The roles of intermediaries and the development of their capabilities in sectoral innovation systems: a case study of Thailand

Abstract

This paper investigates the roles of both public and private intermediaries in the sectoral innovation systems of developing countries by analysing three case studies in the hard disk drive (high-tech sector), automotive (mid-tech sector), and frozen-food (resource-based sector) industries in Thailand. We make three important findings. First, different sectors require different types of intermediaries who play different roles. In the high-tech sector, government research institutes and international industrial associations have gained the trust of transnational corporations (TNCs) and are able to keep pace with rapid technological change. In the mid-tech sector, public-sector development agencies can act as ‘brokers’ and leverage the knowledge of TNCs to strengthen local suppliers' capabilities, and local industrial associations can act as ‘mediators’ in solving conflicts between local firms. In resource-based sectors, public sectoral development agencies can act as ‘resource providers’ to local firms, and local industrial associations can broker coordinated efforts among members to achieve common goals. Second, the division of labour between public and private intermediaries is crucial; public intermediaries should play a leading role in producing the ‘public goods’ that are necessary to upgrade sectors, whereas private intermediaries should play an active role in producing ‘club goods’ for the sustainability of sectors. Third, different intermediary roles require different underlying capabilities.

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