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We began by approaching the NationalNanotechnology Institute. We believed that this technologycentre would work like Taiwan Technology Centre and wouldhave good technology to support industries. But after fivemonths of discussions we decided that this was not the rightchoice. We would be better to start from the beginning withthe university to develop this technology. As a Distinguished Professor of Faculty of Science,Chulalongkorn University, I discussed this idea withProfessor Dr. Supot Harnongbue, Dean of the Faculty ofScience, at Chulalongkorn University. Dr. Supot liked theidea very much. He also liked the idea of linking his researcherswith industry and gave strong support to this project. In November 2007, two senior searchers, Dr SanongAkasit and Dr. Varintorn Chavasiri (Departmental Headof Chemistry Department) from the university, traveledwith Innovation Group researchers to the NanotechnologyExhibition in Korea. After our return from Korea, 1researched a grant that had been given to Dr. SanongAkasit, who proposed to do his research in Silver Nano. OneBanja Junhasavasdikul, Ph.D. 99

graduate scholarship was given to his student, Mr. Chupan Lertchirpabuln, to do research in Silver Nano. Two research grants were given to Dr. Varintorn Chavasiri. The first project was to generating nano particles from the “down-sized method” of changing micro particles into nano particles. These nano particles have to be treated (surface treatment) so that they stay at nano size. The second project was to find value from these nano particles in practical applications of polymer composites. Following the two research grants, two graduate scholarships were given to Dr. Varintorn’s students, Mr. Adisak Chithani and Mr. Boonchai Siratrkul, to do these two research projects. Innovation Group invested US 1 million into buying a nano grinder, ultrasonic blaster and nano particle analyzer for this research. 5) Silver Nano Six months after the program started, Dr. Sanong discovered a method of generating Silver Nano from silver nitrate. In theory, Silver Nano has a biocide effect;100 Winning with Technology

in wet conditions it can stop the growth of bio-organisms.We discussed the applications of the biocidal property ofSilver Nano and concluded that it’s the value of the biocidalproperty would be in detergent. Most Thai families wash their clothes by hand and drythem under the sun, but these clothes not dry very well inthe raining season and they will have a strong acrid smellbecause bacteria digest the organic substances on theclothes and generate the smell. We believe that Silver Nanoin the detergent during the wash would kill the bacteria.Therefore, clothes washed with detergent containing SilverNano would not have an acrid smell, even when the clotheswere not dried in the sun. I invited Mr. Boonyarith Mahamontri, the ManagingDirector of Lion Corporation that makes “Pao” detergent,to visit our research lab. “Pao” has the largest marketshare of the powder detergent market. After I demonstratethe biocidal property of Silver Nano to him, Mr. Boonyarithdecided to join in this Silver Nano research. We spentalmost 10 months finding out the quantity of Silver Nano that 101Banja Junhasavasdikul, Ph.D.

should be added to the powder detergent. We researched the toxicity of Silver Nano when it contacts to human skin. After ascertaining the quantity of Silver Nano required in dry powder detergent, the finance, production and marketing teams of Lion Corp. were invited to join the discussion for commercializing the product. This team started a feasibility study, product design, market study and how to launch the products. Eight months after that, “Pao” with Silver Nano became a popular powder detergent in the market. Currently two students, Mr. Adisak and Mr. Boonchai, are doing their research at Innovation Group’s Nano lab. They discovered good UV shielding properties of Nano zinc oxide and Nano titanium dioxide in rubber and plastic composites. We are extending their researches into industrial applications. “Technology will not come by chance. We have to develop radical technology to sustain the growth of the organization.” - Banja Junhasavasdikul, Ph.D. -102 Winning with Technology

“ The export economy without addingvalue-added to exported products is veryvulnerable to environmental changes.Thailand must emphasize economicgrowth through the “Creative Economy”,developing Thai industries byupgrading the country’s knowledgeand technology base. Technology andvalue innovation will help Thai industriesbecome less vulnerable to environmental”changes and competition.



