The Economic Dynamics of Modern Biotechnology

The Economic Dynamics of Modern Biotechnology

Edited by Maureen McKelvey, Annika Rickne and Jens Laage-Hellman

This book offers a novel insight into the economic dynamics of modern biotechnology, using examples from Europe to reflect global trends. The authors apply theoretical insight to a fundamental enigma of the modern learning society, namely, how and why the development of knowledge and ideas interact with market processes and the formation of industries and firms.

Chapter 8: Future Imperfect: The Response of the Insurance Industry to the Emergence of Predictive Genetic Testing

Stefano Brusoni, Rachel Cutts and Aldo Geuna

Subjects: economics and finance, economics of innovation, environment, biotechnology, innovation and technology, biotechnology, economics of innovation

Extract

* Stefano Brusoni, Rachel Cutts and Aldo Geuna 1. INTRODUCTION This exploratory study of knowledge investment in the life insurance industry aims at examining the impact of increasing medical knowledge on the actuarial practice of life insurance companies. A huge literature exists on the innovative dynamics of a number of service industries. In the service industries, knowledge is often taken to be highly embedded in day-to-day operations or to be received through the purchase of equipment from other sectors. Indeed, most of the available studies of innovation in the service industries focus on the introduction of information and communication technologies (ICTs) in banking and insurance. Most of these studies focus on the impact of ICTs on the way recipient organizations do traditional things, and how this leads them to introduce new products (see Hecht 2001 and the seminal work of Barras 1990). In contrast to these studies, this chapter does not consider the diffusion of new or improved equipment. Its emphasis is squarely on the diffusion of new information and knowledge and their impact on the accumulation of intangible capital by firms, for example, the process by which a firm acquires specific new knowledge. Specifically, our analysis is directed to firms’ responses to the emergence of a particular body of knowledge: genetics and the related development of genetic screening techniques. The innovative character of this study lies in the examination of how externally generated knowledge is acquired by a service industry. Genetics was chosen because of its...

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