Innovative capabilities and strategic alliances: Who is gaining what in the pharmaceutical industry?

Abstract

There have been several respected studies, from a capability-based perspective, pointing to the emergence of a new division of innovative labour in the pharmaceutical industry over the past decades. We still, however, miss empirical evidence relative to the implications of collaborative arrangements, like strategic alliances, for the innovative capabilities of companies involved in such collaborative arrangements. Drawing on a scrutiny of specialised databases (Galé, Dialog, and Business & Industry) covering the 1993–2003 period, this paper examines the entry and exit composition of innovative capabilities of 25 pharmaceutical companies' capabilities involved in such alliances. They are organised in three groups: (i) large pharmaceutical companies ('big-pharma'); (ii) large bio-pharmaceutical companies ('bio-pharma'); and (iii) small and research-intensive companies. The evidence shows the extent to which each of these three types companies, particularly large companies, benefit from these alliances in terms of absorption of strategic pieces of innovative capabilities. Such type of evidence is important to provide researchers, corporate managers, and policy makers with a concrete notion of some features of the nature of such division of innovative labour that occurs and the actual changes going on in the structure and organisation of innovative activities in the pharmaceutical industry.