Big Pharma's Internationalization of R&D to China

China's increasing integration into the global pharmaceutical value chain is occurring at a time when big pharma's traditional R&D model has entered a period of crisis, and when China faces significant challenges in providing healthcare for its huge and rapidly ageing population. Despite China's ambitions of promoting its own pharmaceutical sector, it is likely to continue to depend for some time on significant contributions from foreign companies. While this situation provides considerable opportunities for big pharma companies to expand their markets in China, they are also hoping that offshoring aspects of their R&D to China may contribute to reconfiguring their current R&D model with its weak record of producing new drugs. Drawing on interviews with a small number of pharma R&D centres in Shanghai, patent analyses and industry reports, we provide insights into both the challenges and the opportunities associated with the early stages of establishing such centres in an emerging region with a rapidly growing market. This paper contributes towards a more nuanced view of the internationalization of R&D in emerging regions.     

How Do Pre-existing R&D Activities in a Region Influence the Performance of Cluster Initiatives? The Case of French Competitiveness Clusters

This article explores the diversity of 66 French competitiveness clusters, which were all accredited in 2005 according to the same specifications, by characterizing the initial context in which they emerged and taking a close look at the link between this initial context and their current performance. Since French competitiveness cluster policy is based on state co-funding of R&D projects, we establish a typology based on a multiple component analysis and a hierarchical ascending classification of the R&D potential of the cluster's territory, the respective R&D efforts of companies and academic laboratories, the kinds of actors setting up the cluster and their pre-existing relationships. We then measure the differences among the five classes relating to their clusters' capacity to obtain state funding for their projects. Our results show that initial context can partially explain competitiveness clusters' performance. Competitiveness clusters in territories possessing significant R&D resources, and involving large companies capable of organizing projects, are the most efficient in obtaining state funding. In contrast, competitiveness clusters without prior cooperation experience perform poorly.     

Strategic Considerations for Innovation and Commercialization in the US Biotechnology Sector

This paper examines the importance of alliances as an innovation strategy utilized by US biotechnology firms. In doing so, the role of alliances with universities vis-à-vis alliances with industrial companies is emphasized. The biotechnology sector is dominated by few large and many small firms. The small firms are research focused or technology developers. Several large firms are now integrated biopharmaceutical companies. Very few small firms can survive without strengthening their relationships with universities, biotechnology or pharmaceutical or other large companies. These relationships range from licensing agreements, export–import connections to various forms of alliances for R&D, product development and marketing. Large firms supplement in-house R&D by acquiring research products and/or new technologies from small firms as well as universities. A survey of US biotechnology companies is used to show the emergence of alliance relationships, which continue to highlight university linkages, emphasize connections of biotechnology firms with other biotechnology entrepreneurs, and an ongoing effort to build a synergistic relationship with pharmaceutical or other large companies. Most linkages are not confined to the local area; the main locational attribute is the science base or the labour market.     

Firm Heterogeneity in Biotech: Absorptive Capacity,Strategies and Local-Regional Connections

This paper focuses on the characteristics of biotech firms with various levels of research and development (R&D) activity. It is done by exploring the relationship between R&D intensity, alliances and the extent of regionalization of firms' activities using evidence from a survey of US-based biotechnology firms. We profile two firm prototypes: research-oriented firms and product-oriented firms, focusing on their characteristics, strategies and operations. These include activities devoted to exploration and exploitation through alliances with universities (more exploration) and with pharmaceutical companies (exploration and exploitation), and locational needs which facilitate both exploration and exploitation.     

Context and the role of policies to attract foreign R&D in Europe

This paper explores the effectiveness of policies ‘in’ attracting the foreign research and development (R&D) of multinational enterprises (MNEs) to specific countries in Europe. We develop a macroeconomic investigation covering 29 European countries during the period between 1990 and 2012 in order to address: (a) whether the provision of direct financial support for business R&D is effective for the attraction of foreign R&D; (b) whether direct support is more effective than indirect support for this purpose and (c) whether the link between direct financial support for business R&D and the foreign R&D of MNEs is conditioned by the context within which the support is provided. The results of the analysis show that, first, the provision of direct financial support is generally effective for the attraction of foreign R&D by MNEs. Second, direct support for business R&D is more effective for this purpose than indirect support. Third, the provision of direct financial support for business R&D yields greater returns in contexts that are more socio-economically suitable for knowledge-intensive, innovative activity.     

