To what extent and in what manner do Chinese and Indian contract research organisation learn and upgrade with the unbundling the global pharmaceutical R&D value chain?

Wu, Qiang and Ramirez, Paulina (2016). To what extent and in what manner do Chinese and Indian contract research organisation learn and upgrade with the unbundling the global pharmaceutical R&D value chain? IN: 28th Annual Meeting conference of the Society for the Advancement of Socio-Economics. 2016-06-24 - 2016-06-26.

Abstract

The paper applies the GVC framework to analyse the organisational and geographical reconfiguration of the global R&D function of leading US and European pharmaceutical MNCs. Though pharmaceutical MNCs have been outsourcing clinical trial activities since the mid-1990s, the outsourcing of discovery research tasks is a phenomenon of the 2000s (Ramirez 2013). Moreover, in the context of a crisis of R&D productivity and increasing pressure from shareholders, a number of US and European pharmaceutical MNCs are breaking up their R&D function in an attempt to increase flexibility and reduce risk as well as costs and are thereby restructuring the global architecture of their R&D function. This break-up, or unbundling (Sako 2006), of the R&D function is particularly interesting given the prevalence of market failure in innovation (Howells et al 2008), the non-modular nature of the R&D process in this industry (Pisano 2006) and the strategic important of this activity to the core competence and long-term competitive advantage of firms in this sector. The focus of this paper is on the outsourcing of R&D activities to Chinese and Indian independently-owned contract research organisations (CROs) and the way these firms are becoming integrated as service providers into the global R&D function (or R&D value chain) of pharmaceutical MNCs. Above all the paper is concerned with the development of capabilities of CROs from these two countries and the dynamics of upgrading in GVCs in knowledge-intensive functions. The paper therefore discusses the role of both knowledge flows within global pharmaceutical R&D value chains as well as national innovation systems on the development of capabilities of Chinese and Indian CROs. Our analysis is based on data from semi-structured interviews collected from senior R&D managers from a sample of ten US and European pharmaceutical MNCs and owners and senior R&D managers from five Chinese and five Indian CROs who are providing research services to MNCs in this industry. We discuss the emergence of R&D outsourcing in this industry and the nature and mechanisms of knowledge flows within R&D value chains. The embeddedness of CROS in the national innovation systems of their home countries is also discussed.

Divisions: Engineering & Applied Sciences > Engineering Systems & Management
Engineering & Applied Sciences
Engineering & Applied Sciences > Aston Logistics and Systems Institute
Event Title: 28th Annual Meeting conference of the Society for the Advancement of Socio-Economics
Event Type: Other
Event Dates: 2016-06-24 - 2016-06-26
Full Text Link: https://sase.co ... /Paper5252.html
Related URLs:
Published Date: 2016
Authors: Wu, Qiang
Ramirez, Paulina

Export / Share Citation


Statistics

Additional statistics for this record