Analyzing ICT and Development

Journal of Global Information Management, 19(1), 1-29, January-March 2011 1
Analyzing ICT and Development:
Thailands Path to the Information Economy

Angsana A. Techatassanasoontorn, The Pennsylvania State University, USA
Haiyan Huang, Michigan Technological State University, USA
Eileen M. Trauth, The Pennsylvania State University, USA
Suwan Juntiwasarakij, The Pennsylvania State University, USA
ABSTRACT
This study uses Trauths (2000) Influence-Impact Model as a sensitizing device to examine the influence of four
key socio-cultural factors policy, infrastructure, economy, and cultureon information economy development efforts in Thailand. Our assessment shows that progress has been made but gaps remain. Thailands
infrastructure challenges include unequal development across regions, a small skilled workforce, and low R&D
expenditures in the ICT sector. Future economic growth of Thailand will depend on an increase in investments
and improvement in technology and innovation. The authors cultural analysis reinforces the need to develop
a synergy between Thai cultural systems and development needs. To highlight strategies that Thailand might
follow, the authors compare their findings to the lessons learned from the case of Ireland, India, and China.
These include facilitating ICT sector work, ensuring a supply of qualified workers, exploiting the countrys
distinctive capacities, and reconfiguring policy to adapt to changes in the global ICT market.
Keywords:
Culture, Economic Development, Information Economy, Infrastructure, Offshoring, Outsourcing,

Policy, Thailand, Trajectory
INTRODUCTION
It has been globally recognized that the economic health of a nation is increasingly tied
to its development of a sustainable information economy, one in which information and
knowledge are both the main inputs and the
main outputs of production (Castells, 2000).
During the final decades of the twentieth century, developed countries invested heavily in
information and communications technology
DOI: 10.4018/jgim.2011010101
(ICT) to maintain their competitiveness in the

global information economy. In the twenty-first
century, emerging economies are pursuing a
similar path of economic development through
enhancement of their ICT sectors and promotion
of ICT adoption in other sectors.
A strong linkage between the production and use of ICT and the development of
a sustainable information economy has been
documented in the literature (DCosta, 2006;
Pohjola, 2002). According to Piatkowski (2006),
ICT contributes to economic growth of emerging
economies in four ways. First, the production
of ICT goods and services contributes directly
Copyright 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global
is prohibited.
2 Journal of Global Information Management, 19(1), 1-29, January-March 2011
to an economys aggregate value. Second, the

increase in total factor productivity (TFP) in
the ICT sector contributes to aggregate TFP
growth. Third, the use of ICT capital as an input
in the production of other goods and services
contributes to productivity improvements in
other sectors. Fourth, the increase in TFP in
non-ICT production also contributes to economic growth. Hence, a sustainable information
economy depends upon both the production of
ICT goods and services and the diffusion and
use of ICT in other sectors such as agriculture,
manufacturing, education and public sectors
(DCosta, 2006).
Research has also shown that there is no
one best model for information economy
development (DCosta, 2006; Huang et al.,
2007; Piatkowski, 2006; Trauth, 2000). Rather,
it is necessary to understand the specific ways
in which socio-cultural factors (such as country
size, geographic location, history, resources,
levels of economic and infrastructure development, policies and culture) are shaping both the
production and use of ICT in a country, and
the development of its information economy.
Further, globalization requires that the development of a nations information economy must
be closely connected to the global market, as
the cases of China, India, Ireland, Singapore,
and Taiwan show.
This paper focuses on Thailand. Trauths
(2000) Influence-Impact Model is used to analyze contextual factors influencing Thailands
ICT industry and information economy development. In particular, we focus on the influence of
policy, infrastructure, economy and culture in
Thailand. This research makes several contributions to the literature. Our first contribution
is methodological. In contrast to a variance
approach (e.g., Tan & Leewongcharoen, 2005)
which explores a set of independent variables
to explain variation in a dependent variable, we
explored the complex and nonlinear processes
of information economy development (Soh &
Markus, 1995) through examination of rich
contextual details that explain a countrys trajectory. Our second contribution is scope. Whereas
other research has focused more narrowly on
specific aspects of the information economy

-- such as the hardware and software industry
(Dedrick & Kraemer, 1995) or the software industry (Heeks, 2006; Heeks & Nicholson, 2004)
-- our study examined the overall ICT sector
including ICT goods, software, infrastructure,
information content, and ICT usage. Our third
contribution is the incremental nature of our
investigation. In contrast to other examinations
of a single country (e.g., India in Heeks (2006),
Ireland in Trauth (2000, 2001), Thailand in Tan
& Leewongcharoen (2005), or Singapore in
Wong (1998)), we draw upon lessons learned
from Ireland, India, and China so as to build upon
the experiences of other emerging economies.
We chose to study the case of Thailand
for three reasons. First, Thailand is one of the
emerging economies in South East Asia, a region that has experienced substantial economic
growth during the last decade. Second, in its
effort to develop a sustainable information
economy, Thailand has been actively seeking
ways to develop its ICT sector, attract foreign
investment, foster domestic entrepreneurship,
and raise its competitive position. The Global
Competitive Report 2008-2009 ranked Thailand 34th on the competitive index and 46th
on the innovation index among 134 countries
worldwide. Thailands rankings are higher than
several other developing countries in the region
including China, the Philippines, and Indonesia
(World Economic Forum, 2008). Third, the
volatility of the Thai economy (Warr, 1999)
enabled us to consider the influence of this
aspect of the socio-cultural context. Thailand
rebounded quickly from the Asian economic
crisis of 1997-1998, as indicated by the 7%
GDP increase in 2003. However, its growth
has slowed down in recent years. According to
the World Bank Report published in April 2007
and December 2009, Thailands average annual
GDP growth rate was 6.1% during 2002-2004
and then declined to 4.6% during 2005-2007
and to 2.6% in 2008. In fact, Thailands GDP
growth during 2005-2007 is also lower than the
average growth rate of its neighbors including
Indonesia, the Philippines, Malaysia, Vietnam,
India, and China (World Bank, 2007, 2009).
is prohibited.
The desire to understand the specific ways

in which socio-cultural factors are affecting
Thailands goal of advancing development
through a sustainable information economy
motivates this research. Hence, the research
questions guiding our study are the following:
1) How do socio-cultural factors influence the
development of an information economy
in Thailand?
2) What are some of the lessons that Thailand
can learn from the experience of Ireland,
China and India in their efforts to develop
an information economy?
As was done for information economy
studies elsewhere (e.g., Wong, 1998), we first
examine the dynamics of Thailands information economy based on a synthesis of available
empirical data. Next, we compare the case of
Thailand with that of Ireland, India and China in
order to gain perspectives on the opportunities
and challenges facing Thailand as it competes
in the global market. We chose Ireland because
its success in leapfrogging from a traditional
agrarian economy to an information economy
has been largely attributed to the development
and maturation of the Irish ICT sector (Tallon
& Kraemer, 2000; Trauth, 2000). Thailand is
currently experiencing what Ireland did in the
1990s (Gray & Sanzogni, 2004). Hence, drawing on the experience of Ireland provides rich
insights for analyzing Thailands path. China
and India were chosen for comparison because
these countries are among the fastest growing
economies in Asia and are at similar stages of
economic development yet show clear divergence with respect to their ICT sectors. Thus,
these countries provide additional perspectives
regarding viable paths available to nations for
building their information economies.
The results suggest that although Thailand
appears to be on a positive trajectory toward a
sustainable information economy, areas remain
that require improvement if economic development is to continue. Thailand needs coherent
economic, taxation, trade, ICT, and human
capital policies in order to facilitate the devel-
opment of a sustainable information economy.

