the nation’s competitiveness
Post on 16-Jan-2015
651 Views
Preview:
DESCRIPTION
TRANSCRIPT
Suvit MaesinceeJuly 21, 2003
Suvit MaesinceeJuly 21, 2003
R & D and R & D and The Nation’s CompetitivenessThe Nation’s Competitiveness
R & D and R & D and The Nation’s CompetitivenessThe Nation’s Competitiveness
http://www.nrct.net/symposium/media2.php?type=wma&id=3
Our OpportunityOur OpportunityOur OpportunityOur Opportunity
Thailand Is Over-Reliant on Resource-Based And Labor-intensive Industries
Export Composition of Six Asian Economies
Source: Conference on Thailand’s Dynamic Economic Recovery and Competitiveness, 1998
Thailand
Malaysia
Indonesia
SingaporeResource Based
Labor Intensive
Scale Based
Differentiated
Science Based
China
South Korea
Resource- Based/ Labor
Intensive Economies
Science- Based/ Differentiated/ Scale Intensive
Economies
Percentage of exports in natural resources
PP
P p
er c
apit
al
• Bolivia
• Russia
• Canada
•Costa Rica• Brazil
• India
• Singapore• Sweden
• Japan
• US
• Malaysia
• Korea
• Germany
• Argentina
Relationship Between Natural Resource Exports and Wealth
• Thailand
The Silent War and Paradigm Lost
Scale Driven Scale Driven EconomyEconomy
Tragedy of Tragedy of the Commonthe Common
Over Over InvestmentInvestment
Shortage of Shortage of DemandDemand
IndustryIndustryRationalizationRationalization
Over Over CapacityCapacity
HyperHyperCompetitionCompetition
Mass Market Mass Market Competitive Competitive
ParadigmParadigm
MassMassCustomizationCustomizationCompetitive Competitive
ParadigmParadigm
Creativity Creativity Driven Driven
EconomyEconomy
New New Competitive Competitive Playing FieldPlaying Field
ParadigmParadigmLostLost
Industry Based EconomyIndustry Based Economy
‘Make and Sell’ ‘Sense and Respond’
‘Goods for Elites’ ‘Goods for Everyone’
‘Mass Market’ ‘Markets of One’
‘Owning Assets’ ‘Gaining Access’
‘Corporate Governance’ ‘Market Governance’
‘Just in Time’ ‘Real Time’
‘Local Economy’ ‘Global Economy’
‘Asymmetry of Information’ ‘Democratization of Information’
‘Economics of Diminishing Returns’ ‘Economics of Increasing Returns’
Industries and Businesses Are Buzzing With Changes
Knowledge Based EconomyKnowledge Based Economy
Source: Marketing Moves
Level of Customization
Lev
el o
f S
op
his
tica
tio
n
High Tech
Low Tech
Low Touch High Touch
Video GamesVideo Games AdvertisingAdvertisingArchitectureArchitecture
ArtArt
CraftCraft
DesignDesign
FashionFashion
FilmFilmMusicMusic
Performing ArtsPerforming ArtsPublishingPublishing
R&DR&DSoftwareSoftware
Toys and GamesToys and Games
TV and RadioTV and Radio
The Emergence of Creative Economy
The Most Important Intellectual Property in the Creative Economy is the Stuff Inside People’s Head
TechnologyConcept
Value
Source: Cagan and Vogel
High
Low
HighLow
Thai
Testing and Support
Coding
Low-Level Design
High-Level Design
Requirement Analysis
Conceptualization
Ireland
Israel
India
Example: Software Industry Value Created
More for Less
More for More
Less for More
Source: Software Park
1948-1970Self Sufficient
1970-1980Export Agricultural
ProductsProductivity Improvement
1980 upExport Know-How
and Technologies
Exp
ort
Lo
cal
Co
nsu
mp
tio
n
Value addedValue added
Agricultural Output
‘000 ton 1967 1982 Growth
Vegetable 70 165 6%
Citrus fruits 98 160 3%
Other fruits 30 80 7%
Field crops 30 60 5%
Beef 10 40 10%
Source: Israel Ministry of Agriculture and Rural Development
Example: Israel’s Agricultural Industry
Can Thailand Compete in the New Competitive Landscape?
World Economy
Thai Economy
Industry BasedEconomy
Knowledge Based Economy
?
