Technology is a mandatory factor contributing to long-term economic growth. However, how to promote technology investment has been discussed for ages. This article is drawn from a recent research study published at NIDA Economic Review from Dr.Vasu Suvanvihok from Sokhothai Thammathirat University by investigating the behavior of Thai industries’ R&D and innovation (RDI) activities, the technological investment, using the institutional framework in analyses. firm-level data from Thailand’s R&D and Innovation activities survey from the Industrial sector 2009
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The results show that most of the firms’ characteristic and business environment variables; including ownership status, number of employees, experience in business, total sales and categories of sales, are significantly related to the probabilities to carry out R&D or innovation activities. Locally-owned firms tend to carry out R&D and innovation more than foreign majority firms. Firms having higher sales or carrying other technological activities are also highly tentative to carry out such activities.
The expenditures for R&D can be explained significantly by total sales, number of R&D staff,and external cooperation with business partners and universities or public research institutes, all of which are in a positive direction. For innovations activities, the expenditures are significantly related to total sales, export portion, experiences, and results of former activities in recent years.
Decisions on effort allocation of firms’ R&D and innovations activities are different. For R&D, firms tend to do product research more than process or carry out both of them. The factors that significantly relate to the firms’ decision to carry out process or both product and process are industry group, information from parent and associate companies, information from business partner, and intense cooperation with other institutes. For innovation activities, firms tend to carry out both product and process, except for some industry groups that tend to carry out more on product only. The reason may be they have to commercialize quickly, so they have to plan and develop their production or service process to be ready once the product development is finished.
In general, the institutional factors can explain some behavior of firms in carrying out R&D or innovation activities as described above, of which some are in the part of government roles. From the evidence, government support that significantly relates to decisions on R&D and innovation activities are information from universities, or public research institutes which affect the allocation efforts of R&D activities, cooperation with universities or public research institutes which affect the expenditure, and frequently engagement with universities or public research institutes which affect the allocation effort of R&D activities.
From the study, there are policy implications which are proposed to be implemented. Firstly, as information is the important factor for firms in making decisions on R&D and innovation activities, government should provide, or make firms to be able to access enough information orproper knowledge for industries, the services or supporting mechanisms of government, and contacts of supporting agents using integrated communication to target firms or industries. Events such as public events for intellectual property marketing or R&D fairs should be arranged periodically. This would give more chances for firms to explore, plan and decide to invest in proper technological development.
Secondly, as the results show that external cooperation influences the decision on R&D and innovation, since cooperation or technology alliances can reduce R&D costs by dropping out redundant activities, sharing knowledge and enhancing more outcomes effectively, government must continually support and play a more active role in facilitating the network and cooperation of both public and private, and among private industrial firms.
The co-operation could be contracting or conducting joint research projects or other activities such as hiring academic consultants, technology licensing, using analytical and testing services or other technical infrastructure, training and personnel exchanges, meeting or conference, and even informal personal contacts. Government should also support firms to have more chances for a soft-loan, granted in a specific field of technology, or having a tax rebate program for R&D and facilitate matching funds for technology investment. The available funds or cost reduction should make firms comfortable in making a decision on their choices of R&D and innovations.
The important thing to be done is matching required technology or development of industrial firms to the researchers of universities or public research institutes. These will be the best answer to research problems for researchers since, if it succeeds, it will be fully used and commercialized in the real economic sectors. The public research institutes should also be enthusiastic to acquire research topics from outside-in or industries (users) oriented approach, instead of just following their interests or having competence without any requests from users. The government must play this important role of promoting and subsidizing the institutionalization of joint R&D or innovation activities between public and private firms, setting its policy to target the real commercialization outcomes to the research institutes, and having effective control and monitoring procedures. In terms of individual joint R&D project, the government may have to subsidize or realize some loss in knowledge creation, but it will eventually have more benefit to the economy when fully considered in the long run.
Finally, the government should encourage technological activities other than R&D, such as acquisition or adaptation of external technology, reverse engineering, basic and detail design, testing and quality control of products or processes, since they are significantly lead to the firms’ decision to carry out more R&D and innovations.
