Technological regimes and demand structure in the evolution of the pharmaceutical industry

This paper examines how the nature of the technological regime governing innovative activities and the structure of demand interact in determining market structure, with specific reference to the pharmaceutical industry. The key question concerns the observation that—despite high degrees of R&D and marketing-intensity—concentration has been consistently low during the whole evolution of the industry. Standard explanations of this phenomenon refer to the random nature of the innovative process, the patterns of imitation, and the fragmented nature of the market into multiple, independent submarkets. We delve deeper into this issue by using an improved version of our previous “history-friendly” model of the evolution of pharmaceuticals. Thus, we explore the way in which changes in the technological regime and/or in the structure of demand may generate or not substantially higher degrees of concentration. The main results are that, while technological regimes remain fundamental determinants of the patterns of innovation, the demand structure plays a crucial role in preventing the emergence of concentration through a partially endogenous process of discovery of new submarkets. However, it is not simply market fragmentation as such that produces this result, but rather the entity of the “prize” that innovators can gain relative to the overall size of the market. Further, the model shows that emerging industry leaders are innovative early entrants in large submarkets.     

Knowledge-intensive innovative entrepreneurship integrating Schumpeter,evolutionary economics,and innovation systems

Small Business Economics - This article proposes a novel conceptualization of knowledge-intensive innovative entrepreneurship, which can capture the main characteristics of a vital phenomenon in...     

Persistence of innovative activities, sectoral patterns of innovation and international technological specialization

In this paper, we focus on the role of persistence and heterogeneity of innovative activities at the level of the firm in determining the patterns of technological change in different industries and countries. We ask: are persistence and heterogeneity associated with higher degrees of concentration in innovative activities, stability in the ranking of innovators, and lower degrees of entry and exit in the population of innovators? Or, do the patterns of innovation depend on other variables like firm size and industrial concentration? Moreover, what are the relationships between the patterns of innovative activities, their determinants, and the technological specialization of countries? We compute indicators of persistence and heterogeneity using the OTAF-SPRU patent database at the firm level for five European countries over the period 1969–1986 for 33 technological classes. Then, we estimate the relationships between our indicators of the sectoral patterns of innovative activities and international technological specialization on the one hand, and our indicators of persistence, heterogeneity and market structure on the other. Results show that persistence and asymmetries are important (and strongly related) phenomena that affect the patterns of innovative activities across countries and sectors, while the role of market structure variables is less clear. Finally, international technological specialization is associated to a competitive core of persistent innovators.     

RESEARCH NETWORKS AS INFRASTRUCTURE FOR KNOWLEDGE DIFFUSION IN EUROPEAN REGIONS

This paper concentrates on the role of research network infrastructure in fostering the dissemination of innovation-related knowledge. It examines the structure of collaborative networks and of knowledge transfer between research, innovation and deployment activities in the field of information and communication technology for the European Union as a whole and for several European regions. Research networks complement diffusion networks by providing additional links and by increasing the number of the organisations involved in sharing and exchanging knowledge. Two types of actors are key players in these networks: hubs and gatekeepers. Hubs maintain the bulk of ties in the networks also helping the smaller and more isolated members remain connected. Gatekeepers bridge research and diffusion networks. Such organisations naturally offer greater policy leverage in establishing a European knowledge infrastructure. Moreover, strengthened inter-network connectivity among research and diffusion activities (deployment) would raise the effectiveness of European research in terms of accelerating innovation.     

Technological Regimes and Schumpeterian Patterns of Innovation

This paper proposes that the specific pattern of innovative activities in an industry can be explained as the outcome of different technological (learning) regimes . A technological regime is defined by the particular combination of technological opportunities, appropriability of innovations, cumulativeness of technical advances and properties of the knowledge base. Building upon the distinction between Schumpeter Mark I and Schumpeter Mark II industries, this paper provides empirical estimates of the relationships between indicators of the Schumpeterian patterns of innovation (concentration of innovative activities, stability in the hierarchy of innovators and importance of new innovators) and indicators of the variables defining technological regimes.     

Does the position in the inter-sectoral knowledge space affect the international competitiveness of industries?

ABSTRACT

This paper empirically investigates how the inter-sectoral knowledge flows affect the international competitiveness of industries, once controlling for both cost and other technological factors. Using patent data on 14 manufacturing industries in 16 OECD countries over the period 1995–2009, we apply a network-based approach to capture the effect of industries' position in the flows of technical knowledge across industries, which we label inter-sectoral knowledge space. We find that (i) centrality and local clustering in the inter-sectoral knowledge space positively affect the export market shares of an industry, (ii) such two effects are rather redundant and (iii) national-level knowledge flows' impacts on international competitiveness are way stronger than international ones. Network measures of position in the knowledge space are found to be more relevant than standard technological indicators such as patent counts. Our results point to the importance of industries being well located in the stream of knowledge flows, rather than being innovative per se, and offer a novel yet robust proxy to measure technological factors affecting trade performances. In addition, we find evidence of geographical boundaries of knowledge flows.     

Exploring factors affecting international technological specialization: the role of knowledge flows and the structure of innovative activity

Journal of Evolutionary Economics - We define international technological specialisation (ITS) as the technological performance of a country in a specific technology relative to its overall...     

Pre-entry experience,technological complementarities,and the survival of de-novo entrants. Evidence from the US telecommunications industry

We investigate the effect of pre-entry experience on firms’ performance in terms of survival. In particular we focus on entrants from a related upstream industry – semiconductors – into a downstream industry – telecommunications. We examine a sample of 336 de-novo start-ups in the US telecommunication industry and we estimate a discrete time hazard model of firm exit. Our findings show that, after controlling for both firms and founders’ characteristics, firms whose founders had prior experience in a related upstream industry such as semiconductors enjoy a relatively lower hazard of exit with respect to intra-industry spinoffs and other types of start-ups. Additionally, background heterogeneity of the founding team is an important determinant of survival for the firms in our sample. Our results point to the role of interdependences and technological complementarities between two vertically related industries in affecting the performance of new entrants.     

Networked research: European policy intervention in ICTs

We use social network analysis to evaluate ‘behavioural’ additionality aspects of public programmes supporting research and development (R&D). The paper appraises empirically the partnership and knowledge networks created around the R&D activities of the Information Society Priority of the Sixth Research Framework Programme of the European Community. These emergent, scale-free networks are found to play an important role in generating and, especially, in diffusing knowledge by attracting key industry actors and by strengthening overall network connectivity through public support. Public policy should try to facilitate the development of more European organisations that can be characterised as global network hubs, on the one hand, and to draw larger numbers of the most dynamic small and medium-sized enterprises (SMEs) into these programmes, on the other, to avoid technological lock-ins and mitigate the resistance or network reorientation toward more productive research areas.