4.1 Introduction

CHAPTER-4

MORPHOLOGY OF LINKAGES

The definition of innovation by Schumpeter namely radical or incremental innovation

does not provide any clue as to how the innovation takes place at the firm level. An

understanding of the innovation requires a shift from studying innovation as a 'result' to

studying innovation as an 'activity' or 'process'. An improved understanding of the

innovation process could be gained by studying the linkages or interactions among the

actors in an innovation system. In fact establishing linkages is itself an innovation,

recognizing this fact the 3rd edition of Oslo Manual, 'Guidelines For Collecting And

Interpreting Innovation Data' (OECD 2005) has incorporated ic.teractions or collaborations

suitably for the empirical study of Innovation Surveys.

The study on National System of Innovation (NSI) by OECD (1997) has focused

mainly on four types of knowledge flows or interactions among actors and a variety of

approaches to measure these flows. The varied types of interactions or linkages considered

in this study are: i) interactions among enterprises or firms; ii) interaction among

enterprises; universities and public research laboratories; iii) diffusion of knowledge and

technology to firms and iv) movement of scientific personnel. Guided by the NSI

framework of OECD (1997), the present chapter imparts understanding of the varied

linkages or knowledge flows among the actors or case study firms in the Indian health

biotechnology innovation system.

99

The four case study Indian biophannaceutical firms studied are:

1) Panacea Biotech Public Ltd., Delhi; 2) Dabur Phanna Public Ltd., Ghaziabad; 3) Shantha Biotechnics Private Ltd., Hyderabad; and 4) Biocon Public Ltd., Bangalore.

The present chapter explores the broad characteristics or contours of the finn's

linkages such as their nature and extent, accessibility and sources of knowledge,

globalization of linkages and market and non-market relationships etc. An interesting point

of examination here was to see whether there exists the complimentarity between the market

and non-market interactions or linkages by ·the firms. This would imply testing the

'Schumpeter hypotheses in the NIS framework'. It involves exploring the complementarity

between the markets and non- market finn interactions to create market power or to have

hold on the market for ensuring innovation (see Nath 1993). It may be mentioned here that

the examination of linkages here pertains to the formal linkages only and the informal

linkages or social interactions are not a part of the present study. 1

Further, considering the heterogeneity among the firms as the key feature of the

innovation system (Nelson and Winter 1982; Teece and Pisano 1994; Metcalfe 1998 and

Malerba 2002; 2004) it would be interesting to analyze whether the case study firms differ

in terms of linkage characteristics? And, is the variation in the finn's linkage characteristics

shaped by the historical features? This entails exploring the 'path dependency' and

'technology trajectory' hypotheses as observed by some studies within the evolutionary

approach at the base of NSI framework.

Accordingly, the first section of the chapter discusses the firm's historical profile

1 Informal linkages relate mainly to the human interactions (or social interactions) which are behind the success of the knowledge flows among the actors. These are responsible for the build up of social capital. (for details see Agapitova 2006, Powell 1996 )

100

described under the following categories: macro dimensions, strategic production/ market

attributes and inter-firm competitive indicators; the second section presents the firm's

linkage characteristics in terms of nationality and linkage sub-types defined as per the

broad groups: i) Firm-Firm interactions, ii) Firm- Institution interactions, and iii) Others.

The third section . discusses the path dependency being observed in the linkage

characteristics of firms while the concluding section discusses a comprehensive dimension

of the firms by combining the historical profile and the linkages characteristics and presents

broad observations.

4.2 Brief Historical Profile of Firms

The historical profile of firms is described under three categories: macro

dimensions, strategic marketing/production attributes and inter-firm competitive indicators.

Table 4-1 gives the macro dimensions of the case study firms, a replica of Table 1-9 (page

27) and is once again reproduced for lucidity.

Table 4-1 Firm's Macro Dimensions

Firm, Place Establish- Business Biotechnology Product Segment Category & State ment Promoter Integration in

Year to the business (Year) Biotech. Based Other S~ment

Panacea Biotech Public 1984 family business 1993 rONA Vaccines, new Pain management, Ltd., Okhla, combined Vaccines Diabetes, Delhi

Dabur Pharma Public 1883 ($) family business 1994 new oncology drugs (under Cardiovascular, Ltd., Ghaziabad , development) anti-diabetic, anti-Uttar Pradesh bacterial

Shantha Biotechnics 1993 first generation 1993 rONA Vaccines, Pvt. Ltd., Hyderabad, entrepreneur New combined Vaccines, Andhra Pradesh • Cancer drug, Growth --

hormone, MAB

Biocon Public Ltd., 1978 first generation 1978 Enzymes, Statins, Bangalore, entrepreneur rONA- MAB, --Kama taka •• EPO, Streptokinase, Insulin

($) - Dabur pharma was incorporated in 2003 to look after mainly the specialized Oncology Segment. Dabur started working in the Oncology area in 1991

*-Started as a Indo-Oman Joint Venture (50:50) **- Started as joint venture with Ireland based Biocon Biopharmaceuticals Ltd. MAB- Monoclonal antibodies; rDNA- recombinant DNA

101

The Table 4.1 provides a comparative overview of the firms macro dimensions in

terms of their age or incorporation year, location, legal status, integration of biotechnology

application year and product segment category. It is remarkable to observe the heterogeneity

among the case study firms in terms of varied macro dimensions. Firstly, the firms are

located in different regions or bio-clusters in the country such as Bangalore, Hyderabad,

Delhi or National Capital Region (NCR) having different establishment years ranging from

1883-1993. Secondly, the integration of the biotechnology applications in the health

domain by the firms started mainly during 1990s except for the Biocon2 in 1978. Among the

four study firms, the firms Panacea and Dabur advanced their pharmaceutical 'family

businesses' with the integration of biotechnology while the Shantha and Biocon, two first

generation entrepreneur firms established their joint venture companies to start with their

biotechnology businesses. The Table 4.2 below describes the strategic production and

marketing attributes of the case study firms.

