Academic journal article Journal of the International Academy for Case Studies

Instructors' Notes: Electrical and Electronic Equipment Cluster in Thailand: Can Competitiveness Be Regained?

Academic journal article Journal of the International Academy for Case Studies

Instructors' Notes: Electrical and Electronic Equipment Cluster in Thailand: Can Competitiveness Be Regained?

Article excerpt

ABSTRACT

In April 2015, General Prayut Chan-o-cha, the 29th Prime Minister of Thailand who took over the government to end the political crisis in May 2014, announced upon assuming control of the country that Thailand needed a dramatic reformation before the next democratic election. Now that the country was going through an economic recession, he was pressured to urgently address how to reform the country's economy. In particular, the National Reform Council raised a key issue that the Electrical and Electronic Equipment (EEE) cluster, which had long been the most valuable exported product category providing large employment opportunities, was experiencing a diminishing growth rate. The council demanded directions from the country's leader as to how to resolve the challenges in the EEE cluster and regain the country's competitiveness in the world economy.

Prime Minister Chan-o-cha observed a few warning signs that the Thai EEE industry was experiencing major challenges. A number of foreign firms had relocated their production to neighboring countries with lower labor costs in response to Thailand's recent announcement of the new higher minimum daily wage. Also, the amount of FDI in the EEE sector had been decreasing during the past few years. The share of export revenues of EEE products, although still large, had shown a downward trend over recent years. …

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