By
Phurida Prabsungnoen
Nami Hama
Thunjira Hongjinda
Roy Melville
Small and medium-sized enterprises (SMEs) are crucial to Thailand’s economy. They comprise 99.5% of businesses, employ nearly 70% of the workforce, and contribute almost 40% of the GDP as of 2021 (Junyakhajorn, 2023). Recognising their significance, Thailand has implemented policies, organisations, and incentives to support SME growth. These efforts aim to enhance competitiveness, foster innovation, and integrate SMEs into global supply chains, ensuring they remain vital drivers of economic prosperity and job creation in the country.
On July 15th 2024, the Macroeconomic Policy Division of the Fiscal Policy Office (FPO) and the Finance and Fiscal Journal organised a Local Reach Interview Programme. The FPO had the honour of having Mr. Tanont Korapintanont, a recent Chulalongkorn University graduate and the founder of Impvest, an enterprise that interests many due to its visionary outlook to benefit Thai societ
1.Background and Introduction to Impvest
Impvest is a youth-led non-profit social enterprise focused on enhancing the growth and sustainability of Thai SMEs through knowledge enhancement and improved access to financial resources. The name “Impvest” derives from “impact investing,” a globally recognised approach that seeks to generate social and financial returns from investments a concept that is gaining traction in Thailand thanks to initiatives like Impvest.
Mr. Korapintanont’s journey into social entrepreneurship was catalysed by his involvement in case competitions addressing critical issues such as agricultural debt reduction, where he achieved success. This experience ignited his passion for contributing meaningfully to Thai society, prompting him to integrate his academic learnings and practical insights gained during internships at institutions like the Fiscal Policy Office (FPO).
Recognising SMEs’ pivotal role in Thailand’s economy, Mr. Korapintanont identified a crucial gap in the support ecosystem for these businesses. Through extensive research, he uncovered the myriad challenges SMEs face and saw an opportunity for university students to leverage their theoretical knowledge and innovation skills to address real-world business challenges. This realisation inspired him to establish Impvest, aiming to create a platform where students could apply classroom theories practically and collaborate directly with SMEs key drivers of economic vitality in Thailand.
By bridging the gap between academia and industry, Impvest empowers SMEs with tailored guidance and resources and nurtures a new generation of socially conscious leaders. The organisation serves as a conduit for innovative ideas and sustainable practices, fostering synergies between students and SMEs that benefit both parties and contribute to Thailand’s broader socioeconomic development.
2. Why help Small and medium-sized enterprises (SMEs)?
SMEs play a vital role in Thailand’s economy, contributing around 40% to the GDP and constituting approximately 99.5% of all businesses in the country. Despite their significant presence, SMEs face a landscape influenced by various economic factors, as outlined in Krungsri’s Thailand Industry Outlook 2024-2026. While the overall economic outlook appears positive for the coming years, challenges such as high household debt pose concerns. This debt burden could potentially dampen consumer spending and investment, impacting SMEs that rely on robust domestic demand.
In specific sectors like construction, SMEs encounter challenges due to the competitive advantage held by larger contractors capable of aggressive bidding. This dynamic makes revenue streams unpredictable for SMEs dependent on subcontracting from major players. Similarly, in the real estate sector, SME developers face intensified competition in securing financing and managing construction costs, particularly as major developers increasingly focus on regional markets.
Moreover, SMEs grapple with issues like high debt loads, steep interest rates on loans, and a rise in informal borrowing practices. These factors collectively elevate borrowing costs and strain businesses’ capacity to service debts effectively. To navigate these challenges successfully, there is a critical need for comprehensive education and guidance tailored to the specific needs of Thai SMEs.
Mr. Korapintanont advocates for a proactive approach to equip SMEs with the skills and tools necessary to thrive in a competitive market environment. Embracing technological advancements such as artificial intelligence (AI), exploring new market segments, and adapting to evolving consumer behaviours are identified as crucial strategies. Enterprises like Impvest play a pivotal role in this ecosystem by bridging the gap between SMEs and opportunities that can propel their growth and sustainability.