05Globalization

Globalization Whether you like it or not, globalization has to come to you. Globalization changes people’s lifestyle. With modern communication, information from one place reaches many places quickly. The economy of one country easily affects other countries in a chain reaction as trade crosses from one country to other countries without frontiers, and the product lifecycle becomes shorter. People expect to buy better products of better quality at a cheaper price. Globalization creates not only greater business opportunities but also greater challenges. To take advantage of globalization, a company has to focus on those areas in which the company has advantages (core competencies). The company must emphasize efficiency in using resource, productivity and the organization’s technological competence. Technology and value innovation become the keys of the core competencies that a company must have to sustain its growth in the modern global business.106 Winning with Technology

“In 3 years, every product my company makes willbe obsolete. The only question is whether we make theseobsolete or someone else will.” - Bill Gates, in “The Speed of Thought” - Like many other great companies, Microsoftemphasizes continuing development of technology andvalue innovation in sustaining the growth of the company.Global economic movements If we study the history of trade, globalization can bedivided into four periods. The 1st wave of globalization began with the increasein trade between Europe, America and the Far East duringthe 20th century. The 2nd or post-protectionist wave was the period1965-1980 during which the industrialized countries ofEurope, USA and Japan traded their products under GATS(General Agreement on Trade and Service). 107Banja Junhasavasdikul, Ph.D.

The 3rd wave, from 1980-2007, was the period that the US and Europe turned to manufacturing products for the Global Market in the Asia Pacific region. The 4th wave, from 2008 until now, is the period since the collapse of the US and European economies. Asia Pacific has become the strongest economic zone. China is the second largest economy after the US. It’s quite interesting to study the economic movement in detail, starting after the World War II. After the war, the world was separated into two camps: capitalism and communism. The US was very rich after the war, but spent much of its wealth on the Korean and Vietnam wars to prevent the encroachment of China and the spread of Communism. Meanwhile, twenty years after the war, Japan and the European countries that had suffered from the World War II developed their countries by tightening their belts, and putting in hard work and dedication to developing their industries. They became very strong industrialized countries and their products replaced US products in many countries, including the US market. They108 Winning with Technology

developed their international market by emphasizing thequality of their products. Products from Germany and Japanwere well received as high quality and trouble-free to use. During the conflicts between Russia and the US inthe Gobachev and Kennedy era, the USSR felt its depositsof US currency in New York were insecure and transferredbillions of dollars from its deposit in New York to Europe.This was the beginning of the Euro-Dollar market. Sincethen the US dollar has not been under the control of the USgovernment, and has been freely traded outside the US.This market became very large because OPEC countriesbecame very rich after the oil crises in 1973 and 1978 anddeposited their money in Euro-Dollar currency. During the1980s the high oil prices exacerbated the imbalance ofwealth between OPEC countries, industrialized countriesand under-developed countries. Money flew from Europeand the US to the countries where the interest rates werehigh. Countries in Latin America and Asia kept their interestrates high for the inflow of money from overseas to developtheir countries. Many leaders in Latin America misused that 109Banja Junhasavasdikul, Ph.D.

money. They spent a lot of money in less productive areas, such as property speculation and luxury goods. That caused economic crises in many Latin American countries, such as Argentina, Brazil and Peru. It took six or seven years before those countries could bring the very high inflation in their countries back to normal. From 1980 to 1990, the US and Europe looked at the Asia Pacific region as the sources of raw materials, places for their manufacturing, and markets for their exports. Hong Kong, Singapore, Korea and Taiwan gained foreign investments and the technology brought by the foreign investors. These four countries became the newly industrialized countries through foreign investments. Meanwhile, their governments emphasized the development of technology to upgrade their industries. In twenty years, these countries developed their industries to become newly industrialized countries by using the strategy of “Copy and Develop” to enhance their manufacturing capability. After World War II, most countries used the fixed exchange rate with the US$ by following the Breton Woods110 Winning with Technology

