NIA Set to Boost Funding and Support Thai Entrepreneurs
By Kritphaka Bunfueang, PhD
In any business venture, access to capital plays a crucial role, particularly for startups and SMEs facing numerous restrictions. To address this issue, the National Innovation Agency (NIA), a public institution, has taken on the mission to support entrepreneurs in creating innovation by enhancing the funding mechanism. The aim is to overcome obstacles and provide more opportunities for Thai businesses to thrive and contribute to the growth of the economy.
Dr. Kritphaka Bunfueang, the Director of NIA, outlined the agency’s plan to foster innovation in five key industries – agriculture, food and herbs; health and medicine; energy, environment, and electric vehicles; tourism; and soft power. This effort will be implemented through the 2024-2028 Plan, which focuses on creating and promoting a national innovation system, improving access to innovation infrastructure, and enhancing the innovation skills and capabilities of the target group. This will be achieved through nurturing, funding, and driving growth.
In the fiscal year 2024, NIA has allocated a total budget of 600 million baht, with an initial phase of 300 million baht dedicated to funding innovation. It is expected that this investment will generate an economic and social value of no less than 3,000 million baht.
NIA has a successful track record of providing grants to numerous SMEs, startups, and social enterprises, which have led to the emergence of household brands such as Tofusan soy milk, QueQ application, moreloop, and Botnoi.
Sura-in Suphachatrat, the Deputy Director of Innovation for the Economy and Society at NIA, emphasized the need to address the pain points faced by entrepreneurs and increase the number of innovative businesses that generate income. Previously, the funding mechanism primarily focused on developing ideas into prototypes, leaving many products without support when entering the market. The new funding model aims to better tailor support to the entrepreneurs’ specific needs, whether it be market testing or consulting for expanding overseas markets.
NIA’s decision to adjust the funding model was influenced by its goal to take innovations from laboratories and develop them into commercial products. The overlap of traditional funding sources and the lack of funding during the market entry phase prompted the agency to invest more in the downstream sector.
Starting in 2024, NIA will pilot new mechanisms for the Innovation for the Economy division, which will focus on developing businesses that generate 100% income. In 2025, these mechanisms will be extended to finance both economic and social aspects of business development, resulting in a budget of 300 million baht, with 250 million baht allocated for the Innovation for Economy group and 50 million baht for the Social Innovation group.
The projected seven new funding mechanisms are as follows:
1. Regional Market Validation: Matching funds up to 75% of the project value or 1.5 million baht for testing the market, improving innovative products or services, and expanding the customer base.
2. Thematic Innovation Project Funding: Grants up to 75% of the project value or 5 million baht for testing the market feasibility of products or services and meeting the needs of the target market.
3. Support Mechanism for Innovation Consultants: Contribution up to 50% of the project value or 1 million baht for hiring consultants to enhance operational processes in the areas of business strategy, marketing, intellectual property, accounting, and finance.
4. Mechanism for Product Testing and Standard Compliance: Contribution up to 50% of the project value or 1.5 million baht for hiring consultants to analyze, test, evaluate, and obtain product registration or certification of standards.
5. Expansion of Innovative Businesses: Funding for testing innovations in government and private agencies, up to 100% of the project value in government agencies and 50% in the private sector, or a maximum of 2 million baht for up to one year, aimed at expanding businesses for commercial purposes.
6. Partial Interest Support Mechanism: Increased liquidity through support for up to 75% of the interest value and fees, not exceeding 1.5 million baht for a period of one year, specifically for the growth of innovation-based businesses.
7. Support Mechanism for Technology and Innovation Operators: Collaboration with public and private funding sources (corporate financing) to allow for market expansion and growth. They will need to return 50% of the investment value upon achieving commercial success or a maximum of ten million baht per project, for a period not exceeding five years.
Dr. Krisphaka emphasized that NIA remains open to cooperation with government and private sector partners to increase investment opportunities for Thai businesses and attract foreign venture capital. However, any collaboration must be approved by NIA and the Thai Venture Capital Association (TVCA).
While NIA acknowledges the importance of capital for business success, it also recognizes that capital alone cannot guarantee sustainable growth. To address this, the NIA Academy provides knowledge and support in business and innovation to fill the gaps that entrepreneurs may encounter. The academy offers advice and guidance to propel businesses towards profitability.
In conclusion, NIA’s commitment to funding and supporting entrepreneurs reflects its dedication to fostering a vibrant ecosystem for innovation and economic growth in Thailand. By adapting and expanding funding mechanisms, NIA aims to empower entrepreneurs and stimulate the emergence and expansion of successful businesses.
Kritphaka Bunfueang, Dr
It cannot be denied that “capital” is an important factor for entrepreneurs in all businesses. Especially for start-ups and SMEs, as there are many restrictions on access to capital. Make the National Innovation Agency (Public Institution) or NIA as an organization with a mission to support entrepreneurs to create innovation. Raise and adjust the funding mechanism. To unlock various problems and obstacles and increase opportunities to push Thai businesses to emerge and grow, becoming important cogs in driving the Thai economy.
