Technology Upgrading in Global Value Chain: Thai Experiences

Thailand faced financial crisis in 1997. Both financial and real sectors were seriouslyaffected. Many firms in labour-intensive sectors, where Thailand used to have competitiveadvantage such as garments, textile, shoe, disappeared or had to restructure. Nonetheless,the crisis can also be seen as a blessing in disguise. After the crisis, transnationalcorporation and large domestic firms, in general, started to invest more in R&D. SeveralSMEs that survived the crisis emerged much stronger and paid more attention totechnological development. There was also emergence of new start-up firms with highengineering, design and R&D capabilities. This paper will highlight changes after the crisisin three leading industrial sectors: electronics, automotive and frozen seafood industry. Inelectronics industry, there are not many capable firms in the upstream segment likesemiconductors. Nevertheless, transnational corporations in segment like hard disk drivebegan to invest in process R&D and collaborate more with local suppliers, universities andpublic research institutes in human resource and technological development. In automotiveindustry, several Japanese auto manufacturers such as Toyota, Honda, Nissan, Isuzu set upR&D/Technical centers in Thailand since 2000s. This prompted Japanese and local partsuppliers to also invest more in engineering, design and development activities. Some localuniversities also offer engineering programs specifically targeting the automotive industry.In frozen seafood industry, several Thai firms have developed new ready-to-eat products,own brands and international distribution networks. They started to become transnationalcorporations investing in both developing and developed countries.