The External Sourcing of Technological Knowledge by US Pharmaceutical Companies: Strategic Goals and Inter-organizational Relationships

This study of the organization of the discovery function by large US pharmaceutical companies (LPCs) examines an important knowledge acquisition strategy—external sourcing of compounds and technologies. Through a critical examination of the “capabilities” thesis in strategic management and of the theoretical conceptualization in organization studies of innovation networks, we undertake an in-depth qualitative analysis of the network relationships LPCs establish with biotechnology firms/public research laboratories. We additionally examine the motivations and degree of strategic intent of R&D managers involved in external knowledge sourcing. The paper identifies the tensions and contradictions in network relationships and indicates how these lead to changes in knowledge sourcing. This qualitative analysis is placed in its industry and technology context. This reveals both the pressures towards and the trends in external knowledge sourcing, as compared with in-house discovery. Extensive interviews with US LPCs and biotechnology firms provide a rare glimpse of how some of the most important actors in global innovation networks handle a significant new innovation strategy.     

Obliging Institutions and Industry Evolution: A Comparative Study of the German and UK Wind Energy Industries

This paper firstly examines the relationship between state coordination and wind energy growth by comparing the differences between UK and German institutional configurations and state involvements in the 1990s. While the EU was calling for a unified regulatory framework for its member states, the UK and Germany adopted very different renewable energy policies. The evidence of the early 1990s shows that the British government employed “deregulation” with so limited state involvement that wind energy project developers faced thorny development problems, while the German government tried to require the electricity supply industry to purchase expensive wind power by “regulation” but encountered formidable resistance. Nevertheless, both the British and German administrations later could resolve these problems through new forms of state power. This suggests that, firstly, neither “deregulation” nor “regulation” is an effective means to develop wind power with increasing electricity liberalization and regionalization. Secondly, “obliging” regulations and state powers are vital to the policy outcome by harnessing the state's institutional capacity to smooth out technology innovation and diffusion.     

Stereoisomeric Drugs: FDA'S Policy Statement and the Impact on Drug Development

On May 1, 1992 FDA issued its long awaited policy statement concerning the development of stereoisomeric drugs. These drugs are also known as “chiral drugs.” This paper will focus on the historical perspective of the stereoisomer issue, review of FDA's policy and a discussion of the potential impact of this policy on drug development including the impact on marketing exclusivity.     

Hollywood, the Internet and the World: A Geography of Disruptive Innovation

During the past decade, the Hollywood studios have broadly sought to subdue, rather than explore, the technological possibilities of the Internet. Specifically, the studios have used their ownership of creative works to control the speed and direction of innovation in an emerging digitally networked social and economic environment, which is built upon the Internet and an ecology of hardware and software technologies. In this paper, I use a relational perspective to examine two critical aspects of this case study. The first concerns the cognitive and discursive dimensions of firm strategy. The second concerns the formation and enactment of firm strategy within networks of social relations. The argument is therefore twofold. On the one hand, I argue that the Hollywood studios are seeking to create a “closed” sphere of innovation on a global scale, which enables the absolute defence of property rights. However, this has alienated a broad spectrum of new creative freedoms, causing a “bifurcation” of the networked environment. On the other hand, I argue that this strategic response must be understood in relational terms. The closed sphere has been legitimated, enacted and performed within relational networks at a regional scale in Los Angeles. The paper is based on unprecedented access to the Hollywood studios, combined with interviews across the media, entertainment and technology industries. The overall goal of the paper is to construct an “economic geography” of disruptive innovation under conditions of oligopoly.     