Resource and Labor Intensive
International Division of Labor
Investment Driven
Mass Customization Critical Mass Knowledge Intensive Economies of Skills Economies of Speed
Mass Production Standardization Capital Intensive Economies of Scale Economies of Scope
Our CapabilityOur CapabilityOur CapabilityOur Capability
Government Expenditure 1997-2001
Fiscal Year
Fixed Expense
Public Investment
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
1997 1998 1999 2000 2001
Mil Bht
Our Budgeting Constraint
International Comparison of R&D Investment
Our Investment for the Future Are Significantly Low
Source: Thailand Economic Monitor, June 2000
0
2.0
1.0
1.5
0.5
2.5
3.5
3.0
USAJapan Korea MalaysiaTaiwan Singapore Thailand
Gaps in Science and Technology (At Current Level of Demand)
We Still Deal With a Wide Manpower Gap in Science and Technology
Source: Lall (1999), Raising Competitiveness in Thai Economy, Country Employment Policy Review, ILO.
M.Eng /D. EngB. Engineering B. Science MS/DS
4,520
10,963
5,874
7,015
180541
(113) (352)
1996
2001
...So We Cast Doubt on Our Ability to Compete
High
Singapore
IrelandThailand
Philippines
IndonesiaChina
France
GermanyUK
India
USA
High
Low
LowEntrepreneurial Capabilities
• Number
• Quality
HR Capabilities
• Number
• Wages
• Skills
Source: Nasscom 1999
Software Industry
The Catalysts for Future Growth Such As Venture Capital Have Lagged Behind Its Competitors
Singapore
Hong Kong
USA
India
Japan
Malaysia
Australia
Vietnam
South Korea
USA
Taiwan
HK/China
Singapore
Thailand
Indonesia
Philippines
South Korea
Australia
PR China
Taiwan
Indonesia
Philippines
Thailand
Malaysia
Venture Capital Assets Under Management (% of GDP)
0.10 0.21
9.173.16
1994 1999
The Same Is Also True for the Incubator Businesses
Incubator Growth
4,000 1,000
US
Germany
E. Europe
UK
France
India
Australia
Canada
Israel
Scan-dinavia
Japan
Thailand
Africa1980 1985 1990 20001995 2005
Incubator by Region/Country
Source: Incubators
Telecommunications Productivity
Our ICT
TFP31-57
Labor Productivity
34-51
Capital Productivity
30-60
Lines/Employee
64
Network Utilization
53-79
Subscribed lines/Unit of Investment
56-76
Installed lines/Unit of Investment
73-100
Subscription Rate76
Index of US (1999) =100; Thai data 1999Source: =McKinsey
+
X
X
X
Thailand’s Current Technology Position
Technology Achievement Index
Leader
FinlandUSSwedenJapanKoreaNetherlandsUKCanadaAustraliaSingaporeGermanyNorwayIrelandBelgiumNew ZealandAustriaFranceIsrael
PotentialLeader
SpainItalyCzechHungarySloveniaHKSlovakiaGreeceBulgariaPolandMalaysiaCroatiaMexicoCyprusArgentinaRomaniaCosta RicaChile
Dynamic Adopter
UruguaySouth AfricaThailandPanamaBrazilPhilippinesBoliviaChinaColumbiaPeruJamaicaIranIndonesiaIndiaSri LankaAlgeriaEgypt
Maginalized
PakistanSenegalNicaraguaGhanaKenyaSudanTanzania
Our Strategy (Structural)Our Strategy (Structural)Our Strategy (Structural)Our Strategy (Structural)
Nation’s Building Strategy
Nation’s Competitive
Position
Economic
Social
The New Competitive Paradigm
The New Competitive Landscape
The New Social
Contract
Driving National Agenda
The Strategic Thrusts
Geo-Politic
Environmental
RegionalRegional GlobalGlobalNeighborhoodNeighborhoodLocalLocal
Local Links Global Reaches
Social Cohesion
International Competitiveness
Efficiency Cost effective Productivity Innovation
Sufficiency Community Building Cultural Identity Family Value
New Competitive Paradigm
Lev
el o
f S
op
his
tica
tio
n
High Tech
Low Tech
FoodsFoods TourismTourism
FashionFashion
SoftwareSoftware
Auto industryAuto industry
Level of Customization
Low Touch High Touch
Potential Global Niches
Cultural Cultural StrengthsStrengths
Cultural Cultural StrengthsStrengths
Craftsmanship Craftsmanship SkillsSkills
Peace of MindPeace of Mind
Delicate LivingDelicate Living
Flavorful SenseFlavorful Sense
New Competitive Landscape
Value addedValue addedPotentialsPotentials
Focus of Focus of Thai ProducersThai Producers
Strategic Thrust
Production MarketingR&D
Talent
Conducive Environment
Value Created
Wealth
Job-Wealth Cycle
Job
Wealth Investment
Capital
Knowledge Wealth Cycle
The New Social Contract
Source: Modified from Plowing the Sea