Table 4-2 Firms' strategic production and marketing attributes Firm Subsidiaries Joint Venture M~nufacturing

Unit(s) location@

Panacea Radicura & Co. Ltd( M/s Heaber Biotech Ltd. Cuba ( Okhla (Delhi ), Chandigarh Delhi) , Best On Health 50:50) ; Chiron Corporation UK ( (Punjab), Baddi (HP) Ltd.(Delhi) 50:50)

Dabur Dabur Bordon (UK); Oncology -- Kalyani ( WB), Sahibabad (UP) Pic( UK)

Shantha Shantha West Inc(USA)# #

Medchel, Hyderabad (AP)

Biocon Syngene Inti. Pvt. Ltd Biocon Biopharmaceuticals Bommasundra, Bangalore Pvt. Ltd (51 :49) ( Kamataka)

Clinigene Inti Pvt. Ltd with CIMAB SA , Cuba

@-The Manufactunng umts/locatton are for not exclustvely for the btopharmaceuttcal products but for the entire product being manufactured by the company. The manufacturing faci,lities comply with the cGMP standards having regulatory approvals for the production from US, European and other markets.

#-a joint venture with East West laboratories (USA)

2 The finn Biocon started in 1978 with the low end biotechnology application such as fermentation process in the area o(

enzymes, the 'modem biotechnology' application was started by the company in late 1990s only with the production of recombinant insulin. The 'modern biotechnology' involves the application ofr-DNA, cell fusion and novel bioprocess techniques.

102

Table 4.2 shows that firms have established both nationaVoverseas subsidiaries and

joint ventures with foreign firms to have strong foothold both in the national and the global

market. Further, the multiple manufacturing facilities spread across various regions in the

country and even at foreign locations shows the trend of the firms to avail the benefits of the

government policies/incentives as well as to have geographic expansion of their product in

the nationaVglobal market. An important question which arises is that whether some of the

joint ventures/subsidiaries are also part of the linkages being established by the firms? It

will be examined under the linkage section of the chapter (See section 4.3.2.2, pliO). The

Table 4.3 reveals the competitive indicators of the firms including their present/ future

scenario in the core health and disease segments.

Table 4-3 Inter-Firm competitive Indicators

Firm Age Rank Competition Exports Health Segment Disease Segment as

STO(%) 2006 2005 2004 2003 Present Future Present Future 2004-05

Scenario Scenario* Scenario Scenario*

Panacea New 3 3 3 2 Vaccines Vaccines Infectious Infectious 67.0% Therapeutics Therapeutics diseases- diseases

Hair growth Shantha New 14 13 17 20 Vaccines Vaccines, Infectious Infectious 69.0%

Arrival Therapeutics Therapeutics diseases diseases Diagnostics Diagnostics Diabetes

Oncology Cardiovascular

Dabur Oldest -- -- -- -- Therapeutics Therapeutics Oncology Oncology 44.3% Vaccines, Diagnostics

Biocon Old 2 1 I 1 Therapeutics Therapeutics Enzymes Enzymes 54.6% Vaccines, Cardiovas Diabetes Diagnostics cular Cardiovascular

Diabetes Oncology

Note: The domestic ranking of the biotech compames IS as per the BioSpectrum-ABLE survey, started first m 2003, based on the biotech product revenues for the respective years (see BioSpectrum various issues). *Future scenario here relates to the year 2010.

-- :The firm was not a part of the BioSpectrum-ABLE survey, hence no comparative ranking possible. STO: Sales Turnover

It may be seen from the above table that all the case study firms except Dabur

(ranking not available) come under the Top 20 category of Indian Biopharmaceutical firms.

103

In the present scenario, the firms are able to maintain their position (ranking) in the market

by working in a very selective or specialized health/ disease segment. The specialized

segments include Polio Vaccine in case of Panacea, Hepatitis-B Vaccine in case of Shantha

and Statins/Enzymes for Biocon which are largely influenced by the institutional and global

demand. Dabur has the plant extract based drug/formulation in the_oncology segment which

is exported globally.

Table 4.3 shows that all the firms irrespective of their age, have exports as their

major thrust area of operation (exports formed 44-69 % of the Sales Turnover). The firm

Panacea and Shantha are presently competitors as they are working in almost similar health

and disease segments and having a common product such as Hepatitis-B Vaccine.

Interestingly, Dabur and Biocon have a unique product portfolio among the case study

firms. Dabur has been in the drug discovery or innovative research in the specialized

segment of oncology for the last 15 years. It appears that in the near future, the firms are

going to face intense competition both in the domestic and global markets as their health

and disease segment are coming together or converging.

An important question which arises here is about the broad and diverse historical

features of the firms in shaping the linkage attributes? And, further the role of the linkages

in shaping the technology and market environment of the firms to face and sustain

competition. These issues are being addressed in the next section.

