A structural equation model of factors that affect the ASEAN competitive advantage of the Thai automotive parts industry

Thailand is considered the heart of Asia and a gateway to the most densely-populated countries in the world included China and India. Thailand is also part of the 600 million people ASEAN Economic Community which is considered the ninth largest global economy representing $2 trillion USD. Under this community's free trade framework with a projected average output increase of 10% annually, Thailand's 'Detroit of Asia' is a crucial component of any future growth. As such, the researchers have therefore developed a structural equation model of influences on research and development (R and D) and technological capabilities affecting the competitive advantage of the Thai automotive parts industry. This sector in 2013 was the 3rd largest part of the economy contributing 12% of GDP. This study clearly shows that in developing countries technology plays a key role in competitive advantage and even more so to Thailand which faces intense competition from both regional and other global players. Therefore, it is crucial that organizations focus on innovative research and development capabilities which need to collaborate, support, fund and incentivize players, both domestic and foreign, to upgrade Thailand's innovative capacity and fill in gaps in its cluster environment going forward. Thailand's recognized success as a global automotive hub is a classic case of a well-executed industrial plan but it must not rest on its laurels and continue moving forward with innovation combined with R and D capability.