Discussion Paper Series

2013-03
Strategies for Creative Industry Development,
Case of Thailand
Motohiro Kurokawa

November 1, 2013

Discussion Papers can be downloaded:
http://www1.tcue.ac.jp/home1/c-gakkai/dp/dp13-03

Strategies for Creative Industry Development, Case of Thailand1
Motohiro Kurokawa2

1. Introduction
Middle income countries like Thailand have been achieving economic growth throughsuccessful industrialization, governments are currently eager to upgrade their industrial sector
by enhancing creative industry.

This perspective is crucial for middle income county to escapefrom ‘middle income trap’, by remaking economic growth with labor shortage.

Creativeindustry is usually defined as knowledge-intensive industry, source of those are intangible
goods such are, high-end technology, methodology, system or design, usually brought by skilledhuman resources.

Amongst industrial sectors, art industry, media industry, software industry

or design oriented products are sort of it, to develop and improve those economic activities,
there must be essential needs to provide different types industrial policies and human resource
development program, if we compare to the period when those middle income countries had
been promoting capital intensive industries.
In this study, Thailand is mainly taken as a case, current policies regarding creative
industry development is reviewed, effectiveness and feasibilities of those are the main issues todiscuss.

In Thai, Ministry of Industry is focusing on creative industry development tostrengthen industrial structure, and Ministry of Commerce is interested in the industries for theirexport promotion.

Additionally, Office of Prime Minister is also supporting perspectives

above, the word ‘creative’ is adopted 46 times in the 11th National Economic and Social
Development Plan, currently in the process.
This paper is composed with 5 chapters, definition and present situation of creative
industry are discussed in the second chapter, and feasible policy options as lessons fromdifferent countries and potentials of Thai are reviewed in the third chapter, then in the fourth
chapter, industrial policies in Thailand is analyzed.

The fifth chapter is a conclusion part.

2. Definition and Coverage of creative industry
In this chapter, creative industry is originally defined and its potential as a strategic
export goods is explained through some export statistics.
Basic framework of ‘creative industry’ is firstly defined in UK, then spread aroundEuropean regions, each country has selected different industrial sectors in line with theirstrength and interests. As shown in Table 2.1, typical industrial sectors categorized as creative
industry are mainly 13 sectors 3 .

Considering each characteristics, it is not difficult tounderstand those as creative economic activities.

UNCTAD (2008) explains, in combination

with human capital, Structural or institutional capital, social capital and cultural capital are
resource of creative goods and services, listed industries are definitely within the range.

Table 2.1 Target industrial sectors by country

Architecture
Audio-visual (film,
TV, radio)
Performing arts
Libraries
DesignArt market
publishing
FashionSoftware /multimedia
Museums / cultural
heritage
Music
CraftsAdvertisingUK

Germany

*

*

Spain

Thailand

*

*

*

*

*

*
*
*
*

*
*
*

*

*

*
*
*

France

*

*
*

*

*
*
*

*
*

*
*

*
*
*

*

*

*

*

Thai food, Traditional
medication**

Source: BOP Consulting (2010), Ministry of Industry, Thailand

In the very right hand row, selections by the Thai government are shown there, in
addition to increase modern sectors, they are planning to utilize cultural capital, which is quite
feasible idea in terms that abundant capital should be fully used to raise comparative advantage.
Chart 2.1 is trying to define creative industry among various spices of industrial type.
This chart is mapping typical industrial type in relation to capital-labor ratio (K/L) and laborproductivities (X/L).

In our general understandings, during the long term transition ofindustrial development, from labor intensive to capital intensive, industrial economy has
succeeded to improve productivity by increasing capital-labor ratio.

Thailand also

accomplished to transform their main industrial sector by shifting it from labor intensive
industry to capital intensive industry. But, accounting for characteristics of creative industry,which can be summarized as knowledge intensive type, capital-labor ratio could be smaller thancapital intensive industries, because it is heavily depend on human skills rather than capital
input.

