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Managing R&D activities in the Italian red biotech industry. A comparison between Italian independent firms and multinational companies

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Author Info

  • Alessia Pisoni

    ()
    (Department of Economics, University of Insubria, Italy)

  • Alberto Onetti

    ()
    (Department of Economics, University of Insubria, Italy)

  • Luciano Fratocchi

    ()
    (Department of Mechanical Thermal and Managerial Engineering – University of L’Aquila)

  • Marco Talaia

    ()
    (Business Research Department – University of Pavia)

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    Abstract

    This paper aims at analysing the main features of R&D activities carried out by the Italian biotech companies. The proposed contribution can be ascribed to the massive stream of research related to the reconfiguration of the value chain activities at the international level. Such a topic has become more and more actual because of both the markets globalisation and diffusion of networked architectures within internationalised companies (see, among others, Bartlett 1986; Bartlett and Goshal 1987, 1990; Bartlett, Doz and Hedlund 1990; Forsgren 1993; Forsgren and Holm 1993; Forsgren, Holm and Johanson 1991, 1992; Forsgren and Johanson 1992; Forsgren and Pedersen 1998; Hedlund 1979, 1980, 1986, 1994; Hedlund and Ridderstrale 1994; Hedlund and Rolander 1990; Lipparini and Fratocchi 1999). Within such a stream of research, we decided to focus the attention on the biotech industry, due to its specific features, that deeply influence both the strategic behaviour of firms and the economic environment of the countries where they operate.Keeping in mind the different types of biotech firms operating at global level, we have decided to focus our attention to a less heterogeneous population. In so doing, we narrowed the analysis to the red biotech segment (that is health care biotech companies which develop drugs and diagnostics), because of its absolute predominance both in Italy (73% of enterprises, 94% of total revenue and 86% of investments1) and at worldwide level (51% of EU firms and 60% of USA ones2). First of all we collected data for a sample of companies operating in the Italian red biotech industry. Particularly, we focused on R&D activities: we tried to quantify its extent, to understand where they are located (domestically or abroad) and the role played by alliances/cooperation with -in and -out the industry. More specifically, in order to reach the goals above described, attention was paid to the aptitude of the Italian country-system to attract investments from abroad. In doing so, we studied separately the Italian independent firms and MNCs. Analysing the peculiarities of how Italian independent firms and MNCs manage R&D activities, we tried to find out the existence of a different approach to R&D investments. The paper is structured in four main sections. In the first one, the main relevant features of biotech firms are discussed and the literature background presented. The second paragraph deals with sample and methodology description. In the third section, the main results regarding the analysis of R&D activities carried out by the red Italian biotech companies are presented. The conclusions complete the paper.

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    Bibliographic Info

    Paper provided by Department of Economics, University of Insubria in its series Economics and Quantitative Methods with number qf1003.

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    Length: 31 pages
    Date of creation: Jan 2010
    Date of revision:
    Handle: RePEc:ins:quaeco:qf1003

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    Keywords: Biotech; localisation; R&D; collaborative R&D; MNCs.;

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    References

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    1. Borensztein, E. & De Gregorio, J. & Lee, J-W., 1998. "How does foreign direct investment affect economic growth?1," Journal of International Economics, Elsevier, vol. 45(1), pages 115-135, June.
    2. Pavitt, Keith, 1984. "Sectoral patterns of technical change: Towards a taxonomy and a theory," Research Policy, Elsevier, vol. 13(6), pages 343-373, December.
    3. Junkunc, Marc T., 2007. "Managing radical innovation: The importance of specialized knowledge in the biotech revolution," Journal of Business Venturing, Elsevier, vol. 22(3), pages 388-411, May.
    4. Hopkins, Michael M. & Martin, Paul A. & Nightingale, Paul & Kraft, Alison & Mahdi, Surya, 2007. "The myth of the biotech revolution: An assessment of technological, clinical and organisational change," Research Policy, Elsevier, vol. 36(4), pages 566-589, May.
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    6. Gilsing, Victor & Nooteboom, Bart, 2006. "Exploration and exploitation in innovation systems: The case of pharmaceutical biotechnology," Research Policy, Elsevier, vol. 35(1), pages 1-23, February.
    7. Stuart, Toby E. & Ozdemir, Salih Zeki & Ding, Waverly W., 2007. "Vertical alliance networks: The case of university-biotechnology-pharmaceutical alliance chains," Research Policy, Elsevier, vol. 36(4), pages 477-498, May.
    8. Belderbos, Rene & Lykogianni, Elissavet & Veugelers, Reinhilde, 2005. "Strategic R&D Location by Multinational Firms: Spillovers, Technology Sourcing and Competition," CEPR Discussion Papers 5060, C.E.P.R. Discussion Papers.
    9. Harzing, Anne-Wil, 1997. "Response rates in international mail surveys: Results of a 22-country study," International Business Review, Elsevier, vol. 6(6), pages 641-665, December.
    10. Mytelka, Lynn & Farinelli, Fulvia, 2000. "Local Clusters, Innovation Systems and Sustained Competitiveness," UNU-INTECH Discussion Paper Series 5, United Nations University - INTECH.
    11. Oliver, Amalya L., 2004. "Biotechnology entrepreneurial scientists and their collaborations," Research Policy, Elsevier, vol. 33(4), pages 583-597, May.
    12. Findlay, Ronald, 1978. "Relative Backwardness, Direct Foreign Investment, and the Transfer of Technology: A Simple Dynamic Model," The Quarterly Journal of Economics, MIT Press, vol. 92(1), pages 1-16, February.
    13. Susan Bartholomew, 1997. "National Systems of Biotechnology Innovation: Complex Interdependence in the Global System," Journal of International Business Studies, Palgrave Macmillan, vol. 28(2), pages 241-266, June.
    14. Bercovitz, Janet E.L. & Feldman, Maryann P., 2007. "Fishing upstream: Firm innovation strategy and university research alliances," Research Policy, Elsevier, vol. 36(7), pages 930-948, September.
    15. Barrell, Ray & Pain, Nigel, 1997. "Foreign Direct Investment, Technological Change, and Economic Growth within Europe," Economic Journal, Royal Economic Society, vol. 107(445), pages 1770-86, November.
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