Breaking through the Middle-Income Trap (MIT) by Enhancing the Service Innovation System (ServIS)

: The Case of Thailand’s Service Sector

Abstract

Critical factors that enhanced the service innovation system of Thailand to help the country break out of its middle-income trap were assessed. A sequential mixed method exploratory design strategy was adopted involving a two-step procedure whereby qualitative data were initially collected, followed by the accumulation and analysis of quantitative data. Primary data were collected from semi-structured face-to-face interviews with service industries representatives, academic institutes, R&D institutes, innovation institutes, government agencies and policymakers about various aspects of the impacts of innovation activities, regulations, incentives and policies. Potential participants were recruited through email. Gatekeepers who had a deep understanding of research and innovation processes were asked to reach out to additional potential participants by sending introductory emails. The selection of gatekeepers was based on their comprehensive knowledge of the processes involved in developing and completing innovative projects. Findings indicated that Thailand lacked a clear service innovation system, with the service sector not properly managed due to its fragmented structure and lack of an official host to drive policy. This study recommended establishing a service sector Innovation Centre or Science Park to coordinate and integrate support from various organisations. The findings also revealed that a small proportion of firms in Thailand are actively engaged in research and development or innovation activities, with lack of funding, human resources and skills as the most significant barriers to innovation. To break out of the middle-income trap, innovation policy and management should focus on technology-based, knowledge-intensive business services in addition to high technology manufacturing. This study proposed the octahedral model consisting of seven actor types with governmental organisations as policymakers, customers as service innovation consumers, service companies as innovation producers, research and development performers as universities and research institutes, technology diffusers as providers of technology and knowledge, financial providers as supporters of innovation and research, and innovation development facilitators as intermediaries. This study also discussed other models and frameworks to understand and analyse service innovation systems including the Triple Helix Model, the Techno-Economic Network Model and the Innovation Ecosystem Model. Several enhancing drivers for service innovation systems were identified including effective human resource, knowledge and skill generation, regulation, financing, incentive, network and managerial intermediates. The success of service innovation depends on effective engagement and collaboration of stakeholders and a supportive environment that fosters growth and competitiveness in the service sector. Finally, this study proposed that establishing a service sector Innovation Centre or Science Park would help to coordinate and integrate support from various organisations, thus promoting service innovation and economic growth in Thailand. The service sector is a critical part of any modern economy with linkages to other sectors. Thus, enhancing service innovation will strengthen the overall Thai economy.

Date of Award	18 Jan 2024
Original language	English
Awarding Institution	University of Portsmouth
Supervisor	Sercan Ozcan (Supervisor) & Paul Trott (Supervisor)