In this paper, we have started from the point that Thailand belongs to the “late industrialised countries” and that the blurred notions of knowledge and knowledge economy should be abandoned and replaced by the concept of national innovation system. This implied to show that this system is underpinned more on the dynamic of capital goods sectors rather than on research and education alone. By defining accurately what technical change owes to skills formation, and by showing that skills, whether individual or collective are acquired through learning by doing, the paper has arrived to advocate two original recommendations. The first one is to adopt vigorous and bold industrial policies driven to build strong national capital good sectors. The second one is to accompany theses policies by the formation of skills in these productive sectors through regional cooperation. In that respect, a apprenticeship scheme should be promoted at a regional level so that a learning by doing process could take place abroad in foreign factories producing capital goods for exporting to Thailand. These two recommendations would contribute to a large extent to the development of a strong national system of innovation.
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