Infrastructural challenges include uneven physical infrastructure development across regions,
and human infrastructure issues in the form of
a skilled workforce that is too small, and low
R&D expenditures in the ICT sector. Future
economic growth of Thailand will depend on
an increase in investments and improvement
in technology and innovation. Culturally, it is
important that a synergy be maintained between
Thai cultural systems and development needs,
and that changes be implemented gradually. We
believe that the lessons learned from Ireland
that are in evidence in China and India as well
-- facilitating ICT sector work, ensuring a supply
of qualified workers, exploiting the countrys
distinctive capacities, and reconfiguring and
adapting its information policy to changes in
the global ICT market (Trauth, 2000, p. 352)
can benefit Thailands information economy
development.
Following a discussion of the theoretical
framework, the research methodology and data
collection, we provide a detailed analysis of the
socio-cultural context of Thailand and linkages
to information economy development. This is
followed by a discussion of the cases of Ireland,
India and China to highlight opportunities and
challenges for Thailand in its development of
an active ICT sector. We conclude with the
agenda for future research.
RESEARCH FRAMEWORK
A number of studies have examined factors
contributing to the development of a sustainable and competitive ICT sector (see Table
1). Despite the differences in application, the
studies in Table 1 reported that government
policies, infrastructure and human resources
are among the dominant factors influencing the
growth of an IT industry. For example, Heeks
and Nicholson (2004), drawing on the success
stories of the software industry in Ireland, India
and Israel, developed a software export success
model based on the factors that contribute to
the success of building export-oriented software
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industries in these three nations. In their model,

software industry development is primarily
influenced by both international and domestic
software demands, national policies, a skilled
workforce, the technological infrastructure,
financial incentives, and R&D investment.
Based on the model developed by Ein-Dor,
Myers and Raman (1997), Tan and Leewongcharoen (2005) developed a model to examine
factors affecting IT industry success in develop-
ing countries. In their model, country size,

level of economic development and political
stability are exogenous variables with IT industry success being the dependent variable.
The effects from the control variables to the
dependent variable are moderated by a set of
endogenous factors including geographical
location, domestic IT use, government policies,
human resources, infrastructure and IT related
foreign direct investment (FDI). Using Thailand
Table 1. Information economy and ICT industry development studies

Study
Focus
Country
Findings
Dedrick & Kraemer

(1995)
Computer hardware
and software industry
Asia-Pacific
countries
Human resources, complementary industries, R&D investment, and government

plans are important to the development
of the computer industry
Ein-Dor et al. (1997)
IT industry
Israel, New Zealand, Singapore
Government policy in promoting IT

production, supporting IT industry R&D,
and in educational policies are critical to
the success of IT industry
Ein-Dor et al. (2004)
IT industry
Finland, Israel,
New Zealand,
Singapore
Technology infrastructure, R&D, firm

strategies, and capital availability are important to the development of IT industry
Heeks (2006)
Software industry
India
Advanced skills base, strong skills development institutions, clustering, domestic

competition, and government policy are
the important sources of competitive
advantage of Indias software industry
Heeks & Nicholson

(2004)
Software industry
China, India,
Ireland, Israel,
Russia
International and domestic demands,

national policies, a skilled workforce,
technological infrastructure, financial incentives, and R&D investment influence
software industry development
Tan & Leewongcharoen (2005)
IT industry
Thailand
Geographic location, IT related foreign

direct investment, and human resources
influence the success of the IT industry
Trauth (2000, 2001)
IT industry
Ireland
Explicit and flexible public policies

linking ICT and economic development,
coordinated educational and employment
policies, developing both physical and
human infrastructures, leveraging unique
cultural and contextual characteristics of
the country are critical to the success of
Irelands IT industry
Wong (1998)
Information industries
Singapore
Four stages of information industry

development corresponding to the policy
emphasis on ICT good industry, content
industry, network infrastructure, and
ICT use
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as an exemplar developing country, they found

that geographic location and IT related FDI
have significant effects on IT industry success
in Thailand. Government policies and infrastructure are also important factors but to a
lesser extent. Interestingly, domestic IT use and
human resources do not directly impact IT
industry success in Thailand because its domestic IT use is relatively small and the country is still experiencing an IT workforce shortage. Geographic location, government policies,
human resources and infrastructure together
will help to attract foreign investment to increase
IT industry success in Thailand.
It is important to note that Tan and Leewongcharoens (2005) model is based on a
variance approach to theory development, in
which the outcome is treated as a dependent
variable, the explanatory factors are treated as
independent variables, and the explanations
are based on necessary and sufficient causality
(Markus & Robey, 1988; Mohr, 1982). In contrast, we adopt a process approach because the
phenomenon of interest is complex in nature,
the outcomes are uncertain, and the processes
are nonlinear (Chiles, 2003; Soh & Markus,
1995). Our theoretical perspective is based
on the premise that in the development of an
information economy, countries have their own
unique socio-cultural contexts. Therefore, their
paths to develop a successful ICT sector and
a sustainable information economy are likely
to be different.
In this paper, we draw on a process model,
the Influence-Impact Model (Figure 1), developed by Trauth in a grounded theory examination of the influence of environmental factors on
the evolution of Irelands information economy

(Trauth, 2000). The model shows the reciprocal relationship between four socio-economic
factors -- policy, infrastructure, economy, and
culture -- and the development of an information economy. That is, these four socio-cultural
factors shape the evolution of an information
economy and, in turn, the information economy
has an effect on these socio-cultural factors.
It is important to note that policy, infrastructure, economy and culture are treated as
high-level constructs and can be broken down
into second-level constructs that provide additional explanatory details. See Trauth (2000),
pp. 387-390 for a detailed list of the secondlevel constructs. For example, in Trauths study,
infrastructure was broken down into social
infrastructure (human resources) and physical
infrastructure. The physical infrastructure was
further broken down into telecommunications,
transportation and utility infrastructure. Because
the breakdown of the high-level constructs may
vary across different country contexts, we believe the Influence-Impact Model provides an
appropriate theoretical lens to examine information economy development. It can be adapted
to analyze the specific socio-cultural context
of a particular nation. The high-level constructs
also allow us to conduct comparative analyses
of information economy development trajectories across various countries.
Finally, the model has been successfully
applied in several research studies about economic development. In Ireland it has been used
to study: the role of economic development
policy (Trauth, 2001); ICT workforce development (Trauth, 1993, 1999); multinational
Figure 1. Trauths (2000, p. 18) Influence-Impact model of technology-society interaction
is prohibited.
influences (Trauth, 1996); telecommunications

infrastructure (Trauth & Pitt, 1992); IT workforce management (Weisinger & Trauth, 2002,
2003); women in the ICT workforce (Trauth,
1995; Trauth et al., 2008); and the development of the software industry (Heavin et al.,
2003). This model has also been applied to
other contexts. These include: an examination
of socio-cultural influences on the diffusion of
electronic data interchange in the Netherlands
(Trauth et al., 1993, 1998); an examination of
knowledge economy potential in central California (Yeo & Trauth, 2004; Yeo et al., 2004;
Huang et al., 2006); the influence of economic
and cultural factors on women in the American
ICT workforce (Trauth et al., 2008); and case
studies of socio-cultural factors influencing
the sustainability of a knowledge economy in
western Ireland, central California and Singapore (Yeo, 2007).
METHOD AND DATA

COLLECTION
We chose a case study as our inquiry method
to investigate the rich contextual influence of
Thailands socio-cultural factors on its information economy development. Case research is
considered to be appropriate and useful when a
phenomenon is complex and requires in-depth
investigation (Benbasat et al., 1987; Yin, 1994).
In our context, case research suits the goal of
enabling examination of the complexity of
the process of information economy development in an emerging economy. In addition, the
flexibility of case research also enabled us to
perform a cross-case analysis of information
economy development between Thailand and
other countries (Dub & Par, 2003).
Data Collection and Analysis

The data collection and analysis for this study
was guided by the constructs of the theoretical
framework employed in this research. That
is, we examined the themes of public policy,
national infrastructure, cultural context, and
economic structure and growth. The sources of
this data include: public policies and statistics

from the official websites of the Thai government; reports published by organizations such
as ASEAN (Association of Southeast Asian
Nations), the World Bank, the World Economic
Forum, and OECD (Organization for Economic
Cooperation and Development); and documents from the public media (e.g., newspaper
articles). In addition, the authors, collectively,
have lived experience from each of the countries
considered in this paper. The first and fourth
authors are Thai, the second author is Chinese
and conducted onsite fieldwork in both India
and China, and the third author had lived in
Ireland several times and conducted the work
cited in this paper while living there. Thus,
two of the authors familiarity with Thailand
and the research experience from our previous
qualitative studies on China, India, and Ireland
are helpful in the interpretation and analysis of
Thailands information economy development.
THE CASE OF THAILAND

Although there is no consensus on its definition, information economy generally refers
to an economy in which economic and social
activities are transformed through the application of ICT (OECD, 2009; Wong, 1997). Our
review of the existing literature (Heeks, 2006;
OECD, 2009; Wong, 1998) suggests five distinct
components of an information economy: (1) ICT
goods production such as computer hardware
and digital telecommunications, (2) software,
(3) network infrastructure including basic telecommunications and value-added networks, (4)
information and electronic content such as online content, movies, music, games, and (5) ICT
usage by individuals, households, businesses
and government. We use the Influence-Impact
Model as a theoretical lens in our analysis of
these five components of Thailands information economy development.
It is useful to begin our discussion with an
evaluation of where Thailand is in its information economy development. The World Bank
Knowledge Economy Index is a composite
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index constructed from four sub-indexes on

