Strategic cluster management for technological capability building: A case of hard disk drive cluster in Thailand

Several countries now have national programs to support cluster-based innovation in their key industries. They all realize that geographical clusters are significant drivers of innovations and competitiveness in todaypsilas fast-moving global economy. Cluster are formally planned and created with concentration of targeted industry and support infrastructure such as university researchers, supporting government agencies, vocational training providers, financial institutions, etc., This study follows the development of the hard disk drive (HDD) industry in Thailand. Over the past twenty years, the hard disk drive (HDD) industry in Thailand has grown steadily. The inflows of foreign investment in HDD-related manufacturing to Thailand have made the country the world largest exporter of hard disk drives and components in the past year. The Big 4 companies (Seagate Technology, Hitachi Global Storage Technology (HGST), Fujitsu and Western Digital) all have production bases in Thailand. With their presences, most of their suppliers have decided to have production bases or representatives in Thailand as well. This makes Thailand to have an almost complete supply chain of the HDD industry. This study analyzes the strategy employed by the Thai government to build national technological capability in hard disk drive technology through strategic cluster management. The government has established the Hard Disk Drive Institute (HDDI) as a center to develop infrastructure for research capability for the industry. This case study highlights the government roles and its strategy to formally build national technological capability on specific industry.