Synthesis by microbes or chemists? Pharmaceutical research and manufacturing in the antibiotic era

This article presents a case study of the rise of Pfizer as a leading pharmaceutical company, with a focus on changing relationships between manufacturing technology and R&D between the mid 1940s and the mid 1960s. Pfizer first moved into pharmaceuticals through participation in the US government's penicillin effort during World War II. The company had expertise in deep tank, biological fermentation for the production of chemicals that it adapted to the manufacture of penicillin. Having greatly expanded its biological manufacturing capacity to meet state needs, Pfizer adopted an R&D program to find new microbial antibiotics suited to its manufacturing technology after the war ended. Pfizer's successes in this antibiotic era established the firm as a major pharmaceutical company. In looking to larger commercial markets for drugs, Pfizer, like its competitors, pursued medicines for chronic diseases rather than acute infections. For this pursuit, in the 1950s and 1960s, Pfizer transformed itself into a chemistry‐orientated pharmaceutical firm by reorienting its R&D toward chemistry. This led to a growing divergence between R&D and manufacturing and the eventual replacement of biological manufacturing with chemical manufacturing. The article explores the changing trajectories of R&D and manufacturing at Pfizer, their shifting positions within the firm, and the consequences of these changes and shifts for the firm's strategy and organization.     

International R&D Cooperation between Low-tech SMEs: The Role of Cultural and Geographical Proximity

Although there is a considerable amount of empirical evidence on inter-firm collaborations within technology-based industries, there are only a few works focussing on R&D cooperation by low-tech firms, especially small and medium-sized enterprises (SMEs). Providing further and new evidence based on a recently built database of CRAFT projects, this study analyses the relationship between technology and proximity in international R&D networks using HOMALS and statistical cluster techniques. The resulting typology of international cooperative R&D projects highlights that successful international cooperative R&D projects are both culturally/geographically closer and distant. Moreover, and quite interestingly, geographically distant projects are technologically more advanced whereas those located near each other are essentially low-tech. Such evidence is likely to reflect the tacit-codified knowledge debate boosted recently by the information and communication technology (ICT) “revolution” emphasized by the prophets of the “Death of Distance” and the “End of Geography”.     

The importance of materials R&D to the UK and the role of its National Physical Laboratory

Abstract

The importance of materials R&D to a modern economy, which arises because of the global competition between manufacturers and the essential maturity of all manufacturing industries, is illustrated with direct examples from the semiconductor industry. One result of this R&D is that the consumption of materials per capita decreases as the wealth per capita increases. The development of the materials work at the UK National Physical Laboratory since its foundation is then briefly reviewed, together with its development to meet modern demands. The resulting sophistication in the R&D demanded is illustrated and the link to computer assisted modelling, together with the necessity for extreme precision of input data, is emphasised. The type of materials work most intimately connected with maintenance of standards and metrology is then demonstrated.     

Challenges to Bridging Discrepant Knowledge Bases: A Case Study of the Norwegian Centre for Offshore Wind Energy

From a theoretical perspective, it is possible to enhance the innovation of firms and institutions by combining the analytic (scientific) knowledge base of research and development (R&D) institutions with the synthetic (practical) knowledge base of industries. Such combinations of knowledge are also believed to support regional development. One such initiative to bridge knowledge from the R&D sector and industry is the Norwegian Centre for Offshore Wind Energy (NORCOWE). However, as our case study shows, it is hard to bridge knowledge from these two partner groups. We found that this is mainly because of differences in the partners' timelines (long versus short), their attitudes toward knowledge (research based versus experience based), application of the knowledge (knowledge per se versus commercialization), and organizational dimensions (linear/closed process versus interactive/open process). These differences show that the knowledge bases of these two groups may not just be different; they can also be seen as discrepant. We also argue that the NORCOWE initiative is influenced by a “policy push” logic. This implies that the initiative was not properly embedded in the industrial or R&D institutions before being launched, but was instead driven by a political will to promote the development of a new renewable energy source.     

Mapping the Geography of R&D: What Can We Learn for Regional Innovation Policy in the Czech Republic and Beyond?

Administrative regions do not necessarily correspond to areas that are homogenous in terms of innovation intensity. Although this has been recognized in the literature, quantitative evidence that explicitly considers this problem is rare. Using spatial exploratory analysis on detailed regional data derived from a census of R&D performers in the Czech Republic, we identify local spatial clusters of R&D activities and assess the extent of their (mis)match with administrative borders. Overall, the results support the arguments for regionalization of innovation policy. However, the existing policy units do not appear well suited for this purpose. On one hand, there is a need for policy coordination between multiple administrative regions. On the other hand, however, there are diverse patterns within them. Similar problems are likely to haunt the regionalization process in many other countries, which is alarming, as the regional accent of innovation policies becomes ever more vehement over time.     

