Kosit said the caretaker government would not be able to approve any incentive packages, such as tax deductions for manufacturers, so waiting for them would only reduce the country's export competitiveness. In addition, skyrocketing oil prices and a stronger baht will draw tougher competition for the rest of the year.

"Thai manufacturers should focus on supply-chain development to ensure smooth operations. They have to apply more innovative ideas and research and development (R&D) to develop new products to serve market demand," he said, noting that product quality was another a major factor in boosting sales.

Speaking yesterday in Bangkok at the annual meeting of the Thailand Research Fund (TRF), Kosit said the private sector should invest more in R&D before launching products. He said research would help manufacturers respond more efficiently to market demand.

He said businessmen should not rely so heavily on economic stimulus packages from the government, but rather should concentrate on diversifying their businesses. However, he added that the general absence of knowledge-based management would reduce the Kingdom's competitiveness.

Kosit also expressed concern about the current economic slowdown, which has slowed gross domestic product (GDP) growth to 4 per cent.

Thanit Pulivekin, technical and engineering vice president at Siam City Cement Plc, said businesses should concentrate more on developing knowledge-based management.

He said the government, private enterprises and researchers should all work more closely together in conducting market research.

He said having access to good market information would help manufacturers add value to their goods.

Thanit said the results of research into trade agreements should be made public, in order to allow relevant sectors to draw up solutions.

Pollution Control Department deputy director-general Supat Wangwongwattana said both negative and positive research results should be made public. He said there was currently a bias in favour of positive results.

"Research will help alert manufacturers to coming problems and allow them to hedge their risks," he said, adding that it was cheaper to prepare a business for problems than it was to reverse damage that had already been done.

TRF director Piyawat Boon-long said Thailand spent less money on R&D than did other Southeast Asian countries.

R&D spending accounts for only 0.26 per cent of gross domestic product.

Piyawat said this would directly affect the Kingdom's efforts to make its manufacturing sector more efficient. By comparison, Malaysia spends 1 per cent of its GDP, Singapore about 2 per cent.

Petchanet Pratruangkrai

The Nation