Comment on “The Evolution of University–Industry Linkages in Thailand”

Abstract

Many developing countries including those in East Asian region have been interested in the way to stimulate university industry linkages (UILs) in order to resume their economic growth and to improve their innovation capabilities, which are seen as a key to escaping from the middle income trap (Yusuf & Nabeshima, 2007). Intarakumnerd and Jutarosaga (2023) focus on UILs in Thailand and examine how changes in the higher education sectors in Thailand have contributed to broadening the relationships with firms in key sectors in Thailand. They review the reforms implemented in the higher education system in Thailand and describe in detail various efforts that have been introduced to stimulate UILs in Thailand. The discussion of the higher education system is supplemented by a discussion of the research and development (R&D) activities of firms based on the Thai R&D and Innovation Survey and a detailed look at three strategic sectors for Thailand: the automotive, hard disk drive, and pharmaceutical industries. Intarakumnerd and Jutarosaga find that much of the interactions between universities and firms center around skill development and relative few activities focus on research. They conclude that UILs in Thailand remain weak, even though UILs have become more sophisticated and interactions between universities and firms have increased compared to the past. While Intarakumnerd and Jutarosaga presents the current state-of-affairs in terms of UILs in Thailand, it would be helpful to deepen the discussion relating to the following points. First, the paper could include more assessment of the strengths and weaknesses of the instruments that have been introduced recently in Thailand to encourage UILs. A study by Brimble and Doner (2007) identifies the lack of R&D by firms, the lack of incentives and support for universities, and the slow bureaucracy as the likely causes for the lack of UILs in Thailand. From that time, according to Intarakumnerd and Jutarosaga (2023), the government has introduced a number of efforts to stimulate UILs. While some improvements are seen among universities in terms of more emphasis on research, the interactions between universities and firms are not as forthcoming as expected. More discussion on why firms do not utilize these initiatives, despite the fact that compared to the past more firms are engaging in innovation activities in general, would be quite helpful. Second, the paper could discuss the presence of multinational firms in Thai industries in terms of UILs in more depth. Thailand has been successful in rapid industrialization, mainly through foreign direct investment. In many cases, the innovation activities of foreign subsidiaries are conducted in the home country (or other “hot spot” locations), it is not necessary to conduct them where the actual production is located. According to Intarakumnerd and Jutarosaga, there does not seem much difference among the local and foreign subsidiary firms in their propensity to engage in innovation activities (about 45% of local and foreign subsidiary firms). However, their focuses are slightly different. According to Intarakumnerd and Jutarosaga, local firms tend to engage in more upstream R&D, whereas foreign subsidiaries are more active in product/process innovation. This may be one reason why much of the UILs in Thailand are focused on training rather than R&D, especially those involving multinational firms. Multinational firms are willing to collaborate with local universities and training institutes for training purposes since they need to have access to skilled workers local. Indeed, multinational firms in the automotive and hard drive sectors have been collaborating with universities in Thailand on the training side (Brimble & Doner, 2007). These differences in their focuses could lead to the different approaches taken by firms to engage with universities and Intarakumnerd and Jutarosaga could explore more of how the presence of foreign subsidiaries affect the type of UILs, their impacts on local-owned firms, and subsequently the innovation capabilities of firms in developing countries. However, there are some signs that the innovation conditions and UILs may improve in the future. Even though about 90% of the patent applications are made by non-resident applicants (the entity that holds the legal rights to the invention), about 10% of such patents include local inventors (persons who engaged in invention activities) including those belonging to multinational firms. Among the domestic applicants, public research institutes and universities are increasing their presence (Motohashi, 2020). According to data from the World Development Indicators, R&D expenditure in Thailand has expanded quite rapidly from 0.25% of gross domestic product (GDP) in 2001 to 1.1% in 2019. Thus, the underlying innovation activities in Thailand is expanding and there is some scope for broadening and deepening UILs in Thailand. How to stimulate innovation activities and UILs in a country where the industrialization was driven by foreign direct investment is an important issue to examine, and such research findings will be quite relevant to Thailand and other countries in Southeast Asia.