Evidence and Experience from Developing Countries
Edited by Sunil Mani and Richard R. Nelson
Chapter 4: Knowledge transfer in the Thai automotive industry and impacts from changing patent regimes
Thailand is not only a latecomer in industrialization but recently the country has also changed from a weak to a stronger patent regime since the first amendment of the Patent Act in 1992. Nonetheless, unlike East Asian newly industrialized economies (NIEs) (Korea, Taiwan, Singapore), firms in Thailand have generally failed to catch up. They have been slow and passive in technological learning. Government policies and institutions like public research institutes and universities have not strongly encouraged and assisted firms to enhance their indigenous technological capability, especially in terms of absorbing external knowledge. For example, there was virtually no mechanism to help diffuse knowledge embodied in patents. The situation has not changed under the stronger protection regime from 1992 onwards. Despite significant investment by transnational corporations (TNCs) since the 1960s, firms have only deepened their technological capabilities in Thailand in the area of production. Most have failed to move to more sophisticated activities such as product design and R & D locally. The spillover impacts of upgrading local capabilities have also been relatively small. In a nutshell, there is no co-evolution of intellectual property rights (IPR) regime and technological capability of firms in Thailand, which is different from the case in NIEs (Intarakumnerd and Charoenporn, 2010). Interestingly, lately there have been a few incidences of improvement in key sectors like hard disk drive and automotive. The automotive industry in Thailand is quite an exception. It started in the early 1960s when TNCs started their assembly plants there.
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