Regional science policy and the growth of knowledge megacentres in bioscience clusters

Changes in epistemology in biosciences are generating important spatial effects. The most notable of these is the emergence of a few Bioscience Megacentres of basic and applied bioscience (molecular, post-genomic, proteomics, etc.) medical and clinical research, biotechnology research, training in these and related fields, academic entrepreneurship and commercial exploitation by clusters of drug discovery start-up and spin-off companies, along with specialist venture capital and other innovation system support services. Large pharmaceutical firms that used to lead such knowledge generation and exploitation processes are becoming increasingly dependent upon innovative drug solutions produced in such clusters, and Megacentres are now the predominant source of such commercial knowledge. Big pharma is seldom at the heart of Megacentres such as those the paper will argue are found in about four locations each in the USA and Europe, but remains important for some risk capital (milestone payments), marketing and distribution of drugs discovered. The reasons for this shift (which is also spatial to some extent) are as follows: first, bioscientific research requires the formation of collaboratory relationships among hitherto cognitively dissonant disciplines molecular biology, combinatorial chemistry, high throughput screening, genomics, proteomics and bioinformatics to name a few. Second, the canonical chance discovery model of bioscientific research is being replaced by rational drug design based on those technologies because of the need massively to reduce search costs and delivery timeframes. Third, the US and to some extent European 'Crusade against Cancer' and other pathologies has seen major increases in basic research budgets (e.g. to $27.3 billion in 2003 for the US National Institutes of Health) and foundation expenditure (e.g.$1billion in 2003 by the UK's Wellcome Trust; $1 billion approximately by the top ten US medical foundations, and a comparable sum from corporate foundations). Each of these tendencies weakens the knowledge generation role of 'big pharma'and strengthens that of Megacentres. But the process also creates major, new regional disparities, which some regional governances have recognised, causing them to develop responsibilities for regional science policy and funding to offset spatial biases intrinsic in traditional national (and in the EU, supranational) research funding regimes. Responses follow a variety of models ranging from market following to both regionalised (decentralising by the centre) and regionalist (ground-up), but in each case the role of Megacentres is justified in health terms. But their role in assisting fulfilment of regional economic growth visions is also clearly perceived and pronounced in policy terms.

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

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.Biotech, localisation, R&D, collaborative R&D, MNCs.

Location of value added activities in hi-tech industries. The case of pharma-biotech firms in 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.Biotech, Localization, R&D, MNCs, Value added activities

Business Model Innovation For Potentially Disruptive Technologies: The Case Of Big Pharmaceutical Firms Accommodating Biotechnologies

