Production Factors and Technological Change in Driving Economic Growth in Thailand’s Service Sector

บทคัดย่อ

This research article investigates the impact of labor, capital, and technology on economic growth in Thailand’s service sector. Utilizing time-series data from 1993 to 2023, the study applies the Cobb-Douglas production function alongside the Solow Residual method to isolate the contribution of technological change beyond traditional inputs.

The results indicate that capital significantly influences the service sector’s output, with a regressioncoefficient of 0.6971. In contrast, labor's contribution is minimal and statistically insig-nificant (0.0862), suggesting a gap between labor skills and the demands of the modern economy. The Solow Residual value of 1.1128 confirms that technological progress has been the dominant driver of output growth over the past three decades.

These findings underscore the critical role of technology in boosting productivity and reshaping the structural trajectory of the service sector. As such, investment strategies should emphasize digital transformation through automation, Enterprise Resource Planning (ERP) systems, and digital platforms rather than labor expansion. Additionally, businesses should strengthen digital and data competencies to better capture technological gains and support long-term com-petitiveness. This study contributes to the theoretical discourse on production economics by validating the relevance of Solow’s framework in the context of a service-based economy, while also offering practical insights for business leaders and policymakers focused on sustainable and innovation-driven growth.