economic incentive and institutional regime,
education, innovation, and ICTs. In 2008,
Thailand was ranked 60th, suggesting that its
performance is much lower than other countries
in the region such as Taiwan (ranked 17th),
Singapore (ranked 24th), Korea (ranked 31st),
and Malaysia (ranked 48th). Next, we analyze
the role of policy, infrastructure, economy, and
culture on Thailands information economy
trajectory.
Policy
Institutions particularly governments and their
national policies are important for accelerating
IT innovation (King et al., 1994). The influence
of globalization, regional interdependence,
and international trade requires that a broad
spectrum of policies relevant to information
economy development be evaluated. In this
section, we draw on Trauths (2000) policy
analysis of the Irish information economy to
discuss the development policies in Thailand,
including national economic development
policy, taxation policy, ICT policy, and human
capital policy.
National Economic
Development Policy
After the economic crisis in 1997, the Thai
government developed a set of economic
policies to enable the country to recover from
the crisis. His Majesty the King advocated the
development of a sufficient economy, which
was subsequently translated into requirements
for the 9th national economic and social development plan (Tsuneishi, 2005). The current
-- 10th -- plan (2007-2011) emphasizes the philosophy of people-centered development using
an integrated approach to create a balance in
the development of the economy, society, and
environment. In particular, this economic plan
focuses on four key areas: (1) to promote human
development; (2) to create a competitive and
resilient economy through structural reform,
productivity enhancement, and value-added
products and services; (3) to maintain biodiver-
sity, and conserve the environment and natural

resources; and (4) to promote good governance.
In the years since the financial crisis, Thailands
economy has been more stable, foreign loans
have decreased, preventive inflation measures
have been instituted, and export growth has
slowly been rising.
Taxation Policy
Thailand offers competitive taxation incentives
to both foreign and domestic investors. The
government offers 100% tax exemption incentives for an eight year period and an additional
five years of 50% tax reduction for companies
to establish their businesses outside Bangkok.
Thailand also has a relatively low value added
tax (VAT) of 7% compared with 10%-25% for
Vietnam, 12.5% for India, and 17% for China
(Runckel, 2005).
With respect to its position relative to other
ASEAN countries, Thailand has been lowering
its AFTA/CEPT tariff rate over time (see Table
2). Between 1998 and 2003, the tariff was reduced from 10.56% to 4.64%, which amounts
to a 43.94% reduction (ASEAN Secretariat,
2007). Such a rate is very attractive to investors
both inside and outside the ASEAN region.
Information Communication and

Telecommunication (ICT) Policy
There is a strong connection between ICT
and a countrys economic growth (Madden &
Savage, 1998, 2000). Our analysis identifies
three distinctive stages of evolving government
policies towards the five key components of the
information economy (see Table 3).
Similar to other developing countries,
Thailand has been slow to recognize the economic and social development significance of
ICT. In the first stage (early to mid 1990s), the
main strategy was developing key aspects of
infrastructure. The two main projects were
ThaiSARN and SchoolNet. ThaiSARN (http://
thaisarn.nectec.or.th) was developed in 1992
to promote the use of the Internet especially for
educational and research purposes. SchoolNet
(http://schoolnet.nectec.or.th) was developed
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Table 2. Average AFTA / CEPT tariff rates (percent) (Source: Adapted from ASEAN Secretariat
2007)
Country
1998
1999
2000
2001
2002
2003
Brunei
1.35
1.29
0.97
0.94
0.87
Indonesia
7.04
5.85
4.97
4.63
4.2
3.71
Laos
Malaysia
3.58
3.17
2.73
2.54
2.38
2.06
Myanmar
4.47
4.45
4.38
3.32
3.31
3.19
Philippines
7.96
5.59
5.07
4.8
3.75
Singapore
Thailand
10.56
9.75
7.4
7.36
6.02
4.64
Vietnam
6.06
3.78
3.3
2.9
2.89
2.02
Table 3. Three stages of Thailands information economy development

Stage
ICT goods
Software
Early
1990s
mid 1990s
Infrastructure
Content
ICT usage
Build a
nationwide
Internet network
(ThaiSARN) to
promote use of
the Internet.
Establish SchoolNet to provide
Internet access
to secondary
schools.
1996-2000
Invest in people
to accelerate the
supply of IT human resources.
Promote the
competitiveness
of wafer fabrication, IC design,
optic fibers, and
switches.
Establish
software parks
to build a competitive software
industry.
Build an equitable infrastructure. Liberalize

the telecommunications monopoly
controlled by
CAT and TOT.
2001
present
Promote R&D
investment to upgrade production
technology to
meet international standards.
Promote the
production of
value-added ICT
goods.
Improve software
development
to reach level 2
or above under
the Capability
Maturity Model
(CMM).
Accelerate telecommunications
reform to create
fair and transparent competition.
Promote the
efficient, nondiscriminatory,
and equal access
to networks and
broadcasting
media.
Develop an IT literate workforce.

Promote IT use
in providing
public services
and government
operations.
Establish an
e-commerce
resource center.
Promote the
development
of contents and
information that
are appropriate to
local communities.
Establish knowledge centers
for local public
offices, schools,
communities and
SMEs.
Focus on
e-education,
e-commerce,
e-industry, and
e-government.
Promote the use
of ICT among
SMEs.
is prohibited.
in 1995 to provide Internet access to primary,

secondary, and vocational schools. Currently,
4,794 schools are connected to the network.
In the second stage, Thailand introduced
its first national IT policy (IT2000) in 1996.
The policy placed an equal emphasis on ICT
production, ICT use, and quality infrastructure.
The major strategies during this period were to
develop competitive capabilities in the ICT goods
and software sectors. The Thailand Software Park
was set up to accelerate the development of the
software industry by providing training, incubation, and consulting services. The E-Commerce
Resource Center (http://www.ecommerce.or.th)
was established to strengthen and develop ecommerce in the country. Despite having the
national policy in place, two key problems
prevented the country from achieving the goals
put forth in the plan. First, there was a lack of
coordination among various public agencies
during the implementation of various strategies.
Second, there was a lack of support from the
country leader. Although the prime minister is
expected to serve as the chairman of the national
IT committee, in reality, he often delegated the
duty to other public officials.
In the third stage, the current phase of development of Thailands information economy,
Thailand has developed its second national IT
policy (IT2010) to be used from 2001 to 2010.
This policy recognizes that information and
knowledge is an important factor of economic
production and a source of well-being of people
in the society. The public policy focus is shifting
from building infrastructure to creating a solution
in which information, content and knowledge
are considered integral components. The three
thrusts of this policy are: building knowledgebased human capital; promoting innovation in
economic and social systems; and strengthening
the information infrastructure and information
industry. To address the coordination problems
in the earlier phase, Thailand established the
Ministry of Information and Communication
Technology in 2002 that oversees the implementation of the national IT policies and assessment
of their progress and outcomes.
Human Capital Policy

Thailands overall human development index
has a steep upward trajectory (see Figure 2).
Education is considered to be an integral part
of Thailands planning for human capital development. Thailand and Malaysia are regarded
as the countries devoting the highest shares to
public education expenditure, topping at 25%
among countries participating in the World
Education Indicators (UNESCO, 2007). The
10th national economic and social development plan articulates the goal of a minimum
10 years of required formal education along
with the encouragement of life-long learning
(NESDB, 2007). With respect to the IT sector,
the National IT Committee (NITC) in conjunction with the National Electronics and Computer
Technology Center (NECTEC) has articulated
the building of human capital as a principle
component of the development of knowledgebased economy in Thailand (Thuvasethakul &
Koanantakool, 2002). IT Certification Day,
conceived by the Software Park Thailand (http://
www.swpark.or.th/itcert2006/), is an example of
IT professional development through training,
certification and career enhancement.
Infrastructure
The soundness of Thailands infrastructural development is believed to lay a solid base for its
economic growth (Richter, 2006; World Bank,
2007). According to Richter (2006), Thailand
has a strong physical infrastructure in terms
of roads and a railway system but the country
has a weak communications infrastructure
as indicated by low fixed telephone lines per
capita. Among the important infrastructural
components, ICT infrastructure and human
capital infrastructure are critical to develop a
dynamic ICT sector and a sustainable information economy.
ICT Infrastructure
According to the networked readiness index
(defined as a countrys degree of preparation
is prohibited.
Figure 2. Human development trajectories of Thailand and its neighbors (Source: Adapted from
UNDP, 2007)
to participate in and benefit from ICT development) published by the World Economic
Forum (2009), among 134 countries, Thailands networked readiness was ranked 47th in
2008-2009, which is relatively high compared
to other emerging economies such as India
(ranked 54th), Indonesia (ranked 83th), and
the Philippines (ranked 85th). The Technology
Achievement Index published by the United
Nations Development Program (UNDP, 2001)
placed Thailand at the 40th rank and classified
it as one of the dynamic adopters of ICT along
with China, India, Brazil, and the Philippines.
Overall, these indices seem to indicate that
Thailand has the market, institutional, and the
ICT capabilities to participate in the information economy.
With respect to the extent of ICT adoption
and usage across Thailands population, Table
4 provides the summary of the key ICT indicators in the years 2000 and 2008. It shows that
Thailand has very low fixed line penetration.
More importantly, the fixed phone lines per 100
inhabitants of 10.5 in 2008 shows little improvement from 9.1 in 2000. However, Thailands
mobile phone subscribers experienced a substantial 1740% increase from 5 to 92 subscribers

per 100 inhabitants. This significant jump may
compensate for the lack of access to the fixed
phone lines (Kauffman & Techatassanasoontorn, 2005a, 2005b). Although the PCs per 100
inhabitants increased from 2.8 in 2000 to 7.0 in
2007, Thailands PC penetration remains very
low. The significant increase of PC penetration
can be explained in part by the fact that the
Ministry of ICT made low-cost PCs available
to the public in 2003. Similar to the number of
PC users, the number of Internet users per 100
inhabitants has significantly improved from 3.7
in 2000 to 21.0 in 2007. Although the Internet
adoption rate is low, the trend is reassuring in
that the country appears to be on its way to
enhancing access to basic ICTs.
The distribution of ICT adoption and usage
is one indicator of the extent of equitable ICT
diffusion and associated economic and social
development. Table 5 presents the distribution
of ICT adoption across Thailands five geographical regions in 2003. The statistics across
technologies clearly illustrate that urban centers
is prohibited.
Table 4. Thailands ICT infrastructure (Source: Adapted from ITU)

