The roles of intermediaries in sectoral innovation system in developing countries: public organizations versus private organizations

Abstract

This paper investigates the roles of intermediaries in the automotive sector of Thailand and observes how institutional settings affect the performance of innovation intermediaries. The study finds that intermediaries play a crucial role in compensating for the shortfall in social capital that hinders the functionality of innovation systems in developing countries such as Thailand. Organizational set-up and budgetary support are crucial for the effectiveness of sector-specific intermediaries. The study identifies a number of tensions with regard to the funding and governance structure of such organizations. To strengthen the role of intermediaries in developing countries, governments should pay attention to the issue of the division of labour and collaboration between public and private intermediaries. Public intermediaries should play an active role in producing public goods necessary for the technological upgrading of firms in the sector while private intermediaries should play active roles in industry and/or firm specific issues. Public and private intermediaries should collaborate and have a mutual understanding of which type of organizations should be leaders on what issues. This has serious implications on government policies that initiate and strengthen the roles and capabilities of intermediaries in the innovation processes.