4.3 Linkages of Firms in an Innovation system

Firms are the key actors in an innovation system involved in the generation,

adoption and use of new technologies leading to innovation, production and sale of sectoral

104

products (Malerba 2004). The general pattern of linkages or knowledge flows among the

case study actors or firms in an innovation system frame could be broadly categorized as-

i) Firm-Firm ii) Firm- Institutions or Public Research Organisations, and

iii) Others

The 'Firm -Firm' category linkages represents the linkages of the case study firms

with other firms to gain access to new technology for new product development,

complimentary skills (related to new product development and production), new market,

import of raw material and also collaborative or joint R&D etc. 'Firm-Institutions'3

category linkages represents the linkages of the case study firms with the Public Research

Organisations to gain access to new knowledge , skills for the product development , access

to /usage of advanced facilities, collaborative R&D projects etc. The category also includes

the mobility of the scientific personnel from the Public Research Organisations to the study

firms. The 'Others' category represents the interactions/ linkages of firms with government

ministries/department such as DBT, DST, TDB etc, Technology Information Companies or

Information Networks, Industry Associations /Promotional Agencies such as Confederation

of Indian Industries (CII), Association of Biotech Led Enterprises (ABLE) for taking loans,

R&D recognition etc. All the above categories have both national and international linkage

dimensions.

The next section discusses first the 'Firm-Firm' linkages while the 'Firm - Public

Research Organisations' and 'Other' categories interactions are considered subsequently in

the forthcoming sub-sections. Before discussing the 'Firm-Firm' linkages it would be

appropriate to visit the concept of linkages in the literature and the various definitions used

in the study.

3 Institutions- includes also the interactions with the medical institutions for the clinical trials facility.

105

4.3.1 Linkages in the context of Innovation

Linkages represent the initiatives taken by the firms to access from external sources

new technology, new knowledge or R&D; contract/outsource R&D; add new products to

the product portfolio; stimulate exports; enhance production capacity, etc. and this may take

place through various channels or linkage sub-types such as in-licensing, product

development and expansion, joint manufacturing, mergers and acquisition etc.

In the literature, the term "alliances" or "linkages"4 refer quite comprehensively to

any formal collaborative relation between independent firms that constraints ex ante their

future conducts and may pertain to any sphere of firm's activity1 (see Colombo et al 2006,

among others Contractor and Lorange 1988; Williamson 1991; Hagedoom 1993;

Hagedoom and Schakenraad 1994; Gulati 1995; Oxley 1997; Colombo 2003). Further, the

seminal work by Teece (1986) inspired by the resource and competence-based views

regards alliances as an effective mechanism allowing to combine the technological

capabilities of innovative firms with the specialized complementary assets possessed by

other firms so as to obtain synergistic gains (see among others Kogut 1988; Das and Teng

2000; Grant and Baden Fuller 2004). In the present study, the firms interactions or linkages

e~taillargely three dimensions namely - technological, production and marketing along the

innovation path/chain. The three dimensions cover the following features:

1) Technological linkages: The technological linkages describe mainly the accesses to

technology and new knowledge by the firm to build/enhance the technological

capability in terms of R&D, skill development, new products, and new processes or

their improvements, raw materials, import substitutions etc. Further, it involves various

4 The term alliances, linkages, interactions and collaborations are being used interchangeably in the study.

106

linkage sub-types such as technology in-licensing, collaborative R&D, joint venture,

contract R&D and clinical trials.

2) Production linkages: This relates to linkages having features such as up

gradation/expansion of production facilities to produce new products, modernization of

plants for quality certification, relocation of plants, setting up of new plants, new

production methods leading to production efficiency etc.

3) Marketing Linkages: This relates to linkages having features such as geographic

expansion of the products, selling others products, expansion of the product portfolio,

entering new market to leverage logistics, cost advantages etc.

Moreover, independently of the content of the collaboration (either technological or

production or marketing), alliance partners may resort to an equity governance structure (i.e.

equity joint ventures and acquisitions of a minority stake) or to a contractual one, either of

bilateral (as in cross-licensing) or unilateral (as in a simple license) type5·

The production and the marketing linkages have no further sub-types or in other

·words they are their own sub-type. The next section shall analyze in depth the 'Firm-Firm'

category of linkages. The nature of the linkages mainly their nationality dimension will also

be studied along with the various types and sub-types.

4.3.2 Firm-Firm linkage characteristics

An in-depth analysis of the 'Firm-Firm' category linkages of the case study firms is

depicted below. This section discusses the firm linkages, the linkage sub-types, the

nationality dimension and their implications on the health biotechnology innovation.

5 For a detailed discussion of the different alliance governance modes see Oxley (1997, pp. 389--392).

107

4.3.2.1 Firm Linkages: period and nationality dimension

Table 4.4 below shows the firm-wise linkages, the linkage period representing the

period during which the firms have pursued biotechnology activities6 and the nationality

status of the linkages.

Table 4-4 Firm Linkages by Period and Nationality

Case Study Linkage Number of Linkages FirmS Period National International

[1] [2]

Panacea (1984) 1994-2005 2 12

Shantha (1993) 1993-2005 5 10 Dabur (1884) 1991-2005 + 4 1

Biocon (1978) 1978-2005# 4 7

Total 15 30 Note: Figure m the () md1cate the establishment year of the finn.

+ The finn entered the oncology segment in 1991 #during the period 1978-1990, only one linkage was observed

Total [1+2]

14

15

5

11 45

It is clear from the Table 4-4 that the linkage activity of the firms mainly started in

the early 1990s despite the heterogeneity in the establishment year of the firms. The prime

reason being that the integration of the biotechnology application in to the pharmaceutical

domain is of recent origin in Indian context, which gained momentum in 1990s (Ramani

2004, Arora 2005).

