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 11: On the Spatial Dimension of Firm Formation

Annika Rickne

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


11. On the spatial dimension of firm formation Annika Rickne 1. INTRODUCING THE ISSUES The last two decades have seen an expanding life science sector in both Europe and the USA, with the growth of incumbent corporations, and a vast number of new firms being established. Interestingly, on a global arena of life sciences, US actors are remarkably influential and dominating as regards development of scientific and technological knowledge, identification and exploitation of economic opportunities as well as the ability to create economic growth. In terms of firm formation, the European life science sector showed some success during the 1990s, resulting in almost 1400 biotech start-ups between 1994 and 2000 (Ernst & Young 2001). However, there are still major differences between Europe and the USA in terms of firm growth, revenues, number of public companies as well as economic outcome created. Certainly, the European sector faces somewhat different – and some would argue much larger – challenges as compared to its US counterpart. Thus, even if the gap between the USA and Europe may be decreasing in terms of number of firms, the mechanisms and entrepreneurial innovation activities needed to transform investments in science and technology (S&T) into new firms and economic growth (Schumpeter 1934) may not be fully put into practice in the European context. The European situation is well mirrored also in the Swedish life science sector. The Swedish challenge has been described as a ‘paradox’, with a competitive research sector but with difficulties...

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