Information and Communication Technology
2000
2008
Fixed phone lines per 100 inhabitants
9.1
10.5
Mobile phone subscribers per 100 inhabitants
5.0
92.0
PCs per 100 inhabitants
2.8
7.0*
Internet users per 100 inhabitants
3.7
21.0*
Note: * The PCs and the Internet users per 100 inhabitants are based on the 2007 statistics
such as Bangkok are more advanced than

other regions of the country in terms of technology adoption. With respect to the Internet, for
example, in 2003 there were 27 internet users
per 100 inhabitants in greater Bangkok which
is roughly three times the number elsewhere in
the country. Similarly, technology use among
businesses is concentrated among those that
are located in the greater Bangkok area. For
example, 23% of businesses in greater Bangkok
have computers while many fewer businesses
-- ranging from 8% in the North and Northeast
to 10% in the South -- have computers. The
same pattern is also observed in access to the
Internet and the presence of Web sites. In sum,
these numbers illustrate at least two problems
related to ICT usage. First, there is a relatively
wide gap regarding ICT access and use that
might lead to an even wider digital divide if
left unchanged. Second, Thailand will have to
make significant progress in e-commerce development in order to participate in the global
information economy.
Human Capital Infrastructure

Education and the availability of a skilled
workforce are important prerequisites to building innovation capacity and to supporting the
growth of the information economy. Table 6
presents Thailands ICT workforce and R&D
expenditures and personnel in 2001. It was
reported that there were approximately 280,000
ICT workers in 2001 or 9 ICT workers per
1,000 workers (NECTEC, 2003). This small
ICT workforce reflects relatively low eco-
nomic development around ICT. In addition, the

relatively low proportion of highly skilled ICT
workers (27%) indicates a significant challenge
for Thailand in reaching its goal of becoming a
regional leader in ICT industry, particularly the
software industry that requires highly technical
and managerially skilled workers. Thailand
produced 61,439 science and technology graduates in 2001 but this number is inclusive of
all science and technology disciplines. It was
reported that data on ICT graduates is not yet
available because of the difficulty of drawing
a boundary around what might be considered
ICT curricula (NECTEC, 2003).
Research and development expenditures
and personnel are related to a countrys innovative capability. Thailand has a low overall R&D
expenditure, compared with the international
standard. Furthermore, the R&D expenditure
in ICT was less than 4% of the overall R&D
spending. In addition to the low number of
R&D personnel in ICT, more than 60% of them
work for the government and educational institutions. As a result, it is less likely that their
innovations will be reflected in commercialization of ICT products or services. Given the
importance of innovation in the development
of ICT and the long-term economic growth,
Thailand still needs significant investment in
building a countrys innovative capability.
Economy
From an economic development perspective,
Thailand evolved from a long standing agricultural economy to an industrial economy
is prohibited.
Table 5. Distribution of ICT adoption across geographical regions, 2003 (Source: Adapted from
NECTEC, 2005)
ICT
Greater
Bangkok
Central
North
North
East
South
ICT access
Fixed phone lines per 100 inhabitants
39
5 (the rest of the country)
Mobile phone subscribers per 100 inhabitants
42
29
19
13
20
Households with computers
24%
7.5%
6.1%
4.5%
6.1%
Internet users per 100 inhabitants
27
10
10
Business with computers
23%
9%
8%
8%
10%
Business with Internet access
9%
3%
3%
2%
5%
Business with Web sites
3%
1%
0.6%
0.3%
1.6%
Business access and use of ICT
Table 6. ICT workforce and R&D expenditures and personnel, 2001 (Source: Adapted from
NECTEC, 2003)
Indicators
ICT workforce
Highly skilled workers (computer professionals)
27%
Low skilled workers (technicians)
73%
Education
Science and technology graduates
61,439
Research and Development

R&D expenditure
0.22% of GDP
R&D expenditure in ICT
3.7% of total R&D expenditure
R&D personnel
55,748
R&D personnel in ICT
750
in the 1990s. More recently, the country has

intended to move towards a knowledge based
economy as outlined in its 9th (2002-2006) and
10th (2007-2011) national economic and social
development plans. Recently, Thailand has experienced political turmoil since a military coup
deposed Prime Minister Thaksin Shinawatra in
September 2006. The unstable political situation
has significantly slowed down the countrys
economic development.
Table 7 summarizes Thailands key economic indices to illustrate the current economic
conditions and the dynamics of growth and

change over 40 years of economic development
from 1960 to 2006.
During the last 40 years, Thailand has
shifted its economic strategies from focusing
on an import-substitution strategy, during 19601972, to an export-orientation strategy since
1972 (Abdulsomad, 1994). As shown in Table
7, the export of goods and services has significantly jumped from an average of 16% of
GDP during 1960-1969 to an average of 67%
of GDP: more than a 400% increase during the
is prohibited.
Table 7. Thailands key economic indicators, 1960-2006 (Source: compiled from World Banks
world development indicator database).
Economic indicators
19601969
19701979
19801989
19901999
20002004
2005
2006
Gross domestic product

GDP growth (%)
7.1%
7.3%
7.4%
5.2%
5.0%
4%
5%
GDP per capita (constant 2000 US$)
$400
$632
$989
$1,844
$2,146
$2,446
$2,549
Exports of goods and services (% of GDP)
16%
19%
26%
43%
67%
74%
71%
High-technology exports (% of manufactured exports)
NA
NA
NA
26%
31%
26.6%
NA
NA
0.7%
1.1%
2.6%
1.8%
3%
NA
Employment in agriculture (% of total

employment)
NA
NA
66%
54%
46%
43%
NA
Employment in industry (% of total employment)
NA
NA
12%
17%
19%
20%
NA
Employment in services (% of total employment)
NA
NA
22%
28%
35%
37%
NA
Unemployment (% of total labor force)
NA
NA
3%
2%
2%
NA
NA
ICT expenditure (% of GDP)
NA
NA
NA
NA
4%
4%
4%
R&D expenditure (% of GDP)
NA
NA
NA
NA
0.26%
NA
NA
Private health expenditure (% of GDP)
NA
NA
NA
NA
1.4%
NA
NA
Public health expenditure (% of GDP)
NA
NA
NA
NA
2.1%
NA
NA
Rural population (% of total population)
80%
77%
72%
70%
68%
68%
67%
Exports
1
Foreign investment
Foreign direct investment (% of GDP)
Employment
Expenditure
(Note : High-technology exports include products with high R&D intensity, such as aerospace, computers, pharmaceuticals, scientific instruments, and electrical machinery.)
1
period from 2000 to 2004. From the late 1980s

up to 1995, Thailand enjoyed double-digit
economic growth rates, during which time the
annual GDP growth approached 10%, before
the downturn of its economy in 1997. The GDP
per capita has also grown more than 600% from
US$400 during 1960-1969 to US$2,549 in
2006. The East Asian financial crisis in 1997
had a significant impact on the Thai economy
leading to the devaluation of the Thai baht, the
collapse of major finance companies, and disruption to Thailands industry.
To recover from the 1997 financial crisis

and to maintain the future competitiveness,
Thailand has employed multiple strategies
including: (1) initiating legal and regulatory
reforms to strengthen the financial sector and
the economy; (2) emphasizing the important
role of ICT to increase productivity; and (3) increasing domestic value added by strengthening
the competitiveness of the small and medium
enterprises (SME) sector. Table 8 lists some of
the financial laws, economic reform laws, and
SME promotion laws.
is prohibited.
Small and medium enterprises (SME) play

an important role in the Thai economy. Table
9 summarizes several key economic indicators
to illustrate the contribution of SMEs to the
Thai economy during 2000-2005. In 2005,
Thailand had 2,249,718 business establishments, 99.5% of which were SMEs according
to the definition from the Ministry of Industry.
Among SME establishments, the manufacturing sector had the largest share of SME in 2005
(31%), which had grown from 22% in 2002.
The service sector had slightly reduced from
31% in 2002 to 26% in 2005. The representation
of SMEs in the retail sector had significantly

decreased from 45% in 2002 to 25% in 2005.
Although the wholesale sector increased its
share from 3% in 2002 to 8% in 2005, it still
represented a small number of SME establishments compared to other sectors. In terms of
employment, SMEs employed a large number
of the countrys workforce. In 2005, SMEs in
all sectors employed 75.4% of all those employed in the country.
Between 2000-2007, SMEs maintained a
steady contribution of 39% to the countrys
GDP. However, SMEs have had a dominant
Table 8. Key financial laws, economic reform laws, and SME promotion laws (Source: compiled
from the annual World Bank Thailand economic monitor publications, 1999-2006)
Law
Objectives
Financial reform laws

