The 3rd Study Meeting on Asia

1. Date:
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October 12, 2010 15:00 – 17:00

Venue: Meeting Room, the Takeda Foundation
Title: Industry and Academia Collaboration in Thailand
Speaker: Mr. Masayuki Kondo, Professor, Yokohama National University
Participants
01

Masayuki Kondo

Yokohama National University

02

Yoshio Nishimura

03

Kazutoshi Oyamada

Visiting Professor, Waseda University
International Program Department, Japan
Society for the Promotion of Science04

Ikuo Takeda

Chairman, the Takeda Foundation

05

MIstuo Akagi

Senior ManagingFoundation

06

Ysuo Tarui

Managing Director, the Takeda Foundation

07

Yuzo Mizobuchi

Director, the Takeda Foundation

08

Norio Ohto

Director, the Takeda Foundation

09

Naoaki Aizaki

Program Officer, the Takeda Foundation

10

Aiko Ubasawa

Program Specialist, the Takeda Foundation

11

Setsufumi Kamuro

Program Specialist, the Takeda Foundation

12

Mototaka Kamoshida

Program Specialist, the Takeda Foundation

13

Emiko Mitsui

Program Officer, the Takeda Foundation

14

TakamiMember, the Takeda Foundation

Director,theTakeda

6. MEMO
Penetration of Japanese firms in Thailand
From 1986 to 1990, Japanese firms had 38% of their oversea R&D sites inNorth America, 31% in Asia, and 24% in Europe. However, from 1991 to 2005,
their overseas R&D sites shifted from North America and Europe to Asia (54%).
As for Japanese overseas R&D sites that produce goods for local markets, mostof them are located in China, followed by Thailand, Korea, Vietnam and India. Asfor foreign investment in Thailand, Japan made the highest contribution. From1985 to 2005, 39% (4,144 projects) or 41% (volume, 4.6 trillion yen) of the total
foreign investment in Thailand came from Japan. The number of Japanese firms
1registered at the Japanese Chamber of Commerce in Thailand is 430,000, andthe number of local employees employed by Japanese firms is over 1 million,
which accounts for 20% of the total employees of manufacturing Industries inThailand.
Japanese Contributions to Thai Universities
King Mongkut’s Institute of Technology Lackrabang (KMTL) was originallyestablished as a vocational education center, to which the Japanese
government contributed by providing school buildings and equipment. They also
helped develop the curricula for the center.
The Asian Institute of Technology (AIT) was originally established as a graduate
school of engineering based on ASEAN treaties, but later became an
educational foundation based on Thai law. The Japanese government supported
its management in various ways including by sending teachers to teach at AIT.
Sirindhorn International Institute of Technology, Thammasat University wasestablished with matching funds from the Japan Federation of Economic
Organizations and the Federation of Thai Industries. Thai-Nichi Institute ofTechnology was established in 2007 by Thai students who received higher
education in Japan and returned to Thailand; all students must take a Japanese
language course. In 2007, the Tokyo Institute of Technology established agraduate school of international cooperation in collaboration with the National
Science and Technology Development Agency (NSTDA) of Thailand and Thaiuniversities.
Science and Technology and Innovation policies in Thailand
Thailand had no apparent policies for science and technology before the 21stCentury. In 2001, the Thaksin Administration was elected, and they haveestablished the National Council for Competition (NCC), and developed andpromoted several policies aiming to strengthen certain industries, which
provided a foundation for the current science and technology policies. In 2003,
they developed the following national competitiveness plans.
-Automotive industry aiming to be the Detroit of Asia
Food processing industry aiming to be the Kitchen of the World
Fashion industry aiming to be the Tropical Fashion Base of the World
Software industry utilizing IT
Tourism industry integrated with hotel business