By fostering an environment where SMEs can innovate, acquire new capabilities, and access strategic support, Thailand can bolster the resilience and competitiveness of its SME sector. Empowering SMEs to navigate economic challenges and seize emerging opportunities not only enhances their individual prospects but also contributes to broader economic growth and stability in Thailand.
3. A deeper dive into Impvest
Impvest is pivotal in supporting Thai SMEs through three key dimensions: consultation, academy, and innovation.
Firstly, Impvest focuses on providing expert consultation to SMEs. An illustrative example of their impact is their collaboration with the Bangkok municipality to advise SMEs within the “Talat Noi community”. Additionally, Impvest partnered with SSPP Capitals, a venture capital firm, to offer guidance to companies associated with SME development banks. These collaborations have broadened perspectives and stimulated innovative ideas for future applications.
Secondly, through its academy initiatives, Impvest empowers SMEs by expanding their knowledge base. They create online content and organise seminars such as boot camps to enhance financial literacy and investment acumen. These sessions feature influential guest speakers sharing their firsthand insights and business strategies, offering invaluable learning opportunities for aspiring entrepreneurs and SME owners.
Thirdly, Impvest emphasises innovation as a cornerstone for SMEs to adapt to the rapidly evolving business landscape. They have dedicated efforts to develop an AI platform that aids SMEs in creating compelling content, captions, and visuals for effective communication with their target audiences. This technological advancement underscores Impvest’s commitment to enhancing operational efficiency and market competitiveness for the SMEs they support.
In terms of industry focus, Impvest has notably assisted businesses within the Fast-Moving Consumer Goods (FMCG) sector, particularly in food-related industries. Examples include consultancy services provided to Potato Corner and collaboration with Yindii, a food delivery app addressing food waste challenges.
Despite their successes, Impvest acknowledges and addresses challenges encountered in their journey. One significant hurdle has been aligning SMEs’ operational goals with feasible outcomes, requiring tailored support to clearly visualise and articulate short-term and long-term objectives. Furthermore, introducing innovative strategies sometimes necessitates overcoming resistance from SME management accustomed to traditional practices. Impvest mitigates these challenges through personalised guidance, effective communication strategies, and continuous knowledge-sharing efforts.
In summary, Impvest’s multifaceted approach of consultation, academy programs, and innovation initiatives underscores its commitment to empowering Thai SMEs. Impvest plays a crucial role in enabling SMEs to thrive in a competitive market environment while addressing contemporary challenges and opportunities by fostering knowledge enhancement, technological adoption, and strategic guidance.
4. Key drivers for SMEs in Thailand
The key drivers for SMEs in Thailand can be divided into four main categories and steps: knowledge, technology, data, and access to investment.
Step 1: Thailand’s small and medium enterprises (SMEs) can significantly benefit from knowledge provided through seminars on investment management and access strategies such as those offered by Impvest. These seminars aim to identify areas for improvement and provide essential guidance. By offering free seminars, initiatives like these seek to empower SMEs with knowledge on locating and managing investments. The goal is to facilitate more accessible access to crucial information sources vital for SME growth and sustainability.
Step 2: Embracing technological innovations can significantly enhance accounting and data analysis efficiency while reducing operational costs. For instance, leveraging software solutions developed by startups in Thailand enables SMEs to streamline their financial management. Moreover, integrating Artificial Intelligence (AI) for data forecasting further enhances decision-making capabilities, allowing businesses to anticipate market trends and plan more effectively.
Step 3: Effective data analysis is essential for SMEs to understand their financial standing and operational efficiency. It involves comprehending the structure of their budgets and benchmarking against industry standards. Ensuring sufficient cash flow is often overlooked, yet crucial
for sustaining business operations and growth.
Step 4: Accessing sources of investment remains paramount for SMEs looking to expand. Businesses can stimulate growth and profitability by leveraging investments to procure organisations and fund operational expansions. Today, public and private organisations offer various avenues such as loans, venture capital, and private equity, providing SMEs with diverse options tailored to their needs and growth stages.
