Competitiveness, FDI and Technological Activity in East Asia
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Competitiveness, FDI and Technological Activity in East Asia

Edited by Sanjaya Lall and Shujiro Urata

This book addresses this imbalance with new country studies on the interaction between foreign direct investment (FDI) and technological activity in building export competitiveness. The book covers China, Indonesia, Japan, Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand, highlighting different strategic approaches to building capabilities in industrial enterprises. The book also includes a general overview and studies of Japanese multinationals overseas.
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Chapter 12: Foreign direct investment, technology and competitiveness in Thailand

Peter Brimble


Peter Brimble1 1. 1.1 INTRODUCTION AND CONTEXT Background Foreign direct investment has long played an important role in Thailand’s economic development. Several researchers have examined the impact of FDI on investment, long-term capital inflows, exports, and employment generation, but few have looked at the broader impact on human resource development and technology transfer.2 Given the growing importance of industrial competitiveness and the potential significance of the relationship between inward FDI and technological upgrading, this chapter explores the links between competitiveness and FDI and domestic technological effort. Thai policymakers must address two important questions. First, what are the most effective ways in which technology transfer can take place through FDI, and how can such transfers be accelerated and enhanced? Second, what are the policies needed to stimulate alternative (non-FDI) modes of technology development within the country? 1.2 Framework for Analysis In the Ninth Economic and Social Development Plan, which will run from 2002 to 2006, one of the main pillars of Thailand’s development strategy is improving competitiveness. The framework proposed for this chapter (Figure 12.1) goes further, defining the level of technological development at the firm-level – including MNCs, large local firms, and small and medium-sized enterprises (SMEs – largely local in Thailand) – as the critical determinant of competitiveness. Technological progress is taken to require a continuous upgrading of technology, information and skills. The 334 FDI, technology and competitiveness in Thailand 335 FDI technology resources/ activities Framework conditions Transfer factors • Spillovers • Training • Subcontracting • Public/private • Facilitation • Institutions Science and...

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