Regional Scientific Production and Specialization in Europe: The Role of HERD

This paper analyses the effects of R&D expenditure in the higher education sector on the scientific production across regions in Europe 15. Our research questions relate to the regional production of science and the role of academic R&D expenditures on regional scientific output. The results show that money affects the production of scientific results in regions. On average, we found different impacts and lags of R&D expenditure according to the level of regional development. Our findings also suggest that scientific specialization is a significant factor affecting scientific outputs, although its effects differ across disciplines and regions.     

External Leveraging and Technological Upgrading Among East Asian Firms in the US

This paper examines the innovation strategies driving Asian firms' investment in the US based on the resource-based model of knowledge. Specifically, it is shown that Asian firms' competitive advantage revolves around their ability to capture rents through a series of technological and marketing capabilities that collectively constitute the firms' knowledge resource base. The process of learning is documented by shedding light on the major sources of knowledge acquisition that enhance technological capabilities internally and externally. Specifically, this empirical research, based on a large-scale quantitative survey of Taiwanese, South Korean, and Singaporean firms in the US that was conducted between 2003 and 2004, shows that the firms in industrializing Asian economies (henceforth the IAFs) are directly investing in the US and setting up R&D operations there to acquire knowledge that enables them to become more innovative. A variety of technology sourcing strategies practiced among these IAFs was found, depending on their firm-specific variables (e.g. size and sector) and their prior technological capabilities. The types of technology and knowledge sources also go beyond conventional technological know-how to embrace the entire production chain from manufacturing technologies to expertise in marketing and distribution.     

Determinants of the Uneven Regional Participation of Firms in European Technology Programmes. The 'Low R&D Trap'

Technology is of key importance to the growth of regional firms and economies. Research has shown the association between low technology development or take-up and regional disparities. Hence technology policy is moving closer to the heart of regional policies. European innovation programmes are intended to involve firms, large and small, in international technology research and development networks. The paper focuses on the involvement of Spanish firms in such programmes. Participation tends to be low if business R&D, presence of large firms, and the development of regional innovation systems are also low. Creation of R&D infrastructure through the Structural Funds has now to be prioritized at EU level and also define a new scheme of sectoral priorities in order to support R&D innovation activities in fields diverse from high-tech, if regions are to escape the 'low R&D trap'.     

Hydrogen and Fuel Cell Development in China: A Review

Hydrogen and fuel cells may have a major role in the future energy market if governments give a high priority to reduction of CO₂ emissions with associated R&D investment in efficient hydrogen technologies. It is predicted that China would have the highest share of hydrogen fuel cell vehicles in 2050 if their ambitious climate and energy security policies are adopted (OECD (Organisation for Economic Co-operation and Development)/IEA (International Energy Agency) (2005) Prospects for Hydrogen and Fuel Cells (Paris: OECD Publications)). R&D in hydrogen and fuel cell technologies in China has been pushed by the central government's commitment to reduce air pollution emissions from transportation, to enhance energy security and improve national competitiveness. The paper focuses on current policies and progress on hydrogen and fuel cell development in China. Development prospects and challenges are discussed with a view to achieving better understanding of the emerging hydrogen economy.     

Regional planning of R&D and science–technology interactions in Andalucia: a bibliometric analysis of patent documents

Andalucia is a southern European LFR (less‐favoured region) with a high degree of self‐government that has allowed it to design its own R&D policies that complement those implemented throughout Spain and the European Union (EU). Recently the Regional Government passed the Third Andalucian Research Plan 2000–2003, an R&D planning instrument that, as has become customary in previous Plans, attributes considerable budgetary weight to the scientific aspects of the science–technology–industry system (Andalucia allocates more of its own resources to promoting research than any other region in Spain). This paper provides deeper insight into the role played by science in driving the technological development of Andalucia, one of the LFRs of the EU. The aim was to answer five fundamental questions: How is basic science utilized by industry in Andalucia? Which sectors are the most dynamic in the employment of scientific know‐how? Which scientific fields are most in demand by industry? Which types of institution utilize scientific knowledge most profusely? What delay is there in incorporating science into technology? The methodology that has been applied for investigating the links between science and technology is based on scientific citations in patent documents (NPC). The results in this article provide relevant information about the interconnection of scientific and technological systems and thus constitute a good point of reference for the development of future R&D plans.     

