Public-Private Interaction and the Productivity of Pharmaceutical Research

We examine the impact of publicly funded biomedical research on the in-house research of the for-profit pharmaceutical industry. Qualitative analysis of the history of the discovery and development of a sample of 21 significant drugs, and a program of interviews with senior managers and scientists reveals a complex and often bidirectional relationship between the public and private sectors of the industry, illustrating the difficulties inherent in estimating the rate of return to public support of basic research. This analysis also highlights the importance for private sector firms of maintaining close connections to the upstream' scientific community, which requires them to make significant investments in doing in-house basic research and adopting appropriate internal incentives and procedures. We measure the extent and nature of this connectedness' using data on coauthorship of scientific papers between pharmaceutical company scientists and publicly funded researchers. These measures are significantly correlated with firms' internal organization, as well as their research performance in drug discovery as measured by important patents per research dollar. The size of the estimated impact of connectedness' to private research productivity implies a substantial return to public investments in basic research.

Balancing Incentives: The Tension Between Basic and Applied Research

This paper presents empirical evidence that the intensity of research workers' incentives for the distinct tasks of basic and applied research are positively associated with each other. We relate this finding to the prediction of the theoretical literature that when effort is multi-dimensional, firms will balance' the provision of incentives; when incentives are strong along one dimension, firms will set high-powered incentives for effort along other dimensions which compete for the worker's effort and attention (Holmstrom and Milgrom, 1991). We test for this effect in the context of pharmaceutical research using detailed data on individual research programs financed by private firms. Consistent with the complementarity hypothesis, we find strong evidence that firms who provide strong promotion-based incentives for individuals to invest in fundamental or basic' research also provide more intense incentives for success in applied research through the capital budgeting process. The intensity of these bonus' incentives is weaker in firms who use a more centralized research budgeting process. We interpret this latter finding as providing support for theories which emphasize substitutability between contractible and non-contractible signals of effort (Baker, Gibbons, and Murphy, 1994).

The Diffusion of Science-Driven Drug Discovery: Organizational Change in Pharmaceutical Research

Recent work linking the adoption of key organizational practices to productivity raises an important question: if adoption increases productivity so dramatically, why does adoption across an industry take so long? This paper explores this question in the context of one particularly interesting practice, the adoption of science driven drug discovery by the modern pharmaceutical industry. Over the past two decades, the established pharmaceutical industry has slowly shifted towards a more science-oriented drug discovery: (a) adopters experienced substantially higher rates of R&D after the late 1970s and (b) the rate of adoption across the industry was extremely slow. Motivated by the apparent contradiction between large boosts in performance and slow rates of adoption, this paper characterizes the sources of differences in rates of adoption between 1980 and 1993. The principal finding is that adoption of a science-oriented research approach was a function of initial conditions, or subject to 'state dependence': some firms simply began the sample period at a much higher level of science orientation. Moreover, while these effects attenuated over time, our empirical results suggest that it took more than ten years before adoption was unrelated to initial conditions. In addition, consistent with theories developed in the context of technology adoption, we find that relative diffusion rates depend on the product market positioning of firms. More surprisingly, adoption rates are seperately driven by the composition of sales within the firm. This latter finding suggests the potential importance of differences among firms in terms of the internal structure of power and attention, an area which has received only a small amount of theoretical attention.

Using DEWIS and R for multi-staged statistics e-assessments

We demonstrate how the DEWIS e-Assessment system may use embedded R code to facilitate the assessment of students' ability to perform involved statistical analyses. The R code has been written to emulate SPSS output and thus the statistical results for each bespoke data set can be generated efficiently and accurately using standard R routines. This enables students' answers, generated from their application of SPSS, to be marked and appropriate feedback supplied back to them by DEWIS. Staging is used between different parts of the e-Assessment to replicate the natural stages of a complete statistical analysis. This allows students the freedom to work away from DEWIS; they may view the relevant stage an unlimited number of times prior to submitting their answers for that stage. The technical challenges of setting up the e-Assessment in this way are discussed as well as the rationale for adopting this pioneering approach

