Innovation Analysis of ASEAN Countries

Abstract

The objective of this paper is to identify the determining factors for national innovation capabilities. The ASEAN 10 countries are used as proxy subjects for our studies. Secondary data from the World Economic Forum was used for testing. The WEF identified 12 categories of composite for national competitiveness index. We take these 12 composites and re-analyzed them for innovational capabilities. We identified innovation capabilities as dependent variable (Y), and the remaining 11 factors as independent variables (Xs): institutions, infrastructure, ICT adoption, macroeconomic stability, health, skills, product market, labor, financial system, market size, business dynamism. Correlation matrix was used to identify models. We found that product market, financial institution, business dynamics, and skills of the labor force are significant factors for innovation capabilities for the ASEAN countries. The R squared level for the proposed multiple regression was 0.9783 and the ANOVA F test value was 74.63 compared F(8,8) = 3.44 (p = 0.0000) with adjusted R squared at -0.95. This study also showed that the expected innovation capabilities of ASEAN countries are low; this finding implies that the ASEAN economies are still left in the Industry 3.0 despite their government mound the policy of Industry 4.0. Economic growth in the ASEAN will continue to depend on manufacturing and export processing, not based on knowledge and innovation. ; Fukbua, Thunchanok is a research assistant and contributed to this article