Speaking at the FPO Symposium 2016, the veteran economist said disruptive technology had impacted on General Motors due to both the auto giant’s market cap and price earnings ratio being far behind technology companies like Facebook and Apple.

GM has a market cap of US$47 billion (Bt1.6 trillion) and a PE ratio of only four times, while Apple has a market cap of $563 billion and PE of 12 times and Facebook has a market cap of $362 billion and a PE of 59 times.

Supavud said the contracted growth of GM over several years was a clear example of a disruptive technology, as Thailand attempted to position itself as the Detroit of Asia.

“We think Thailand is facing a challenge of disruptive technology to major industries like automotive. Electronic vehicles will replace fuel cars. Hence, we are quite worried over the policy of Thailand because disruptive technology could hurt the key industries of Thailand,” he said.

Supavud said that Thailand’s export sector was facing a challenge from the protectionism wave. As an open economy, the country’s exports to gross domestic product reached 70 per cent in 2014 from only 18 per cent in 1975, he said.

Thailand’s economy had plugged in the global economy, while protectionism expanded in many developed countries after the US raising free trade brought a parity between the wages of unskilled workers in developing countries with unskilled workers in developed countries.

He said the candidates in the US presidency election had raised the issue of protectionism in terms of banning imports from developing countries. It would be a threat to Thai exports if several countries used protectionism against free trade.

Supavud said that Thailand’s policymakers should be concerned with the decline in net inflow due it being the first time foreign direct investment was lower than direct investment, at a time when theBank of Thailand was pushing outbound investment more.

“The danger to Thailand is we are increasing the GDP of other countries instead [of our own],” he added

Predee Daochai, chairman of the Thai Banker’s Association and president of Kasikornbank, echoed Supavud comments the effects of disruptive technology on the country. He said that the banking sector must adjust itself because a growing number of customers, especially the young generation, were more familiar with smart devices rather than queuing at bank branches.

He said that banks were monitoring the number of transactions at branches – their main expense -compared to transactions on smart devices to adjust their cost structures to comply with the change.

“The key for the banks’ adjustments is the behaviour of customers. Today we don’t know if we will have to close down branches,” he said.

He said that the banking sector had to focus on delivering strong capital to deal with new regulations.

The reduction of capital may create problems to the economy, and as a result the banking sector must deal with every change because a sustainable banking sector is crucial for the health of the economy, he added.