It may be seen from Fig. 4-1, that out of the total45 firm linkages (100%), the firm

Shantha accounts for the highest, 34% of the linkages followed by the Panacea 31%, Biocon

24% and the least 11% being accounted by the firm·Dabur.

6 The linkage period is the period of the integration of biotechnology domain in to the main business activity by the firms covered till 2005.

108

D

24%

Firm-Firm Linkages Distribution

D Dabur

11% \

• Panacea 31%

Fig 4-1

1!1 Shantha

34%

The recent ly established firms such as Shantha and Panacea exhib ited more linkages

to develop capabilities from external sources, as compared to the older firms such as Dabur

and Biocon having high re liance on their internal capabilities.

Q) Cl ro c Q) (.) .... Q)

Cl.

Firm-wise National and International Linkages

100 -.-------------------------------.

80

60

40

20

0

Panacea Shantha Dabur Biocon Total

I • National • International

Fig 4-2

Fig 4-2 shows an overall dominance of internat ional linkages comprising of nearly

2/3 rd or 67% of the total linkages. The international linkages are dominant across the firms

with the exception of the firm Dabur. Firm-wise, Panacea exhibited the highest, 86% of the

109

l

international linkages while in contrast the firm Dabur demonstrated the highest, 80% of the

national linkages respectively.

Interestingly, on analyzing further, the fi rm linkages by the nationality status

(See Fig. 4-3), it is observed that the finn Dabur accounts for 27% of the total national

linkages while its contribution is merely 3% to the total international linkages. On the other

hand, the fi rm Panacea accounts for 13% of the total national linkages and 40% of the

international linkages.

Linkage of firms by Nationality Status Fig 4-3

100 100 100

75 Q) C> <11 c 50 Q) u .... Q)

0... 25

0 National International

I • Panacea • Shantha 0 Dabur c Biocon • Total J

The percentage share of the linkages of the two remaining firms namely Shantha and

Biocon, remained almost the same in both the national and international linkages category.

The finn linkages contribution or proportion is not uniform across the nationality

dimension, a disproportionate trend is observed in case of Panacea and Dabur while a more

balanced trend is observed in case of Shantha and Biocon.

4.3.2.2 Firm Linkages and their Sub-types

Table 4.5 below shows the case study firms varied linkages categorized under the

three dimensions mainly Technological, Production and Marketing. The Technological

110

linkages further covers the sub-types such as technology in-licensing, collaborative R&D,

contract R&D, joint venture and clinical trials.

Table 4-5 Firm linkages and their Sub-Types (Number)

Linkage Sub-Types Study ----- ------------------I------------------------- ------- -- ll-- --Ill--Firms Total

Tech.- Colla b. Joint Contract Clinical Prod. Market In-icense R&D Venture R&D• Trials •

(2+ .. +8)

(1) (2) (3) (4) (5) (6) (7)- (8) (9)

Panacea IO 4 3 I 2 8 9 37

Shantha 7 4 3 I 3 5 9 32

Dabur - - - 4 - - I 5

Biocon 7 6 4 3 3 7 6 36

Total 24 14 10 9 8 20 25 110 Note : One linkage may have many linkage sub- types, hence the total hnkage sub-types will be greater than the total linkages. *- includes Contract Manufacturing The production and marketing linkages have no further sub-grouping and hence the production/marketing linkages are itself their sub-type. 1- Technological linkages; II- Production linkages; III- Marketing linkages.

It may be seen that a total of 45 linkages established by the four case study firms

(See Table 4-4) translated in to a total of 110 linkage sub-types spread across the innovation

chain. The distribution of the firm linkages sub-types (See Fig. 4-4) reveals that firms are

interacting or establishing linkages with external firms through the various modes or sub-

types, the most prefen:ed being the 'marketing'(23%) and 'technology in-licensing' (22%)

accounting together for 45%, followed by 'production' ( 18%), 'collaborative R&D' (13%)

and 'joint venture'(9%) 'contract R&D' (8%)" and 'clinical trials' (7%).

111

Firm Linkages by Sub-types

Production 18%

Marketing 23%

Clinical trials 7% R&D

Contract 8%

Fig 4-4

Tech.-In-license

22%

Collaborative R&D

Joint Venture

9%

13%

The presence of the various firm linkage sub-types shows that the linkages among

the firms involve both the technological (non-market) and non-technological (market)

interactions7• The firms have established linkages at various stages of the health

biotechnology innovation chain for the development of new drugs and their

commercialization.

Further the, firm linkage sub-types dimension (See Fig.4-5 and Fig 4-6) reveal that

except the firm Dabur, the other three firm s exhibited all the linkage sub-types namely

technology in-licensing, collaborative R&D, joint venture, contract R&D, production and

marketing, though with varying intensities. The fi rm Dabur exhibited mainly the contract

R&D and marketing linkages.

7 It may be noted that out of the total II 0 varied linkage sub-types, around 60 % of them fa ll under the technological linkages while 40 % of them belong to the non-technological or production/marketing linkages. This broad categorization has the limitations that many of the sub-type linkages such as Joint venture or collaborative R&D are also applicable/ extended to the production/marketing as well , but the same have been counted once only under the technological linkages category.

11 2

<I> 0> ro c <I> (.) ..... <I> c..