And the fact that smaller number of knowledgeable labor efficiently bring about larger

output, labor productivities is projected to be larger than capital intensive industries. Having
said that, creative industry can be developed by smaller capital investment, which is adoptablefor developing economies with scarce amount of capital 4 .

It is also advocating middle

income countries how to provide against labor shortages and increasing labor costs, economic
structure with larger creative industry is supportive regime to sustain economic growth.

K/L

Capital Intensive
Heavy
Light
Knowledge Intensive
Labor Intensive

X/L

Chart 2.1 Figure of creative industry
Source: by author

Among UN agencies, UNCTAD is approaching to creative industry as strategic export
goods, they are providing statistics on creative economy concentrating to the area of traderelated information. 5

It must be useful data, since many countries are supporting creative

industry as part of export promotion policy.
Chart 2.2 shows export amount of creative goods in the world.

In recent decade,export of world total is enormously increasing in, it has performed average 10.0% of growth,from 198 billion (2002) to 454 billion US$ (2011).

It is noteworthy that the amount has

quickly recovered even after the recession in 2009. Comparing exports from developed anddeveloping economies, export from developing economies has increased 145.9% from 2002 to
2011, which is extremely larger than that of developed economies (80.7%), effects of expansion
in creative goods transactions are more contributing to developing economies.6

In the same

period, average growth of developing economies is about 10.8%, and average growth of

developed economies is about 7.3%.

This means, export promotion for creative goods isfunctioning more in developing economies.
To reconfirm differentials among developed and developing economies, share ofexporting creative goods and its transitions are shown in Chart 2.3 and 2.4.

500000450000400000Million US$

350000300000250000200000150000102221.5

10000050000

41567.1

02002 2003 2004 2005 2006 2007 2008 2009 2010 2011World

Developed Econnomies

Developing Economies*

Chart 2.2 Export of creative goods
Source: UNCTAD, statistics on creative economies* Developing economies except China

Chart 2.3 is explaining the case of developed economies.

Among UNCTAD

classifications, 11 crucial sectors are picked up, variety of sectors are holding certain amountof shares, in case of 2011, although Interior (17.84%) and Jewelry (17.48%) are top two sectors,
Fashion (14.11%), New media (12.99%) Publishing (15.12%) and Visual arts (9.72%) are also
keeping relative amount of shares.

Differently, in developing economies, as in Chart 2.4,

share of Jewelry is the largest, which is 35.81% in 2011 and more than doubled from 2002.7
But we have to be careful to the fact that fashion (15.34%), Interior (11.80%) and Toys (10.57%)
are taking larger share, even though highly ranked sectors are similar to developed economies,
there is a possibility that manufacturing processes of those sectors are simply transferred todeveloping economies and the amount of export is resulted to increase naturally, like shown inChart 2.2.

If it is true, increasing in creative goods export does not always prove the increasing

creativities of developing nations, to reconfirm it, we have to seek for evidences that creativevalue-added process such are, designing, drawing or planning are really conducted in

100%

90%
80%

Visual Arts,
9.67

Visual Arts,
10.21

Publishing,
21.16

Publishing,
20.09

New Media,
10.61

New Media,
10.55

70%

60%

Visual Arts,
9.92
Publishing,
17.09
New Media,
15.72

Visual Arts,
9.72
Publishing,
15.12
New Media,
12.99

OthersVisual Arts
Publishing
Performing Arts

New Media

50%

Toys

40%

Jewelry
Interior

30%
20%
10%

FashionFashion,10.49

Fashion,11.33

Fashion,11.67

Fashion,
14.11

2002

2005

2008

2011

0%

Architecture
Audio Visuals
Art Crafts

Chart 2.3 Export of creative goods from developed economies
Source: UNCTAD, statistics on creative economies* Developing economies except China

