Production Linkages between Thailand and Mainland ASEAN Nations

Abstract

This research investigates the production linkages between Thailand and mainland ASEAN countries. in the case of Thailand, accelerating productivity growth and skills development are critical in addressing the challenges arising from labor shortages and skills mismatch. Findings from in-depth interviews indicate that Thai industry has gradually lost its competitiveness. Based on three case studies involving autoparts (wire harnesses), electronics products (digital cameras) and garments (lingerie), Thai operations have accumulated experience in production and become involved in higher levels of technology, such as process and product engineering. The case studies under consideration revealed evidence of the role of Thai companies in transferring standardized technology to neighbouring countries having relocatedelements of their production away from Thailand. The relocation of manufacturing to neighbouring countries will continue, but the locations involved will become nearerto the borders of Thailand where road transportation networks are more accessible. The ASEAN highway network, especially the East–West andSouthern Economic Corridors, may shape anew patterns of trade and investment. Thailand has gradually increased its role in providing technical support to overseas plants operating in mainland ASEAN nations.