2In 2004, the Thai government determined the following as the national scienceand technology strategies for the period 2004 to 2013.
-Cluster strategy
Human resource development by science and technology
Development of research infrastructure and institutes
Building awareness and understanding of science and technology in people- Reformation of management systems in science and technology
The Cluster strategy is closely related with the industries that are the focus of theNational Competitiveness Plans. The Thai government has the National
Research Council of Thailand (NRCT), which directly advises the prime ministerin matters related to research policy and strategies in science and technology
and social sciences. They also have the National Science and Technology
Innovation Policy Committee (NSTIC), which coordinates polices among
ministries related to the development of science and technology as a base for
economic development; however, the NSTIC is not so influential because it does
not have its own budget. In reality, the National Science and Technology
Development Agency (NSTDA), an affiliate agency of NSTIC, has a significant
budget and research forces. NSTDA has many research institutions including
BIOTEC, NECTEC, MTEC, NANOTEC, and TMC, which provide small andmedium sized enterprises with technological support.
The GDP ratio of the total investment in R&D in Thailand is 0.24 – 0.26 %, whichis smaller than those of Japan (3%) and the US (2.7%), and the actual amount ofbudget is rather small. Public institutions including government institutions anduniversities spend 60 % of their total investment in R&D, and the expansion ofinvestment in the private sector has been a major challenge for Thailand.
Government institutions conduct mainly basic research in agricultural areas.
Thailand also has royal projects whose budgets are not included in thegovernment budget, although the amount does not seem negligible.
To become a professor in a university is rather difficult. Candidates need to beapproved by a government committee. Universities can appoint associate
professors or lower ranked professionals. The mobility of university teachers islow. Basically, a person with a Ph.D. degree can be appointed as an instructor,
and no one hired by universities from other areas. Thailand has very few
doctoral course graduate students, only 5 % as many as in Japan, which is3

a major reason for the very low amount of research activity in Thai universities.
Since research activities in universities are limited, most academia-industrial
collaborations are short term projects based on personal connections. However,some of the higher ranking universities are active in academia-industry
collaborations such as Mahidol Universit,y which has developed venture capitaland actively invests in ventures.
Research and Development in the Private Sector
Most private firms in Thailand are developed from trading businesses and are
not active in R&D activities. Foreign firms see Thailand as a manufacturing site
and are not active in R&D activities. However, as globalization progresses, othercountries with low cost labor are catching up with Thailand as manufacturing
sites, and there is a growing need for R&D in Thai private firms. The following isa list of areas that have certain numbers of R&D human resources, accounting
for 83% of all R&D human resources in the private sector.
- Food processing, beverages, tobacco 2800 personnel- Chemicals, petroleum, coals, rubber, plastics 2500 personnel-Machinery, equipment 2200 personnel

Overview- Thailand has been mainly serving as a manufacturing site for domestic andforeign firms, but recently are converting themselves into a R&D site.
- The importance of innovation in own country increases.
- The importance of academia-industry collaborations increases as a tool forthe promotion of innovation
Academia-industry collaborations are now developing as a reflection of theabove mentioned factors.
QUESTIONS AND ANSWERS
Question 1
You mentioned that Japanese firms are shifting their overseas R&D sites fromthe US and Europe to Asia. China is a big market and I understand why theywant to conduct R&D in China, but I don’t understand why they would locate
their R&D sites in Thailand, which does not have a large market. You alreadymentioned that Thailand does not have many engineering students or engineers4

in industry. Why do Japanese firms want to locate their R&D sites in Thailand
where there are not many local human resources.
Professor Kondo
It is quite difficult for Japanese firms to develop goods for Asia in Japan. If you
are not living in an Asian country, you would not know what kinds of goods localpeople want. Japanese goods in general have too many and too high functions,which can be accepted by Japanese consumers but not by their Asiancounterparts. Commodity goods are usually produced in Asian countries, andto manufacture these commodity goods it is necessary to obtain parts that areavailable in local places. You would not know how much these parts cost unless
you are living in an Asian country. For these reasons, Japanese firms are now
establishing R&D sites in Asia where they have manufacturing plants.
Question 2You mentioned that there are not many science major students. Does this meanthat there is not a high need for engineers in Thailand?
Professor Kondo
Higher education in Thailand did not aim to nurture professional engineers.
Good students used to go to American or European universities after graduatingfrom good Thai universities. Thai industries are developed from tradingbusinesses, and they did not need engineers. If necessary, they bought foreignmachines and introduced foreign technologies to do business. Foreign firms saw
Thailand as a manufacturing site and did not conduct any R&D in Thailand.
According to the NSTDA study conducted in 2000, less than half of all private
firms possess designing capacity, and less than one-third can conduct reverse
engineering. Only 15% conduct R&D. Reflecting this situation, there have been
many humanity major students and only a few science major students,
especially graduate students, in Thailand. Currently, the Thai government istrying to tackle R&D through academia-industry collaborations, but the effort has
not been successful because the research capacity of Thai universities has been
low. The Thai government is considering developing measures to benefit
science major students to change the current situation.

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