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Cablegate: Consulate Promotes Entrepreneurship in Northern Thailand

VZCZCXRO0751
PP RUEHCN RUEHDT RUEHHM
DE RUEHCHI #0149 2820357
ZNR UUUUU ZZH
P 080357Z OCT 08
FM AMCONSUL CHIANG MAI
TO RUEHC/SECSTATE WASHDC PRIORITY 0855
INFO RUCPDOC/USDOC WASHDC PRIORITY 0012
RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEHCHI/AMCONSUL CHIANG MAI 0927

UNCLAS CHIANG MAI 000149

SIPDIS

E.O. 12958: N/A
TAGS: ECON EINV ETRD TH
SUBJECT: CONSULATE PROMOTES ENTREPRENEURSHIP IN NORTHERN THAILAND

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Summary
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1. Post promoted entrepreneurship and small and medium
enterprise (SME) development in northern Thailand through a
one-day seminar entitled "Encourage Entrepreneurship: Promoting
SMEs in Northern Thailand." Business leaders, CG, and econoff
addressed an audience of 80 students and faculty and 30 small
business owners about the experiences of small business
initiatives in the Chiang Mai area and in the United States,
respectively. Business students who are considering opening new
small businesses or working for start-up firms in northern
Thailand had the opportunity to ask questions about SME
management, marketing, and government policies that are
favorable to SMEs.

2. Post partnered with the Faculty of Business Administration of
Payap University to host this seminar on September 26. Speakers
from the Chiang Mai Chamber of Commerce, Association for the
Promotion of Thai SMEs (APTSME), and post addressed business
students about the experience of Thai and American SMEs, the
challenges entrepreneurs face, and the potential benefits of
risk-taking. End summary.

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Small Means Big for Northern Thailand
-------------------------------------

3. SME employment makes up 76 percent of jobs, 38 percent of
GDP, and 29 percent of exports throughout Thailand, according to
the Chiang Rai Chamber of Commerce President. He specified that
within northern Thailand, agriculture, tourism, and
agro-industry are the three pillars of the local economy and
that SMEs are the building blocks of these major sectors.
Econoff referenced the eJournal "Entrepreneurship and Small
Business" and relayed to participants the significant role that
SMEs play in the American economy as a comparison case study.
All speakers agreed that small businesses are the cornerstone of
the northern Thai economy.

--------------------------------------------- -------------
Speakers Encourage Innovation, Risk-taking, and Creativity
--------------------------------------------- -------------

4. Innovation was the ingredient for success for small
businesses that failed or struggled after the 1997 Asian
financial crisis, the APTSME President told participants. He
also said that the high costs of wages, energy, and logistics
are major challenges for small businesses whose smaller customer
bases are sensitive to rising prices. He encouraged, however,
that innovation in production methods and management is more
easily implemented in small firms and can help save costs in
other ways.

5. Local small business owners emphasized the importance of
risk-taking in entrepreneurial endeavors. The Managing Director
of a major local supermarket company said that family unity (or
loyalty within small firms) is a key factor when the firm enters
a crisis. Loyal business partners can more easily agree to sell
off assets, pay back debts, and use liquidity to sustain
business operations. Econoff highlighted the flexibility
American firms have under U.S. bankruptcy law and emphasized
that government support of risk-taking can be a valuable asset
for future entrepreneurs.

6. The Amcit Managing Director of a local leather product
company bluntly told the audience that "Thai people lack
creativity," a key characteristic of a successful small business
seeking to flourish in niche markets. He emphasized that future
entrepreneurs not only need to expand their creativity, but also
understand how to match their unique products to the correct
market. The Managing Director of a locally owned graphic design
firm delivered a lecture on branding, underscoring how good
marketing can not only expand sales but also increase the
perceived value of the product.

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Comment
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7. The three pillars of the northern Thai economy - agriculture,
tourism, and agro-industry - tend to limit the perceptions of
northern Thais about business potential in this region. The
entrepreneurship seminar allowed for local business leaders to
explain to potential future SME owners and employees that
innovation and creativity are key to private sector success.
The narrowness of economic development in northern Thailand
tends to contribute to a Bangkok-centric focus and to limit
foreign investment opportunities in the region.

MORROW

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