage 6.96

Cosmetics 10.08

Software 12.07

Oil and Petroleum 3.77

Semiconductor 5.82

Telecom 7.94

Pharmaceuticals 11.83

The Chemistry of the Creative Economy

Product and Graphic Design

Communications

Spatial Design

Substance

Central Message

Structure

Form

PeripheralMessage

Symbolism

AES

THET

ICS

FUN

CTI

ON

ALI

TY

Oxygen Bar

Organic Food Store

Natural Therapy Shop

OrientalChinese Boutique

BuddhismAlternative Medicine

Alternative Therapy

Cooking/Painting ClassesNatural Beauty Treatment

Zakka Boom

Exploring Local-Contemporary designed products Exotic Boutique Hotels

Emerging Value

Source: Leo Burnett

People Make Up Their Own Life Stories…”The Art of Living”... Instead of Following Traditional Patterns

• A perfume made by the Gandh Sugandh company in Mumbai, is very successfully sold in Paris, purveys a little Hindu culture with each bottle

• Urvashi was the celestial dancer who gave the gift of theatre to mankind

UrvashiUrvashi

Mont BlancMont Blanc

• Currently carrying a promotion which celebrates the genius of Mozart

• Mont Blanc is originally German company with French name currently owned by a Swiss corporation

• Mont Blanc embraces not only Austrian composers, but is associated with artists and musicians from a wide range of countries

• The net effect is a European brand representing European culture

Culture As Revenue Earner

Source: Simon Anholt

Consumption Emotions

ANGERANGER DISCONTENT

SADNESSSADNESSWORRYWORRY

FEARFEAR SHAMESHAME LONELINESSENVYENVY

ROMANTIC LOVELOVE CONTENTMENT

PEACEFULNESS

OPTIMISM JOYJOY OTHER ITEMS

EXCITEMENT

• Frustrated• Angry• Irritated

• Unfulfilled• Discontented

• Nervous• Worried• Tense

• Depressed• Sad• Miserable

• Lonely• Homesick

• Envious• Jealous

• Embarrassed• Ashamed• Humiliated

• Scared• Afraid• Panicky

• Sexy• Romantic• Passionate

• Sentimental• Loving• Warmhearted

• Calm

• Peaceful

• Contended• Fulfilled

• Optimistic• Encouraged• Hopeful

• Happy• Pleased• Joyful

• Exited• Thrilled• Enthusiastic

• Guilty• Proud• Eager

Creative Economy Requires the Knowledge Driven Platform

Investment Driven Platform

Job Creation

Wealth Investment

FinancialCapital

Physical infrastructure as an enabler

ICTas an enabler

ConstructiveEnvironment

Talents

Value Created

Knowledge Driven Platform

Wealth

The Global Forces and

Trends

The New Competitive Landscape

Thailand’s Ability to Compete

Re-managing Thailand

• The End of the Industry Economy andThe Emergence of the Creative Economy

• The Fragment of the Nations and the Rise of the Company States

• The Eruption of Nanosecond Culture andthe Age of Disruption

We Are Coping With ‘Nanosecond Culture’

• There are a new patent issued in the US every 3 minutes

• One hundred twenty-five new products arrive in supermarkets every weekday

• Technology has always put us within reach, anywhere, any time, and in multiple ways

• Most of the radical changes are ‘Intra-Generation Changes’

Instance Obsolescence

Infinite Reach

Intra-Generation Changes

Time to Mass Market

Sources:Sam Hill

No.

of Y

ears

60

50

40

30

20

10

01860 1880 1900 1920 1940 1960 1980 2000

Auto

Electricity

Phone

RadioTV

VCR

Microwave

PCCell Phone

WWW

Compression of The PLCR

even

ue

Time

Sales

Sales

ProfitProfit

The Drastic Changes Can Partly Be Explained By the Law of Disruption...

Time

Cha

nge

Political Political ChangeChange

Business Business ChangeChange

Social Social ChangeChange

Technology Technology ChangeChange

UncertaintyUncertainty

ComplexityComplexity

Second Order Effect

IrreversibilityIrreversibility

InterdependencyInterdependency

SynchronicitySynchronicity

ChangesChanges

StabilityStability

Management, therefore, Needs to Redefine ‘Change’...

PastPast FutureFuture

Today’s Agenda

The Global Forces and

Trends

The New Competition

Thailand’s Ability to Compete

Re-managing Thailand

Place to WorkPlace to Work

Place to ShopPlace to Shop

Place to VisitPlace to Visit

• Natural attractions• Man-made attractions• Hospitality• Hotels and Resorts• Cost• Occasions• Activities

Place to InvestPlace to Invest

Place to LivePlace to LiveProduct to BuyProduct to Buy

• Salary• Benefits• Business Environment• Colleagues• MNCs/ Regional Headquarters• Local Firms• Language• Profession• Lifestyle• Visas & Work Permits• Tax System

