Economic Development as a Learning Process

Economic Development as a Learning Process

Variation Across Sectoral Systems

Edited by Franco Malerba and Richard R. Nelson

Until recently, economists studying economic development have tended to consider it a universal process, or focussed their attention on common aspects. This book originates from the growing recognition of significant sectoral differences in economic development and examines the catching-up process in five different economic sectors: pharmaceuticals, telecommunications equipment, semiconductors, software, and agro-food industries. Each of these sector studies explore the learning and catch-up processes in various developing countries, in order to identify both the common features, and those which differ significantly across sectors and nations. The authors pay particular attention to China, India, Brazil, Korea and Taiwan.

Chapter 5: Catching up in the Pharmaceutical Sector: Lessons from Case Studies of India and Brazil

Shyama V. Ramani and Samira Guennif

Subjects: development studies, development economics, economics and finance, development economics, economics of innovation, evolutionary economics, innovation and technology, economics of innovation


Shyama V. Ramani and Samira Guennif 5.1 INTRODUCTION Taking off with the discovery of antibiotics, the pharmaceutical industry emerged as a distinct sector in the developed world in the last century, when research and development (R&D) activity by firms greatly increased in order to find solutions to the problems and demands created by the two world wars. Since then, it has continued to be a highly R&D-intensive industry with technological competencies and innovation creation being important determinants of firm survival and growth. Such trends were reinforced with the emergence and integration of biotechnology during the 1980s1 and the commercial success of radical innovations such as recombinant insulin, human growth hormone, interferon, TPA and EPO (Achilladelis and Antonakis, 2001; Malerba and Orsenigo, 2002).2 Major innovators of the pharmaceutical industry are to be found in only five countries: USA, Germany, Switzerland, the UK and France, where they were greatly supported by favourable national policies in terms of public and private research (McKelvey et al., 2004). Nevertheless, some emerging economies have developed significant industrial capabilities over the last 50 years. The objective of this chapter is to unravel the determinants of the catching-up process of this group through a case study of two such countries: India and Brazil. India and Brazil are interesting countries to compare because they share some common features. Since the mid-twentieth century, the national objective of both these countries has been to develop industrial capabilities in essential sectors. The two countries also enjoyed a considerable period...

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