Understanding national innovation system (NIS) using porter’s diamond model (PDM) of competitiveness in ASEAN-05

Abstract

Purpose The purpose this study is to investigate national innovation systems (NIS) using Porter’s Diamond model (PDM) by examining the five founding member nations of the Association of South East Asian Nations (ASEAN) namely Indonesia, Malaysia, Philippines, Singapore and Thailand, for the period 2010-2014 (WCY 2015, WDI 2015). Design/methodology/approach PDM of competitiveness helps us understanding a nation’s competitive position in world trade. In exploring the empirical relationship between NISs and PDM, a non-parametric approach has been applied using the Malmquist Productivity Index (MPI). This study focused on representing the PDM in a simplified manner and endeavored to understand NIS more rigorously through PDM. The study has used several innovation input-output variables to investigate the efficiency and productivity of the countries concerned. The accuracy of the study has been enhanced by the use of MPI. Findings PDM is found efficacious in the practice and strengthening of NIS in the context of these countries’ competitiveness. This study found unchanged Total Factor Productivity (TFP) for Philippines, Singapore and Thailand; that is technological progress is yet to be obtained. Indonesia lags both in technical and technological progress. On the other hand, Malaysia is found to be over-using the existing input-output factors of NIS. Originality/value Many authors have attempted to measure competitiveness and NIS separately in the context of ASEAN or other South-East Asian countries. However, as yet, no empirical investigation has been conducted to assess the competitiveness of a nation by applying NIS-based analysis according to PDM.