Financial institution law
Emphasize financial liberalization, strengthen supervision, provide prompt

corrective action, and improve disclosure and corporate governance
Central bank law
Allow the Bank of Thailand to intervene into troubled banks, internationalize regulations, and improve consumer protection
Economic reform laws

Competition act
Define abuse of dominance, price fixing, and collusion
Secured transaction act
Include a wide range of personal and business assets that can be pledged as
collateral
Bankruptcy court law
Establish the bankruptcy court and bankruptcy case procedures
Foreclosure law
Give the courts discretionary power to complete foreclosure cases within a

short time frame
State enterprise corporatization bill
Facilitate corporatization and private participation in state enterprises
SME promotion law

SME promotion act
Coordinate, finance, and implement SME support activities

Establish a new agency called the Office of SME Promotion
Set up SME promotion fund
Human capital development laws

Education act
Promise free education for up to 12 years
Electronic commerce laws

Electronics transactions act
Accept the legal status of electronic data and electronic signatures as being
equal to paper-based transactions
Universal access law
Promote and support the development of an adequate information infrastructure throughout the country
Data protection law
Provide the protection of personal data of individuals
Computer crime law
Define computer crimes and provide penalties for non-compliance
Electronic funds transfer law
Establish security procedures for electronic fund transfers
is prohibited.
Table 9. SME and its roles in Thailands economy, 2000-2007 (Source: Compiled from the annual white paper on small and medium enterprises of Thailand, 2001-2007, Office of small and
medium enterprise promotion, Thailand)
Economic Indicators
2000
2001
2002
2003
2004
2005
2006
2007
99.6%
99.5%
99.8%
99.5%
99.4%
99.6%
SME establishments (% of all establishment)

All sectors
NA
NA
SME establishments by sector (% of total SME establishments)

Manufacturing
NA
NA
22%
19%
22%
31%
29.6%
28.2%
Service
NA
NA
31%
32%
33%
26%
29.7%
30.0%
Retail
NA
NA
45%
32%
33%
25%
30.0%
NA
Wholesale
NA
NA
3%
6%
6%
8%
7.2%
NA
NA
NA
69%
61%
80.4%
75.4%
76.7%
76.0%
39.5%
39.4%
38.8%
38.1%
37.8%
39.6%
38.9%
38.2%
SME employment (% of all employment)

SME employment
SME contribution to GDP
All sectors
SME contribution to GDP by sector

Manufacturing
28.4%
33.1%
32.9%
33.1%
33.7%
33.7%
33.7%
33.7%
Trade and maintenance
84.6%
81.5%
80.9%
80.0%
79.8%
79.8%
79.8%
79.8%
Services
41.5%
51.5%
50.8%
49.7%
49.2%
48.3%
48.2%
46.9%
39.4%
38.2%
26.0%
26.5%
29.7%
29.1%
30.1%
SME contribution to total export values

All sectors
38.4%
role in the trade and maintenance sector with

their contribution to the GDP being as high as
85% in 2000 and a slightly decreased 80% in
2007. SMEs have steadily contributed approximately one third (34% in 2007) of the
GDP in the manufacturing sector. SMEs also
contributed a significant share of the GDP in
the trade and maintenance sector, which includes
retail and wholesale industries. In 2005, SMEs
contribution to GDP in this sector was 80%. In
the service sector, SMEs have maintained a
stable contribution of 48% in 2005. Although
SMEs contribution to exports decreased from
38% in 2000 to 27% in 2004, their contribution
to Thai high skill products exports has improved
over the years. In 2005, the SMEs export of
high skill products including personal computers and accessories contributed 13% of the
countrys total export value.
The supportive macroeconomic policies,

together with legal and regulatory reforms,
continuous infrastructural improvements, and
active participation of SMEs in economic
development, contributed to a steady annual
economic growth rate of 6.1% in Thailand
during 2002-2004 (World Bank, 2007). Such
growth was mainly driven by strong export
growth, especially in agriculture and laborintensive manufacturing (Richter, 2006; World
Bank, 2007). The World Bank report (2007)
projected that the Thai economic growth rate fell
to 4.3% in 2007, which resulted in an average
annual growth rate of 4.6% during 2005-2007,
1.5% lower than the growth during 2002-2004.
Richter (2006) studied the nature of Thailands
economic growth and suggested that the growth
is due to extensive expansion in many development areas including an increase in capital
is prohibited.
and labor, and relocation of labor sources from

agriculture to industry and services. However,
Thailand still lacks sufficient intensive growth
to improve total factor productivity (TFP).
Furthermore, the decline in investment rate was
also cited as one of the reasons for the economic
growth slowdown in Thailand (Richter, 2006;
World Bank, 2007).
Culture
Culture is defined as beliefs, attitudes, norms,
and values that are shared by a group of people
(Hofstede, 2001; Triandis, 1995) and is included
among the factors in the theoretical framework
influencing the development and adoption of
information technologies. Chandrasekaran and
Tellis (2007) point out that a national culture
influences the acceptance and adoption of a
technology because shared cultural beliefs form
a common pattern of thinking among individuals
and the degree to which the behavior of individuals, groups, and institutions are viewed as
legitimate, acceptable, and effective.
Drawing on several empirical studies of
Thai society, Komin (1990) suggests a framework to examine Thai culture. According to
Komin the culture of Thailand places a high
value on Buddhism, as manifested in behaviors
such as valuing community collaboration and
reciprocal relationships, preferring courtesy and
pleasant interactions, and appreciating relationship harmony more than individual ambition
and hard work. Komins findings correspond
to Thai cultural characteristics highlighted by
Hofstede (2001). The results of Hofstedes
cross-cultural research indicate that Thailand
is a society that ranks high with respect to collectivist, feminine values, power distance, and
uncertainty avoidance. Thailand is a strongly
collectivist society in which trust and personal
relationships with others are highly valued.
Jirachiefpattana (1996) argues that personal
and family connections play an integral part
in Thai business operations. Hallinger and
Kantamara (2000) suggest that the feminine
dimension of Thai culture is demonstrated in
seeking harmony, avoiding conflict, and foster-
ing a strong community spirit. According to

Hofstede (2001), Thailand is also considered as
a high power distance society that places great
emphasis on its hierarchical structure. In the
workplace, high power distance translates into
significant respect for an organizations leader,
consequently, subordinates are unlikely to directly challenge or disagree with their supervisors. Thailand is also rated as a high uncertainty
avoidance society. Uncertainty avoidance is
the extent to which the members of a culture
feel threatened by uncertain or unknown situations (Hofstede, 2001, p. 161). Uncertainty
avoidance is reflected in some behavioral traits
including low risk tolerance, stability seeking,
and the tendency to reject ideas and behaviors
considered to be different.
Several researchers have pointed out that
since information technologies are cultural
entities that emanated from developed countries, cultural traits embedded in information
technologies may be different from the cultural
contexts of other countries, including Thailand
(Gray & Sanzogni, 2004; Jirachiefpattana,
1997; Hongladarom & Hongladarom, 2005;
Thanasankit & Corbitt, 2000; Vatanasakdakul,
2006, 2008). For example, Gray and Sanzogni
(2004) argue that the objective of developing
and implementing management information
systems in businesses is to promote information
sharing, facilitate effective decision making,
increase business efficiency and flexibility,
and cultivate innovation capacity. However,
the cultural traits of high power distance and
high uncertainty avoidance in Thai society may
restrain these effects (Gray & Sanzogni, 2004).
Jirachiefpattana (1997) investigated the case of
unsuccessful executive information systems
(EISs) development in Thai banking. She found
that EISs developed by foreign consulting
firms were unsuccessful mainly because they
did not apply an Asian management style to
the systems, a common issue related to other
cases of unsuccessful EISs developed by foreign
consultants (Jirachiefpattana, 1996). Moreover,
lack of cooperation and involvement from executives and IS department severely paralyzed
the deployment of the system (Jirachiefpattana,
is prohibited.
1997). Thanasankit and Corbitt (2000) conducted an ethnographic study of the influence
of Thai cultural factors on the software requirements elicitation processes between clients of
and developers in a software company. Their
findings show that the requirements elicitation
had to start from top-level managers because
of the strict hierarchical structure. If there was
a potential conflict between the requirements
identified by the top-level managers and those
identified by the low-level managers, the lowlevel managers were less likely to raise opinions
that differed. Due to the high power distance and
high uncertainty avoidance, the requirements
elicitation activities needed to be approved by
the authority figures in the client companies
because the subordinates were not comfortable
making such decisions. The conclusion was that
this situation may delay and sometimes inhibit
requirements gathering. In their interpretive
analysis of Thai culture using the data from
the same study on requirements engineering
processes from Thai software companies, Corbitt et al. (2004) view culture as code systems
and suggest that multiple social codes (e.g.,
verbal language, bodily codes, commodity
codes, and behavioral codes) are important to
an understanding of the role of Thai culture on
software development practices.
The implication for multinational IT consulting organizations is the need to adjust their
practices to Thai cultural values, accommodate
different practices, and perhaps alter requirements engineering procedures (Thanasankit,
2002). Hanisch et al. (2001) also suggested
that project managers should compromise
between formal procedures and socio-cultural
aspects in their requirement engineering pursuits. Vatanasakdakul (2006, 2008) studied
the influence of Thai culture on business to
business (B2B) technology adoption using
in-depth interviews with government and Thai
practitioners. Through a cultural fits lens, the
results showed that adoption was quite slow
due to cultural fit issues. Thai business people
rely on face-to-face communication, personal
relationships, long-term relationships, and interorganizational trust as critical factors to maintain
their business relationships. Vatanasakdakuls