Potenziell disruptive Technologien sind schwer zu vermarkten, weil sie mit Werten verbunden sind, die für etablierte Unternehmen neu sind. Ohne geeignete Geschäftsmodellinnovation gelingt es den etablierten Unternehmen nicht, neue, potenziell disruptive Technologien auf den Markt zu bringen. Die aufkeimende Literatur über disruptive Innovationen bietet nur begrenzte Empfehlungen zu spezifischen Geschäftsmodellelementen, die dazu dienen können, potenziell disruptive Technologien zu integrieren. Um diese Forschungslücke zu schließen, wird in dieser Arbeit untersucht, wie große Pharmaunternehmen Biotechnologien in die Gestaltung ihrer Geschäftsmodellinnovation einbezogen haben, um erfolgreiche Elemente der Geschäftsmodellgestaltung zu ermitteln. Es wird ein qualitativer Forschungsansatz gewählt, der aus drei Studien besteht. Zunächst werden nach einer systematischen Literaturrecherche zur Geschäftsmodellforschung in der pharmazeutischen Industrie 45 Arbeiten ausgewählt und qualitativ ausgewertet. Zweitens werden qualitative halbstrukturierte Interviews mit 16 Experten in großen Pharmaunternehmen geführt. Die Transkripte werden mit der Methode der Qualitativen Inhaltsanalyse ausgewertet. Schließlich wird eine Clusteranalyse durchgeführt, um den von allen digitalen Angeboten großer Pharmaunternehmen vorgeschlagenen und gelieferten Wert zu ermitteln. In dieser Arbeit werden erstmals zwei Geschäftsmodelle großer Pharmaunternehmen aus der Zeit vor und nach der Einführung der Biotechnologien beschrieben. In dieser Arbeit wird argumentiert, dass für die Anpassung an potenziell disruptive Technologien folgende Geschäftsmodellelemente empfohlen werden: Kollaborationsportfolios und digitale Servitisierung. Erstens sollten etablierte Unternehmen ein Portfolio von Kooperationsformaten entwickeln, indem sie die Breite der Partner (einschließlich der Wettbewerber) diversifizieren und alle Aktivitäten in ihrer Wertschöpfungskette abdecken. Zweitens sollten die etablierten Unternehmen den Wert, den sie anbieten, und die Art und Weise, wie sie diesen Wert für etablierte und neue Kundensegmente bereitstellen, innovativ gestalten, indem sie ihre Produkte mit ergänzenden Dienstleistungen bündeln, insbesondere mit solchen, die digital ermöglicht werden. Digitale Dienstleistungen dienen dazu, die Bedürfnisse der Kunden mit denen des Herstellers zu verknüpfen. Neben der Weiterentwicklung der Theorie über disruptive Innovationen können die empfohlenen Elemente des Geschäftsmodells von führenden mittelständischen Pharmaunternehmen (z. B. Fresenius oder Servier) und Unternehmen aus anderen Branchen direkt genutzt werden, um andere potenziell disruptive Technologien zu vermarkten. Diese Forschung unterstützt politische Entscheidungsträger bei der Entwicklung von Strategien zur Förderung der Kommerzialisierung potenziell disruptiver Innovationen in ihrem spezifischen Kontext.Potentially disruptive technologies are challenging to commercialize because they are associated with values new to established firms. Without fitting business model innovation, incumbent firms fail to bring new potentially disruptive technologies to the market. The burgeoning literature on disruptive innovation provides only limited recommendations on specific business model elements that can serve to accommodate potentially disruptive technologies. To close this research gap, this thesis explores how big pharmaceutical firms accommodated biotechnologies in the design of their business model innovation to discover successful business model design elements. A qualitative research approach consisting in three studies is adopted. First, following a systematic literature review on business model research in the pharmaceutical industry, 45 papers are selected and qualitatively analyzed. Second, qualitative semi-structured interviews are conducted with 16 experts in big pharmaceutical firms. The transcripts are analyzed using the qualitative content analysis method. Finally, a cluster analysis is conducted to identify value proposed and delivered by all digital offers of big pharmaceutical firms. This thesis is the first to describe two business model designs of big pharmaceutical firms from before and since the accommodation of biotechnologies. This research argues that business model designs recommended for the accommodation of potentially disruptive technologies are collaboration portfolios and digital servitization. First, established firms should devise a portfolio of collaboration formats by diversifying breadth of partners (including competitors), and by covering all activities in their value chain. Second, incumbent firms should innovate in the value they offer and how they deliver it to mainstream and new customer segments though bundling their products with complementary services, especially those that are digitally enabled. Digital services serve for back-coupling customers’ needs with the producer. Besides advancing theory on disruptive innovation, the recommended business model design elements can be directly used by top midsize pharmaceutical firms (e.g., Fresenius or Servier) and firms from other industries to commercialize other potentially disruptive technologies. This research supports policy makers in devising strategies for the promotion of the commercialization of potentially disruptive innovations in their specific contexts

Innovation in India and China : Challenges and Prospects in Pharmaceuticals and Biotechnology

