Multinationals and Emerging Economies

Multinationals and Emerging Economies

The Quest for Innovation and Sustainability

Innovation, Co-operation and Development series

Edited by Wilfred Dolfsma, Geert Duysters and Ionara Costa

The global economy is changing rapidly and multinational corporations (MNCs) are at the forefront of this transformation. This book provides novel and profound analyses of how MNCs and emerging economies are related, and how this relationship affects the dynamics of the global economy. In particular, the authors deal with the nexus between multinationals, emerging economies and innovation from a variety of different perspectives. Innovation is regarded as a core driving force in the global economy but the authors show how it can impede as well as encourage sustainability. The book brings together insights from business studies and economics, and combines concise theoretical discussion with empirical analyses of unique data.

Chapter 3: New Europe’s Promise for Life Sciences

Sergey Filippov and Kálmán Kalotay

Subjects: business and management, international business, organisational innovation, economics and finance, economics of innovation, international business, innovation and technology, economics of innovation, organisational innovation

Extract

Sergey Filippov and Kálmán Kalotay INTRODUCTION The life science industry has a significant impact on the health of the population and the wealth of nations and has attracted a lot of attention recently. Growth in the life sciences is fuelled primarily by the disruptive and creative nature of biotechnology. It is similar to the changes provoked by the technological revolution that information and communication technologies (ICT) provoked in the recent past. There are profound differences though. Because governmental regulations did not play a crucial role for ICT, the major players in the sector were start-up firms and small and medium-sized enterprises in general, in the life sciences sector the situation is different (Luukkonen and Palmberg, 2007). The sector falls under a tight control by national medicine regulatory bodies. Moreover, it is characterized by high upfront R&D investment and long development times. Thus, in most cases only multinational companies possessing enough capital and facilities and able to comply with regulations can operate in the sector; and small companies tailor their strategies to cooperate with multinationals. Not only in the life sciences, but in most other industries too, multinationals are playing an ever increasing role in global economy in terms of production of goods and delivery of services as well as research and development (R&D) activities. Already in the mid-1990s, multinationals accounted for a large share in the R&D expenditures of the Triad economies ‒ US, Western Europe and Japan (Gassmann and von Zedtwitz, 1999). In 2002, the...

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