System in their international trading. Countries in Asiaand Latin America had small foreign reserves and theirgovernments kept tight control of foreign exchange. Butin the 1990s, in order to welcome the inflow of foreigncurrencies into the countries, countries in Asia releasedtheir tight control on foreign exchange. The US dollar flewinto these countries in terms of investment and loans.The Asian countries developed their economics throughheavy borrowing. Parts of these loans were invested ininfrastructure and manufacturing, but many were spent onunproductive areas, property speculation and the stockmarkets. Prudential regulations to secure domesticborrowing with collateral were weak and foreign exchangerisk was not covered. Those were the causes of the Asianeconomic crisis in 1997. The financial crisis happenedin Thailand in April, 1997. The Thai currency (baht) wasdevalued from 25 baht to US$1 to 60 baht per US$1 in amonth. The foreign banks felt insecure and pulled theirmoney out. The Thai financial institutions collapsed andmany businesses went bankrupt. The financial crisis quicklyspread to Taiwan, Korea, Hong Kong, Singapore, Malaysia 111Banja Junhasavasdikul, Ph.D.

and the Philippines. Currencies of these countries were devalued by half in a few months, and they had to pay more than double for their foreign loans. Many businesses went bankrupt. It took more than three years for these countries to recover from the crisis. Asian countries gained experience from the financial crisis in 1997, and were very conservative in both borrowing and covering foreign exchange. Central Banks and governments were in tight control of inflation, therefore these countries were not much affected by the economic crisis. I, along with many economists, were very surprised to see the financial crisis occur in the US and spread to Europe in 2007-2008 as these countries were renowned as the experts in economics and finance, but they repeated the mistakes of Asian countries in 1997. Latin America and Asia suffered a financial crisis partly because they had no experience and relied on the US$ in developing their economies. But the subprime mortgage crisis in the US happened because the Central Bank of America stimulated the economy through the policy of low interest rates and high112 Winning with Technology

liquidity, although the US economy had been very good fora decade, because liquidation of money and low interestrates led to property speculation. Properties in the US wereover-valued and that caused the “Subprime” crisis in whichBear Stearns, Fannie Mae and Freddie Mac lost 290,000million dollars. Lehman Brothers went bankrupt while AIG,Goldman Sach, Merrill Lynch and Morgan Stanley lost tril-lions of dollars. The Subprime crisis spread quickly to Europe andAsia. Every country came out with rescue plans. The USGovernment spent about US$1.8-2.2 trillion to rescue itseconomy. Other countries in Europe and Asia also spenttrillions of dollars on rescue plans. Business stood still forover 6 months. However, the economy in Asia recoveredafter 6 months and GDP growth rates were very high in2010. Their economies will continue to grow at high rates forfew years through the trade and business cooperationamong the Asian countries. But many countries in Europe,like Greece, Spain and Ireland are still in financial crisisbecause of heavy borrowing over the past ten years. 113Banja Junhasavasdikul, Ph.D.

Free Trade Agreement (FTA) Globalization led to very strong competition in international trade. Every country set trade regulations to defend their local industries. International trading became too complicated for the World Trade Organization (WTO) to handle. The WTO is very ineffective in either regulating or settling disputes in global trade. It was easier for two countries to settle trade conflicts between themselves through their bilateral agreements. Many countries in the same geographic zone formed economic communities to achieve economic and trade cooperation between member countries. They tried to defend their countries from competition by countries outside their zone. Countries in Europe formed the European Union (EU). The US, Canada and Mexico formed the North America Free Trade Agreement (NAFTA). Six countries of South East Asia (Thailand, Brunei, Malaysia, Indonesia, Singapore and the Philippines) formed the ASEAN Free Trade Area (AFTA) community to facilitate cooperate between the six members. The objectives of AFTA were to liberalize trade,114 Winning with Technology

service, investment and labor mobility by harmonizingrules and regulations among ASEAN members. After 2000,Vietnam, Laos, Cambodia and Myanmar joined the AFTA.ASEAN was renamed the ASEAN Economic Community(AEC) with a total of 10 member countries. AEC will have anaggregate population of 580 million - more than thepopulation in the European Union - with a total GDP of$US1.5 trillion. Looking at AEC as a product market withhigh potential, in 2007 China, Japan and Korea joined AECto form ASEAN+3. By 2018, Australia, New Zealand andIndia will also integrate into AEC to become ASEAN+6. Thiswill make ASEAN a very influential economic zone becauseASEAN+3 will have a population of 2 billion and ASEAN+6will have a population of over 3 billion. These countries havevery high GDP growth rates. The AEC will result in greaterconcentration of production in the region. Trade betweencountries in Asia will increase and will counterbalance theirtrading between the US and the EU. The AEC involves the economic integration of 10countries. It covers the liberalization of capital movement, 115Banja Junhasavasdikul, Ph.D.

