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                         investment in technology and innovation, particularly by the
                         private sector.


                         Institutional changes required are considerable. Education and
                         skill development, for example, requires strengthening
                         educational institutions, and increasing collaboration among
                         educational institutions, private firms, and government
                         agencies. With respect to innovation, it means strengthening
                         the capacity of innovation-related government agencies and
                         research institutions; and effective linkages between
                         universities and firms. Institutional change will have to be a
                         collective and collaborative process, over an extended period
                         of time.

                         Uneven distribution of costs and benefits will be unavoidable.
                         There will be groups directly benefiting from particular
                         infrastructure projects and investments in new high-
                         technology/high-skill industries; and groups benefitting less,
                         e.g. lower skill labour; and groups and communities asked to
                         shoulder significant costs. This is not unusual: all growth
                         strategies, by their very nature, involve an uneven distribution
                         of benefits and costs. The challenge is to ensure that the
                         development path involves improving the quality of life of the
                         majority of the population, directly and/or indirectly.


                     Therefore while the structural transformation of the Thai economy,
               for example through the EEC program, is essential to address both
               domestic and external changes, it faces substantial implementation
               challenges. It requires significant resources, a collective effort, and an
               extended time horizon for economic and societal change. Implementing
               this economic transformation strategy will also require creating and
               maintaining a level of societal consensus, and therefore a supportive but
               also adaptive political system. This leads to the third proposition.








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