STRATEGISING AGRO- -INNOVATION INNOVATION STRATEGISING AGRO - - PowerPoint PPT Presentation

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STRATEGISING AGRO- -INNOVATION INNOVATION STRATEGISING AGRO - - PowerPoint PPT Presentation

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STRATEGISING AGRO- -INNOVATION INNOVATION STRATEGISING AGRO SYSTEM: SYSTEM: THE CASES OF THAILAND AND VIETNAM THE CASES OF THAILAND AND VIETNAM PUN-ARJ CHAIRATANA BACH TAN SINH Globelics conference, Rio de Janeiro 2003 Theme C: The

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PAC and BTS 2003 Strategising Agro-Innovation System

STRATEGISING AGRO STRATEGISING AGRO-

  • INNOVATION

INNOVATION SYSTEM: SYSTEM: THE CASES OF THAILAND AND VIETNAM THE CASES OF THAILAND AND VIETNAM

PUN-ARJ CHAIRATANA BACH TAN SINH Globelics conference, Rio de Janeiro 2003 Theme C: The Transformation of innovation systems

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PAC and BTS 2003 Strategising Agro-Innovation System

Content Content

  • Conceptual framework
  • Thai agro-innovation system
  • Vietnamese agro-innovation system
  • Conclusion
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PAC and BTS 2003 Strategising Agro-Innovation System

South East Asian as World South East Asian as World’ ’s s Rice Bowl Rice Bowl

  • Most of ASEAN agro-based economies has successfully adopted the

1st Green revolution, but inequality of income distribution among rural and urban areas exists

  • Crop yields have multiplied with the applications of scientific research

and development, new farming techniques and irrigation

  • Quality of products, capital resources management and marketing

capability developments are evidently improved

  • In terms of employment, agriculture remains the biggest component of

the ASEAN economies, it accounts for some 70% of the total employment

  • Agricultural development continues to be vital to overall economic

growth due to the multiplier effect factor, despite declining contribution of agriculture as a percentage of GDP

  • Over 20% of food exports to developed countries comprises

processed foods (or three times the amount from developed countries)

  • The food producing economies in ASEAN + China are becoming a

major world producer and supplier of food

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PAC and BTS 2003 Strategising Agro-Innovation System

Agro Agro-

  • Innovation System and

Innovation System and Foresight Foresight

  • Agro-Innovation System (AIS) systematises the

agricultural sector in holistic approach

  • To understand the dynamics of agricultural

sector and its relationships to other sector in generating growth and prosperity

  • Sectoral innovation system and clustering

approaches

  • Foresight is an effective and useful tool for

strategic planning and to understand the dynamics of sector

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PAC and BTS 2003 Strategising Agro-Innovation System

Innovation system and Innovation system and Foresight Foresight

Feedback /Learning

People who understand markets

Communication

People who understand technologies Concentration

Possible Futures Attractive Futures Foresight Dialogue Co-

  • rdination

Consensus Commitmen t

Innovation And Competitive Advantage Feedback/Learnin g

Knowledge Information

Knowledge Information

Local Innovation System Regional Innovation System Sectoral Innovation System

Clusters Clusters

National Innovation System Corporate Innovation System Corporate Innovation System

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PAC and BTS 2003 Strategising Agro-Innovation System

Thai & Vietnam Foresight Agro Thai & Vietnam Foresight Agro-

  • food

food Technology roadmap architecture Technology roadmap architecture

Market/ industry trends, drivers, key issues and uncertainties

Evolution of required and desired functional performance of agriculture Required and desired technological response, including research needs

NOW VISION

+5 years +20 years +10 years +15 years

Trends and drivers Performance Measures and targets Technology and research

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PAC and BTS 2003 Strategising Agro-Innovation System

FOOD PROCESSING FOOD PROCESSING INDUSTRY IN INDUSTRY IN THAILAND THAILAND

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PAC and BTS 2003 Strategising Agro-Innovation System

Composition of the Thai food industry

  • Food processing industry has been key strategic sector in National

Social and Economic Development Plan since the 1960’s

  • There are more than 8,000 factories in Thailand
  • employed 570,000 persons – 20 million including related sectors
  • The majority of these establishments are relatively small.
  • Sugar and fishery products belongs to large firms
  • 70% of raw material counts for local content
  • 80% of raw food material of local market
  • 9.6% of GDP and 14.4% of total exports in 2002 with average

annual growth of 13%

  • Product champions are frozen shrimp (25% of total world market),

pine apple (45% of total world market), and Frozen chicken (6% of total world market) – in year 2000

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PAC and BTS 2003 Strategising Agro-Innovation System

The King and agriculture The King and agriculture

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PAC and BTS 2003 Strategising Agro-Innovation System

Food processing sector in Thailand at a glance

Source: National Food Institute of Thailand

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PAC and BTS 2003 Strategising Agro-Innovation System

Thailand NIS in Brief Thailand NIS in Brief

  • Thailand is similar to the East Asian NIEs by having its economic

structure change from an agriculture-based economy to an economy in which the industrial (manufacturing in particular) sector has gain distinctive significance.