100%
Others90%

Visual Arts

80%

Publishing

70%

60%
50%

Performing Arts

Jewelry,
14.25

Jewelry,
22.50

Jewelry,
27.47

Jewelry,
35.81

Interior

30%

Fashion

20%

0%

Toys
Jewelry

40%

10%

New Media

Architecture

Art Crafts,
13.55

Art Crafts,
13.93

Art Crafts,
10.89

Art Crafts,
10.29

2002

2005

2008

2011

Audio Visuals
Art Crafts

Chart 2.4 Export of creative goods from developing economies
Source: UNCTAD, statistics on creative economies* Developing economies except China

developing economies.

So, from these information, it is unclear to say that creative industry

has been already growing in developing economies.

But it can be said that upper processes

are gradually transferred to developing economies along with production size, at least, amountof output can support potentials that the creative value-added could be implemented andconducted in near future, if it has not been available up to present moment.

3. Possible plan to promote creative industry
It is generally said in previous studies that the origin of creative industry development
in policy level, it was UK government, when former Prime Minister Tony Blair announced theword “Cool Britania” during election campaign in 1996.

After he was elected in 1997, task

force was immediately launched under his cabinet, which has published two reports as follows.
Additionally in 1998, advisory group for creative industries export promotion was also
launched, and reported the effectiveness of creative industry from the perspective on export
promotion.8
In 1998, 1st Creative Industry Mapping Document (by Creative Industry Task Force)
In 1999, Creative Industry Exports: our hidden potential (by Creative Industries Export
Promotion Advisory Group)
In 2001, 2nd Creative Industry Mapping Document (by Creative Industry Task Force)

But according to discussion by Oshita (2009), those three documents and related
actions have partially contributed to the policy making, because reports were just describing
facts and farther potentials, policy advocacy for development were not contained.

In abovementioned period, efforts by UK government succeeded to implement the word ‘Creative
Industry’ in the policy level, but actions kicked off with the word ‘Cool Britain’ has not reached
to policy making level.

After a while, it was finally concluded as an all-inclusive policy, when

Creative Economy Program has published ‘Creative Britain’ in 2008.

Oshita (2009) also

raised another evidence that budget for creative economy was finally implemented in 2008,
amount of 3 million pounds.

In 2007, Staying Ahead: the Economic Performance of the UK’s creative industry (by Creative
Economy Program)
In 2008, Creative Britain: new talents for the new economy (by Creative Economy Program)Creative Britain, the first comprehensive policy in 2008, was mainly formed by 8
strategies, and 26 commitments are listed as a realistic program to cope with those.

Beforesettlement of Creative Britain, Oshita (2009) says that UK government had been randomly
implementing several policies for creative industry, putting scope to human resource
development was one of features. 9

Creative Britain is also emphasizing such a trend, 11commitments out of 26 are suffering to human resource development.

It is very clear thatcreative industry, heavily dependent upon personal knowledge, could be strengthened throughhuman resource development.
Steering body of creative Britain is basically 3 Ministries, namely DCMS, BIS and
DfEE, and those are linked with committee and group functioning as proxies, additionally,various types of organizations are participating in advocacy, planning, and implementation
stages.

It is also an important fact that activities are decentralized and different organization

implemented original program in different regions.

Understanding creative industry whichshould be diversified, participation of variety of organizations are understandable and filledwith legitimacy as methods for creative industry development.
In UK, there are two reasons that policies are characterized as above. One is declineof manufacturing sector.

It also raised unemployment rate, so vocational training wasstrengthened under the pillar of creative industry development as provisions for it.
Creative Britain naturally driven to centralize human resource development.

Thus,

As a second

reason, there is essential needs of regional development policy to adjust regional disparities.
To fulfill the needs, Creative Britain has a face to encourage regional activities, then, variety ofpolicies are introduced in each regional level.
Chapter 3.1 is trying to explain the effectiveness to attract creative industry in Thailand,
three possible evidences found from current circumstances are shown.
Firstly, as one of developing economies, Thai is classified as follower required tocatch-up with technological level of developed economies.