NIA’s role in funding
Dr Kritphaka Bunfueang The Director of NIA said that NIA aims to develop innovation in 5 industrial groups, namely 1. agriculture, food and herbs, 2. health and medicine, 3. energy, the environment and electric vehicles, 4. tourism and 5. soft power, through the 2024-2028 Plan. Under the mission: create and promote the national innovation system Create access opportunities and use innovative infrastructure Improve the innovation skills and capabilities of the target group Through mechanisms of care (groom), giving capital (grant) and stimulating growth (growth)
For funding in fiscal year 2024, there is a total budget of 600 million baht, but it has already been received. And 300 million baht will be used in the first phase, it is expected that it will create an economic and social value of no less than 3,000 million baht.
In the past, NIA has provided grants to many SMEs, start-ups and social enterprises. Leading to quite a few household name brands in the business world, such as Tofusan soy milk, QueQ application, moreloop, Botnoi, etc.
Sura-in Suphachatrat Deputy Director of Innovation For the economy and society, NIA added that the original funding mechanism was a matching fund, which provided some matching funds. The main focus is on developing ideas into prototypes. causing many items to fail to become real businesses Because they do not receive support when the product enters the market. Whether it’s testing quality according to various standards or finding the right market. Therefore, mechanisms must be adapted to solve pain points and increase the number of innovative businesses that generate income. and innovation foundation entrepreneurs (innovation-based enterprise IBEs) or groups that create or bring more innovation to use in business operations.
Adjust to fix Pain Point
“Our goal in 2027 is to create 10,000 IBEs, with thousands of businesses in the growth phase or making real money. It has an economic value of no less than 10,000 million baht, which makes it difficult for traditional funding that ends with prototypes to achieve its goals. Therefore, they moved to provide more capital during the time they were about to enter the market. Every entrepreneur has different needs. Some people may just need a market testing period. Some people need consultants to expand overseas markets. So the design of the funding mechanism is better tailored to the needs of entrepreneurs.”
And that the NIA’s decision to adjust its funding model was influenced by the goals of the agency that is the source of the funding. For example, the Office of the National Science, Research and Innovation Commission or NRCT wants NIA to take innovations from laboratories and develop them into businesses or products for commercial sale. along with traditional forms of funding overlapping with many agencies and it was found that there was little funding during the time the market was entering. So adjust the situation to invest more in the downstream sector. Which in terms of the amount of money is not much different from before.
In 2024, NIA will pilot the new mechanism for the operations of the Innovation for the Economy division. or groups that develop businesses for 100% income first and in 2025 are used as a mechanism for financing economic and social aspects. or business development group A profit is returned to society under a budget of 300 million baht, divided into 250 million baht for the Innovation for Economy group and 50 million baht for the Social Innovation group.
Projected 7 new mechanisms
There are 7 mechanisms as follows: 1. A mechanism for expanding regional innovations to the market (regional market validation), providing matching funds not exceeding 75% of the project value or not exceeding 1.5 million baht for test the market. Improve innovative products or services Expand commercial results and new customer base Increase competitive potential
2. The thematic innovation project funding mechanism provides grants not exceeding 75% of the project value or not exceeding 5 million baht for testing the market feasibility of products or services. Improving innovative products or services to meet the needs of the target market, etc.
3. Mechanism to support consultants for innovation development: A contribution not exceeding 50% of the project value or not exceeding 1 million baht for hiring consultants. Improving operational processes within the organization in business strategy, marketing, intellectual property, accounting, finance, etc.
4. Mechanism for product testing to be consistent with relevant standards. Contribution not exceeding 50% of the project value or not exceeding 1.5 million baht for hiring consultants. Analysis, testing, evaluation to request product registration. or request certification of standards
5. A mechanism for expanding innovative businesses, providing funding for testing innovations in government agencies and private agencies, up to 100% of the value of the project in government agencies and 50% in the private sector, or no more than 2 million baht, for a period of not more than 1 year, for business expansion to commercial
6. Partial interest support mechanism In order to increase liquidity, no more than 75% of the interest value. and fees or not more than 1.5 million baht for a period of not more than one year for increased liquidity for the growth of innovation-based businesses
and 7. Mechanisms to support operators of technology and innovation businesses. Have the opportunity to grow and expand the market. By collaborating with public and private funding sources (corporate financing), the condition is to return 50% of the investment value when the project is commercially successful. or no more than ten million baht per project Period not exceeding 5 years
Focus on being open and fulfilling.
Dr Krisphaka said that NIA is still open to cooperation from government and private sector partners. to connect investment and increase opportunities for the growth of Thai businesses or foreign venture capital (VC) interested in investing in Thai entrepreneurs. But it must be approved by NIA and Thai Venture Capital Association (TVCA) first.
“We have not abandoned traditional forms of financing. But there may be less. and he must ensure that it is a business that can enter the market Or if there is an entrepreneur And new businesses that are eligible to receive investment in the seed round write a proposal to NIA and can forward it to agencies that for investing in the seed round, connecting the investment ecosystem more seamlessly.”
Dr. concluded. Suratth by saying that all entrepreneurs can choose to receive funding in accordance with their business needs, for example, a food business may need funding for standard tests with relevant agencies. and improve product quality Or if an application is developed, it may just need money to test the market. The important point is First you must understand what is missing in your business. And what are your goals for the future? To receive support on the point
“We believe that capital alone cannot bring a business to market. and grow sustainably, so the NIA Academy is to provide knowledge in doing business and innovation Fill in the parts that are still missing. There are people there to give advice and push the business to actually make money.”
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