The traditions of Thailand permeate all aspects of everyday life, from religion to politics to business. At first glance, the modernization and Westernization of the country gives the impression that the hierarchies and cultural beliefs of historical Thailand have softened, but this is far from the truth.
Throughout its long and distinguished history, Thailand has maintained its national culture, and owns the distinction of being the only Southeast Asian nation never to have been colonized. Thailand remains a devout Buddhist country, with 95% of the population practicing Theravada Buddhism. This practice informs how the Thai people spend their time and their value system, from frequent prayer to simple details like the removal of shoes before entering a structure or bowing as a form of greeting.
While based in Thailand exploring the local culture and startup ecosystem, I was taken aback by the ubiquity of Buddhist temples throughout the country, oftentimes placed in the midst of corporate offices and major streets. The omnipresence of temples is a literal representation of the importance of Buddhism in Thai culture. The respect for a higher authority that is inculcated in the Thai people through their religious observance spawns a respect for other authority figures in society and reinforces social hierarchies.
For example, the traditional Thai greeting is called the wâi, a gesture where the greeter bows slightly while bringing their hands together. This greeting involves nuanced differences depending on the person being greeted. When greeting a royal or a religious figure like a monk, the greeter raises their hands up to their forehead. The next level of deference is given to parents or teachers; the greeter raises their hands to their nose. And finally, when greeting a superior or someone older, the greeter raises their hands to their mouth.
Traditions and hierarchy also play a significant role in the Thai political system. The Thai royal family has always played a central role in Thai politics and culture. Even in recent years when all other parts of the Thai political system have deteriorated and where the ruling party has been subject to repeated upheaval and coups, the most recent of which occurred in 2014, the public respect for and stability of the monarchy remained intact. The King has minimal effective power as a ruler (the role of head of state belonged to the Prime Minister and more recently the military junta known as the National Council for Peace and Order), but commands incredible popular respect and allegiance. Speaking negatively about the King and royal family is to this day considered a crime in Thailand, and the death of King Bhumibol Adulyadej in late 2016 was followed by a nationwide year-long period of mourning.
With these religious and political traditions firmly in place, it’s only natural that the business world in Thailand has adopted many of the same approaches and models enumerated above: convention, hierarchy, deference, and obedience.
The first (and in many ways the most significant) major hurdle to starting up in Thailand is cultural. Thai corporate culture upholds a traditional top-down approach to hierarchy, management and innovation, a dynamic that is not ideal for out-of-the-box thinking and disruptive innovation. Kanchanasuwan Gling, a Chiang Mai-based entrepreneur who went to college and worked in the U.S. before returning to Thailand to co-found a fintech startup called Zpring, shared the ways in which this approach limits the growth of the local startup industry and hampers disruptive creative thinking.
To start, there are relatively few Thai entrepreneurs and startups, as conservative thinking and aversion to risk, combined with social pressures to secure a steady income, means much of the talent that would be expected to venture into the startup world in another environment ends up working in Industry in Thailand. Top young Thai software engineers tend to work in roles such as system administrators for large corporations like SAP or Oracle, because these employers offer more stability and better compensation. Consequently, the technical talent that is left over is not always the best quality. Furthermore, while the government has stated it plans to enact reforms, as it stands currently Thai startups are not able to provide stock options to new employees.
The lack of support for innovation and creative thinking shows in the shortage of civilian Research & Development expenditures and international patent filings. While startup nations like Israel and the U.S. are investing 2-4% of their GDP in R&D, Thailand’s expenditures amount to less than 0.7%. Consequently, the number of international patents filed in 2015 (under the Patent Cooperation Treaty) amount to 1 for every US$34 million dollars spent in civilian R&D, compared to one patent for every US$8 to 9 million in R&D spending in tech powerhouses Israel and the United States, and US$12 to 16 million in tech hubs Singapore and China. Overhauling the traditional Thai corporate mindset is a necessary step to encourage more risk-taking and out-of-the-box thinking in the workplace.
Thailand’s corporate culture is also one of personal relationships, and decision making is influenced by close personal connections. This approach, combined with the top-down corporate approach discussed above, makes for a patronage-esque dynamic in the Thai startup community whereby support and success can oftentimes be dictated by or tied to familial or government connections. This is one of the reasons why most of the country’s successful startups are based in Bangkok, where most of the interested investors and wealth in concentrated, as well as the government capital.
Again, on a certain level this is nothing new; networking and connections have always played a large role in startup success. However, the notion that successful startups in Thailand are driven not by the quality of their products but by the personal connections of their team is especially prominent in the country. Examples include refinn.com, a fintech company started by Korn Chatikavanij, the ex-Minister of Finance. Chatikavanij was able to partner with almost every Thai bank immediately and scale the company, whereas other fintech startups previously had little success working with these banks. Another example is online touring company tourkrub.co. The founder of the site is the son of the owner of a major tour operator in Thailand already earning hundreds of millions of baht a year through offline tour sales. He was able to build the online site leveraging the tours and packages already offered offline.
The backstories of these companies, and many others like them, have created a public perception of startups as a ‘fad’, a ‘trend’, and a ‘hobby’. It is hard for the general public to seriously consider the viability and impact of startup businesses because of how startup success has been achieved, limiting the opportunity to compete in the national or global market to those who are wealthy or connected. The fact that these perceptions exist in the first place, even if they are gross generalizations, is in itself an issue. As one early stage startup founder I met with declared: “startups are still just toys for the rich. People with a good social background can use their fame and wealth to help support or damage startups across the country.”