Firm-wise linkages by sub-types

100

80

60

40

20

0 Panacea Shantha Dabur Biocon Total

Firms

Fig 4-5

• Market

o Prod. •

• Clinica l trials

D Contract* R&D

D Joint Venture

• Collab. R&D

• Tech.- In-license

Though, technology in-licensing and marketing appeared as the most preferred

linkage sub-types among the firms, the clinica l trials have emerged as the new domain of

technological linkage activity with the firm s. The conduct of the clinical trials linkages by

the firms shows the innovative behavior of the firms to launch a new drug or an improved

version of the existing drug in the market. Further, the clin ical trials activity is also pursued

by the firm as a part of the contract R&D, collaborative R&D and joint venture sub-type

linkages as well.

- Linkage sub-types by firms ~ 0 -------, - I o I

<I> 0>

80

ro so c <I> E 4o <I>

c.. 20

Market

113

Cl Biocon

D Dabur

• Shantha

• Panacea

The presence of the contract R&D linkages is reflective of the firm's internal

capabilities and resources to perform certain specialized tasks. Fig 4-6 shows that the early

established firms such as Dabur and Biocon possess relatively higher internal capabilities to

undertake contract R&D than the other study firms.

So far, the firm linkages and their sub-types have been discussed, in the next section,

the firm sub-types would be further studied in depth along with their nationality dimension.

4.3.2.3 Firm linkage Sub-Types and Nationality Dimension

Table 4-6 Firm linkages Sub-Types by Nationality (Number)

Linkage Types Study ----- ----------------------1--------------------------------------------------------- -- -- II------ ---- III----Firms

Tech.- Collaborative Joint Contract Clinical Production Market In-license R&D Venture R&D* Trials *

Nat. Inti. Nat. Inti. Nat. Inti. Nat. Inti. Nat. Inti. Nat. Inti. Nat. Inti.

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14)

Panacea 2 8 - 4 - 3 - 1 - 2 2 6 2 7

Shantha 3 4 2 2 2 1 - 1 1 2 2 3 3 6

Dabur - - - - - - 4 - - - - - - 1

Biocon 1 6 1 5 1 3 1 2 - 3 1 6 1 5

Total 6 18 3 11 3 7 5 4 1 7 5 15 6 19

Grand Total= (A+B) = 110 Note: (A)= 1+3+5+7+9+11+13; (B)= 2+4+6+8+10+12+14

1- Techno1ogicallinkages; II- Production linkages; III- Marketing linkages Nat. -National; Int. -International

* includes Contract Manufacturing

Total

Nat.

(A)

6

13

4

6

29

The Table 4.6 presents the categorization of a total of 110 linkage sub-types of firms

by the nationality dimension, which also encompasses the firms' broad categories of

linkages such as technology, production and marketing linkages. The firm-wise linkage sub-

types by nationality may be seen in Figs. 4-7, 4-8, 4-9 and 4-10.

114

Inti.

(B)

31

19

1

30

81

100

Q) 80

Ol 60 ro c 40 Q) (.) 20 ..._ Q)

0 Cl...

Panacea linkage sub-types by nationality

Tech Collab. In-license R&D I Jt Venture Contract*

R&D Clinical trials

Fig 4-7

Prod. Market

Fig. 4-7 shows that the Panacea' s linkage sub-types have strong global orientation. The firm sub-types linkages namely R&D collaboration, joint venture, contract R&D and clinical trials being truly global in nature.

Q) Ol ro c Q)

~ Q)

Cl...

Shantha linkage sub-types by nationality

100 .--------------------------------

Tech Collab. In-license R&D I Jt Venture Contract*

R&D Clinical trials

Fig 4-8

Prod. Market

Fig 4-8 shows that the firm Shantha has truly global contract R&D linkages. The national feature dominates in the joint venture linkage sub-type as compared to the global dimension in other linkage sub-types.

115

Dabur linkage sub-types by nationality

100 ~---------------------­

~ 80 +---------------------------C'O c 60 +-----------------Q) e 40 +-------------«> a_ 20 +-------------

0 +----r------r-------,---,------,-

Nat. Int. Nat. Int. Nat.

Tech In-license

Collab. R&D

Jt Venture Contract* R&D

Clinical trials

Fig 4-9

* Prod. Market

Fig. 4-9 shows that the Dabur has only two linkage sub-types. The national dimension being prevalent in the R&D contract linkages while the global dimension in the marketing linkages.

100-

80 -

Q) 60 -Ol C'O 40 c Q) 20 (.) .... Q) 0 a_

Tech.­

ln-license

Biocon linkage sub-types by nationality

Collab. Jt Venture Contract* Clinical R&D R&D trials

Fig 4-10

Market Prod.

Fig. 4-10 shows that the firm Biocon is dominated by a global dimension in all the linkages sub-types with the cl inical trial linkages being tru ly global in nature.

llh

Distribution of linkage sub-types by nationality Fig 4-11

Markel-Int.

Market-Nat

5%

Prod .-lnt.

14%

Prod-Nat.

17%

5% ----

Clinical trials-In!.

6%

Clinical trials-Nat.

1%

ln-licenc-Nat.

\

5%

\ \

ln-licenc-lnt

16%

Collab R&D-Nat

3%

Collab R&D-In!.

10%

Joint Ven-Nat.

3%

Joint Ven-In!.

6%

Contract R&D-In!. Contract R&D-Nat Total linkage Sub-types=11 0 4% 5%

Fig. 4-11 and Fig. 4- 12 give the percentage distribution of various linkage sub-types

by the nationality dimension. It is clear from the two graphs that the popular linkage sub-

types such as technology in-licensing, marketing, production, collaborative R&D etc. are

dominated by global dimension while the national dimension is being dominated by the

contract R&D linkage sub-type.