In the past, advantage for latecomer was automatically given, but Trade Related Intellectual Property Rights (TRIPS) underagreement of WTO will force Thai to spend larger costs in recent situation.

For sustainablegrowth, Thai should enhance innovative capacity to reduce catch-up costs and to be competitivein world market.

Secondly, Asian Economic Committee (AEC) will bring about borderlesstrade without tariff barrier.

In this situation, labor intensive process/industry would transferredto surrounding countries and Thai should be responsible to hold knowledge-based
process/industry.

To accomplish such a role sharing in AEC region, Thai should be morecreative to take care upper processes like, planning, marketing, developing and designing.
Through efforts to support creative industry, human capital capable to work in those process
will be incubated. Thirdly, upgrading manufacturing sector is necessary to provide against
middle income trap.

Increasing income has already caused increased wage and shortage oflabor, Thai economy is demanding more productive industries. Creative industry can be asolution and strong driving force to upgrade Thai economy.

WTO-TRIPS provisions
Enhance development capacity
Reduce catch-up cost

Creative Industry

AEC provisions
Centralize upper process
Increase productivity

Upgrade manufacturing
Transfrom to knowledge intensive
Provide shortage of Labor

Chart 3.1 Importance of creative industry for Thailand
Source: by author

4. Creative industry development policies in Thailand
In this chapter, reconfirming potentials of the Thai creative industry by statisticalinformation, then, projected and ongoing policies are reviewed.
Chart 4.1 is showing rapid growth of the Thai export for creative goods, which has
increased from 28 billion to 61 billion US$ in 10 years. From 2002 to 2011, before launchingcreative industry policy, it has grown up in average 9.14%, it is quite rapid if we are considering
its economic growth in the same period, even it is smaller than average growth of total
developing economies (10.08% in the same period).

In recent three years from 2009 to 2011,

it is currently growing with 17.58% growth rate in average.
To know contributions of various creative industry sectors, Chart 4.2.1 and 4.2.2 aredisplaying export amount by the share to total world exports. The data also task to reconfirm
presences and comparative advantages in world market.

As in Chart 4.2.1, unfortunately, totalexport is losing presence from 1.46% in 2002 to 1.35% in 2011. But Paperware sector (1.43%
to 3.84%) and Film sector (0.50% to 7.88%) increased in very much.

Paperware sector was

exporting 0.81 million US$, and increased to 2.66 million US$, which was 18.41% of average
growth.

Film sector developed from 2.26 million US$ to 38.74 million US$ with average

growth of 44.0%.10

Those are still small amount to total, but in terms of presence to the global

market, those sector can be candidates to give preferential treatment in development policy.

7000
6124.6
6000

Million US$

5434.25077.45000

3789.84000
2999.33000

4318.64437.73869.43313.62895.82000
1000
02002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Chart 4.1 Export of creative goods, Thailand
Source: UNCTAD, statistics on creative economies

9.00

7.88

8.00
7.00

%

6.00
5.00
3.84

4.00

3.00
2.00

1.46

1.00

1.43

0.00

0.50
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

1.35

All Creatives Goods

Paperware

Film

Chart 4.2.1 Export of creative goods, Thailand (% to total world)
Source: UNCTAD, statistics on creative economies

2.50
2.35
2.00
1.50
%

1.14
1.00

1.01
1.00
0.48

0.50

0.37

0.00
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

FashionInterior

Toys

Chart 4.2.2 Export of creative goods, Thailand (% to total world)
Source: UNCTAD, statistics on creative economies

Oppositely, as in Chart 4.2.2, Fashion, Interior and Toys sector have been decreasingpresences to the world.

As far Fashion sector, it has once declined to 203 million US$ fromits 308 million in 2002, then regained to 303 in 2011. During the period, share to total export
from Thailand has declined from 10.66 to 4.95%.

