Knowledge accumulation and industry evolution : the case of Pharma-Biotech

462 Pages·2006·2.73 MB·English

by  Mariana Mazzucato

Knowledge Accumulation and
Industry Evolution
Written by internationally acclaimed experts in the economics of
innovation,thisvolumeexamineshowthebiotechnologyandpharma-
ceutical sector isaffectedby thedynamics of innovation, institutions,
and publicpolicy. Itcontributes boththeoretically andempiricallyto
the increasingly influential Schumpetarian framework in industrial
economics, which places innovation at the centre of the analysis of
competition. Both quantitative and qualitative studies are included,
andthisvariedperspectiveaddstotherichnessofthevolume’sinsights.
Thecontributorsexploredifferentideasregardingthehistoricalevolu-
tionoftechnologyinthesector,andhowfirmsandindustrystructure
havecoevolvedwithinnovationdynamics.Importantpolicyquestions
areconsideredregardingthefutureofinnovationinthissectorandits
impactontheeconomy.
MARIANA MAZZUCATO is Professor of Economics at the Open
University, where she is also Director of the inter-faculty research
centre,Innovation,KnowledgeandDevelopment(IKD).
GIOVANNI DOSI is Professor of Economics at the Sant’Anna School
ofAdvancedStudiesinPisa.
Cambridge Bo o k s O n l in e © C a m b r i d g e U n i v e r s i t y Press, 2009
Cambridge Bo o k s O n l in e © C a m b r i d g e U n i v e r s i t y Press, 2009
Knowledge
Accumulation and
Industry Evolution
The Case of
Pharma-Biotech
Edited by
MARIANA MAZZUCATO AND GIOVANNI DOSI
Cambridge Bo o k s O n l in e © C a m b r i d g e U n i v e r s i t y Press, 2009
cambridge university press
Cambridge, New York, Melbourne, Madrid, Cape Town, Singapore, São Paulo
Cambridge University Press
TheEdinburghBuilding,Cambridgecb22ru,UK
Published in the United States of America by Cambridge University Press, New York
www.cambridge.org
Information on this title: www.cambridge.org/9780521858229
© Cambridge University Press 2006
Thispublicationisincopyright.Subjecttostatutoryexceptionandtotheprovisionof
relevantcollectivelicensingagreements,noreproductionofanypartmaytakeplace
withoutthewrittenpermissionofCambridgeUniversityPress.
Firstpublishedinprintformat 2006
isbn-13 978-0-511-49323-2 OCeISBN
isbn-13 978-0-521-85822-9 hardback
isbn-10 0-521-85822-4 hardback
CambridgeUniversityPresshasnoresponsibilityforthepersistenceoraccuracyofurls
forexternalorthird-partyinternetwebsitesreferredtointhispublication,anddoesnot
guaranteethatanycontentonsuchwebsitesis,orwillremain,accurateorappropriate.
Cambridge Bo o k s O n l in e © C a m b r i d g e U n i v e r s i t y Press, 2009
We dedicate this book to the memory of
our dear colleagues and mentors
Keith Pavitt and Paul Geroski
Cambridge Bo o k s O n l in e © C a m b r i d g e U n i v e r s i t y Press, 2009
Cambridge Bo o k s O n l in e © C a m b r i d g e U n i v e r s i t y Press, 2009
Contents
Listoffigures pageix
Listoftables xii
Listofcontributors xiv
Acknowledgments xvii
1 Introduction
GiovanniDosiandMarianaMazzucato 1
PartI Innovationandindustryevolution 19
2 Pharmaceuticalinnovationasaprocessof
creativedestruction
Frank R. Licht enberg 21
3 Theevolutionofpharmaceuticalinnovation
PaulNightingaleandSuryaMahdi 73
4 Firmandregionaldeterminantsininnovation
models:evidencefrombiotechnologyand
traditionalchemicals
MyriamMariani 112
5 Innovationandindustryevolution:acomment
LouisGalambos 145
PartII Firmgrowthandmarketstructure 161
6 Heterogeneityandfirmgrowthinthe
pharmaceuticalindustry
ElenaCefis,MatteoCiccarelli,andLuigiOrsenigo 163
7 Growthanddiversificationpatternsoftheworldwide
pharmaceuticalindustry
GiulioBottazzi,FabioPammolli,andAngeloSecchi 208
vii
Cambridge Bo o k s O n l in e © C a m b r i d g e U n i v e r s i t y Press, 2009
viii Contents
8 Entry,marketstructure,andinnovationina
