Alfonso Gambardella

Complementarity and External Linkages: The Strategies of the Large Firms in Biotechnology

In biotechnology, large firms enter into different kinds of linkages with universities and small/medium sized research-intensive firms. The authors test the hypothesis that the strategies of external linkage of the large firms with other parties are complementary to one another. They show that if any two strategies are complementary (i.e., undertaking more of one strategy raises the marginal value of the other), then they are positively correlated. Using data for a sample of large U.S., European, and Japanese chemical and pharmaceutical producers, the authors find that the strategies above are positively correlated even after controlling for firm-specific characteristics. Copyright 1990 by Blackwell Publishing Ltd.

The changing technology of technological change: general and abstract knowledge and the division of innovative labour

Abstract In the past, most innovations have resulted from empiricist procedures; the outcome of each trial yielding knowledge that could not be readily extended to other contexts. While trial and-error may remain the primary engine of innovation, developments in many scientific disciplines, along with progress in computational capabilities and instrumentation, are encouraging a new approach to industrial research. Instead of relying purely on trial-and-error, the attempt is also to understand the principles governing the behaviour of objects and structures. The result is that relevant information, whatever its source, can now be cast in frameworks and categories that are more universal. The greater universality makes it possible for the innovation process to be organised in new ways: firms can specialise and focus upon producing new knowledge, and the locus of innovation may be spread across both users and producers. More generally the use of general and abstract knowledge in innovation opens up the possibility for a division of labour in inventive activity -the division of innovative labour. The implications for public policy, especially that on intellectual property rights, are discussed.

Does technological convergence imply convergence in markets? Evidence from the electronics industry

Abstract This paper uses data on new subsidiaries, acquisitions, collaborative agreements, and patents of the largest 32 US and European electronics firms during 1984–1992 to examine the relationships between technological and business diversification. We find that during the 1980s many firms focused on fewer businesses, but we find no evidence of greater technological focus. We argue that this is related to the fact that, in spite of technological convergence, electronics sectors still command highly industry- or even product-specific downstream assets. In addition, we find that business focus improved performance, but that better performance is also associated with greater technological diversification. We discuss some interpretation of this finding.

Competitive advantages from in-house scientific research: The US pharmaceutical industry in the 1980s *

The public nature of science may lead to the simplistic conclusion that firms can at no cost avail of the scientific knowledge generated by academia or other non-profit institutions. This paper offers empirical evidence that in-house scientific research raises the ability of the firms to take advantage of “public” science. Case studies of a few large US drug manufacturers show that firms with better in-house scientific research programs have exploited more effectively outside scientific information. Statistical analysis reinforces this conclusion. Using data on the 14 largest US-based drug manufacturers between 1973 and 1986, I find that company patents are positively correlated with the scientific publications of the firms even after controlling for the scale of R&D.

The Market for Patents in Europe

By using the PatVal-EU dataset we find that the most important determinant of patent licensing is firm size. Patent breadth, value, protection, and other factors suggested by the literature also have an impact, but not as important. In addition, most of these factors affect the willingness to license, but not whether a license actually takes place. We discuss why this suggests that there are transaction costs in the markets for technology. The issue is important because many potential licenses are not licensed suggesting that the markets for technology can be larger, with implied economic benefits.

In the footsteps of the Silicon Valley? Indian and Irish software in the international division of labour

This paper analyses the development of software in India and Ireland. The development patterns of the software industry in Ireland and India clearly show both the advantages and disadvantages of being a follower. The most obvious advantage is the ability to sustain growth without a broad based set of technical capabilities, at least initially. With the leaders creating and defining markets, and possibly even the business models, and the policy and technical infrastructure required, many uncertainties are greatly reduced. Moreover, in many instances, multinationals from the leading countries can catalyse growth and may even, as in Ireland, account for a substantial part of the initial growth. On the other hand, relatively narrow sources of competitive advantage imply that the firms in the follower industries tend to be similar in capabilities, with competition among them transferring the bulk of the benefits to customers overseas. Sophisticated and well established competitors located in the leading clusters stand in the way of followers moving up the value chain, leaving innovative firms to search for new niches, and ways to link to lead users. Moreover, clusters in the followers lack the thick vertical and horizontal links, that are important for knowledge spillovers, innovation and growth. However, our analysis, which s draws on the evidence collected in India and Ireland through two surveys of domestic firms and foreign-owned firms, also suggests that early success, narrowly based though it may be, can lay a foundation for future growth that is based more on innovation.

Specialized technology suppliers, international spillovers and investment: evidence from the chemical industry

Abstract In this paper we study how the development of specialized upstream technology suppliers in leading countries improves technology access and lowers investment costs for downstream firms in follower countries. We test this idea using a novel database covering all investments in chemical plants in less developed countries (LDCs) during the 1980s. We find that investments in chemical plants in the LDCs are greater, the greater is the number of technology suppliers that operate in the first world. A major contribution of this paper is to identify an important but understudied mechanism through which technology is made available.

Division of Labour and the Locus of Inventive Activity

This paper argues that modularity of knowledge andtechnologies has important implications for the locusof inventive activities. This is because modularityallows for a separation of the innovation process intwo main activities: The production of basic(standardised) modules, and their combination toproduce variants of technologies or product designsthat are better suited to the special needs ofindividual users or markets. This gives rise to adivision of labour whereby the production of moduleswill be performed by specialised upstream suppliers(who enjoy economies of scale), while the combinationof modules will be performed by firms furtherdownstream or by the users themselves. We then suggestthat this pattern can explain a variety of phenomenasuch as why users ’’co-produce‘‘ their innovations, andhow small regions can support innovative activitydespite the apparent efficiency advantage of largerregions.

The Market for Technology

This chapter reviews the growing literature on the “market for technology,” a broad term that denotes trade in technology disembodied from physical goods. The market for technology flourished during the nineteenth century in the United States. After several decades of relative decline, the market for technology has once again grown considerably in recent years, although the growth is uneven across sectors and across countries. Thus far, the literature has paid most attention to the supply of technology, and on the efficiency of market transactions in technology. A key contribution has been that the decision of firms to license depends on whether the revenues from licensing are higher than the rent-dissipation effect produced by increased competition in the licensors product markets. The literature has featured several factors that condition the tradeoff between licensing revenue and rent dissipation. For instance, general-purpose technologies enable the potential licensors to sell technology in product markets distant from the product operations of the licensors, and thus are more likely to be licensed. Another stream of research has focused on the factors, such as intellectual property protection, that condition the efficiency of licensing contracts. The study of the demand for external technology is less developed, and is an open area for future research. Another exciting area for future research is the relationship between the product market and the market for technology, of which a special but important case is the division of labor between technology specialists such as biotech firms, and their customers downstream, in this instance, pharmaceutical firms. The area in the most urgent need of attention is research on the consequences of the market of technology, on the rate and direction of inventive activity, and on productivity growth. This will also require a deeper understanding of the microfoundations of the market for technology.

The Impact of NSF Support for Basic Research In Economics

This paper studies the relationship between NSF funding and the publications of US economists using data on 1473 applications to NSF during 1985-1990, 414 of which were awarded a research grant. We first outline a basic methodology for assessing the impact of the NSF support for basic research in Economics. In doing so, we shall also point to key conceptual and measurement problems. Second, we provide empirical evidence about the factors that influence the NSF allocation decision, the effects of this decision on the production of publications, and the extent to which these effects differ among researchers at different stages of their career. (This abstract was borrowed from another version of this item.)