Innovation, Agglomeration and Regional Competition
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Innovation, Agglomeration and Regional Competition

Edited by Charlie Karlsson, Börje Johansson and Roger R. Stough

This book provides a state-of-the-art overview of current research on regional competition and co-operation. Developing our current understanding of the new role of regions and their behaviour, this book addresses questions such as: How and why do regions compete? How does competition between border regions operate? Which regions are successful and which regions fail? What are the implications of regional competition in terms of resource allocation, the location of economic activities and the distribution of incomes? The book illuminates a number of critical theoretical end empirical issues relating to the competitive and cooperative nature of regions, as well as highlighting a number of new case studies from a variety of countries.
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Chapter 6: Regional R & D Outsourcing in Bioscientific Industries

Philip Cooke


6. Regional R&D outsourcing in bioscientific industries Philip Cooke INTRODUCTION 6.1 Whereas until around the end of the 1970s pharmaceuticals were mainly researched, designed, marketed and distributed from within specific, stand-alone transnational corporations (TNCs) based on in-house drug discovery (in 1980, for example, 34 new products were associated with R&D expenditure of $2 billion), thereafter, in-house research competences came under pressure. This happened to such an extent that, by 2002, the top 15 global ‘pharma’ TNCs spent $28 billion for less than 20 unambiguously new treatments. The main reason for this is that the ‘golden age’ of synthetic chemistry innovation ceased before 1980, the rise of biotechnology to prominence occurred thereafter, and the centre of gravity of scientific research shifted to key universities. From the economic geography viewpoint, three interesting and potentially crucial theoretical insights flow from this transformation. First, this transformation did not produce Schumpeterian ‘gales of creative destruction’ in the industry. Inter-firm relations are symbiotic rather than ‘creatively destructive’. Second, from a position in which the prime mover in spatial structure became the TNC and its internal and international divisions of labour that created economic geography to a large extent, this had declined significantly by 2004 in pharmaceuticals, though less so in agro-food. Now, in biopharmaceuticals, the prime mover is the key university, its research capabilities, specialist fund-attracting Centres of Excellence, and entrepreneurship in dedicated biotechnology firms (DBFs). Third, in both sectors TNCs translocate and integrate research ‘lookout’ posts and even whole research divisions into proximity...

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