  • Low technological capability in Thai firm
  • No articulated government policy to support innovation process
  • Dynamic and high growth rate after financial crisis
  • Static change in academic programme to support new economy, but

high demand in private sector seeks human resources from abroad

  • Transformation can be seen now:

✿ Several conglomerates increased their R&D ✿ A number of smaller companies collaborated with university R&D groups. ✿ Subcontracting suppliers were forced to strengthen their technological efforts. ✿ Emerging new own-designed, start-up firms

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PAC and BTS 2003 Strategising Agro-Innovation System

Foresight projects in Thailand

1995 1995

Future key Technologies for Thailand

Science and Technology in Thailand in the year 2020

Public warehouse

  • rganisation

National Metrology Institute of Thailand Technology Promotion Association

Agriculture Agriculture

IT for education IT for SME

2002 2002 2001 2001 2000 2000 1999 1999 1998 1998 National level National level Sectoral Sectoral level level Organisationnal Organisationnal level level

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PAC and BTS 2003 Strategising Agro-Innovation System

Agricultural Foresight in Thailand

  • Objective:

To plan the development of science and technology in Thai agriculture

  • Main players:

Thai Foresight Unit, NSTDA

  • Methods:

33 experts interviewed with 1070 Delphi Questionnaires, 19.4% success rate and 36 in Scenario workshop

  • Time Frame:

10 years

  • Outputs:

Good governance, R&D on Local knowledge, database, grass rooted organisation

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PAC and BTS 2003 Strategising Agro-Innovation System

Three scenarios of Thai Three scenarios of Thai Agriculture foresight Agriculture foresight

  • Thailand as kitchen of the world
  • Thai technology is widely used for national

agricultural development

  • Harmonious cooperation among private sector,

farmer and government

  • Three dimensions applied from STEEP

dimensions are included

– Managerial dimension – Technological dimension – Policy dimension

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PAC and BTS 2003 Strategising Agro-Innovation System

North Bangkok North Bangkok Food processing industry Food processing industry

5 4 3 2 1

AYUTTHAYA PATHUMTHANI BANGKOK

HI-TECH Industrial Estate

  • Fromost Friesland (Thailand) Public Co.,Ltd.
  • Ajinomoto Frozen Foods (Thailand) Co.,Ltd.

Total Food Industries : 2

ROJANA Industrial Park

  • Pacific Aladin Co., Ltd.
  • P.S. International Food Co.,Ltd.
  • Metro Food (1999) Co.,Ltd.
  • Ken Foods Co.,Ltd.
  • Thai Nippon Foods Co.,Ltd.

Total Food Industries : 5

NAVA NAKORN Industrial Estate

  • Asan Service Co., Ltd.
  • Baskin-Robbins Co.,Ltd.
  • BB Co.,Ltd.
  • M.K. Restaurant Co.,Ltd.
  • Nestle Foods (Thailand) Co.,Ltd.
  • Sara Lee Coffee & Tea (Thailand)Co.,Ltd.
  • Snacky Thai Co.,Ltd.
  • Sun Foods Co.,Ltd
  • Central Van Melley Confectionery Co.,Ltd
  • Nutritional Product (Thailand)Co.,Ltd.
  • Siam Cona Co.,Ltd.

Total Food Industries : 11

BANGKADI Industrial Estate

  • Thai Glico Co.,Ltd.
  • Gardenia Food (Thailand) Co.,Ltd.

Total Food Industries : 2

BANGPA-IN Industrial Estate

  • Winner Foods Co.,Ltd.
  • Inbisco (Thailand) Co.,Ltd
  • Alfredo Enterprise Co.,Ltd.
  • A.S & V Intertrading Co.,Ltd.
  • Siam General Food Co.,Ltd.

Total Food Industries : 5

TSP

Surrounding

Total Food Industries : 32

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PAC and BTS 2003 Strategising Agro-Innovation System

Northern Thailand and agriculture

  • Cut-flower cluster
  • Rice
  • Tropical fruit

preservation

  • Transportation

hub of central sub- Maekong region

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PAC and BTS 2003 Strategising Agro-Innovation System

FOOD PROCESSING FOOD PROCESSING INDUSTRY IN INDUSTRY IN VIETNAM VIETNAM

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PAC and BTS 2003 Strategising Agro-Innovation System

Siuation of Vietnam agro-food processing industry (1)

  • Agro-product processing of Vietnam is still less developed,

leading to low quality products and economic inefficiency;

  • However, food processing sector is growing:

– 6.7% of GDP in 1991 – Food processing growth of 14% annually while GDP growth of only 8.9% annually during 1991-1997

  • The total estimated value of food processing is 2 billion US$

(1997), representing 8.8% of GDP and 35%of industrial value added;

  • 5000 rice milling units with total capacity of 20,000 tons/day (1000

SOEs and 4000 private ones);

  • 13 SOEs of vegetables and fruit processing. Most units with 100%

foreign capital use imported equipment and technologies, can produce high quality products mainly for export;

  • 50 Coffee processing units (14 equipped with foreign technologies)
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PAC and BTS 2003 Strategising Agro-Innovation System

Siuation of Vietnam agro-food processing industry (2)

  • 75 tea industrial processing and 12,000 private processing units
  • 53 sugar processing units with equipment imported from various

countries

  • A few processing units for livestock products and fish
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PAC and BTS 2003 Strategising Agro-Innovation System

Challenges/issues for Vietnam food processing industry

Unstable, fragmented and low-quality supplies of raw material for processing. Lack of capital for investment to expand the production areas and modernise the equipment and technologies. Poor infrastructure such as transportation means, storage facilities. Lack

  • f

highly-qualified people, both technically and managerially. Low investment in research on processing. Lack of specific and realistic Government policies for the promotion of processing.

