Most investigations into the effects of funding changes on higher education systems have been carried out in developed economies. This article focuses on the Thai higher education system, applying theoretical arguments and empirical analyses to the case of a newly industrialising country. One goal of the Thai higher education funding reform is to cut public spending and to stimulate university-industry cooperation as a means to obtain additional university income. This article presents empirical data based on an investigation into the cooperation activities of five Thai universities. The results show that both individuals and organisations react to changes in university funding: university-industry relations are becoming more frequent and are promoted by university administrations. The financial benefits for the universities as well as the technological benefits for the cooperating companies are, however, both very limited.