Interior sector, formally one of leadingindustries accepted in global level, once increased to 1051 million US$ from 902 million in
2002, but declined to 926 in 2011, accordingly, share in the Thai economy changed from 10.66
to 4.95%. Toys sectors has sharply declined from 221 to 206 million US$ from 2002 to 2011,
share in Thai also decreased from 7.64 to 3.36%.
Chart 4.3 is expressing transition of components of creative goods export from 2002
to 2011.

In Thailand Jewelry sector has performed in different level, it increased from 1 billion

to 4 billion US$ during a decade, ranked in the top in Thailand.

It is the largest component,that share is 65.75% in 2011, heavily concentrating if we compare to average developing
economies. So, Jewelry industry is eliminated from this chart to see smaller sectors precisely.
Except Jewelry sector, Interior, Art craft and fashion sectors are relatively larger, similar trend
to typical developing economies. On the other hand, growth of Audio visuals and New media
are notable points.

It is clear to understand the growth of Audio visuals, which is due to therapid growth of film industry.

100%
90%
80%

New Media,
New Media,
0.54
1.06

New Media,
0.42

New Media,
others0.96
Visual Arts
Publishing70%

Performing Arts

60%

New Media

50%

Toys

40%

Interior

30%
20%

10%

FashionAudio Visuals, Audio Visuals, Architecture
1.85
Audio
Visuals,
0.94
Audio Visuals,
Audio Visuals
0.38
0.12
Art Crafts

0%

2002

2005

2008

2011

Chart 4.3 Export of creative goods from Thailand
Source: UNCTAD, statistics on creative economies* Data eleminating Jwelry sector from total

About New media, Video game sector, one of components has been growing very well.
It was only 0.19 million US$ in 2002, but has grown to 11 million in 2011, the share has doubled.
This change should be focused to design development strategies.
Creative industry development policy in Thailand, a comprehensive framework, has
just launched in recent years.
Ministry of Industry.

In Chart 4.4, brief strategy is summarized, which is driven by

As in Table 2.1, the Thai government has selected 8 sectors for targeting

activities, and 13 industrial sectors and 2 sectors are defined as related economic activities. To
promote those industry, Ministry of Industry has provided 6 commitments.

Commitment 1 isto strengthen capabilities of related human resource in Thai, it is a basement to attract creative
industry known as knowledge-intensive activities.

If the program will be designed withinvolvement of capacity development for creativity, not only technological skill training,educated human resource will be a future potential for Thai creative industry in the long run.
Learning from experience in UK, spreading creative economy to regions will cope with regional
economic development and cultural industry could be developed through supports.

Creative Industries

Handycraft, Thai food, Thai Traditional Medication,
Movie and Video, Printing, Design, Fashion, Sftware

Industrial Sectors

Machinary, Garment and Texitle, Pharmaceuticals andChemicals, Jewelry and Accessories, Petrochemicals,
Wood and Furniture, Steel, Rubber, Food, Automobile,
Industrial Sectors
Footwear and Leather goods, Ceramics and Glass, Electricand Electronics

Commitments

1. Support technical skill development
2. Promote Creative industry in regional and community level
3. Introduce Thai creative works to international level
4. Develop creative zone especially for Visual and PerfoormingArts
5. Funding creative SMEs
6. Adjust laws and regurations for investment promotion andbusiness expansion

Chart 4.4 Creative industry development policy in Thailand
Source: Ministry of Industry, Thailand

Commitment 4, 5 and 6 will support creative industry in present by providing
infrastructure to grow up.

Like in Commitment 3, government are apt to think such amarketing support is sufficient to increase business amount and export, but in advance, capacity

development should be proceeded to raise attractive qualities of the industry.

In the case ofThai government, most of provisions are projected to do so, this strategy can be highly
evaluated as a productive support from public sector.