City and innovation: Different size,different strategy

The objective of this paper is to assess whether establishments' innovation performance and innovation strategies differ by the size of the city in which they are located. Using the Canadian 1999 Survey of Innovation database (establishment-based), it was found that the rate of innovation is not correlated with city-size, but when the innovation measure takes into account the importance of innovation, then the size of the city does matter. The results show that establishments belonging to smaller cities (with populations of less than 50,000) are less likely to be associated with a world-first innovation than those located in larger cities. Four innovation strategies have been retained—Private Source, R&D, Collaboration and Public Science Base paths—and the results show that the R&D path leads to the greatest increase in the estimated probability to be associated with a world-first innovation, for almost all sectors and all city sizes.     

Fostering place-based innovation and internationalization – the new turn in German technology policy

Since the mid-1990s German technology policy has experienced a paradigmatic shift from standard grant schemes towards a region-oriented and competition-based R&D policy. Currently, a new policy experiment, the InterClust contest, is under way, trying to simultaneously foster place-based innovation, R&D internationalization and the internationalization of innovative places. The current paper analyses the new policy, relating it to the recent literatures on heterogeneous firms and on cluster-life cycles, and presents results from a firm survey performed in 21 winner regions of InterClust. Findings show that the new funding scheme takes insights from recent theoretical developments into account and addresses important impediments to firm and cluster internationalization. Although it is too early for an overall assessment, it is argued that the long-term impact will critically depend on the inflow of heterogeneous knowledge and the strength of intra-regional mobilization effects.     

The challenge of breaking the academia–business firewall in Czechia: comparing the role of differentiated knowledge bases in collaborative R&D projects

Contemporary innovation processes increasingly involve a large number of networked actors, and cross-fertilization between knowledge institutions and firms has thus become a significant driver for innovation. Important insights into the differing nature of research and development (R&D) collaboration in particular sectors have been provided by research inspired by the knowledge-base approach embedded within innovation system (IS) theory. This study aims to contribute to this body of literature by applying the concept of differentiated knowledge bases to the former state-socialist countries, where the IS operates through a firewall between academia and industry. Data on collaborative R&D projects co-financed by public resources have allowed a detailed analysis of the nature of collaboration networks, revealing emerging patterns of academia–industry linkages and questioning the propositions stemming from the knowledge-based approach. The study concludes that collaborative science–industry networks show a very distinct topography when analytical and synthetic knowledge is compared.     

Varieties of Innovation and Welfare Regimes: The Leap from R&D Projects to the Development of City-regions

In the varieties of capitalism, welfare capitalism, and systems of innovation literatures, the university is a critical actor as public employer, trainer and provider of several public goods. However, there is relatively weak enquiry into the spatial and institutional characteristics of university-led economic development and a relative neglect of the political economy and organizational features of embedded R&D projects in urban and regional planning. We argue that technical projects, far from being stand-alone entities, have taken on the broad characteristics of the university and city-regional development mandate in where they reside. The article is based on an exploratory study of university–industry R&D projects in six city regions of Finland. We show that: (a) the shifting role of universities reflects a changed context for the welfare state in which the “public” debate occurs; (b) These create distinct issues of legitimacy and coalition-building in local economic planning which give rise to diverse regional interpretations of single technology programmes; (c) We categorise three general types of models of R&D projects in universities and propose tentative categories of contributions to “public knowledge”. This diversity of interpretations and outcomes leaves us optimistic regarding the ability of city-regions to adapt and plan for the future against a changing welfare state that shapes the university's role, yet more cautious about any clear-cut “public knowledge” emerging from such technical projects.     

Delocalization Patterns in University–Industry Interaction: Evidence from the Sixth R&D Framework Programme

Increasing university–industry interaction (UII) and university contribution to the local economy are compatible—conventional wisdom would say. However, similar to other university activities, interaction with industry may be limited due to a lack of absorptive capacity in local firms. The data of those participating in the European Union's (EU's) Sixth R&D Framework Programme (FP6) were used to obtain values for the number and, notably, the budgets of UII projects at the regional level for the EU27. Two types of interactions were considered: inside and outside the region. Our analysis indicates that universities from regions whose firms have low absorptive capacity participate more often in FP6 projects with firms outside the region. Our results highlight the value of policies that facilitate firm R&D to enhance collaboration with regional universities.