(2006, 2008) cultural fit concept was aligned
with findings from several studies regarding
technology adoption and cooperation in a
virtual environment (Arnott et al., 2007; Burn
& Thongprasert, 2005; Hanisch et al., 2001;
Thongprasert & Burn, 2003; Ngampathanakul
& Pill, 2005).
The study conducted by Hongladarom
and Hongladarom (2005) on the influence of
culture on communication behaviors of the
participants of a Thai forum (Pantip.com)
is an example of how Thai culture affects
information technology adoption. Hongladarom and Hongladarom (2005) point out that
while online discussion forums were typically
utilized by people in Western countries to assert individual identity and sometimes at the
expense of others, the participants of Pantip.
com viewed their forum as a community and
always sought to maintain a community harmony by building a common ground instead
of fighting for personal victory in heated
arguments and debates.
These examples illustrate how culture
influences the development and adoption of information technologies in Thai society. While
cultural factors can have both negative and
positive effects on the development and adoption of information technology, these examples
illustrate the need to develop a synergy between
Thai cultural values and the innovation initiatives, and incrementally implementing those
changes (McKenna, 1995). A case study of
Microsofts effort to train teachers to utilize
information and communication technologies
in several Asian countries found that because
of the hierarchical structure, the norm in Thai
culture is that elders instruct younger people
(Quah, 2008). Therefore, younger teachers who
were more proficient in new technologies were
not comfortable playing an instructor role to
teach older teachers. The results of this case
study indicate that peer coaching proves to be
a more suitable approach to training teachers
using ICT in Thailand because it conforms to
the Thai cultural norms of sharing practices
with friends and families (Quah, 2008).
is prohibited.
DISCUSSION
After reviewing the policy initiatives, infrastructure development, economic growth and
cultural influences in Thailand with respect to
the development of a vibrant ICT sector and a
sustainable information economy, some questions remain:

What are the differences in the developmental trajectories between Thailand and
other countries?
What are the challenges that Thailand is
facing in developing a sustainable information economy?
How can Thailand leverage its distinctive
characteristics to address these challenges?
Although there is no one-size-fits-all path

of information economy development (DCosta,
2006; Trauth, 2000), we argue that there are
some general themes that are fundamentally
important for developing a sustainable information economy in any context. In this section,
we employ the four themes that resulted from
Trauths study (2000, p. 352) of the Irish information economy to compare and contrast the
developmental trajectory of the ICT sector in
Thailand with that of Ireland, India and China.
These four themes are: facilitating ICT sector
work, ensuring a supply of qualified workers,
exploiting distinctive characteristics, and reconfiguring industrial and information policy. We
summarize the key discussion points in Table 10.
Facilitating ICT Sector Work

A well developed infrastructure is very important to facilitating the work in the ICT sector.
Table 11 lists some of the key indicators of
ICT infrastructure development in 2007. Ireland is in the leading position with respect to
infrastructure development among these four
countries because of its early start, the strong
support from the Irish government, and the active involvement of the private sector (Heavin
et al., 2003; Minevich & Richter, 2005). The
indicators also show that China is far more

advanced than India with respect to ICT diffusion and infrastructure development. However,
China and India are at a similar developmental
stage and carry similar developmental burdens
such as a large population and regionallyskewed development. The advancement of
China in terms of infrastructure development
can be attributed to a considerable amount
of investment, nationwide developmental
strategy, strong interventions and controls of
the central government (Aspray, Mayadas, &
Vardi, 2006; Deloitte, 2006; Panagariya, 2007).
In India, on the other hand, despite its domination in the global ICT services export market,
the service industry is heavily concentrated
around major clusters including Bangalore,
Mumbai, Chennai, Delhi and Hyderabad
(Heeks & Nicholson, 2004). In these clusters,
the infrastructure has been developed to facilitate ICT sector work. However, for the rest of
India, the infrastructure in many rural areas
is inadequately developed, thereby lowering
the national average indicators and posing as
a barrier to future growth (Panagariya, 2007;
Worthen, 2007). As discussed in the previous
section, Thailand has made steady progress
towards infrastructure development, with
many indicators close to or higher than those
of China (indicated by data from Table 11).
One of the significant initiatives with
respect to facilitating ICT work in Thailand
is the development of the software park, which
aims at providing software development skills
training to the workforce (Gray & Sanzogni,
2004). As a latecomer participant in the
global ICT market, Thailand can learn some
valuable lessons from those early adopters
such as Ireland, India and China. These would
include: continuously investing in ICT infrastructure, involving both public and private
sectors in development activities, focusing
greater effort on establishing a strong technical and human infrastructure (education and
R&D expenditure), and promoting balanced
nationwide ICT development.
is prohibited.
Table 10. The comparison of developmental trajectories between Thailand, China, India and
Ireland
Themes
Ireland
India
China
Thailand
A. Understand the characteristics of the information economy

A1. Facilitating ICT
sector work
World-class technical infrastructure

Strong support
from government and
active involvement of
private sector
Uneven infrastructure development between ICT

clusters and other
regions
Good infrastructure
Strong governmental commitment, investment,
and control
Good infrastructure
Software parks
Low R&D expenditures in the ICT
sector
A2. Ensuring a
supply of qualified
workforce
Free secondary
education
Close linkage between academic and
industry
Large supply of
college graduates
Skill gap
Mobile human
capital
Large supply of
college graduates
Skill gap
Mobile human
capital
Government sponsored scholarships

Talent shortage
Good English
skills
A relatively good
cultural fit with
Western developed
countries
Relatively low
labor cost
Great potential
internal market
Low labor cost

Regional advantages and competitions
Seeking cultural
synergy
Focusing on software and service

exports
Hardware manufacturing
Focusing on
internal software
market
Series of IT plans
B. Leveraging socio-cultural characteristics

B1. Exploiting
distinctive characteristics
English speaking
Member of European Union
The cultural fit with
Western developed
countries
C. Adapting the vision along the way

C1. Reconfiguring
industrial and information policy
From multinational
to indigenous ICT
companies
Focusing on the
niche market
ENSURING A SUPPLY OF
QUALIFIED WORKERS
One common lesson learned from the ICT
sector and information economy development
in many different countries is the criticality of
ensuring the supply of a qualified knowledge
workforce (Aspray, Mayadas, & Vardi, 2006;
Farrell et al., 2005; Heeks, 2006; Trauth, 2000).
According to Riain (1997), the introduction
of free secondary schooling in the 1960s laid
the foundations for supplying a technically
sophisticated workforce for the first booming of
the Irish ICT sector that was primarily driven by
major multinational ICT companies coming to
Ireland. The university education was also made
essentially free in Ireland since 1996, something
that ensures the supply of a skilled workforce
(Cusumano, 2005). In addition to the govern-
ment support, another unique aspect of the Irish

software sector development is the close linkage
between the academic institutions and industry.
Not only have some of Irelands most successful indigenous companies originated from the
university environment, but also the innovative
research outcomes from universities have been
directly applied in some rapidly growing firms
(Sands, 2005). Such close linkage is one of the
factors that ensure Irelands dominance in the
high-end offshoring outsourcing market.
There are many similarities between China
and India in terms of the supply of skilled
workers. Building on the large population base
in both nations, it is estimated that the size of
Indias pool of young university graduates
is around 14 million, 1.5 times the size of
Chinas (Farrell et al., 2005); however, only
4% of Indias university educated workforce
is prohibited.
Table 11. ICT infrastructure development, 2007 (Source: Adapted from World Development
Indicators Database http://web.worldbank.org/)
Indicator
Ireland
India
China
Thailand
92
60
70
70
5.1
5.7
4.7
5.3
C1. Telephone main lines (per 1000 people)
480
40
280
110
C2. Mobile subscribers (per 1000 people)
1140
210
420
1240
C3. Internet users (per 1000 people)
582
72
161
210
C4. Personal computers (per 1000 people)
561
33
57
70
C5. Broadband subscribers (per 1000 people)
184.6
2.8
50.4
14.3
C6. International Internet bandwidth (bits per person)
15,229
32
280
346
C7. Total telecommunications investment