60

40

20

0

Linkage sub-types by Nationality Fig 4-12

Tech In- Collab Joint Contract Clinical A"oduct 11!1arket Total license R&D Venture R&D Trials

11 7

Further the Fig. 4-1 3 below shows that the fi rm Dabur is mainly responsible for the

contract R&D at the national level.

Firm-wise linkage sub-types by nationality

100

80 Q) Ol 60 "' c Q) u 40 v a..

20

0

Panacea Shantha Dabur Biocon

Fi2: 4-13

• Market

IJ Prod .

• Cl-trials

IJ Cont-R&D

o Jt-Venture

• Collab-R&D

• Tech-in-licence

The analysis of the linkages reveals that the fi rm developed linkages along the entire health

biotechnology innovation chain comprising of technological, marketing and .production. Both

technology and marketing linkages were the most preferred types among the firms. In case of

linkage sub-types, the technology in- licensing was most preferred among the three firms namely

Panacea, Shantha and Biocon whereas; the contract R&D and marketing were predominant in case

of the firm Dabur (See Table 4-7).

Table 4-7. Top 3 Linkage Sub-Types among the study firms

Firm Linkage Sub-types (Rank*)

Tech. [n-licensing Contract R&D Production

Panacea I - 3 Shantha 2 - 3

Dabur - I -

Biocon I - I

Note: Rank IS as per the proportion of linkages m each of the sub-type category. ' -' Not Appl icable

118

Marketing

2 I

2

I

In fact all the ftrms except Dabur ( see Fig 4-5 and Fig 4-6 ) have made strategic use of all

the linkage sub-types, namely, Technology in-licensing, Collaborative R&D, Joint venture, Contract

R&D, Production and Marketing, albeit in varying intensities. The Table 4-7 shows that firms

differ in terms of the linkage sub-types preferences for e.g. in case of Panacea the

'technology in-licensing' linkage is ranked 1st, for Shantha 'marketing' is ranked 18\ for

Biocon it's tie among the three sub-types; the technology in-licensing, production and

marketing all being ranked 1st , while in case of Dabur, the contract R&D is ranked 1st. The

presence of both technological and non-technological linkages as revealed by the choice/

rank among the case study firms shows the overall capability or complementary assets

mobilized by firms for commercializing an innovation successfully (See also Pavitt 1998).

The technology acquisition ( preferably international) is much more preferred by the firms

as compared to the long term or stable alliances such as collaborative R&D or joint venture

as the shortest route to have early products and profits. Having delineated 'firm-firm'

linkages the forthcoming section explores the interaction or linkages of the firms with the

'public research organizations' and 'other' government organizations/departments.

4.4 Linkages with Public Research Organisations and other Government Departments

The success of the biotechnology advanced nations such as USA, UK etc shows that

the growth of biotechnology industry is associated with the high dependence on the

scientific knowledge of the public research organisations and the role of the government.

The Government agencies/ departments have been associated in coordinating the advanced

research programmes and providing enabling environment in terms of new institutional

arrangements and policies for financing innovations, technology transfer and greater

coupling between academic research and industrial application and of academic research

with market opportunities, better incentives to become entrepreneur etc. The trend of

publication and the patents indicators reveal a strong hold of the technological capabilities

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possessed by the public research organisations in the health biotechnology globally and the

same holds true for India as well (see Tables 1-4 to 1-8, Chapter-1).

It is quite well known that the Indian government has played a key role in building

capacities and capabilities in terms of research infrastructure, human resources, fiscal/ R&D

incentives and R&D support by synergizing the various actors through new initiatives and

programs such as DPRP (DST), NIMTLI (CSIR), etc. aimed at utilizing the results of the

public research institutions for commercialization. The question now arises whether the

study firms have benefited from the knowledge expertise or infrastructure facilities of the

public research organisations and other government initiatives or instruments in the process

of their technological development?

The public research organizations comprising of public research labs and

universities, not only produce new knowledge but are also source of new methods,

instrumentation and valuable skills residing in the human resource apart from being a

repository of the scientific and technical knowledge in the specific field. The quality of the

public research organizations and its links to the industry as per (OECD 1997)8 are one of

the most important national assets for innovation.

Evidence from the literature (EPOHITE 2003, Bhattacharya and Arora 2007)

suggests that the private enterprises or firms generally collaborate with the public sector

organizations to gain acce~s to specific, complementary expertise (basic and applied); enter

new research areas with low financial risk, access to facilities, tools, additional funds, new

skilled manpower or scientific networks; for clinical trials etc.

8 The linkages between the public and private interactions are representative of the knowledge flows in national biotechnology innovation system.

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In this regard, the present section traces the interactions or linkages of the case study

firms with the public research organisations and other government agencies/institutions

including instruments responsible for fostering the health biotechnology innovation. Table

4-8 shows the interaction of firms with various government organizations for different

aspects of health biotechnology innovation activities in the country.