India and China are important players in an evolving process of globalization of research and development (R&D). Focusing on pharmaceuticals and biotechnology industries, this paper analyses the challenges and prospects facing the two countries in global innovation. Large supplies of highly skilled professionals and well-established science and technology infrastructures are important assets for India and China in the era of globalization of R&D. At the same time, however, there is a concern that as globalization of R&D gathers steam, the poor in India, China and other developing countries are likely to be left out of the new innovations. A good example is the case of Indias pharmaceuticals industry. The leading Indian pharmaceutical firms have responded well to the challenge of a strict intellectual property rights (IPR) regime by increasing their R&D spending and, simultaneously, targeting their sales to the generic drugs markets in North America and Europe. But even as Indias top drug firms have been growing in technological capabilities and taking part in the globalization of pharmaceuticals R&D, they have also been shifting their focus away from the market for medicines for poor patients.India, China, innovation, pharmaceuticals, biotechnology

Life Sciences Innovation as a Catalyst for Economic Development: The Role of the Massachusetts Life Sciences Center

This report provides an up-to-date, independent evaluation of the $1 billion, 10-year Massachusetts Life Sciences Initiative and the Massachusetts Life Sciences Center (MLSC) charged with the responsibility of carrying out its mission. The initiative was established in July 2008 by Governor Deval Patrick's Administration and the Legislature to encourage the growth of discovery and production in the life sciences, including biotechnology, pharmaceuticals, medical diagnostics, medical devices and bioinformatics in the Commonwealth. Based on the region's existing comparative advantage in life sciences research and development (R&D) emanating from the laboratories of its leading universities and medical institutions, this substantial infusion of public funds was undertaken with the ambitious goal of making this cluster of industry sectors the most successful in the world. This evaluation comes at a propitious time, given the state of fiscal affairs in the Commonwealth and the nation. Virtually every unit of government is scrutinizing the use of each tax dollar to ensure that public revenue is being spent effectively and efficiently. Put simply, our goal in this evaluation was to gather as much data as possible to assess whether the Commonwealth's sizeable commitment of public resources is paying off in the form of a life sciences "super cluster" capable of attracting massive amounts of investment dollars, generating well-paying jobs for Massachusetts residents and yielding additional tax revenue for the Commonwealth

From commercialising intellectual property to facilitating open innovation: the evolution of UK biotechnology incubators

This paper investigates the changing landscape of biotechnology incubators in the UK and evidences their evolution from 1999 to 2017. We highlight the changing policy environment for biotechnology incubators and begin to investigate the evolution of UK biotechnology incubators from facilities that primarily support the commercialisation of intellectual property derived from universities to facilities that reuse former pharmaceutical research and development laboratories and collocate with operational pharmaceutical companies. This study uses two desk-based surveys that provide snap-shots of 21 biotechnology incubators taken in December 2012 and December 2017. The surveys provide a detailed examination of the characteristics of UK biotechnology incubators and their tenant companies. We observe the appearance of biotechnology incubators with an economic regeneration remit, funded by and working in partnership with regional government (BioPark Hertfordshire & BioCity Nottingham). We also observe the appearance of corporate biotechnology incubators (Akcomak, 2009) co-located on operational pharmaceutical research and development sites with an open innovation remit e.g. Astra Zeneca (Manchester), GlaxoSmithKline (Stevenage) and Boots (Nottingham). We propose that regional and national policy initiatives and changes in the business model of large pharmaceutical companies have been the main drivers for the evolution of biotechnology incubators in the UK

The Öresund region : a dynamic region in Europe due to inter-regional collaboration?

El cluster Medicon Valley es troba a la regió d'Øresund binacional que s'estén per Dinamarca i Suècia, inclosa la Universitat de Lund, ciutat i tercera ciutat més gran de Suècia, Malmö (veure figura 1). El 2000, aquestes dues parts nacionals estaven connectades físicament per l'establiment dels 18 quilòmetres de longitud, enllaç fix del Øresund (ponts i túnels).The cluster is located in the Medicon Valley region spanning the Oresund binational Denmark and Sweden, including the University of Lund, city and third largest city of Sweden, Malmö (see Figure 1). In 2000, the two national parties were physically connected to the establishment of 18 kilometers, the Øresund fixed link (bridges and tunnels)