• System thinking, results form mental models• Integrative, interdisciplinary approaches• Team oriented
• Create wealth through innovation and distribute to most productive people• Law and regulatory framework as enabling investment in innovation• Informal producers increasingly integrated
The Old Direction A New Direction
Social Capital
Human Relations
• Paternalistic• Hierarchical organizations• Individual oriented
• Trust oriented• Interdependent• Meritocratic• Team oriented
Human Capital
• Labors and managers are fungible• Viewed as input costs• General education
• Source of competitive advantage• Source of increasing return on inv.• Education as specialized, focused
Learning
• Linear learning, results form strategy choices and organizational design (single loop learning)• Reductionist strategies• Technical and compartmentalized
Justice and Social Equity
• Redistribute finite wealth• Law and regulatory framework as constraints• Informal producers are marginalized
New Direction of Investment in Human and Social Capital
Our Strategy (Behavioral)Our Strategy (Behavioral)Our Strategy (Behavioral)Our Strategy (Behavioral)
Early Market Mainstream Market
InnovatorInnovatorEarly Early AdoptAdopt
erer
Early Early MajoriMajori
tyty
Late Late AdoptAdopt
ererLaggaLagga
rdsrds
Type of Market
Nature Propensity to Innovate
Propensity to Imitate
Risk Preference
Risk Neutral Risk Averse
Pace Revolutionary
Evolutionary
Pattern Discontinuity
Continuity
Focus Creative Destruction
Productivity Improvement
EnthusiasticsVisionariesPragmaticsConservativesSkepticsProfile
Nature of Entrepreneurs
InnovatorInnovatorEarly Early AdoptAdopt
erer
Early Early MajoriMajori
tyty
Late Late AdoptAdopt
erer
LaggaLaggardsrds
Architecture and Capability Innovation
Platform InnovationProduct Innovation
Process Innovation
Different Stages of Innovation Development
Innovator
Early Adopt
erEarly Majori
tyLate
Adopter
Laggards
IRR Line
Return
Risk
Mature
Growth
Introduction Business
AngelVentu
re Capit
alFixedDebt
Different Types of Business Support
Psychological Issues
Loss Gain
• Delay Gain
• Delay Loss
• Unbundle gains• Bundle losses• Bundle smaller losses with larger gains• Unbundle smaller gains from larger losses
Creating Creating a New Competitive Platforma New Competitive Platform
Creating Creating a New Competitive Platforma New Competitive Platform
Clustering Clustering DevelopmentDevelopment
Knowledge Driven PlatformKnowledge Driven Platform
Emerging
Extending
“Lift-off”
A Cluster Provides a Conducive Platform for the Creation, Diffusion, Adoption and Interaction of Innovation
Creation
DiffusionInteraction
Innovation CycleInnovation Cycle
Strategic Transformation…Clustering Development...
Adoption
Pro
cess
Rel
ated
Market Related
Local
Loca
lN
atio
nal
Inte
rnat
iona
l
National International
Rural Enterprises
FamilyEnterprises Traditional
Subcontractors
Source: Bianchi and Tommaso
Strategic Transformation…Clustering Development...
Most of Thai Industry Clusters Are Still in the Emerging Stage
Nature of market/customer baseNature of market/customer base
Nature of technology R&D needsNature of technology R&D needs
Nature of human resource needsNature of human resource needs
Nature of capital financing needsNature of capital financing needs
Underdeveloped, narrow, often serving limited local demandUnderdeveloped, narrow, often serving limited local demand
Very specific and high-level; often still relate to spawning entityVery specific and high-level; often still relate to spawning entity
Narrow but high-level; often reliant on a few key peopleNarrow but high-level; often reliant on a few key people
Patient capital required; limited sources often lead to owner financingPatient capital required; limited sources often lead to owner financing
Economic multiplier capacityEconomic multiplier capacity
Ability of attract outside investmentAbility of attract outside investment
Small; employment and economic impacts limitedSmall; employment and economic impacts limited
Low; may attract some state R&D or investment moniesLow; may attract some state R&D or investment monies
Nature of Cluster Linkages in the Emerging Stage is Uneven and Unpredictable
Strategic Transformation…Clustering Development...