‘‘history-friendly’’modeloftheevolutionof
thepharmaceuticalindustry
ChristianGaravaglia,FrancoMalerba,
andLuigiOrsenigo 234
9 Thegrowthofpharmaceuticalfirms:acomment
BoyanJovanovic 266
PartIII Policyimplications 275
10 Theeffectsofresearchtoolpatentsandlicensingon
biomedicalinnovation
JohnP.Walsh,AshishArora,andWesleyM.Cohen 277
11 Upstreampatentsandpublichealth:thecaseof
genetictestingforbreastcancer
FabienneOrsi,ChristineSevilla,andBenjaminCoriat 327
12 Competition,regulation,andintellectualproperty
managementingeneticallymodifiedfoods:evidence
fromsurveydata
PierreRegibeauandKatharineRockett 346
13 Governance,policy,andindustrystrategies:
pharmaceuticalsandagro-biotechnology
JoyceTait,JoannaChataway,CatherineLyall,
andDavidWield 378
14 Thedynamicsofknowledgeaccumulation,regulation,
andappropriabilityinthepharma-biotechsector:
policyissues
LuigiOrsenigo,GiovanniDosi,and
MarianaMazzucato 402
Index 432
Cambridge Bo o k s O n l in e © C a m b r i d g e U n i v e r s i t y Press, 2009
Figures
2.1 Thedistributionofdrugsprescribedin1994,
byyearofFDAapproval page47
3.1 Structure-baseddrugdiscovery 81
4.1 Theaveragesize(meanofSALES)offirmswith
patentsinbiotechnologyandtraditional
chemicals 126
4.2 Averagecharacteristicsoffirmswithpatentsin
biotechnologyandtraditionalchemicals:R&D
intensity(meanofR&D/SALES)andtechnological
specialization(meanofTECHSPEC)offirms 127
6.1 Histogramsofobserveddata:thepharmaceutical
industry 178
6.2 Convergencerates:thepharmaceuticalindustry 180
6.3 Thesteadystate:thepharmaceuticalindustry 184
6.4 Histogramsofobserveddata:UKmanufacturing 186
6.5 Convergencerates:UKmanufacturing 188
6.6 Industrydistributionoffirmswith(cid:1)¼1 190
6.7 Thesteadystate:UKmanufacturing 191
6.8 Asensitivityanalysis:thepharmaceuticalindustry 196
6.9 Histogramsofreplicateddata:thepharmaceutical
industry 197
6.10 Histogramsofreplicateddata:UKmanufacturing 198
7.1 Kerneldensityestimatesofnormalized(log)sales
forfivedifferentyears 214
7.2 Thetimeevolutionovertherange1987–1997of
themean,standarddeviation,skewness,andkurtosis
ofthefirmsizedistribution 215
7.3 Therelationbetweenfirmsizeandthestandard
deviationofgrowthrates(onalogscale)together
withthefitlog((cid:2)(g|s))¼aþbsandanon-parametric
estimateoftherelationbetweenlog((cid:2)(g|s))ands 219
ix
Cambridge Bo o k s O n l in e © C a m b r i d g e U n i v e r s i t y Press, 2009
x Listoffigures
7.4 Logoftheempiricaldensitiesofrescaledgrowth
ratesgˆ togetherwithaLaplacefit;growthratesof
differentyearsarepooledtogether 220
7.5 Logoftheempiricaldensitiesofrescaledgrowth
ratesgˆ togetherwithanasymmetricSubbotinfit;
growthratesofdifferentyearsarepooled
together 222
7.6 Logofthenumberofactivesub-marketsversusfirm
sizetogetherwithalinearfitandanon-parametric
estimateoftherelation 224
7.7 Scatterplotofthevariationinactivesub-marketsdN
i
versusfirmgrowthratesg forsmallerthan
i
averagefirms 225
7.8 Scatterplotofthevariationinactivesub-markets
dN versusfirmgrowthratesg forlargerthan
i i
averagefirms 225
7.9 Scatterplotoffirmsizes versusourmeasureof
i
diversificationheterogeneityD~,forallfirms
i
andallyears 228
8.1 Thetopographyoftheindustry 245
8.2 Thenumberofpotentialentrantsandfirmswith
productsincase(a)andcase(d) 255
8.3 Marketsharesofthefivegenerationsoffirmsin
case(a) 256
8.4 Marketsharesofthefivegenerationsoffirmsin
case(d) 256
8.5 Overallconcentration:theHerfindahlindexinthe
overallmarketincase(a)andcase(d) 257
8.6 Concentrationineachtherapeuticcategory
(meanvalues):theHerfindahlindexincase(a)and
case(d) 257
8.7 Thenumberofpotentialentrantsandfirmswith
productsinthestandardsimulationandinthe
‘‘continuous’’case 259
8.8 High-opportunitysimulationrun 260
8.9 High-costssimulationrun 262
8.10 Marketsharesofgenerationsoffirmsinthehigh-costs
simulationrun 262
Cambridge Bo o k s O n l in e © C a m b r i d g e U n i v e r s i t y Press, 2009