ABSTRACT
Thailand faced financial crisis in 1997. Both financial and real sectors were seriously affected. Several banks and financial institutes collapsed. Many firms in sectors where Thailand previously held competitive advantages, such as clothing, automotive and electronics, disappeared or were restructured. The economy seriously contracted, and it took several years to recover to the same level as before the crisis. Nonetheless, the crisis can also be seen as a benefit. After the crisis, TNCs and large domestic firms, in general, started to invest more in R&D. Several SMEs that survived the crisis emerged much stronger and paid more attention to technological development. There was also an emergence of new start-up firms with high engineering, design and R&D capabilities.