Untangling the Origins of Competitive Advantage

A paper prepared for the SMJ Special Issue on The Evolution of Firm CapabilitiesWhat are the origins of competitive advantage? Although this question is fundamental to strategy research, it is one to which we lack a clear answer. As strategy researchers we believe that some firms consistently outperform others, and we have some evidence consistent with this belief (Rumelt, 1991; McGahan and Porter, 1997). We also have a number of well developed theories as to why, at any given moment, it is possible for some firms (and some industries) to earn supranormal returns. As of yet, however, we have no generally accepted theory C and certainly no systematic evidence C as to the origins or the dynamics of such differences in performance. We know, for example, why high barriers to entry coupled with a differentiated product positioning obtained through unique organizational competencies may provide a firm with competitive advantage. But we know much less about how barriers to entry are built: about why this firm and not that one developed the competencies that underlie advantage, and about the dynamic process out of which competitive advantage first arises and then erodes over time.This study was funded by POPI, the Program for the Study of the Pharmaceutical Industry at MIT and by the MIT Center for Innovation in Product Development under NSF Cooperative Agreement Number EEC-9529140

Public & Private Spillovers, Location and the Productivity of Pharmaceutical Research

While there is widespread agreement among economists and management scholars that knowledge spillovers exist and have important economic consequences, researchers know substantially less about the "micro mechanisms" of spillovers -- about the degree to which they are geographically localized, for example, or about the degree to which spillovers from public institutions are qualitatively different from those from privately owned firms (Jaffe, 1986; Krugman, 1991; Jaffe et al., 1993; Porter, 1990). In this paper we make use of the geographic distribution of the research activities of major global pharmaceutical firms to explore the extent to which knowledge spills over from proximate private and public institutions. Our data and empirical approach allow us to make advances on two dimensions. First, by focusing on spillovers in research productivity (as opposed to manufacturing productivity), we build closely on the theoretical literature on spillovers that suggests that knowledge externalities are likely to have the most immediate impact on the production of ideas (Romer, 1986; Aghion & Howitt, 1997). Second, our data allow us to distinguish spillovers from public research from spillovers from private, or competitively funded research, and to more deeply explore the role that institutions and geographic proximity play in driving knowledge spillovers.

Filter design for real-time ambisonics encoding during wave-based acoustic simulations

The ambisonics format is a powerful audio tool designed for spatial encoding of the pressure field. An under-exploited feature of this format is that it can be directly extracted from virtual acoustics simulations. Finite Difference Time Domain (FDTD) simulations are particularly adapted as they simplify greatly the problem of extracting spatially-encoded signals, and enable real-time processing of the simulated pressure field. In this short contribution, we first write a time domain representation of the ambisonics channels, in terms of spatial derivatives of the acoustic field at the receiver location, and formulated as a set of ordinary differential equations. We show that in general, the natural corresponding discrete recursive integration yields a prohibitive polynomial drift in time. We then describe a real-time filtering strategy which stabilizes this numerical integration; in the discrete-time setting of FDTD simulations, this real-time filtering process features very low computational costs, avoiding the latency associated with large convolutions and frequency-domain block processing of previous approaches.publishedVersio

Open access statistics resources

In this paper we illustrate an open access statistics resource related to the statistical activities involved in choosing and carrying out an appropriate one sample test for location (mean or median) on a randomly generated data set. The development of the resource was funded through a sigma Resource Development Grant and is freely available from the UK national statstutor site. Five e-Assessment modules are available and these may be accessed independently or can be taken sequentially mimicking the flow of a full statistical analysis using the SPSS software package. On accessing the resource a new statistical data set may be generated or an existing data set used. Each module requires the data to have been downloaded to the SPSS statistical package, relevant analysis output obtained and a few questions answered to demonstrate understanding of the results. On submission, the e-Assessment system marks the responses immediately and provides full bespoke feedback for inappropriate test choices as well as other incorrect analysis. Videos and instruction pamphlets are accessible as links from each e-Assessment, which give clear instructions as to how to carry out the analyses and interpret results using SPSS. These additional resources, together with repeated use of the e-Assessment modules, facilitates learning how to identify and employ the correct test on a variety of data sets