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Embeddedness, social epistemology and breakthrough innovation: The case of the development of statins

  • Baba, Yasunori
  • Walsh, John P.
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    Radical, breakthrough innovations create not only great industrial possibilities, but also great social uncertainties. When a breakthrough medical technology is discovered, the question arises as to whether to accept the possible risks involved, or to defer implementing the innovation until more data is available, and, specifically, until others have taken up the innovation and demonstrated both its efficacy, its relative safety and market acceptance. Specifically, when a firm discovers a new candidate substance for a first in its class drug, how to evaluate the potential risks becomes a key predicament for management. This paper focuses on the role of a firm's social networks and national innovation system context in influencing the social epistemology around potential breakthrough innovations. Through an examination of the processes of drug development related to the same candidate substance in a Japanese firm and an American firm, we suggest that, in addition to organizational capabilities at the corporate level, social capital, specifically formed under a certain innovation system, plays a key role in leading to the successful introduction of breakthrough innovations.

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    Article provided by Elsevier in its journal Research Policy.

    Volume (Year): 39 (2010)
    Issue (Month): 4 (May)
    Pages: 511-522

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    Handle: RePEc:eee:respol:v:39:y:2010:i:4:p:511-522
    Contact details of provider: Web page: http://www.elsevier.com/locate/respol

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    1. Henderson, Rebecca., 1994. "The evolution of integrative capability : innovation in cardiovascular drug discovery," Working papers 3711-94., Massachusetts Institute of Technology (MIT), Sloan School of Management.
    2. Walsh, John P. & Cohen, Wesley M. & Cho, Charlene, 2007. "Where excludability matters: Material versus intellectual property in academic biomedical research," Research Policy, Elsevier, vol. 36(8), pages 1184-1203, October.
    3. Metcalfe, J.S. & James, Andrew & Mina, Andrea, 2005. "Emergent innovation systems and the delivery of clinical services: The case of intra-ocular lenses," Research Policy, Elsevier, vol. 34(9), pages 1283-1304, November.
    4. Nelson, Richard R. & Winter, Sidney G., 1977. "In search of useful theory of innovation," Research Policy, Elsevier, vol. 6(1), pages 36-76, January.
    5. Maryann Feldman & Meric Gertler & David Wolfe, 2006. "University Technology Transfer and National Systems of Innovation: Introduction to the Special Issue of Industry and Innovation," Industry and Innovation, Taylor & Francis Journals, vol. 13(4), pages 359-370.
    6. Henderson, Rebecca. & Cockburn, Iain., 1994. "Measuring competence? : exploring firm effects in pharmaceutical research," Working papers 3712-94., Massachusetts Institute of Technology (MIT), Sloan School of Management.
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