An ILO study carried out by Rapid Asia confirms Thailand’s automotive industry is shifting towards more sustainable and technologically advanced manufacturing processes. Hence, sector stakeholders must foster collaboration to address skill shortages to meet emerging needs.
As the largest automotive producer and exporter in the ASEAN region, and eleventh largest globally, Thailand is experiencing transformation towards increased technological intelligence, enhanced efficiency, and heightened sustainability. Furthermore, electric vehicles are projected to make up 35 per cent of all vehicles internationally by 2040 and Thailand is projected to have a 7 per cent market share in 2036. Hence, the automotive sector in Thailand must adapt to multiple factors, including digital driving systems adoption, shifting consumer preferences, growing environmental concerns as well as regulatory pressures.
The situation has been well described in a recent ILO study report ‘Navigating Transformational Changes and Transitions Study’, carried out by Rapid Asia. The report provides an overview of the employment and skills landscape in Thailand’s automotive manufacturing subsector and identified critical skills gaps, necessary policy measures and developing strategic initiatives for skills development, especially for older workers.
The study was conducted in 2023, applying the mixed methods approach as shown in the following figure:
Apart from the qualitative in-depth interviews, informant interviews, and FGD, the research also collected quantitative data through employer (in collaboration with the Thammasat University) and workers surveys. Moreover, a tripartite workshop was conducted to validate the study findings to identify important recommendations.
From Transformation Trends to Addressing Skill Shortages
The study shows the transformation trends, their impact on the sector, and the need for a workforce development strategy. New job roles are emerging that require more diverse skills such as digital skills and green jobs-related skills. The study also found a shortage of high-tech skills related to electric vehicle components. The table below details the most pertinent skills that are needed to fill the gap.
The importance of responsible business conduct to help mitigate upcoming risks in the sector was also highlighted. Automotive manufacturing companies need to be more proactive in addressing ethical violations which may jeopardise the position of the sector as a ‘economic powerhouse’.
To meet the skills demand, regular skill needs assessments are needed coupled with efforts to reskilling and upskilling the aging workforce. The creation of tailored training programmes that can cater to different age groups is recommended. It is crucial to ensure all employees have the capacity to remain productive as the industry evolves.
The study confirms the importance of workforce development strategies that can prepare workers for the evolving industry landscape where automation will play greater role. To do that, improved soft skills are needed, such as teamwork, analytical thinking and problem-solving. Similarly, workers also needs to excel in areas that require judgement, creativity, and interpersonal communication. By enhancing soft skills and digital literacy, workers will be able to collaborate in diverse teams better, lead projects, manage cross-functional initiatives and contribute to innovation. The study also recommends to enhance the training supply side with focus on formal training such as TVET and recognised certified courses. To be successful, collaboration will be important and examples of past success include public-private partnership, collaboration with vocational training institutions, and trade union involvement on training such as rights-based training and inclusive workforce development.
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To read more about “Navigating Transformational Changes and Transitions Study,” please click here.
About the authors: Daniel Lindgren is the Founder of Rapid Asia Co., Ltd., a management consultancy firm based in Bangkok that specialises in evaluations for programs, projects, social marketing campaigns and other social development initiatives. Israr Ardiansyah is a writer working with Rapid Asia.
Photo: AHRDA training centre