An Analysis of The Economic Interdependencies of The Next – Generation Automotive Industry Under Shaped by Thailand 4.0

Abstract

This research article examines the economic interconnections within the next-generation automotive industry (NGA4.0) and is structured into two main components. The first component analyzes the structure of factor usage and production distribution, while the second focuses on evaluating the economic multipliers associated with NGA4.0. The study utilizes data from production factors and output tables, which are reviewed every five years. Specifically, it compares data from 2010 to 2015 to ensure alignment with the 20-year strategy for Thailand 4.0 (2017 - 2036) within the context of the Eastern Economic Corridor (EEC).

The analysis of factor usage and production distribution within the next-generation automotive industry (NGA4.0) revealed notable trends. Domestic factor usage in this sector rose from 0.53% in 2010 to 2.36% in 2015. In contrast, the share of production allocated to the sector itself decreased from 2.34% in 2010 to 2.31% in 2015. Overall, the economic interconnectedness index for NGA4.0 indicates that this industry relies significantly on external sectors while also distributing its production to them. Notably, both the overall backward and forward linkage indices are above the average, exceeding a value of 1.

The analysis of economic multipliers for the next-generation automotive industry (NGA4.0) indicates that a 1% increase in final demand within this sector leads to a corresponding rise in the total value of production across the economy by 9.42% in 2010 and 9.57% in 2015. To foster ongoing production growth and economic expansion in the NGA4.0 and other sectors, the government should prioritize and support research and development of modern technologies and innovations. This effort should include adequate budget allocations and various investment promotion incentives.