Technological capability of automobile parts suppliers in Thailand

Abstract

This paper analyses the development of the technological capabilities of the engineers in automobile parts suppliers in Thailand. The evidence shows that Thailand's latecomer firms accumulated their technology primarily from foreign direct investment, mostly from Japanese car makers. There has been a significant rise in the demand for engineering and technological capabilities that has driven some amount of technological catch-up in the industry. However, the lack of engineers and technological capabilities among Thai supplier firms has restricted the catch-up process. To upgrade further the Thai automobile firms should build a strong industrial cluster by stimulating the development of technological human capital to provide the horizontal integration necessary for the suppliers to remain competitive. Upstream technological capability is important for this to take place, but it can only be achieved through the development of human capital.

Keywords:

• technological capability
• automotives
• Thailand
• Japan

JEL classifications:

• F23
• L62
• O33
• O38

Acknowledgements

This paper has benefited from comments and suggestions by Rajah Rasiah and two anonymous referees.