• Lifestyle• Real estate and housing

• Permanent Residency• Citizenship

• Schools• Medical Care

• Social Security• Standard of living

• Degree of Freedom• Official Language

• Environment and Sanitation• Human Rights

• Regulation

• Market Access• Rules and Regulation

• Investment Rate of Return• Perceived Risk

• Workforce• Labor Cost

• Political Stability• Tax Incentives

• Language• Support Industries

• Foreign Business Act• Business Environment

• Business Potential• Infrastructure & Utilities

• Industrial Clusters• Degree of Industrialization

• Product Variety• Pricing• Product Quality• Specialty Stores• Niche Products• Niche Markets• Marketplace

Place to LearnPlace to Learn

• Quality• Value• Price• Niche Products• Competitive Products• Product Safety• Innovation Technology• Standard

• Tuition Fee• Cost of Living• Lifestyle• Language• Campus environment• Standard• Education System• International Reputation

Place in Competition

Asia’s Best Cities

Rank

Source: Asiaweek, Dec 15, 2000

City Country

12344....

FukuakaTokyo

SingaporeOsakaTaipei

.

.

.

.

JapanJapan

SingaporeJapan

Taiwan....

KaohsiungChiangmai

MacauShanghai

BeijingBangkok

TaiwanThailand

ChinaChinaChina

Thailand

121314151617

Asia’s Top Brands

Rank Brand Category Origin

1 Singapore Airline Airline Singapore2 Speedo Apparel Australia3 Shangri-La Hotel Hospitality Hong Kong 4 Lee Kim Kee Food and Beverage Hong Kong 5 Foster’s Alcoholic Beverage Australia 6 Qantas Airline Australia 7 Sound Blaster I/T Singapore8 Acer I/T Taiwan9 Star TV Media Hong Kong

10 Cathay Pacific Airline Hong Kong11 Mandarin Oriental Hospitality Hong Kong12 Thai Airway Airline Thailand

Note: Not include JapanSource: Pual Temporal

Spirit of their People

Hong Kong• Their unstoppable energy• ‘Can-do’ approach to life (‘hoh yi’)

Belfast

• People’s genuine warm welcome• Their humor• Sense of optimism

Wales

• The spiritual yearning of the country• The resilience• The strength of feeling in communities resonate

through poetry and music and in the ups and downs of everyday life

Thailand ??

Question: In which sectors do you think France ranks among the world’s leaders?

Responses:FashionWinesCulture (music,books,films)Military armamentsNuclear energyMedical researchAerospaceTelecommunications and computersPetroleum and natural gasOther areas

55%52%28%11%10%8%4%4%2%4%

Top of Mind

Question: When you think of products made in France, which are those which come to mind?

Responses:Wines, champagnes, liquorsFashion and shoesFoods and cheesesAutomobilesFurnitureChemicalsSpecial industries

84.7%80.7%57.4%51.8%23.8%16.8%16.3%

Made in France

Image Positioning of FranceFAVORABLE

OPINIONTechnology• The latest technology?• Advanced technological researchManufacturing

• Excellent production capacityMarketing• Marketing ability in the foreign marketsBusiness Attitude• Understanding of the foreign markets• Agreeable to do business withPublicity• Understanding of public relations and publicityProduct quality• High price• Good relationship between quality and price• Good quality• Good durabilityService• Accessibility• Excellent after-sales service

27%9%

9%

4%

4%5%

5%

48%6%

13%16%

4%4%

Perceived Product Quality

JapanGermanyUKSwedenFranceItaly

72%14%6%5%4%2%

An Improvement in French Image

IN A RELATIVELY SHORT TIME PERIOD

• Building on strong point where the image and the commercial reality are good-- Cosmetics, agricultural-nutritional products, tourism

• Building on strong points where the image is good but French commercial performance is unsatisfactory--Fashion

• Building on strong points where the image is weak in spite of the good performance of French exports to the foreign markets--Automobiles, aeronautics, aerospace, optics, energy including nuclear, hydraulic, offshore petroleum, and information

A LONGER TERM IMPROVEMENT

• Building on French strong points where her image is either unknown or poor and the commercial performance is very weak--Rail transportation, construction

Image Positioning of French Businessmen

• Lack of perseverance and aggressiveness in their business efforts• Do not know how to adapt their products to the foreign market• Don’t keep their commitments particularly date of delivery and

promised quality and quantity• Have a bad after-sales service• Have a tendency toward secretiveness; do not supply information

especially financial information about their companies• Do not know how to listen or accept foreign ideas--too arrogant

and sure of themselves• Poorly prepare their business trips• Inaccessible• Do not make an effort to speak English