Action strategies for strengthening industrial clusters in southern Taiwan

For the past decade, the Taiwanese government has applied the policy of “North heavy, South light” to put more emphasis on development in northern Taiwan instead of the south. This has resulted in uneven development between the northern and southern regions, especially when introducing, developing, and supporting high technology and resource allocation in education. Industry clusters have become the centerpiece of economic development policy in many parts of the world. In this study, it is assumed that there are two categories of less-advantaged regions in Taiwan: (1) older industrialized regions dominated by labor-intensive/capital-intensive industries, and (2) industrial regions that have merged with potential high-technology small firms but still lack infrastructure. This study discusses the following points: (a) How do industrial clusters work in action? (b) What barriers do less-advantaged industrial clusters face? (c) What action strategies promote less-advantaged industrial clusters?     

Linking the bottom-up and top-down evolution of regional innovation systems to policy: organizations,support structures and learning processes

The literature is ambiguous about whether regional innovation systems (RIS) evolve bottom-up or top-down. This is reflected in RIS policies, which tend to focus on either development of the actor level, i.e. organizations in a RIS, or the system level, i.e. the support structure for innovation. Here, we analyzed a Norwegian RIS policy programme, the Programme for Regional R&D and Innovation (VRI), which aimed to combine both approaches. We found that VRI mainly developed the support structure for innovation and that learning outcomes from VRI involvement in organizations differed between the involved actor groups. This is particularly so for RIS development in regions inexperienced with support structure development prior to VRI involvement. Conversely, in regions with well-functioning support structures prior to VRI, the focus was most beneficially on stimulating learning at the actor level. We argue that future research should investigate mechanisms and interlinkages between the two levels and especially their regional particularities.     

Combining cost-based and rule-based knowledge in complex resource allocation problems

A major challenge in the formulation of optimization models for large-scale, complex operational problems is that some data are impossible or uneconomical to collect, producing a cost model that suffers from incomplete information. As a result, even an optimal solution may be “wrong” in the sense that it is solving the wrong problem. In many operational settings, knowledgeable experts will already know, at least approximately, how a model should behave, and can express this knowledge in the form of low dimensional patterns: “high powered locomotives should pull intermodal trains” (because they need to move quickly) or “loaded C-141s should not be flown into Saudi Arabia” (for maintenance reasons). Unlike the literature on inverse optimization which uses observed actions to train the parameters of a cost model, we used exogenous patterns to guide the behavior of a model using a proximal point term that penalizes deviations from these patterns. Under the assumption that the patterns are derived from rational behaviors, we establish the conditions under which incorporating patterns will reduce actual costs rather than just the engineered costs. The effectiveness of the approach is demonstrated in a controlled, laboratory setting using data from a major railroad.     

The Dependence of Innovativeness on the Local Firm Population—An Empirical Study of German Patents

Local clusters and the co-location of firms are repeatedly related to a high level of innovativeness in the literature. The underlying argument is that firms that are co-located with other firms of the same industry undertake more innovation than “lonely” firms because of spillovers, local labour markets and cooperations. These arguments are tested here for four industries in Germany. To this end, four different hypotheses about the impact of co-location on the innovativeness of firms are formulated and empirically compared. The results show that the innovativeness of firms indeed depends on the existence of other firms in the same region. However, the relationship between co-location and innovation output depends on the industry studied.     

“Low-Tech” Innovations

This paper is about an industrial sector which, according to the usual socio-scientific indicators, is referred to as “low-tech”, respectively as non-research intensive and which mostly comprises “traditional” industries. The interest in this sector is motivated by the contradictory situation that, on the one hand, the debate about the perspectives of modern societies focuses on the rapidly growing importance of technological innovations, knowledge and research-intensive economic sectors while, on the other hand, traditional industries make up a considerable fraction of employment and production, especially also in developed economies. On the basis of the results of extensive empirical research, this contribution tries to find answers to the basic question, whether one can speak of an innovation mode typical of the low-tech sector. The institutional based innovation systems approach forms the categorical basis of the analysis. In order to elucidate the specific features of low-tech innovations, they are, in conclusion, compared to the general characteristics of high-tech-based innovation processes.     