5. Conclusions
In this paper, development strategy for creative industry is mainly discussed, throughthe enhancement of definitions and characteristics of it, possible options are figured out andreview of UK experiences supported suggestions.
Encouraging creative industry seems to be easier.

Marketing support, events,

exhibitions, designer’s contests and any other promotional activities are easily implemented inmany case which actually feasible to explore markets in the short run. But, if the government
really hope to strengthen creative industries, policy should be based upon human resource
development and preparation of platform for growth.

From that perspectives, announcement

and commitment by the Thai government are putting those points as core, feasibility of Thai
strategy is reaching to acceptable level.
In this paper, trade related statistics are singly referred, it is usable to know potentials
of creative industry as export goods, but failed to reconfirm production size, which is left forfarther studies.

To analyze real potentials, more production based statistics, such are value-

added, labor force, number of enterprises or investment, are demanded by estimating andaccumulating creative industries.
Importance of human resource development is emphasized in this paper, feature ofcreative human resource can be defined and specific training program to incubate them will bedemonstrated in the farther study.

References:
BOP Consulting (2010), Mapping the Creative Industries: A Tool Kit, The British Council,
LondonCastillo, P. J. (2012), ‘Developing AEC into a Global Service Hub: The Case of the Creative
Industries in the Philippines’ in Tullao, T. S. and H. H. Lim (eds.), Developing ASEAN
Economic Community (AEC) into A Global Services Hub, ERIA Research Project Report 20111, ERIA, Jakarta, pp.271-338.

Howkins, John (2001), The Creative Economy, Penguin, London
NESDB (2011) The 11th National Economic and Social Development Plan (2012-2016),
NESDB, Bangkok
Newbigin, John (2010), The Creative Economy: An Introductory Guide, The British Council,
LondonSimatupang, T. M., S. Rustiadi and D. B. M. Situmorang (2012), ‘Enhancing theCompetitiveness of the Creative Services Sectors in Indonesia’ in Tullao, T. S. and H. H. Lim(eds.), Developing ASEAN Economic Community (AEC) into A Global Services Hub, ERIA
Research Project Report 2011-1, ERIA, Jakarta, pp.173-270.
United Nations (2008), Creative Economy Report 2008: The Challenge of Assessing theCreative Economy: towards informed Policy-making, United Nations, Geneva
United Nations (2010), Creative Economy Report 2010: Creative Economy: A Feasible
Development Option, United Nations, Geneva
United Nations (2011), United Nations Partnership Framework for Thailand: 2012-2016,
United Nations, Bangkok
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into A Global Services Hub The Case of Interior and Fashion Design in Vietnam’ in Tullao, T.
S. and H. H. Lim (eds.), Developing ASEAN Economic Community (AEC) into A Global
Services Hub, ERIA Research Project Report 2011-1, ERIA, Jakarta, pp.339-383.
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This is a revised version of the paper presented in Meijyo International conference
Technological Capability and Innovation in east Asia, Organized by Meijyo University Asian
Research Center, Nagoya, September, 2013
2 Associate Professor, Faculty of Regional Policy, Takasaki City University of Economics,
Japan (kurokawa@tcue.ac.jp)
3 UNCTAD and WIPO are differently selecting industries, one is for providing trade-related
statistics, the other is for intellectual property rights protection, but those are quite
overwrapped.
4 In this argument, investment for human capital occurring in advance is ignored and mainly
concentrating on production level.
5 http://unctadstat.unctad.org/
6 Data for developing economies are excluding data of China due to the huge share, holding
around 50% of total developing nations.
7 Jewelry is said to be a potential sector, but increasing trade amount seems to be influenced
by unstable material market
8 This advisory group was consisted by Department of culture, media and sports, Departmentof trade and industry, Trade partners UK, and private firms.
9 Some policy has implemented in elementary school level.
1The growth of film industry is driven by government effort by attracting oversea project.
See http://www.thainationalfilm.com/site/.

10

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