The Value Chain Vault Explained In 9 Steps

Infinite Thailand Strategy #1

1. In 2019  Thailand has a GDP per capita of $7,806.74.  In the same year, Italy had a GDP per capita was at $33,228.24.   

2. The Infinite Thailand Target is this: by 2039, Thailand will reach - or exceed - the same GDP per capita as Italy. 

3. How is this possible? Through the “value chain” vault: that is, a series of targeted moves upwards the value chain in a variety of key sectors: tourism,  hospitality, agriculture, the film industry, real estate, education, food production. 

4. Understanding the value chain vault involves two parts: the value chain, and vaulting. 

5. Vaulting is easier to understand: to vault means to leap upwards while supporting oneself with a pole.   Here is a photograph of Armando Duplantis, who holds the world record for the highest pole vault.

6. The value chain is slightly more difficult to explain. Consider a pair of jeans. These jeans began as cotton in a field, and then they passed through, first, a manufacturing process that turns the cotton into thread, and thread into fabric, then fabric into clothes; then the jeans get distributed to retailers. The value chain stretches up from the raw materials (the bottom) all the way to sales the top) 

7.  Painting offers an especially useful example of a value chain. At the bottom: cotton for canvases, wood for stretchers, oil for the medium, various dyes and hues for the pigments.  At the very top of the value chain,  a painting called “Salvator Mundi”  sold for $450.3 million. 

8.  Typical development economic strategies suggests climbing the value chain: moving up from agriculture, to industrial production, to information economies.  The problem is the “middle income” trap: at a certain point, growing economies seem to stagnate.  The advantage of cheap labor evaporates; costs increase, growth slows. By most indications, the Thai economy seems stalled in a “middle income trap.” 

9. Enter the “Infinite Thailand Strategies.” Each strategy proposes a different value vault.  The Bangkok Tunnelparks will “vault” the value of Bangkok as a tourism destination upwards. The city is already to world’s top tourist destination, but the tunnelparks will function as a kind of world wonder.  Tourists will be able to walk on a greenway all the way from Thonglor ferry station to Lumpini park, and then, from Lumpini park, to Chinatown and Dusit. The Tunnelparks will also “vault” upwards the value of the real estate surrounding the parks themselves.  The 420AOC program proposes creating a regional certification program (like the French AOC system, or Italian DOP) for cannabis production. Such differentiation, again, acts as a value chain vault.  Consider the difference between so-called “government cheese” - that is, the leftover cheese products melted into blocks and given to American welfare recipients and Wyke Family Cheddar, made only by one English farm, and sold for $200 per pound.  Read through each of the strategies to see how each propose different value chain vaults.