(% of revenue)
10.8
___
33.3
36.5
C8. ICT expenditure (% of GDP)
5.9
5.6
7.9
6.1
C9. Schools connected to the Internet (%)
99
___
___
37
C10. E-government readiness (scale 0-1)
0.66
0.57
0.41
0.53
A. Economic and Social Context

A1. Primary, secondary, tertiary school enrollment
(% gross)
B. ICT Sector Structure
B1. Government prioritization of ICT (scale 1-7)
C. ICT Sector Performance
Note: The data reported in items B1, C7, C9, and C10 are based on the 2004 statistics.
hold engineering degrees while that number

is 33% for China (Farrell & Grant, 2005). For
the software sector in particular, both countries
are facing the challenge of skill gaps (Aspray,
Mayadas, & Vardi, 2006; Li & Gao, 2003). In
India, the post-secondary education system is
a mix of private institutions and state owned
universities, among which the educational quality varies widely (Aspray, Mayadas, & Vardi,
2006). In China, the traditional educational
system is biased towards theory while overlooking practical training (Farrell & Grant, 2005).
It was not until 2001 that Chinese universities
began to establish a separate academic discipline
for the software development domain (Aspray,
Mayadas, & Vardi, 2006). The majority of the
software workforce in both countries is strong
in terms of technical skills but weak in terms
of general skills (such as communication skills)
and business skills (such as management skills)
(Aspray, Mayadas, & Vardi, 2006; Huang,
2009). While the educational systems in both

countries strongly emphasize math and science,
the Indian workforce has a clear advantage over
China with respect to English language skills.
The lack of English-speaking proficiency in the
ICT workforce is considered one of the biggest
disadvantages of China in competing with India
in the global ICT offshore outsourcing market
(Farrell & Grant, 2005).
In addition to reforming the education
curriculum and improving the education quality, one of the strategies that both nations can
leverage is the reverse brain-drain. Each year,
a large number of Chinese and Indian college
students come to the U.S. and other developed
countries to pursue advanced degrees and careers. Saxenians (2006) study of the connection
between Indians and Chinese working in Silicon Valley and the development of Indian and
Chinese information economies suggested that
these graduates are valuable human capital as-
is prohibited.
sets because they bring back skills, knowledge,

and networking connections and opportunities
when they return to their homelands. Therefore,
it is important for India and China to turn the
brain-drain into a brain-gain, by providing
incentives and opportunities that encourage
returning, and that cultivate the great potential
of such mobile human capital.
The challenges China and India are currently facing in workforce supply are valuable
lessons for Thailand. Consistent with the findings from Tan and Leewongcharoen (2005),
we believe that Thailand needs to improve the
quality and quantity of IT workers to support
the growth and value-added contribution of its
IT industry. Some of the important initiatives
are reforming the educational curriculum, emphasizing the language skill training, focusing
on improving both technical skills, and general
and business skills, taking advantage of the
academic research capabilities to nurture innovation in industry, and making sure that the
mobile human capital (e.g., appropriate positions and responsibilities of the government
sponsored scholars when they return to the
country after their education aboard in the case
of Thailand) is properly utilized. Thuvasethakul
and Pooparadai (2003) delineated the priority
in Thailands human capital development and
recommended the following strategies: quantitatively and qualitatively incubating the ICT
profession by providing financial support to IT
R&D in academia and in industry; establishing
a productive collaboration among industries and
academia; erecting IT training centers capable
of transforming a non-ICT workforce into ICT
professionals; and boosting ICT literacy by offering an ICT-ready environment that enables
learners to update their ICT knowledge base.
EXPLOITING DISTINCTIVE
CHARACTERISTICS
Each country has its own unique socio-cultural
context. Therefore, it is important to explore the
distinctive characteristics of a given country,
leveraging the advantages and overcoming
the barriers. In the case of Ireland, its distinct

competitiveness comes from the well-trained
English-speaking workforce, geographical
proximity to other European Union nations,
and a close cultural fit with western developed
countries (Riain, 2007; Trauth, 2000; Cusumano, 2005). In the case of India, the distinct
advantages include a large workforce that is
relatively well trained and English-speaking,
and a relatively good cultural fit with developed
countries. (Minevich & Richter, 2005). It is
anticipated that India will remain in a leadership
position as the biggest exporter of software and
services in the near future (Minevich & Richter,
2005). As far as China is concerned, although it
is lagging behind those early entrants (Ireland,
Israel and India) with respect to the share of the
global ICT market, its tremendous opportunity
in the internal market will keep attracting foreign
investment. Furthermore, labor costs are still
relatively low in China. Minevich and Richter
(2005) predicted that China will replace India to
become the leader of the worlds most competitive and popular ICT outsourcing destinations
in the next decade.
Similar to Ireland, the size of the qualified
workforce in Thailand is quite small compared
to the quantity present in China and India. In
addition, the high power distance and high uncertainty avoidance characteristics of the Thai
value system may indicate a cultural misfit with
rapid technology advancement and innovation.
Similar to China, the English language skills
will also be a challenge for Thailand. However,
Thailand currently has the relative advantage of
low labor costs. To increase their competitiveness, companies in India are seeking different
ways of moving up in the value chain and saving
costs by transferring some low-end jobs to a third
country. Being geographically close to some of
those active offshore outsourcing players may
be beneficial for Thailand. However, at the same
time, Thailand is facing some strong competition in the region, as well. Ireland, India and
Israel are often referred as the first tier software
exporters, while China, Russia and the Philippines are referred as the second tier software
exporters (Heeks & Nicholson, 2004). The
is prohibited.
Philippines has already established its position

as one of major players among the second tier
software exporters (Heeks & Nicholson, 2004).
Therefore, it is very important for Thailand to
carefully evaluate the global market trend and
its distinctive characteristics to define its own
developmental path.
RECONFIGURING INDUSTRIAL
AND INFORMATION POLICY
Because the ICT sector is fast changing in nature
and the global ICT market is highly competitive,
it is important for those countries who aim at
developing a strong ICT sector to constantly
adjust the developmental strategies and adapt
the vision along the way. Taking Ireland as an
example, the ICT industry of Ireland has gone
through different phases (Sands, 2005). From
the mid 1970s to the late 1980s, the active players
in developing the Irish ICT sector were those
multinational hardware and software companies
who intended to use Ireland as a platform for
the European market (Riain, 1997; Sands,
2005; Trauth, 2000). In the beginning, these
multinational companies focused on hardware
manufacturing and gradually added software
development as one of their major activities
in Ireland (Sands, 2005). The 1990s was the
era of the indigenous software companies who
gained critical mass and became the engine for
development. Instead of competing with India in
the service market, Ireland followed a different
trajectory by entering the international niche
market, specializing in systems software and
enterprise systems development (Sands, 2005).
Sands (2005) suggested that the emergence of
indigenous Irish software companies is the key
to stimulate the development of a sustainable
national system. Since the mid 1990s, the entrepreneurial starts-ups have increasingly become
active in the software market. According to
Sands (2005) and Cusumano (2005), most of
those entrepreneurial start-ups are small and mid
sized, with a focus on the international market.
India and China show clear divergence in
their development trajectories with respect to
the ICT sector. From the very beginning, India

set its vision at the global service market and
has become the largest ICT-service provider in
the world (Aspray, Mayadas, & Vardi, 2006). It
is projected that Indias software and services
exports will be worth $50 billion by 2008 (Sahay
et al., 2003). Indias dominance in the global
software and services market is largely attributed to its policy liberation in the early 1990s
and a large, talented ICT workforce, who was
skilled and fluent in English (Aspray, Mayadas,
& Vardi, 2006; Farrell et al., 2004). However, as
the cost-saving margin gradually diminishes in
India, it has to adapt its vision of development
in order to sustain its leading position in the
future. China is the worlds largest hardware
manufacturing country, with a small share of the
global software and services market (Aspray,
Mayadas, & Vardi, 2006; Dedrick & Kraemer,
2006). The national software strategy of China
has traditionally focused on the domestic market (Aspray, Mayadas, & Vardi, 2006). Some
experts comment that it is difficult for China to
compete in ICT services because its software
industry structure is not well integrated and lacks
needed expertise to capture large international
projects (Aspray, Mayadas, & Vardi, 2006).
However, China has great potential to compete
in global software and ICT service markets in the
future because of the support from its continuous
infrastructure development, improved higher
education, and reformed software strategies
(Farrell et al., 2004).
According to its ICT master plan for 20022006, Thailand has set its goal of becoming
one of the top software and service exporters
in its region. A series of IT plans reflects the
adaptation of the Thai government in crafting its
developmental targets, strategies, and priorities
along the way. Experts suggested that Thailands
export base is rather limited (ESCAP, 2004).
Hardware production still dominates the ICT
industry, accounting for 63% of Thailands ICT
market in 2001 (ESCAP, 2004). At the same
time, more than 70% of the domestic software
demand of Thailand is being met by imports
as a result of the immature local software development sector (ESCAP, 2004). Under these
is prohibited.
circumstances, the developmental strategies of