Choosing the appropriate capacity for a make-to-forecast production environment using a Markov analysis approach

In the “make-to-forecast” production environment, competitive market dynamics require customer delivery times substantially shorter than the fixed manufacturing lead times, which require the release of units into production without prior knowledge of customers' desires. As a result, there is the possibility of either getting more orders than can be accommodated causing the rejection of some, or getting too few orders leading to a finished unit without a buyer, which we term an “orphan”. The physical size and dollar value of the units make storing of the orphans, if not completely impossible in some situations, at least extremely undesirable. The likelihood of these two undesirable events depends on the managerially predetermined production capacity relative to the exogenous average order arrival rate. If the capacity is excessive, too many units will be orphaned, whereas insufficient capacity will result in too many rejected orders. We present a Markov model to analyze the behavior of the system in regard to orphan and order rejection levels. The analysis provides management and researchers with highly generalizable insights into managing this common dilemma under various demand and policy scenarios to make more informed capacity level decisions.     

On new types of non-crystalline metallic composite

The structure and mechanical properties of new types of non-crystalline metallic composites, namely “glass-quasi-crystal”, “glass-disclinated nanocrystal” and “quasi-crystal(-glass)-disclinated nanocrystal” composites are theoretically examined. In particular, a theoretical model is proposed which effectively describes the relationship between plastic deformation and the growth of the glassy phase in metallic “glass-quasi-crystal” composite materials. Here also basic features of both the structure and the mechanical properties of the “glass-disclinated nanocrystal” and “quasi-crystal(-glass)-disclinated nanocrystal” composites are theoretically examined. It is shown that such composites are characterized by a very high yield stress.     

Patterns of Innovation in Industrial Districts: An Empirical Analysis

Research has proved how the industrial district model can deliver sustained economic growth and sustains firms' competitiveness. Studies have also shown how spatial proximity helps in the process of knowledge generation and diffusion. Indeed, the literature on industrial districts since the earliest studies has stressed how districts are “loci” where sustained innovation activity is undertaken. However, this innovative dimension of districts' activities has not yet been fully explored. Sufficient theoretical background and empirical evidence as to whether the peculiar socio-economic characteristics of the industrial district model influence firms' innovation performance and the way innovation activity is carried out is lacking. The aim of this paper is thus to explore the determinants of innovation activities in firms located inside and outside industrial districts in the Italian region of Lombardy, investigating whether the district provides a favourable environment for the development of innovations and identify possible competitive advantages.     

A fast procedure for computing the total system cost of an appointment schedule for medical and kindred facilities

Scheduling outpatients and medical operation rooms has the following structure: Nusers are given appointment times to use a facility, the duration required by the facility to service each user is stochastic. The system incurs a “user idle cost” if a user arriving at the appointed time finds the facility still engaged by preceding users, while a “facility idle cost” is incurred if the facility becomes free before the next user arrives. We develop an accurate procedure to compute the expected total system costs for any given appointment schedule. Compared to earlier related procedures, ours is much faster and can handle larger problems as well as very general service-time distributions. We then show that this fast computation procedure enables one to determine easily the “lowest-cost appointment schedule” for any given “job” (i.e., “user”) sequence. This in turn will enable one to search for the optimal job sequence that has the best “lowest-cost appointment schedule”.     

Test of adiabatic spin flippers for application at pulsed neutron sources

Experimental results on the flipping efficiency are shown for a set of 2 V-coils as spin flipper and for a high-frequency flipper with adiabatic transition. The influence of the adiabaticity parameter is discussed. The merits of these adiabatic flippers are compared with the use of “monochromatic” flippers, when operated in a beam from a pulsed neutron source. It is concluded that for “long pulse” sources adiabatic flippers will be superior.     