T I 4 8 F' abe - Irms I . hG nteraction wit overnment 0 r_gamzations ~ I or ti nnova on Firm Technology Transfer Venture Capital Research &

Development

Incentives Support

BCIL NDRC DBT TDB DST Other DSIR PSROs Panacea * * * * Shantha * * * * * Dabur * * * * Biocon * * *

The interactions of firms with the government agenCies/ institutions for the

knowledge support and R&D incentives have been a significant feature. However, a few

firms also interacted with the government established technology transfer agencies such as

National Research and Development Corporation (NRDC), Biotechnology Consortium of

India Limited (BCIL) and Venture Capital agencies such as Technology Development

Board (TDB) and the Drugs and Pharmaceuticals Research programme (DPRP),

Department of Science and Technology (DST)9. The finn Shantha Biotechnics Ltd. is the

first commercial enterprise which received the loan of Rs 8.5 crores from the Technology

Development Board (TDB) for the indigenous development and commercialisation of

Hepatitis-B vaccine. The company later also received the TDB loan for the indigenous

development and commercialisation of tetravalent combination vaccine 'DPT' and

'Hepatitis-B'. Similarly, the finn Biocon Ltd also received a TDB loan amounting toRs 9.7

Crores for setting up the fermentation facility for the production of an immuno-suppressant,

9 It may be noted that except NRDC other agencies namely BCIL was established in early 90s while the TDB in late 80s and DPRP programme DST started giving soft loans in early 2000.

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Mycophelonate Mofetil based on the 'PlaFractor' technology developed indigenously (See

www.tdb.gov.in). Also, the study firms have availed other benefits associated with the

government recognition such as R&D tax exemption, excise exemption on the import of

equipments etc. The interactions of the firms with different government

organisations/institutions have been a significant step in the path of their evolution to keep

pace with the requirements in the biotechnology innovation.

Further, Table 4-9 shows the interaction of firms Panacea, Shantha, Dabur, and

Biocon with large number of public research organisations in the country and few

international institutions/agencies as well in the process of building their innovation

capabilities. The finn Dabur is observed to have a large number of linkages with the public

research organisations, as it is primarily involved in the 'drug discovery research' related to

oncology. It may further be interesting to mention here that among the case study firms,

only Dabur has linkages involving multiple public research organisations working in a

network mode on a specific discovery research projects as compared to other firms

functioning mainly in the generics research activity.

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Table 4-9 Firm Research Linkages with Public Research Orgamsations

STUDY FIRMS

Panacea Biotech, New Delhi

Shanta Biotechnics, Hyderabad

Dabur Pharma, Gaziabhad

Biocon, Bangalore

Public Research Organisations National International

Nil, New Delhi JNU, New Delhi Delhi Univ

CCMB Hyderabad NIN, Hyderabad DBT, New Delhi Nil, New Delhi liSe, Bangalore JNU, New Delhi BARC, Mumbai Delhi Univ JNCSAR, Bangalore IICT, Hyderabad CCMB, Hyderabad NCL, Pune IICB, Kolkata University of Hyderabad, Hyderabad JNCSAR, Bangalore Manipal Hospital, Manipal CDRI, Lucknow liSe, Bangalore TMC,Mumbai Rajiv Gandhi Cancer Institute & Research Centre (RGCI&RC), New Delhi Sri Satya Sai Institute of Higher Medical Sciences (SSSIHMS), Bangalore lACS, Kolkata Institute of Nuclear Medicine & Allied Sciences, New Delhi Saurashtra University, Rajkot National Medicinal Plants Board, Deptt. of ISM&H, MoHFW,

IISc,Bangalore CCMB Hyderabad IBAB , Bangalore

NIH (USA)

Emory Univ ( US) Aeras Global TB

Vaccine Foundation

Karolinska Instt, Sweden

The various objectives of firm collaboration with public research organisations are

further delineated in to varied linkages types (See Table 4-10). It 1s observed that all the

firms are signifi.cantly involved in the research and development or new knowledge

interactions with various public research organisations while equally preferred are the

linkages related to consultancy and the usage of the advanced facilities. The Scientific

mobility form the public research organisations also appeared to be an important linkage

factor or type.

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Table 4-10 Types of linkages with public research organisations

Firm Public Research Organisations Linkage Types

Scientist R&D Consultancy Facilities Mobility

Sbantba * * * * Panacea * * Dabur * * * * Biocon * * *

The R&D linkages of firms are generally of 'long-term' nature as compared to the

'short-term' such as consultancy or usage of facilities developed mainly to overcome the

shooting problems in the innovation process. The long-term R&D linkages have been

associated with collaborative or joint projects including contract research with the premier

universities and research labs such as the firm Panacea Biotech, New Delhi with JNU, New

Delhi for the development and production of Anthrax Vaccine and with National Institute of

Immunology (Nil), New Delhi, for the development and production of Japanese

Encephalitis Vaccine.

Further, it is pertinent to mention here that the government supported Public-Private

Partnerships (PPP) are largely responsible for catalysing the long-term R&D programmes

while there are only few joint projects being sponsored solely by the industry to universities

or research labs. For instance, the firm Dabur has more than 20 collaborative joint projects

mostly synergized through the Government supported programme DPRP, DST leading its

entry in to the professional research network including access and use of advanced research

facilities (See Table 4-9). Similarly, Shantha Biotechnics, Hyderabad availed the state-of-

the-art facilities such as Electron Microscopy, Cell Culture Facility, Nucleic Acid Synthesis,

Protein Analysis etc in the area of molecular biology including scientific expertise at

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CCMB, Hyderabad for the development of the country's first recombinant DNA based

Hepatitis-B vaccine for human use 10.