These steps outline a comprehensive approach to empowering SMEs in Thailand. From enhancing knowledge through seminars on investment management and leveraging technology for efficiency gains to effectively analysing financial data and accessing diverse sources of investment, these strategies collectively support SMEs in navigating and thriving in today’s competitive business landscape.
5. Future: New generation and technology
As a forward-thinking individual, Mr Korapintanont recognises the importance of leveraging insights from Generation Z’s behaviour and technological advancements to benefit SMEs. Understanding the shifts in social media behaviour and preferences among Gen Z can offer valuable perspectives and new ideas for enhancing experiences for juniors, seniors, and peers within the same field or across different universities.
Incorporating technologies such as AI into daily operations is crucial for modernising SME practices. By bridging the gap between generations, Mr. Korapintanont aims to educate older SME owners on applying new technologies that are second nature to the younger generation. This approach not only improves operational efficiency but also introduces innovative ways to manage, account, market, and analyse data, thereby reducing costs and enhancing competitiveness on a global scale.
Participating in case competitions focusing on social impact is a commendable starting point for those aspiring to start a startup or initiate a club similar to Mr. Korapintanont’s vision. These platforms not only foster creativity and problem-solving skills but also encourage the development of ideas that can positively impact society. Joining clubs and activity groups aligned with personal interests further enriches one’s entrepreneurial journey by providing networking opportunities and shared learning experiences.
Emphasising the importance of purpose and leveraging one’s generational perspective is key. Identifying a clear goal and understanding how new technologies can be harnessed to achieve that goal is fundamental. Whether creating innovative solutions for SMEs or pursuing social entrepreneurship, the focus should be leveraging knowledge and technology to benefit others in diverse ways and through various channels.
Ultimately, by embracing technology as a strategic tool and nurturing a mindset geared towards social impact, individuals like Mr. Korapintanont can inspire positive change within SMEs. This holistic approach addresses current challenges and paves the way for sustainable growth and adaptation in an increasingly dynamic business environment.
6. Summary
Impvest, a youth-led social enterprise, dedicated to empowering Thai small and medium-sized enterprises (SMEs) through knowledge enhancement and expanded access to financial resources. Founded by Mr. Korapintanont, a graduate of Chulalongkorn University, Impvest bridges academic insights and practical business needs through consultation, educational seminars, and innovative tools like AI-driven platforms. By focusing on knowledge acquisition, technological integration, data-driven decision-making, and investment attraction, Impvest equips SMEs with the requisite tools to excel in a competitive marketplace. The organisation also emphasises leveraging Generation Z’s technological affinity to modernise SME practices and drive sustainable growth.
Finally, we would like to express our sincere gratitude to Dr. Norabajra Asava-vallobh, Executive Editor, and the entire fiscal and finance journal team, including Mr. Mayoon Boonyarat, Mr. Chaiwat Hanpitakpong, and Ms. Kanta Sooksatra, for this exceptional opportunity.
References
Arunmas, P. (2024, January 5). Bid to hike SME contribution to GDP to 40%. https://www.bangkokpost.com. https://www.bangkokpost.com/business/general/2718551/bid-to-hike-sme-contribution-to-gdp-to-40-
Junyakhajorn, L. (2023). A study of the benefits and barriers of Thai SMEs with bot policy supporting SMEs. https://doi.org/10.58837/chula.is.2020.96
Krungsri Industry Team. (2024, January 10). THAILAND INDUSTRY OUTLOOK 2024-2026. https://www.krungsri.com/en/research/industry/summary-outlook/industry-outlook-2024-2026. https://www.krungsri.com/en/research/industry/summary-outlook/industry-outlook-2024-2026
Phurida Prabsungnoen
ผู้เขียน
Nami Hama
ผู้เขียน
Thunjira Hongjinda
ผู้เขียน
Roy Melville
ผู้เขียน