With Remarks on Thailand A Commentary on Human Resources Development System, Policy and the Contributions of HRD to Economic Growth in South Korea by ChangWon Jang With Remarks on Thailand Somchai Jitsuchon Thailand Development Research Institute NESDB-WB 29 January 2007 Bangkok

General Comments This is a good paper, Covers past, present, and future of Korea HR development. Informative on Korea HR adjustment to changing global environments. Touches on some important issues, potentially worthy lessons to other countries.

Important Lessons Demand-driven HR policy more appropriate than supply-centered policy. Information-age knowledge is key to future success. Higher education is increasingly important. Vocational elements added to regular curriculums. Private sector can play a very crucial role in HR development.

Some Specific Lessons for Thailand International quality of primary and secondary education promoted rich HR base for subsequent high economic growth, through industrial exports. High tertiary enrollment rate helped deepening industrialization. Workers need global views as well. New paradigm is needed, especially to move away from mass production system. High-tech workers must be expanded. This is utmost necessary given China/India factors.

Thailand’s HR Situation

Overall Picture Used to be trapped in low HR development path, relied mainly on depletion of natural resources (deforestation for agric.) and cheap labor (for manufacturing). Low TFP, low contribution from education. Technological advancement has been through business managements (+ imported techno), not much value-added in scientific/engineer. Reallocation of labor from low-productivity agr to higher-productivity non-agr also contributed. This channel is not likely to be reliable in the future, as most young adults in rural areas have already permanently migrated to urban.

Overall Picture Forced with less abundant natural resources and cheap labors, Thailand started to import foreign workers in the past 10-15 years. This adjustment might prolonged the need to upgrade the country’s true technological advancement. Large influx of foreign workers might continue, esp. from Myanmar. However, significant improvement in secondary education since around 1990 has potential to change the country’s HR structure and might induces industrial technological change as well. At this juncture, hence, lessons from countries like South Korea will prove to be utmost useful.

IMD’s HR Rankings of Thailand vs. Some Competitors # Skilled Labors University Education Qualified Engineers Overall Education Indonesia 55 57 53 61 Thailand 37 46 48 Malaysia 20 Taiwan 16 5 19 Korea 47 4 54 42 Japan 18 2 28 23 Singapore 9 3 11 13 Source: IMD World Competitiveness Yearbook 2006 (cited in Ahuya et.al, 2006)

Recent Improvement in Education (mostly secondary, some tertiary) Source: Ahuya et.al, 2006

Roles of Public Policy on Education Concentrated mainly on supply-side education. Demand-side nearly absent. Pay too little attention on vocational education. This is true with the latest ‘education reform’ too. Fiscal decentralization might profoundly change the primary/secondary education system. Not much progress so far.

Comparison of Government Spending on Education

Quality Problems!......both present and future? Thai Labor’s Skill Expected Actual Gap -Analytical thinking 3.89 2.30 1.59(41%) - IT 3.57 2.02 1.55(43%) - Language 3.38 1.93 1.45(43%) - Communication 3.74 2.42 1.32(35%) Thai Students’ Test Scores Source: Yongyuth Chalamwong, 2006 Source: Ahuya et.al, 2006

Roles of Private Sector Only few big businesses invest in HR. Medium-size firms have no incentive to invest, fearing losing trained employees to other firms. This ‘public good’ problem likely to last, perhaps until a critical mass of HR investment is reached. No tight linkage to the public sector.