labor movement, the harmonization of customs regulations, standards of product and economic cooperation among ASEAN countries. But there is no plan for customs union (charging the same tariff on imports from outside the region). Restrictions on investment and labor will need more negotiation before the AEC can become a true single market like the EU. The 4th wave of globalization The 4th wave of globalization started after the economic crisis in the US in 2008. In the past, the economies of countries in Asia had been growing through exports to the US and the EU. After the economic crisis in US and Europe, these countries started to put more emphasis on their trades among Asian countries. ASEAN+6 are a very large single market with a total population of over 3 billion, or half the world’s population. The aggregate of investment and trade in Asian countries is quite substantial. However, each country still has restrictions on business and different imported tariffs to defend their own domestic116 Winning with Technology

industries. China has the highest growth rate, followedby India and countries in ASEAN. AEC and APEC (AsiaPacific Economic Community) have become the world’slargest economic communities. Their economies arebecoming less dependent in exporting to the US and EU.However, companies in the US and the EU have becomemore dependent on exports to and investments in Asia. The more integration in the FTA, the greater themarket and trade opportunities and the more challenges.Successful business has to focus on core competencies andwhere the business is particularly distinctive. It is importantto identify specific opportunities under the FTA regulationsversus the company’s unique strengths. Production capacity,product innovation, process technology, and manufacturingmanagement become crucial to create a company’scompetencies under the FTA.Thailand under AEC and FTA Thailand had been growing its economy from anagricultural to an export economy. Electrical appliances, 117Banja Junhasavasdikul, Ph.D.

disk-drives, food processing, automobile and auto parts are five major Thai exports. The Thai automobile and auto part industries benefits from the big production base due to the infrastructure, investments from Japan, and labor skill that has developed in that industry. Thailand will benefit from another US$1 billion foreign investment in the Eco-car. This will increase Thailand’s benefits in a larger ASEAN market. But some of Thailand’s other exports are very vulnerable. Thai rice is losing market share to Vietnam. Production of rice depends on the weather (rain). Some years we have good crops, but some years we have a small harvest. Exports of sea food, processed meat, fruit etc. are facing tighter control in food safety regulations from the countries that import these products. Unfortunately, Thailand does not have a very good international standardized food testing lab to support food exports to the US and EU. Meanwhile, many exports from Thailand are facing strong competition from other Asian countries because of the strengthening of the Thai currency against the US$. Thai currency appreciated 28% against the US$ in 2010 while China, Hong Kong and Vietnam kept their currencies low. Some competition came from the118 Winning with Technology

larger economy scale of production in China and India.Vietnam and Indonesia have an advantage over Thailandbecause of cheaper labor costs. These make the exportsfrom Thailand more and more vulnerable. Should we still emphasize the Export Economy withoutadding value innovation into Thai industry?Creative Economy The export economy without adding value-addedto exported products is very vulnerable to environmentalchanges. Thailand must emphasize economic growth throughthe “Creative Economy”, developing Thai industries byupgrading the country’s knowledge and technology base.Technology and value innovation will help Thai industriesbecome less vulnerable to environmental changes andcompetition. To change from an export economy to atechnology creative economy, the government must changeits policies to emphasize technological development,starting with the education system and the government’s policyto promote research and development in the private sector. 119Banja Junhasavasdikul, Ph.D.

