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Though the Thai economy has recorded impressive growth rates over the past 50 years, the country is now in the ‘middle-income trap’ unable to achieve the status of high-income economy and catch-up with the forerunner countries of Asia in technologically sophisticated industries. At the same time, it is losing out to countries such as Indonesia and Vietnam in labour-intensive and resource-based industries. Passive and slow technological learning behaviour of frms in Thailand are the underlying problems. Apart from defciencies in technological efforts and the strategic intent to upgrade, several frms have continued to perpetuate ineffective technology and innovation policies. Seven unhealthy habits are outlined here to explain Thailand’s ineffective policies. The analysis offers lessons for other developing countries aiming to avoid getting caught in the middle-income trap.
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