Thailand faces mounting demographic and productivity pressures that could constrain long-term growth unless urgent steps are taken to modernise its workforce, according to a new World Bank assessment that highlights the need for accelerated artificial intelligence and digital skills development.

The report warns that Thailand’s ageing population and declining birth rate are steadily shrinking the labour force, creating structural constraints in key sectors including manufacturing, services and technology.

Without decisive reforms, the contraction could weigh on competitiveness and economic resilience in the years ahead.

The World Bank recommends a comprehensive strategy centred on upskilling and reskilling workers in digital technologies, automation and artificial intelligence.

It argues that strengthening human capital will be essential to offset demographic headwinds and maintain Thailand’s position as one of Southeast Asia’s most dynamic economies.

Thai authorities have already prioritised innovation and digital transformation under national development frameworks, with expanded investment in smart industry, advanced manufacturing and technology-driven services.

Government initiatives aimed at strengthening science, technology, engineering and mathematics education, promoting lifelong learning and supporting private-sector digital adoption are seen as critical foundations for the next phase of economic development.

The report underscores that artificial intelligence, if effectively integrated across industries, could enhance productivity, improve public services and support higher-value economic activity.

However, it cautions that realising these gains will depend on broad-based workforce readiness, inclusive access to training and stronger collaboration between government, academia and industry.

Thailand’s transition toward a more knowledge-intensive economy comes at a time of heightened global competition for skilled labour.

By investing decisively in AI capabilities and digital infrastructure, policymakers aim to transform demographic challenge into an opportunity for technological leapfrogging and sustainable growth.

The World Bank concludes that timely reforms, coupled with Thailand’s established manufacturing base and strategic regional position, could enable the country to navigate demographic shifts while reinforcing its long-term development trajectory.