The Thai education system is considered very ineffective. The government and schools put more emphasis on the quantity rather than the quality of their graduate students. Students learn from what teachers teach in the class and become very narrow in their thinking. The Thai government should start by upgrading the quality of teachers and the method of education. The conventional “teaching” method must change to a “learning” method. Activities outside the classroom must add more to the education system. During the industrial development stage, the availability of skilled labor and qualified engineers will attract foreign investment into the country. Thailand needs more qualified engineers. There are many good engineering schools, but these universities must link more with the industry to know what and how to serve the requirements of the industry. These universities should be able to provide qualified engineers that meet the industries’ requirements. They can also help to speed up the technology capability of Thai industries by working closely with them.120 Winning with Technology

Thailand must take advantage from FTA Thai industries must take advantage of the greaterbusiness opportunities brought by globalization.Geographically, Thailand is located at the center of ASEANwith a population of 580 million as one single market.Thailand has many advantages in good infrastructuresand highly skilled labor, but Thai industries have to createtechnological competence and innovative products to servethis big market. Thailand was traditionally a food exportingcountry. We were the largest exporters of rice, natural rubber,fruit, vegetables, shrimps and canned sea food to the US, EU,and countries in Asia. We can maintain the position in foodexports if the government helps these industries by setting upFood Safety Standards for exports. China and India are taking advantage of their largerscale of production. Their commodity products arecheap. Foreign investments in high technology industriesenable them to catch up quickly with changes theirproducts to better quality and higher technology products toexport. The growth of these two countries creates 121Banja Junhasavasdikul, Ph.D.

bigger challenges for small countries in ASEAN, but in the dark cloud there are always golden rays of opportunities. The 2.4 million populations (China and India) give great opportunities for Thailand to export its agricultural products to feed this market. Besides food, India and China need large quantities of natural rubber and rubber products for their growing automotive and tire industries. It is a good opportunity for Thailand to export natural rubber to these countries, but instead of exporting raw materials, the Thai rubber industry should export products that have a higher added value. There are also investment opportunities in these countries if we bring in the competitive edge technology to invest in niche industry of these countries. (CP invests poultry farm and poultry and processing food in China). Besides exports and investment, we should also consider buying products which are cheaper from China to market in ASEAN. Trading products among AFTA+3 is another good business opportunity under FTA. The 3 billion population in Asia will provide great business if we study the market potential in each country122 Winning with Technology

carefully, but we must find out our competitive edge ofproducts and technology and link our technology to theindividual industry’s requirements. To create the competitiveedge in technology, the company must develop innovativeproducts to offer to this 3 billion population market. 123Banja Junhasavasdikul, Ph.D.

DISTINGUISHED PROFESSOR BANJA JUNHASAVASDIKUL Education Background : BSc (Chemistry), Chulalongkorn University : MA (Organic Chemistry), University of Texas : MBA (Executive), Thammasart University : Ph.D. Technology Management, Rushmore University, USA. Existing Business Position : Chairman, Board of Directors Honors & Awards > QUALITY PERSONS OF THE YEAR 2011 from Foundation of Science and Technology Council of Thailand - Organization for Public Charity > Nominated as a Distinguished Professor from the Faculty of Science, Chemistry Department, Chulalongkorn University in 2006 until present124 Winning with Technology

> International Professional of the Year 2005 “Innovation in Polymers” from International Biographical Center, Cambridge, England > Chosen as one of the distinguished person in the magazine “Who’s Who in the World” 22nd edition, 2005Social Activities > Vice Chairman of The Federation of Thai Industries, Rubber Based Industry Club > Executive Director Committee of The Federation of Thai Industries > Committee of The Federation of Thai Industries in FTA, NTB and Taxation > Executive Committee of Scientific and Technology Research Equipment Center, Chulalongkorn University 125Banja Junhasavasdikul, Ph.D.

> Executive Committee of The Metallurgy and Materials Science Research Institute, Chulalongkorn University > Honorable Advisor of Science Chemistry Alumni Chulalongkorn University > Special lecturer for the courses polymers and lndustrial Chemistry, Chulalongkorn University > Establish the program of “Technology Polymers Summer Camp” to give training and knowledge in polymers for university students126 Winning with Technology