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

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.

Factors influencing the fund raising process for innovative new ventures: an empirical study

Purpose – The purpose of this paper is to identify the factors that influence the fund raising ability of innovative new ventures/startups. Design/methodology/approach – The authors investigate a data set composed of 108 Italian innovative new ventures. Specifically, the authors run a Tobit regression model linking the amount of equity raised by the company to the human capital of the company. The authors focussed the analysis on the Chief Executive Officer (CEO) of the new company, who usually is a founder and, in the early stages, the most charismatic figure. Findings – The analysis shows a significant relationship between the ability of a startup to raise funds and the level of education of the CEO. The findings suggest that this causal relation is even stronger as the CEO holds an MBA. Research limitations/implications – The results of our empirical study provide further insights about the characteristics of the CEO that mostly impact on fund raising ability of the new ventures. The results are limited to startups founded by Italian entrepreneurs. A cross-country comparison will represent the natural prosecution of our research. Practical implications – The study provides important implications for researchers and practitioners who are interested in understanding the fundamentals of the fund raising process for innovative startups. Moreover, these findings may also be helpful for policy makers in better understanding the factors potentially influencing the Italian startup ecosystem. Originality/value – The paper sheds light on the factors affecting the fund raising process of innovative new ventures in the early stage of the company’s life cycle. Specifically, it is one of the few study focussing on the profile/background of the CEO in early-stage companies. </jats:sec