Stine Jessen Haakonsson

The Changing Governance Structures of the Global Pharmaceutical Value Chain

The pharmaceutical industry was originally led by vertically-integrated and technology-intensive transnational corporations (TNCs). The TNCs maintained production in their home countries with little foreign direct investment into the larger markets. In this sense, the industry was internationalised, but not yet globalised. With the implementation of the WTO TRIPs Agreement, the pharmaceutical industry became globalised and its value chain was reorganised into three different strands: a producer-driven strand for branded products, a buyer-driven strand for quality generics, and a strand for low-value generics which is not driven. This paper examines these changes through the lenses of GVC governance, suggesting a need to look for different dynamics of governance as they apply to different value chain strands.

Trips and Public Health: The Doha Declaration and Africa

The Doha Declaration on the TRIPs Agreement and Public Health (2001), aimed at improving access to medicines, especially for HIV/AIDS, malaria and tuberculosis in developing and least developed countries, has not yet been used for compulsory licences to import generic medicines or for expanding production for export to poor countries. By analysing HIV/AIDS treatment in Uganda, this article discusses the variety of TRIPs-related channels for ensuring drugs for domestic treatment, and argues that emphasising the restrictive nature of TRIPs provisions fails to grasp the scale of the obstacles involved. Lack of domestic resources leaves African countries dependent on donor financing, which in turn constrains their ability to exploit international trade provisions.

‘Learning by importing’ in global value chains: upgrading and South–South strategies in the Ugandan pharmaceutical industry

Drawing on global value chain analysis, this article discusses the possibilities for upgrading in a domestically oriented import-dependent industry. The pharmaceutical industry in Uganda consists of a large number of importers, nine of which have upgraded into assembly and four a step further into manufacturing. The industry upgrades by a process of ‘learning by importing’. Although not engaged with global buyers, pharmaceutical producers in Uganda are tied into the global pharmaceutical value chain by international linkages with their suppliers, mainly in India, from whom they access technology and intermediates for production. Hence, this industry is based on South–South networks for production of low-value pharmaceutical products. With the globalisation of the pharmaceutical industry, an increasing number of global lead firms are ceasing to manufacture these products. This study illustrates an alternative form of industrialisation and upgrading that has not been adequately considered in the development of the African pharmaceutical industry.

Configuration of technology networks in the wind turbine industry. A comparative study of technology management models in European and Chinese lead firms

Through a comparative analysis of technology management at the component level by wind turbine manufacturers from Europe and China, this article compares strategies of internalisation of core technology components by European and Chinese lead firms and outlines how different internalisation strategies impact the networks established by the two types of lead firms. Building on the concept of governance developed by the global value chain literature, the article identifies two different types of networks: European lead firms internalise core technology components and keep strong captive or relational ties with key component suppliers, whereas Chinese lead firms modularise and externalise core technology components, hence adopting a more flexible approach to technology management. The latter model mirrors a strategy of overcoming technological barriers by tapping into knowledge through global innovation networks. The article contributes to the network governance literature by introducing scales of component technology complexity and lead firm capabilities for understanding network constructs.

Offshoring of Innovation: Global Innovation Networks in the Danish Biotech Industry

This chapter is an investigation into the internationalization of innovation in the Danish food-related biotech industry. The process of the internationalization of innovation in food and ingredients into new markets has followed a similar path: first, the companies enter new markets with their products developed in the home economy; secondly, they increasingly adjust their products to the new markets; and thirdly, some of the more high-tech companies have developed international techno-scientific networks. These companies explain the development as a strategy for ‘tapping into new knowledge’ by collaborating with local research facilities and suppliers. The companies engage in various constructs of global innovation networks more or less simultaneously according to the type of technology. The type of engagement and entry mode relates to the host location. Similar companies develop different network constructs. Furthermore, companies face many difficulties in organizing innovation internationally. These challenges are dealt with through either virtual or physical centres of excellence. Communication and communication tools provide a key for companies to manage these centres, and new forms of qualifications are needed to facilitate this.

Understanding innovation spaces through emerging multinational enterprises in China: an explorative case study of a Chinese wind turbine manufacturer

This chapter firstly provides a theoretical framing to explicitly relate the entrepreneur (individual) with the venture (company) to the national innovation system in China. The proposed framework defines an innovation space as a multifaceted organism not restricted geographically; but rather seen as consisting of multiple levels, including institutional, organisational and geographical aspects. This chapter also provides empirical insights of this journey from entrepreneurial venture to multinational enterprise, by focusing upon the process of expansion and internationalization of research and development of the Chinese wind turbine manufacturer. In doing so, the chapter provides a thick case description, with many details about the development of this Chinese company in the renewable energy industry. Right from its establishment in 2006, the company has been emphasizing the importance of innovation for its activities.

The globalization of innovation in the Danish food industry: exploitation and exploration of emerging markets

The internationalization of innovation in the food industry is becoming increasingly oriented towards emerging markets. Innovative lead firms express a need for ‘tapping into knowledge’ by collaborating with research facilities, customers and suppliers in these new locations. European firms experience a push towards market expansion and knowledge generation directed at emerging markets. This results in new network constructs: global innovation networks. The aim of this paper is twofold. First, it identifies and outlines the determining factors behind the internationalization of innovation due to the need to access new markets and knowledge. This unfolds through strategies of exploitation and exploration. Second, it investigates the extent to which these strategies connect to position in the value chain and factors in the host economy. In this, the potential impact at the receiving end of the offshore equation is also addressed. Through an analysis of the Danish food industry, the paper concludes that the internationalization of innovation is an emergent phenomenon predominantly associated with exploration strategies. As much as exploitation may neither rely on nor develop local technological capabilities, exploration seeks and engages with local capabilities in the host economy.