Nature of market/customer baseNature of market/customer base
Nature of technology R&D needsNature of technology R&D needs
Nature of human resource needsNature of human resource needs
Nature of capital financing needsNature of capital financing needs
Expanding , diversifying within region, and developing links Expanding , diversifying within region, and developing links outside regionoutside region
Some continuing high-level, but increasing technology applications Some continuing high-level, but increasing technology applications activity and basis “off-the-shelf” equipment needs for suppliersactivity and basis “off-the-shelf” equipment needs for suppliers
Some high-level professional, but increasingly mid-level technical Some high-level professional, but increasingly mid-level technical and marketing needs as well; reliant on an increasingly diverse and marketing needs as well; reliant on an increasingly diverse workforceworkforce
More complex and diverse; venture capital and expansion capital More complex and diverse; venture capital and expansion capital are particularly important and may become more accessible and are particularly important and may become more accessible and cluster increasingly proves its viability cluster increasingly proves its viability
Economic multiplier capacityEconomic multiplier capacity
Ability of attract outside investmentAbility of attract outside investment
Growing; core firms now have impact on local suppliers and Growing; core firms now have impact on local suppliers and consumer services, etcconsumer services, etc
Emerging; cluster capabilities and synergies may begin to attract Emerging; cluster capabilities and synergies may begin to attract similar firms and suppliers and government/private investmentsimilar firms and suppliers and government/private investment
Some Industries (e.g., Autos), However, Shift their Clusters from the Emerging Phase to the Extending Phase
Strategic Transformation…Clustering Development...
Enterprises in the Cluster Increasingly Diverse and Sophisticated; Enterprises in the Cluster Increasingly Diverse and Sophisticated; Multiple Coopetitive Relationships EmergingMultiple Coopetitive Relationships Emerging
SME Networks Are Loosely-linked Groups of Small Firms with Some Specific Purposes
Pro
cess
Rel
ated
Market Related
Local
Loca
lN
atio
nal
Inte
rnat
iona
l
National International
Rural Enterprises
FamilyEnterprises Traditional
Subcontractors
SME Networks
Source: Bianchi and Tommaso
People’s Republic of China
SMEs
E.g., improving technological
efficiency and pooling resources
for export promotion, thereby
accessing international markets
Strategic Transformation…Clustering Development...
Opportunity for Our Cultural Industry Cluster Development
TourismCreative Industries
Graphic
Product/Packaging
Design
Advertising
Music Video
Web Design
Radio/TV Production
Fashions
Foods
Magazine/Book Publishing
Strategic Transformation…Clustering Development...
Medium Sized Niche Enterprises Exists in Certain Fashion, Luxury Items of Handicraft Production and High Tech Products
Pro
cess
Rel
ated
Market Related
Local
Loca
lN
atio
nal
Inte
rnat
iona
l
National International
Rural Enterprises
FamilyEnterprises Traditional
SubcontractorsMedium Sized
Niche Enterprises
SME Networks
Source: Bianchi and Tommaso
Singapore SMEs
--Making sound cards used in
multimedia computing
--In the mid 1990s, together
accounted for three-quarters
of the world market
Strategic Transformation…Clustering Development...
Both broad and niche markets; state, regional, national, even Both broad and niche markets; state, regional, national, even international customer; some mature marketsinternational customer; some mature markets
Needs at all levels, from technology discovery to commercialization Needs at all levels, from technology discovery to commercialization and application to off-the-shelf equipment development, reflecting and application to off-the-shelf equipment development, reflecting the spectrum of cluster firmsthe spectrum of cluster firms
Very broad and high skill demands; occupations of many kinds Very broad and high skill demands; occupations of many kinds required; institutions are respondingrequired; institutions are responding
Full range of financing needs represented in cluster; good access Full range of financing needs represented in cluster; good access to regional and national sources because of cluster reputationto regional and national sources because of cluster reputation
Nature of market/customer baseNature of market/customer base
Nature of technology R&D needsNature of technology R&D needs
Nature of human resource needsNature of human resource needs
Nature of capital financing needsNature of capital financing needs
Extensive; cluster becomes virtually self-reliant, attracting wealth Extensive; cluster becomes virtually self-reliant, attracting wealth and during it over locally rather than exploring itand during it over locally rather than exploring it
Excellent; reputation spreads; major national players tend to feel Excellent; reputation spreads; major national players tend to feel they have a stake in the regional cluster, so relocations/expansions they have a stake in the regional cluster, so relocations/expansions increaseincrease
Economic multiplier capacityEconomic multiplier capacity
Ability of attract outside investmentAbility of attract outside investment
The Ultimate Goal Is to Develop “Lift-off” Industry Clusters
Strategic Transformation…Clustering Development...