Thailand need to be realistic, flexible and improvisational with the emphasis on continuity
of development plans.
POLICY AND RESEARCH

IMPLICATIONS FOR
INFORMATION ECONOMY
DEVELOPMENT
We used the Influence-Impact Model to explain
the influence of policy, infrastructure, economy,
and culture on information economy development in Thailand. We believe that our model can
be applied as a general framework to develop
a rich understanding of information economy
development trajectories of a particular country.
The model is also useful for other researchers
who want to have a systematic framework for
a comparative study of information economy
development across countries or regions.
Our results point out issues and offer suggestions for Thailand and other emerging economies to further develop its information economy.
From a policy perspective, our findings suggest
that Thailands most recent ICT policy puts the
country in a strong position towards sustainable information economy development. This
is because this policy puts equal emphasis on
all five components of ICT industry and shows
strong efforts to improve ICT infrastructure,
production, and usage. However, we believe
that Thailand also needs to develop a set of
measures regarding achievement of its ICT
policy goals and reduction of the gap between
the expected goals and realized values. Drawing
on the lessons from China, India, and Ireland,
we believe that Thailand needs to use policy
evaluation results to develop realistic and attainable policies and strategies. Their policies and
strategies should also be adaptable to changes
in global and local information economy.
From an infrastructure perspective, Thailand has a number of ICT infrastructure and
human capital infrastructure issues. These
include low PC and Internet use, unequal ICT
infrastructure development across regions,
small skilled workforce, a small number of

highly skilled ICT workers in the valued-added
software and content industries, and low R&D
expenditures and R&D personnel in the ICT
industry. To advance its information economy,
Thailand needs continuous effort directed at
investing in ICT infrastructure, leveraging
both public and private sectors in development
activities, improving the quality and increasing
the quantity of IT workers through strong investment in education and R&D, and promoting
balanced nationwide ICT development.
From an economic perspective, Thailands
future economic growth depends on an increase
investment and improvement in technology
and innovation. It also needs to strengthen
the competitiveness of the SME sector in ICT
production and ICT usage. From a cultural
perspective, Thai society values hierarchical
structure, trust and personal relationships in
doing business, and uncertainty avoidance.
These characteristics may prevent the country
from gaining widespread adoption and usage
of newer ICT technologies particularly those
ICT-enabled intermediaries such as B2B or
B2C technologies.
CONCLUSION
In this study, we assess the economic development of Thailand and explore the distinctive
characteristics and unique challenges of Thailand in its path to a sustainable information
economy. In doing so, we draw on Trauths
Influence-Impact Model and analyze how
dimensions of the socio-cultural context
(policy, infrastructure, economy and culture) of
Thailand influence its information economy
development as indicated by ICT production
and use. We also invoke lessons learned from
Ireland, India and China to consider how Thailand may overcome some of its developmental
barriers in the future.
This research has identified some of the
significant challenges of developing a sustainable information economy in Thailand from
both the vertical (different perspectives of
is prohibited.
development) and horizontal (comparing across

different countries) dimensions. The research
model and analytical themes utilized in this
study can be applied in studying other emerging
economies as well. Future research will involve
more detailed and systematic examination of
the factors influencing Thailands information
economy development that were identified in
this study.
Cusumano, M. A. (2005). Software in Ireland: A

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Developmental Trajectory? In D Costa, A. P. (Ed.),
The New Economy in Development: ICT Challenges
and Opportunities (pp. 113). New York: Palgrave
Macmillan.
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Angsana A. Techatassanasoontorn is an Assistant Professor of Information Sciences and Technology at the Pennsylvania State University. Dr. Techatassanasoontorns research is concerned
with theory building and empirical analysis on ICT-enabled social innovations, the adoption
and diffusion of technology, technology policy, and technology-mediated learning. She has
published in IEEE Security & Privacy, Information Technology and Management, Journal of the
Association for Information Systems, and Telecommunications Policy. Her research has been
supported by grants from ACM SIGCSE, the Commonwealth Fund Foundation, Microsoft, the
National Science Foundation, and Qualcomm.
is prohibited.
Haiyan Huang is a graduate of the Pennsylvania State University (Ph.D. in Information Sciences
and Technology). Her research and teaching interests include global information systems development, global IT offshore outsourcing, virtual teams, computer supported cooperative work and
learning, knowledge management, knowledge economy, and global IT workforce development.
She has published journal articles, book chapters and conference papers in these areas. She is
current working at Michigan Technological University.
Eileen M. Trauth is Professor of Information Sciences and Technology, Womens Studies, and
International Affairs at The Pennsylvania State University. Dr. Trauths research is concerned
with societal, cultural and organizational influences on information technology and the information technology professions with a special focus on the role of diversity and social inclusion. Her
research has been supported by two Fulbright Scholar Awards, and grants from the National
Science Foundation, the Australian Research Council and Science Foundation Ireland.
Suwan Juntiwasarakij is a PhD candidate in the College of Information Sciences and Technology at The Pennsylvania State University where he is a Royal Thai Government Science and
Technology Scholar. His research and teaching interests include global information systems,
the knowledge economy, knowledge management, conversational knowledge management, and
collaborative intelligence for innovation.
is prohibited.

Analyzing ICT and Development

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Journal of Global Information Management, 19(1), 1-29, January-March 2011 1

Analyzing ICT and Development:

Thailands Path to the Information Economy

Culture, Economic Development, Information Economy, Infrastructure, Offshoring, Outsourcing,

(ICT) to maintain their competitiveness in the

2 Journal of Global Information Management, 19(1), 1-29, January-March 2011

to an economys aggregate value. Second, the

specific aspects of the information economy

Journal of Global Information Management, 19(1), 1-29, January-March 2011 3

The desire to understand the specific ways

opment of a sustainable information economy.

4 Journal of Global Information Management, 19(1), 1-29, January-March 2011

industries in these three nations. In their model,

ing countries. In their model, country size,

Table 1. Information economy and ICT industry development studies

Dedrick & Kraemer

Human resources, complementary industries, R&D investment, and government

Ein-Dor et al. (1997)

Israel, New Zealand, Singapore

Government policy in promoting IT

Ein-Dor et al. (2004)

Technology infrastructure, R&D, firm

Advanced skills base, strong skills development institutions, clustering, domestic

Heeks & Nicholson

International and domestic demands,

Tan & Leewongcharoen (2005)

Geographic location, IT related foreign

Trauth (2000, 2001)

Explicit and flexible public policies

Four stages of information industry

Journal of Global Information Management, 19(1), 1-29, January-March 2011 5

as an exemplar developing country, they found

the evolution of Irelands information economy

Figure 1. Trauths (2000, p. 18) Influence-Impact model of technology-society interaction

6 Journal of Global Information Management, 19(1), 1-29, January-March 2011

influences (Trauth, 1996); telecommunications

METHOD AND DATA

Data Collection and Analysis

this data include: public policies and statistics

THE CASE OF THAILAND

Journal of Global Information Management, 19(1), 1-29, January-March 2011 7

index constructed from four sub-indexes on

sity, and conserve the environment and natural

Information Communication and

8 Journal of Global Information Management, 19(1), 1-29, January-March 2011

Table 3. Three stages of Thailands information economy development

Build an equitable infrastructure. Liberalize

Develop an IT literate workforce.

Journal of Global Information Management, 19(1), 1-29, January-March 2011 9

in 1995 to provide Internet access to primary,

Human Capital Policy

10 Journal of Global Information Management, 19(1), 1-29, January-March 2011

mobile phone subscribers experienced a substantial 1740% increase from 5 to 92 subscribers

Journal of Global Information Management, 19(1), 1-29, January-March 2011 11

Table 4. Thailands ICT infrastructure (Source: Adapted from ITU)

Fixed phone lines per 100 inhabitants

Mobile phone subscribers per 100 inhabitants

PCs per 100 inhabitants

Internet users per 100 inhabitants

such as Bangkok are more advanced than

Human Capital Infrastructure

nomic development around ICT. In addition, the

12 Journal of Global Information Management, 19(1), 1-29, January-March 2011

5 (the rest of the country)