SI-013-05 :
Urban–Rural Economic Integration & Regional Value Chains

Situation

Thailand’s urban and rural economies remain structurally disconnected. Cities function as centers of consumption, services, and administration, while rural areas focus on agriculture and primary production.

Key challenges include:

• Weak linkage between rural production and urban markets

• Limited value capture at the rural level (raw output vs processed goods)

• Fragmented supply chains between farms, processors, and cities

• Rural areas lagging in infrastructure, services, and economic diversification

• Migration of labor from rural to urban areas without balanced development

This creates a dual economy, where urban growth does not fully translate into rural prosperity.

Shift

Global economic systems are shifting from urban–rural separation → integrated regional value chains.

Key transitions include:

• From linear supply chains → integrated production–processing–distribution systems

• From rural production only → diversified rural economies (processing, services, tourism)

• From city-centric growth → region-based economic ecosystems

• From labor migration → distributed economic opportunities

Urban and rural areas are becoming interdependent components of a unified economic system.

Advantage

Thailand has strong potential to build integrated regional economic systems:

• Large agricultural base connected to food industry (SI-012)

• Multiple regional cities that can serve as processing and distribution hubs

• Existing logistics and connectivity infrastructure (SI-013-03)

• Cultural and economic diversity across regions

• Potential for rural diversification (agri-processing, tourism, services)

This allows Thailand to evolve into:

“Region-Based Economic Ecosystems (City + Production Zone Integration)”

Additional Structural Advantage

Thailand can design a multi-layer urban–rural integration system:

• Production Layer → Agriculture, raw materials, and primary industries

• Processing Layer → Regional agro-industrial and manufacturing hubs

• Distribution Layer → Logistics and market access through cities

• Service Layer → Finance, education, healthcare, and digital services

• Experience Layer → Tourism, culture, and local economic activities

Supported by:

• Integration with smart farming (SI-012-01) and agro-industry (SI-012-03)

• Digital platforms enabling market access and coordination

• Policy alignment across urban and rural development

This creates a system where value is captured across the entire regional chain—not just at one point.

Implication

Without urban–rural integration:

• Rural areas remain low-income and dependent on primary production

• Urban areas face overpopulation and resource strain

• Value chains remain fragmented and inefficient

• Economic inequality persists across regions

With integrated regional value chains:

• Increased value capture in rural areas

• Balanced economic development across regions

• Reduced urban migration pressure

• Stronger, more resilient national economy

Action Layer