While the recent development will reduce the need to import technology, it could generate revenue from sales to neighbouring countries.

Unfortunately, such R&D success stories are few and far between.

A National Economic and Social Development Board study showed that the number of published scientific reports has been on the rise and so has the number of product patents. However, most patents are design-oriented, not production-oriented. And only a small portion was implemented for commercial or public purposes. In 2005, out of 888 research papers, only 308 or 35 per cent were used for commercial purposes.

What is notable is the fact that due to a paucity of concrete policies, the number of patents on new innovations and product development dropped sharply from 2,466 items in 2002 to 1,322 items in 2005.

The result is a steady decline in Thailand's competitiveness ranking by the International Institute for Management Development (IMD). In 2006, Thailand's rank plunged 5 places from 27th in the previous year. The weakness in updating scientific and technology infrastructure is cited by the economic think tank as a factor in pulling down the overall competitiveness of the country.

The IMD attributed the slowness to small contributions of funds for research and development (R&D) activities, both by the public and private sectors.

In 2003, in terms of its combined R&D budget, Thailand was ranked 51st, compared to Malaysia at 44th place, Singapore at 33rd, and South Korea at 8th. Based on the number of R&D workers for every 1,000 people, Thailand was ranked 47th that year when compared to Malaysia at 43rd, Singapore's 16th and South Korea's 23rd. Comparatively, Thai R&D expenses are 8-14 times lower than those spent by other emerging economies.

"R&D investment is often conducted in a limited area, mostly by universities and state-owned research centres with little focus on the effective results on the manufacturing industry. This points to the manufacturing sector's low competitiveness in technological terms which could pose obstacles in accumulating knowledge and applying technology to lift up the national competitiveness," NESDB said in its assessment report released on July 1.

Under a five-year plan implemented in 2002, the focus was to turn Thailand into a "knowledge-based" economy. It was decided that at least 0.4 per cent of gross domestic product (GDP) - or 1.5 per cent of the national budget - would be set aside for R&D purposes. Meanwhile, the number of full-time researchers would be increased to 3.5 per 10,000 people.

But Thailand fell short of both targets. The combined R&D expenses borne by the public and private sectors in 2003 were only Bt15.5 billion. Though the amount rose from Bt13.3 billion in 2002, it accounted for only 0.26 per cent of GDP. In 2003, only 42,379 researchers, or 2.87 per 10,000 people, contributed to R&D, much lower when compared to emerging economies particularly South Korea. The ratio in South Korea was 39.86 in 10,000 in 2002.

The low number of researchers and the low rate of turning their developments into commercial use forces Thai companies to import technology. As a result, Thailand's expenses on royalty and license renewal fees have been on a steady rise. According to the Bank of Thailand, in 2005, the expenses accounted for 1.01 per cent of GDP, up from 0.97 per cent in 2004, 0.89 per cent in 2003, 0.87 per cent in 2002 and 0.71 per cent in 2001.

Based on the economy's size of Bt7 trillion last year, the R&D expenses were equivalent to Bt70 billion.

R&D are a priority thanks to the growing manufacturing sector, which contributed 39.2 per cent to the country's GDP in 2005. Thailand depends on a small number of exports, including computers and parts, automobile and parts, integrated circuit boards, jewellery, canned food and rice. But, Thai manufacturers still lag behind in adjusting to global changes mainly due to limitations in productivity improvements.

As neighbouring countries step up their R&D efforts, Thailand's position in the future will be further threatened.