There are extensive and multiple synergies within cluster; major There are extensive and multiple synergies within cluster; major linkages develop with other regional clusters and/or outside linkages develop with other regional clusters and/or outside agglomerationsagglomerations
From Traditional to Global SubcontractorsP
roce
ss R
elat
ed
Market Related
Local
Loca
lN
atio
nal
Inte
rnat
iona
l
National International
Rural Enterprises
FamilyEnterprises Traditional
SubcontractorsMedium Sized
Niche Enterprises
SME Networks
Global Subcontractors
Source: Bianchi and Tommaso
Japanese SMEs
--Moving from their
pre-existing domestic
subcontractors to global
subcontractors
Strategic Transformation…Clustering Development...
Industry Districts Comprise Geographical and Sectoral Concentration of SMEs...
Pro
cess
Rel
ated
Market Related
Local
Loca
lN
atio
nal
Inte
rnat
iona
l
National International
Rural Enterprises
FamilyEnterprises Traditional
Subcontractors
Industrial Districts
Medium SizedNiche Enterprises
SME Networks
Global Subcontractors
Source: Bianchi and Tommaso
Strategic Transformation…Clustering Development...
...Undertaking of Joint Action Aimed at Raising Collective Innovation and Efficiency
Source :Marketing of the Nations
• Population 4 millions
• 90,000 SMEs covering 40%
of employment
• Stand alone and subcontractors
SMEs
• Supporting infrastructure:
transports, research center,
financial institutes, university,
laboratories
• Gain advantages of economies of
specialization
• Export-oriented and has capacity
to respond to market changes
and compete globally
Key Features
Emilia-Romagna
Emilia-Romagna In the Nortern Italy Is a Good Example
Strategic Transformation…Clustering Development...
ClusteringFormation
Physical Capital
Human Capital
Social Capital
Financial Capital
ConnectivityInteractivity
Key Success Factors For Clustering FormationStrategic Transformation…Clustering Development...
Creativity Liquidity
Co-Prosperity
Dynamics of Industry Clustering
PrintingPrinting
InformationServices
InformationServices
FinancialServicesFinancialServices
BusinessServices
BusinessServices
Advanced Advanced Information SystemInformation System
FoodFood
AgricultureAgriculture
TextilesTextiles
ApparelApparel
ChemicalsChemicals
Basic MetalsBasic Metals
ElectricalMachineryElectrical Machinery
IndustrialMachineryIndustrial
Machinery
Metal Products
Metal
Products
Trade, Wholesale Distribution
BankingBanking
ChemicalsChemicalsFoodFood
PharmaceuticalsPharmaceuticals
HealthServicesHealth
ServicesMedical
EquipmentMedical
Equipment
BiomedicalBiomedical
High-FashionApparel
High-FashionApparelChemicalsChemicals
Basic MetalsBasic Metals
PlasticPlasticTextilesTextiles
AdvancedAdvanced MaterialsMaterials
ConsumerElectronicsConsumerElectronics
ComputersComputersIndustrial
MachineryIndustrial
Machinery
CommunicationsEquipment
CommunicationsEquipment
TransportationEquipment
TransportationEquipment
Advanced Advanced ManufacturingManufacturing
PharmaceuticalsPharmaceuticals Medical ServicesMedical Services
FoodFood
Financial Services Financial Services PrintingPrinting
Information Services
Information Services
Business Services
Business Services
ConsumerElectronicsConsumerElectronics
Industrial MachineryIndustrial
Machinery
CommunicationsEquipment
CommunicationsEquipment
BicyclesBicycles
ChemicalsChemicals MetalsMetals
PlasticsPlastics
TextilesTextiles High-Fashion Apparel
High-Fashion Apparel
Strategic Transformation…Clustering Development...
The New R&D
PersonalAgenda
Organizational Agenda
NationalAgenda
Governing
Directing
Managing
Executing
top related