Notwithstanding, there are some new development by public research institutes in Thailand in cooperation at more concrete levels than in the past. National Research Administration Network (NRAN), consisting of leading public research institutes relating to scientific fields, was founded in 2012 according to the national research strategy to bring research outputs to solve problems and increase the competitiveness of the country. The NRAN members work together in national research project management, focusing on the same target issues and thoroughly supporting each other to bring the outputs to commercialization. At present, the five issues they focus on are rice, cassava, rubber, logistic and tourism. This is a good evolution in Thailand R&D society, but it has to be done continually and it will take length of time to see the effectiveness and sustainability of the operation. Related parties must support this for future success, not just be initiated by politics and to fade away in the later.
For more information, full paper can be downloaded from http://
Decisions on effort allocation of firms’ R&D and innovations activities are different. For R&D, firms tend to do product research more than process or carry out both of them. The factors that significantly relate to the firms’ decision to carry out process or both product and process are industry group, information from parent and associate companies, information from business partner, and intense cooperation with other institutes. For innovation activities, firms tend to carry out both product and process, except for some industry groups that tend to carry out more on product only. The reason may be they have to commercialize quickly, so they have to plan and develop their production or service process to be ready once the product development is finished.
In general, the institutional factors can explain some behavior of firms in carrying out R&D or innovation activities as described above, of which some are in the part of government roles. From the evidence, government support that significantly relates to decisions on R&D and innovation activities are information from universities, or public research institutes which affect the allocation efforts of R&D activities, cooperation with universities or public research institutes which affect the expenditure, and frequently engagement with universities or public research institutes which affect the allocation effort of R&D activities.
From the study, there are policy implications which are proposed to be implemented. Firstly, as information is the important factor for firms in making decisions on R&D and innovation activities, government should provide, or make firms to be able to access enough information orproper knowledge for industries, the services or supporting mechanisms of government, and contacts of supporting agents using integrated communication to target firms or industries. Events such as public events for intellectual property marketing or R&D fairs should be arranged periodically. This would give more chances for firms to explore, plan and decide to invest in proper technological development.
Secondly, as the results show that external cooperation influences the decision on R&D and innovation, since cooperation or technology alliances can reduce R&D costs by dropping out redundant activities, sharing knowledge and enhancing more outcomes effectively, government must continually support and play a more active role in facilitating the network and cooperation of both public and private, and among private industrial firms.
The co-operation could be contracting or conducting joint research projects or other activities such as hiring academic consultants, technology licensing, using analytical and testing services or other technical infrastructure, training and personnel exchanges, meeting or conference, and even informal personal contacts. Government should also support firms to have more chances for a soft-loan, granted in a specific field of technology, or having a tax rebate program for R&D and facilitate matching funds for technology investment. The available funds or cost reduction should make firms comfortable in making a decision on their choices of R&D and innovations.
The important thing to be done is matching required technology or development of industrial firms to the researchers of universities or public research institutes. These will be the best answer to research problems for researchers since, if it succeeds, it will be fully used and commercialized in the real economic sectors. The public research institutes should also be enthusiastic to acquire research topics from outside-in or industries (users) oriented approach, instead of just following their interests or having competence without any requests from users. The government must play this important role of promoting and subsidizing the institutionalization of joint R&D or innovation activities between public and private firms, setting its policy to target the real commercialization outcomes to the research institutes, and having effective control and monitoring procedures. In terms of individual joint R&D project, the government may have to subsidize or realize some loss in knowledge creation, but it will eventually have more benefit to the economy when fully considered in the long run.
Finally, the government should encourage technological activities other than R&D, such as acquisition or adaptation of external technology, reverse engineering, basic and detail design, testing and quality control of products or processes, since they are significantly lead to the firms’ decision to carry out more R&D and innovations.
Notwithstanding, there are some new development by public research institutes in Thailand in cooperation at more concrete levels than in the past. National Research Administration Network (NRAN), consisting of leading public research institutes relating to scientific fields, was founded in 2012 according to the national research strategy to bring research outputs to solve problems and increase the competitiveness of the country. The NRAN members work together in national research project management, focusing on the same target issues and thoroughly supporting each other to bring the outputs to commercialization. At present, the five issues they focus on are rice, cassava, rubber, logistic and tourism. This is a good evolution in Thailand R&D society, but it has to be done continually and it will take length of time to see the effectiveness and sustainability of the operation. Related parties must support this for future success, not just be initiated by politics and to fade away in the later.
For more information, full paper can be downloaded from http://