Epistemic Communities and Cluster Dynamics: On the Role of Knowledge in Industrial Districts

This paper questions the prevailing notions that firms within industrial clusters have privileged access to “tacit knowledge” that is unavailable—or available only at high cost—to firms located elsewhere, and that such access provides competitive advantages that cause the growth and development of both firms and regions. It outlines a model of cluster dynamics emphasizing two mutually interdependent processes: the concentration of specialized and complementary epistemic communities, on the one hand, and entrepreneurship and a high rate of new firm formation on the other.     

Redefining Firm Competencies, Innovation and Labour Mobility: A Case Study in Telecommunication Services

The search amongst large high-technology firms to generate flexible competencies has been paralleled by growing interest in establishing flexible employment relationships with “knowledge workers” and greater labour mobility as a means of meeting the organization's growing diverse strategic requirements. This paper argues that while greater labour mobility may well aid greater flexibility, the consequent break down of internal labour markets as attractive career options for knowledge workers may also lead to the weakening of essential firm competencies. The discussion suggests, that rather than relying exclusively on labour mobility, large firms involved in innovation activity are developing novel employment practices to broaden their scope of knowledge while enhancing internal capability.     

Biotechnology: Present and Future Roles in the Pharmaceutical Industry

Biotechnology is the integration of a number of scientific disciplines including microbiology, genetics, biochemistry and chemical engineering. It uses living organisms, or systems or products from these organisms to make or modify useful products. New biotechnology comprises genetic engineering, protoplast fusion and monoclonal antibody techniques, powerful new “tools” designed to generate efficient bioprocesses and products for the pharmaceutical industry. The following areas of biotechnology are highlighted: human insulin, interferons and other growth factors, neuroactive peptides, blood products, antibiotics, enzymes, monoclonal antibodies, vaccines and oncogenes.     

The Optimal Sight Angle Problem

We introduce the following problem in this paper. There are n points on the plane that are to be observed from some point on a circle of given radius that encloses all of the points. We wish to find the observation point that has the best possible view of the n points in the sense that if we draw lines of sight from the observation point to the given points, the smallest angle between the lines is maximized. Applications could include the planning of photographs or displays. This is a “maximin problem” in which the function to be maximized has many local optima. We present two methods for solving the problem, one more efficient in computer time, and the other in storage. We also present a simplified procedure for the case where the observation point is “infinitely” distant from the given points.     

Design considerations for thin film coated semiconductor thermal neutron detectors—I: basics regarding alpha particle emitting neutron reactive films

Semiconductor-based thermal neutron detectors provide a compact technology for neutron detection and imaging. Such devices can be produced by externally coating semiconductor-charged-particle detectors with neutron reactive films that convert free neutrons into charged-particle reaction products. Commonly used films for such devices utilize the ¹⁰B(n,)⁷Li reaction or the ⁶Li(n,)³H reaction, which are attractive due to the relatively high energies imparted to the reaction products. Unfortunately, thin film or “foil” type thermal neutron detectors suffer from self-absorption effects that ultimately limit neutron detection efficiency. Design considerations that maximize the efficiency and performance of such devices are discussed. Theoretical and experimental results from front coated, back coated, and “sandwich” designs are presented.     

Rents, Rights N'Rhythm: Cooperation, Conflict and Capabilities in the Music Industry

The need for better informed copyright policy and management is a huge problem because of the enormous and growing size and scope of the creative industries. In this paper we challenge the prevailing thinking dominating the theoretical literature on the economics of copyrights. By integrating the very real effect of cooperation (strategic interaction and creative interdependence) and conflict (asymmetric relationships in terms of interests, financial dominance, power and capabilities) throughout the economic system in generating value and appropriating rent from music copyrights, we argue how prevailing theory on copyright can be improved by integrating it into a framework of New Institutional Economics. Focus is on the interplay between (i) the “institutional environment” (or “rules of the game”) with respect to the regulation of copyrights underpinned by the economic rationales; and (ii) the “institutions of governance” (or the “play of the game”) with respect to the specific institutional mechanisms in organizing the creation and distribution of value and revenue from music copyrights, and with respect to royalty management.