Evolution of Automotive Clusters and Interactive Learning in Thailand

Abstract

This paper analyses the evolution of clusters and ‘interactive learning’ in upgrading manufacturing capabilities. We analyse the upgrading process in line with key concepts constituting ‘interactive learning’, which include clusters and agglomeration (regional) innovation systems, open innovation and localised learning. On the basis of analysis at firm and industry-wide levels, this paper contributes to current literature concerning clusters and innovation that relate to technological upgrading in locally based firms by (1) examining the role of governments in promoting clusters and regional development; (2) identifying the conditions important for firm agglomeration and how agglomeration leads to knowledge-sharing at horizontal, vertical and institutional levels; (3) discussing the role of foreign firms in transferring technology and encouraging their suppliers to share knowledge within the production network; and (4) reporting on the characteristics and determinants of R&D cooperation within the Thai manufacturing sector. The main findings reveal that developing countries, including Thailand at this moment, may have limitations in their science and technology base. This can hinder their upward progression on the global value chain. It is of particular importance for government policy to be more supportive, rather than regulative, in order to strengthen the scientific knowledge base and promote cooperation between indigenous firms and innovation in supporting organisations.