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PAC and BTS 2003 Strategising Agro-Innovation System

Vietnam NIS in Brief Vietnam NIS in Brief

  • Vietnam is similar to Thailand and other East Asian NIEs by having its

economic structure change from an agriculture-based economy to an economy in which the industrial (manufacturing in particular) sector has gain distinctive significance.

  • Low technological capability in Vietnam firm
  • Weak interactions among actors

– weak links between research and industry; – domestic enterprises underestimate potential support of local research institutions; – Miss-match between capabilities at R&D institutions and technology demand of enterprises

  • Poor institutional framework for innovation:

– Lack of intermediary institutions/agencies for facilitation of innovation process; – Policies not consistent and sometime conflicting each other;

  • Lack for motivation of innovation

– limited investment by enterprises to use and exploit technologies; – Limited technology learning of enterprises from foreign partners; – No venture capital

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PAC and BTS 2003 Strategising Agro-Innovation System

FOOD PROCESSING FOOD PROCESSING FORESIGHT IN FORESIGHT IN VIETNAM VIETNAM

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PAC and BTS 2003 Strategising Agro-Innovation System

Foresight projects in agro-food industry in Vietnam

Agriculture Agriculture

Food-Processing Tea industry

1995 1995 TF Application for setting S&T priorities in VN 2002 2002 2001 2001 2000 2000 1999 1999 1998 1998 National level National level Sectoral Sectoral level level Organisationnal Organisationnal level level

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PAC and BTS 2003 Strategising Agro-Innovation System

Food Processing Foresight in Vietnam

  • Objective:

To set up S&T Priorities food-processing industry in Vietnam

  • Main players:

TF Research Department, NISTPASS with assistance from APEC TF Centre

  • Methods:

30 experts from food-processing industry, managers from MARD, researchers from research institutions and universities and scenario workshop

  • Time Frame:

2001-1025 (15 years)

  • Outputs:

3 scenarios developed; a number of S&T priorities for food industry identified

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PAC and BTS 2003 Strategising Agro-Innovation System

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PAC and BTS 2003 Strategising Agro-Innovation System

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PAC and BTS 2003 Strategising Agro-Innovation System

Tea industy Foresight in Vietnam

  • Objective:

To set up S&T Priorities in tea industry in Vietnam

  • Main players:

TF Research Department, NISTPASS with assistance from APEC TF Centre

  • Methods:

100 experts from Tea industry, researchers from research institutions and universities and scenario workshop

  • Time Frame:

2001-2020 (20 years)

  • Outputs:

4 scenarios developed; a number of critical strategic areas for VN tea industry up to 2020 (quality, marketing, management and policies) identified; some immediate actions to be followed up

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PAC and BTS 2003 Strategising Agro-Innovation System

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PAC and BTS 2003 Strategising Agro-Innovation System

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PAC and BTS 2003 Strategising Agro-Innovation System

Interfacing TF with Strategic Planning and Decision Making in Vietnam: some challenges

  • Follow-up with the results from TF for users;
  • From user side: long-term visions are temporally

not the centre of attention among manager and business communities;

  • From supplier side: very beginning stage of

capacity building can not supply and prove more evidence of success to potential clients

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PAC and BTS 2003 Strategising Agro-Innovation System

Mapping ASEAN Agro Mapping ASEAN Agro-

  • Innovation System

Innovation System

Weaknesses

  • Weak linkages among

stakeholder

  • Competing in the same

products

  • Technological

backwardness in some area (rural area) cause low productivity and quality Strengths

  • Varieties of primary and

secondary products

  • Cost advantages
  • Location
  • Food culture (Thai and

Vietnam cuisines)

  • Complementary from

related sector (handicraft and tourism)

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PAC and BTS 2003 Strategising Agro-Innovation System

Mapping ASEAN Agro Mapping ASEAN Agro-

  • Innovation System

Innovation System

Opportunities

  • Upgrading to higher

manufacturing standards and technological innovation

  • planning agricultural

development in more dynamic and holistic ways

  • To become “industrial” in the

form of “factory production”

  • Large-scale industrial systems

for growing and breeding, production and processing can be introduced to manufacture food products for the world market Threats

  • Trade and non-trade barriers
  • Higher quality and standard

demands from importers (HACCP, ISO 14000 etc.)

  • Price competition from lower

cost economies

  • Decreasing of labour and

professions in related fields (farming and fishery in particular, in Thailand and Malaysia)