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Location of value added activities in hi-tech industries. The case of pharma-biotech firms in Italy


  • Luciano Fratocchi

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

  • Alberto Onetti

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

  • Alessia Pisoni

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

  • Marco Talaia

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


This paper aims at analysing the main features of the activities carried out by the Italian biotech industry. This topic is so wide and various that particularly we decided to focus on the value added activities of the so-called “pharma-biotech”, i.e. pharmaceutical firms that have diversified in the biotech business or pharmaceutical spin-offs. First of all we try to identify the main activities carried out by the studied companies. Particularly, we focus on R&D carried out on biotech, trying to measure its extent both in terms of employees involved and of percentage of total investments. Moreover, we provide a picture of the range of R&D activities performed and the contribution arising from the cooperation with actors in and out of the industry. It is worth pointing out the exploratory scope of this paper that at the present is not yet able to provide through managerial guidelines for decision makers. With this respect, the sample is composed of companies operating in Italy in specific business within the biotech industry. More specifically, in order to reach earlier presented goals, attention was paid on the so called red biotech segment, that is biotech companies which develop drugs and diagnostics. This segment - which is predominant at worldwide level - was further divided accordingly to the adopted business model: born-biotech companies (more focused on R&D activities) and pharma-biotech companies (generally operating also manufacturing and sales activities). The research interest was finally focused on the latter segment, which was divided among pharma-oriented and biotech-oriented companies. The paper is structured in four main sections. In the first one, the most relevant features of biotech firms are discussed on the base of a literature review. In the second paragraph, adopted methodology is presented and sample main characteristics are discussed. In the third section, the main results regarding the localization of R&D activities study carried out on the biotech activities in Italy are presented. The conclusions complete the paper.

Suggested Citation

  • Luciano Fratocchi & Alberto Onetti & Alessia Pisoni & Marco Talaia, 2007. "Location of value added activities in hi-tech industries. The case of pharma-biotech firms in Italy," Economics and Quantitative Methods qf0708, Department of Economics, University of Insubria.
  • Handle: RePEc:ins:quaeco:qf0708

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    References listed on IDEAS

    1. Pavitt, Keith, 1984. "Sectoral patterns of technical change: Towards a taxonomy and a theory," Research Policy, Elsevier, vol. 13(6), pages 343-373, December.
    2. Ronald Findlay, 1978. "Relative Backwardness, Direct Foreign Investment, and the Transfer of Technology: A Simple Dynamic Model," The Quarterly Journal of Economics, Oxford University Press, vol. 92(1), pages 1-16.
    3. Anoop Madhok & Thomas Osegowitsch, 2000. "The International Biotechnology Industry: A Dynamic Capabilities Perspective," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 31(2), pages 325-335, June.
    4. Barrell, Ray & Pain, Nigel, 1997. "Foreign Direct Investment, Technological Change, and Economic Growth within Europe," Economic Journal, Royal Economic Society, vol. 107(445), pages 1770-1786, November.
    5. 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.
    6. Forsgren, Mats, 1990. "Managing the international multi-centre firm: Case studies from Sweden," European Management Journal, Elsevier, vol. 8(2), pages 261-267, June.
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    Cited by:

    1. Mario Cerrato, 2008. "Valuing American Derivatives by Least Squares Methods," Working Papers 2008_12, Business School - Economics, University of Glasgow, revised Sep 2008.

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    Biotech; Localization; R&D; MNCs; Value added activities;

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