Germany

France

Italy

Britain

Japan

USA

Engineering Culture

Chic Culture

Sexy Culture

Heritage Culture

Technology Culture

Youth Culture

Culture as the Root of Competency

Cultural OrientationCultural OrientationCountryCountry

Thailand

Our Flagship Products

Finland

Switzerland

Ireland

Scotland

India

Singapore

Mobile Phone

Pharmaceuticals; Tourism; Foods; Watches

Wireless Technology

Whisky; Biotechnology; Energy

Software; Talents

Professional Services; Regional Financial Center

Source: Moving the Nation by Dr. Suvit Maesincee

Thailand

Country Campaign Slogan

Thailand

Place Slogan

Amazing Thailand

Vietnam

Nepal

Australia

Scotland

Spain

A Destination of the New Millennium /Enchantment for the Next Thousand Years

Mt Everest and More

Australia 2000 Fun and Game

Silicon Glen

Everything Under the Sun

City/City-State Campaign Slogan

MacauMaldivesSingaporeHong KongPerthFlandersMiamiSouth Australia

Place Slogan

Macau Welcomes YouThe Sunny Side of LifeLive it Up in SingaporeCity of LifeBest on Earth in PerthEurope’s Best Business LocationFinancial Capital of South AmericaRelax, Indulge, Discover, Enjoy

Chiangmai ???

Image Positioning Statements

Philippines

Siargao

Hong Kong

West Bengal

Sydney

Osaka

Singapore

Place Positioning

Call Center Hub of Asia

Surfing Capital of Asia

Asia’s World City

Gateway to the East

Cultural Capital

Sports Paradise

Tourism Capital

Chiangmai ???

Visual Symbols

Opera House

Great Wall of China

Taj Mahal

Big Ben

Eiffel Tower

Red Square

Statue of Liberty

Corcovado-Christ Statue

Sydney

Beijing

Agra

London

Paris

Moscow

New York

Rio de Janeiro

Bangkok ???

Today’s Agenda

The Global Forces and

Trends

The New Competitive Landscape

Thailand’s Ability to Compete

Re-managing Thailand

Gro

wth

in Im

port

Sha

re

Growth in Export Share

Source: WTO International Trade Statistics 2001

- 1

0

1

2

3

4

- 1 1

US

ChinaIndiaVietnam

Philippines

Malaysia/IndonesiaThailandThailand

Singapore

Japan

EU

Our Level of Internationalization

5

q1/96

q 1/97

q 1/98

q1 /99

q 1/00

q1 /01

q 1/02

Export Price Index

Export Volume Index

-13.8

8.817.1

-9.2

Baht Devaluation

Our Export Performance

Source: Ministry of Finance

Correlation of Structure of Manufacture Export

Our Major Competitors

Source: Lall et al (1999)

China

China

Hong Kong

Hong Kong

Indonesia

Indonesia

South Korea

South Korea

Malaysia

Malaysia Philippines

Philippines

Singapore

Singapore

Thailand

Thailand Taiwan

Taiwan

1

0.59

0.35

0.21

0.17

0.35

1

0.31

0.20

0.570.57

0.40

0.43

0.44

0.51

0.36

0.540.54

0.17

0.18

0.21

0.07

0.210.21

0.09

0.10

1

0.66

0.66

0.520.52

0.64

0.73

1

0.74

0.590.59

0.67

0.82

1

0.580.58

0.56

0.62

1

0.81

0.700.70

1

0.76

11

1

• Lack of Focus• Lack of Differentiation

Leve

l of I

ndus

try A

ttrac

tiven

ess

• Foods• Garment • Jewelry

• Metals• Petrochemicals• Machinery

HighLow

Thai Producers’ Competitiveness

Low

H

igh

• Leather•Electronics• Autos

• Rubber• Wood Products • Pulp & Paper

• Plastics• Ceramics & Glass• Chemicals

Thai Manufacturing Sector’s Competitive Position

Cluster III

Cluster II

Cluster I

% L

ocal

Con

tent

% Export Share

• Frozen Shrimp80

60

40

20

1 2 3 4 5 6 7 8 9 10 11 12

• Frozen Chicken

• Apparel•

• Precious Stones• Jewelry

Fabric,Woven

•FootwearPassenger Car

• Pick Up•

•Computer Equipment

13

•

Electric Appliances

Zooming in the First Cluster

Lead

ers

Tech

nolo

gyan

d D

esig

nFo

llow

ers

Low Cost

Competitive Advantage

Differentiation

Italy (2)

China (1)

Thailand (11)

Design /differentiation

basedcompetition

Low Cost-basedcompetition

Competitive Nutcracker: Apparel

Hong Kong (3)

Top ThreeTop Three

15,60015,700

16,400

18,500

1,044 1,080 1,105 1,259

ThailandThailand

ChinaChina

ItalyItaly

Hong KongHong Kong

1997 1998 1999 2000

Thai Service Sector’s Competitive PositionLe

vel o

f Ind

ustry

Attr

activ

enes

s

HighLow

Thai Producers’ Competitiveness

Low

• Distribution• Financial

Services• Transports

• Business Services • Communications• Environmental

Management

• Construction & Engineering

• Education• Health & Social• Tourism &Travel• Recreation, Culture,

Sporting

Hig

h

The World Top 15 Tourist Destination# of Tourist Arrivals(Mil)

Receipts (Bil.$US)

30

45

60

75

5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90

• •

•

•

••

• • ••••

• • • •

France

Spain

Italy

USA

UKChina

GermanyRussia

ThailandGreeceHong Kong

Mexico CanadaAustriaPolandHungary

20