Exploring Technological Change in the German Pharmaceutical Industry
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Exploring technological change in the German pharmaceutical industry A history-friendly model of technological change and technology adoption in a science-based industry Zur Erlangung des akademischen Grades eines Doktors der Wirtschaftswissenschaften (Dr. rer. pol.) von der Fakultät für Wirtschaftswissenschaften der Universität Fridericiana zu Karlsruhe genehmigte Dissertation von lic. rer. pol. Iciar Dominguez Lacasa Tag der mündlichen Prüfung: 17. Juli 2005 Referent: Prof. Dr. Hariolf Grupp Koreferent: Prof. Dr. Hagen Lindstädt E R K L Ä R U N G (gemäß §4, Abs. 4 der Promotionsordnung vom 21. April 1989) Ich versichere wahrheitsgemäß, die Dissertation bis auf die in der Abhandlung angegebe Hilfe selbständig angefertigt, alle benutzten Hilfsmittel vollständig und genau angegeben und genau kenntlich gemacht zu haben, was aus Arbeiten anderer und aus eigenen Veröffentlichungen unverändert oder mit Abänderungen entnommen wurde. Acknowledgements The driving ideas for this project came from a working paper my supervisor gave me from the Danish Research Unit for Industrial Dynamics (DRUID). Already on the first pages I found a family of economic terms that were quite new for an economist with a strong neo-classical background like me: complex dynamics, behavioural patterns, invention, innovation, selection mechanisms, simulation model etc. Both, my curiosity to find out more about these terms and my interest for the economics of technological change motivated the learning process I have been involved in the last 4 years. This document is the result of this intellectual adventure. There are a number of people that have been important and I would like to thank here. First, I would like to express my special thanks to Hariolf Grupp for providing me with enough intellectual freedom and guidance when I needed it to complete this effort. The support of Hagen Lindstädt and his comments in the final stage of my work have been very valuable as well. I am also grateful to the research programme "Innovation Culture in Germany", funded by the German Federal Ministry for Education and Research, for giving me the opportunity to develop my work in an interdisciplinary context. During the empirical field work with archival material I obtained guidance from Hans- Hermann Pogarell, Christina Sehnert, Christine Berghausen, Sabine Bernschneider- Reif and Manuela Kuhl. An important part of this project would have not been possible without the access to the historical archives of the corporations I have studied. Additionally, I have benefit from discussions and lectures during the European Doctoral Training Program ETIC 2001 organised by Patrick Llerena. I am especially grateful to Esben Sloth Andersen and to Marco Valente for their intellectual support and for teaching me how to develop a simulation model. Moreover, a Marie Curie Fellowship from the European Commission has given me the opportunity to participate in interesting seminars and obtain useful comments from the researchers at CESPRI at Bocconi University and from the members of the IKE Group at Aalborg University. Their influence can be found throughout the next pages. During my PhD I was very fortunate to work at the Fraunhofer Institute for Systems and Innovation Research (ISI) where I learnt a lot from Thomas Reiss and Ulrich Schmoch. My colleagues at the Emerging Technologies Department have supported me since the beginning of the project with exceptional working conditions and good humour. Stefan Wörner, Bernhard Bührlen and Ralf Lindner have given me stimulating comments on earlier drafts of my work. My literature requests had been greatly managed by Martina Fuchs-Blum and Silvia Rheinemann. Silke Just has strongly supported me with the final layout. It is a great pleasure to acknowledge their encouragement and support and to thank them for it. I would also like to thank the other PhD students at Fraunhofer ISI for their interest and encouragement during the project and especially in the days before my exam. Without their support I would have never been able to prepare a 30-minutes-talk for defending my work in July 2005. They have all been excellent colleagues and I have very much enjoyed working with them. My last words of thanks go to Christoph Bayer for distracting and inspiring me with his pioneer projects. Dealing with my mood in the in the last stages of my PhD was a fantastic achievement and I thank him for his patience. Iciar Dominguez Lacasa Karlsruhe, December 2005 I List of contents .........................................................................Page List of tables i List of figures iii 1 Introduction.................................................................................................1 1.1 Technological change in the pharmaceutical industry..................1 1.2 Technological change from an evolutionary perspective..............3 2 Theoretical and methodological framework.............................................7 2.1 Introduction ..................................................................................7 2.2 The building blocks of evolutionary economics ............................8 2.2.1 The Austrian School.....................................................................9 2.2.2 Institutional Economics: the legacy of Thorstein Veblen and the developments of new Institutional Economics...............10 2.2.3 Neo-Schumpeterian Economics: the work influenced by Schumpeter................................................................................11 2.3 A conceptualisation of the nature of technology.........................15 2.3.1 General principles to characterise technology ...........................17 2.4 Technological change from an evolutionary perspective............19 2.4.1 The emergence of technologies (or the search for alternative technological solutions and the creation of variety) .......................................................................................21 2.4.2 Technology diffusion (or the ex-post selection mechanisms in the process of technological change)................24 2.4.3 Taxonomies of technological change.........................................25 2.4.3.1 Taxonomies focusing on the direction of technological change and on its paradigmatic basis........................................26 2.4.3.2 Taxonomies focusing on the impact of technological change on organisational capabilities ........................................26 2.4.3.3 The impact of technological change on the whole economy ....................................................................................28 2.5 The firm in the process of technological change ........................29 II ...............................................................................Page 2.5.1 Theory of the firm in the Nelson and Winter approach .............. 29 2.5.2 The knowledge-based view to the theory of the firm ................. 31 2.5.2.1 The building blocks of a firm's knowledge base ........................ 31 2.5.2.2 Accumulation of knowledge for technological change: Organisational learning ............................................................. 32 2.5.2.3 Firm's performance in dynamic environments ........................... 33 2.6 Simulation models to explore technological change.................. 36 2.6.1 Simulation models in socio-economic research......................... 36 2.6.2 Value of simulation for the evolutionary approach to technological change................................................................. 37 2.6.3 The Nelson and Winter simulation models ................................ 40 2.6.4 Evolutionary history-friendly modelling...................................... 41 2.6.5 Examples of evolutionary history-friendly models ..................... 43 2.7 Towards a history-friendly model of technological change and technology adoption in the German pharmaceutical industry...................................................................................... 46 3 An appreciative theory of technological change and technology adoption in the German pharmaceutical industry during the 20th century ............................................................................ 51 3.1 Introduction ............................................................................... 51 3.2 Tracing the development of organic chemical synthesis and biotechnology ..................................................................... 52 3.2.1 Organic chemical synthesis....................................................... 55 3.2.2 Biotechnology............................................................................ 57 3.3 Technological change in the German pharmaceutical industry during the 20th century ................................................. 60 3.4 The recognition and exploitation of modern biotechnology by 4 German drug producers ............................. 70 3.4.1 Organisational technological capabilities in the second half of the 20th century.............................................................. 72 3.4.2 Research traditions ................................................................... 73 III ................................................................................Page 3.4.3 Attitudes towards the application of traditional biotechnology.............................................................................75 3.4.4 Investment in research and development ..................................77 3.4.5 Internal capabilities ....................................................................78