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

This paper investigates the roles of intermediaries in the automotive sector of Thailand andobserves how institutional settings affect the performance of innovation intermediaries. Thestudy finds that intermediaries play a crucial role in compensating for the shortfall in socialcapital that hinders the functionality of innovation systems in developing countries such asThailand. Organizational set-up and budgetary support are crucial for the effectiveness ofsector-specific intermediaries. The study identifies a number of tensions with regard to thefunding and governance structure of such organizations. To strengthen the role ofintermediaries in developing countries, governments should pay attention to the issue of thedivision of labour and collaboration between public and private intermediaries. Publicintermediaries should play an active role in producing public goods necessary for thetechnological upgrading of firms in the sector while private intermediaries should playactive roles in industry and/or firm specific issues. Public and private intermediaries shouldcollaborate and have a mutual understanding of which type of organizations should beleaders on what issues. This has serious implications on government policies that initiateand strengthen the roles and capabilities of intermediaries in the innovation processes.