Apart from the R&D, consultancy and usage of advanced facilities of public

research organisations by the firms, scientific mobility emerged as an another important

dimension of linkage having a long term impact on the recipient (firm) and the loser (public

research organisations). Scientific personnel mobility embodying the knowledge and

experience is governed by various Push and Pull factors 11and is an important resource of

knowledge flow in national innovation systems observed globally and is more prominent in

science based industries such as biotechnology. The mobility of persons equipped with

scientific knowledge according to an Austrian Survey by Schibeny et al. (2002) is mainly

responsible for the transfer of knowledge between universities and industrial sector. The

mobility of scientists from the public research organisations to the firms (See Table 4-11)

has made a significant impact in case of firms such as Shantha, Dabur and Panacea in

strengthening /enhancing their innovation capability (personal interview with the R&D

chiefs offirms).

Table 4-11. Mobility of Scientific Personnel from Public Research Organisations to Industry

University/ Research Or2anisation Firm Centre for cellular Molecular Biology(CCMB), Hyderabad

Shantha National Institute oflmmunology( Nil), New Delhi, Department of Biotechnology( DBn, New Delhi(+) Panacea National Institute oflmmunology( Nil), New Delhi

Dabur Note:{+)- indicates a movement of a Scientist from the

Department of Biotechnology (DBT), Government of India

10 CCMB has also been chosen as the Centre of Excellence by the UNESCO's Global Network of Molecular and Cell biology and also South Centre of Excellence in Research and Training by the TWAS Award, Italy. 11 The primary Push factor being the demand for the transfer of certain knowledge or key technology while the Pull factor includes better financial incentives, re-cognition of the talent and opportunity to capitalize their knowledge etc facilitating the mobility of scientific personnel (based upon the personal communication with one of the Directors of the Public Research Organisation)

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The movement of the scientific personnel from the Nil, Delhi has been associated

with the scientific developments related to Neuro-Peptides responsible for the Cancer

diseases and the vaccine for Japanese Encephalitis virus. The senior scientist involved in

the specialized domain of Neuro-peptides technology migrated from Nil, New Delhi to

Dabur Research Foundation (DRF), Dabur Pharma Ltd and was responsible for pushing up

the technology further up the value chain leading to the product development for the

treatment of Cancer which has now reached the second stage of clinical trials. Further, the

scientist has gained very prominent position in DRF and has been responsible for

establishing the company's R&D infrastructure as per World Health Organisation (WHO)

and Good Laboratory Practices (GLP) guidelines, building a strong R&D team including a

professional research network with leading research labs and universities in the country.

Following the similar path, another scientist from Nil, New Delhi joined Panacea Biotech

Public Ltd and was able to successfully transfer the vaccine technology for Japanese

Encephalitis. The company, Panacea Biotech has benefited immensely from the expertise of

the scientist and is in the process of launching vaccines for the Japanese Encephalitis virus.

Further, there are many scientists form Nil, New Delhi who have emulated the similar path

and have been absorbed in other leading firms in the Life Sciences area owing to the fact

that the organisation does not have an institutional mechanism to interface with the industry

for translation of their research findings (Personal Discussion with Director/Senior

Scientists Nil, New Delhi.)

In case of Centre for Cellular and Molecular Biology (CCMB) Hyderabad, the

scientist who· helped initially the firm Shantha Biotechnics to develop the concept for the

first indigenous Hepatitis-B vaccine in the country, later joined the Shantha Biotechnics.

The mobility of CCMB scientists to the firm Shantha have been a regular feature, with the

CCMB scientists holding prominent positions in the company (Personal discussions with

the CCMB Scientists).

1').-;:

The mobility of the experienced scientific personnel from the public research

organisations and their contribution in the overall development of the health biotechnology

is indeed not a national loss but a loss of scientific capabilities and due recognition for the

public research organisations. This unquestionably calls for establishing a proper 'Institute­

Industry' interface, a flexible mechanism to facilitate smooth inter-flow of scientific

personnel from institute to industry and vice-versa for effective translation of public

research. The mechanism shall ensure due recognition including the financial incentive for

the meritorious work and shall help in overcoming the problem of permanent migration/

loss of expert scientists form public research organisations. The recent policies both Draft

National Biotechnology Strategy(DNBS) 2005 and also the Science and Technology

Policy(STP) 2003 have prominently addressed this important issue but the exact mechanism

or modalities are yet to be evolved perhaps a lead could be taken from the mechanism

established by the Indian Institute of Science, Bangalore.

Furthermore, the study firms also exhibited other forms of interactions (see

Bhattacharya and Arora 2007) such as the 'General research interaction' and also the

'Institutional support' with public research organisations. The 'General research interaction'

of firms with public research organisations involved summer training of the students,

participation in the Workshops, Board meetings etc. As a part of the 'Institutional support',

the firm Biocon provided the support of Endowment Chair and as well as the

infrastructure support to institutions such as Institute of Bioinformatics and Applied

Biology (IBAB), Bangalore and sponsorship of Biocon Entrepreneurship Development

Centre at Xavier Institute of Management and Entrepreneurship (XMIE), Bangalore. The

subsequent section discusses the implication of the characteristics of the firms' linkages and

their historical features shaping the innovation.

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4.5 Hypotheses of Path dependency and technology trajectory

It is interesting to note that the success achieved by a firm in getting market foothold

for a product through a strategy of national and international linkages has largely defined its

future course of strategy and choice of product. This is to say that, if a firm had achieved

success in product development and gained market foothold as a 'flagship product' (let us

call it as 'linkage product') then firm's future course (linkage product) has been largely

defined by linkages similar to that of the flagship product. Table 4-12 throws light on the

similarity between past experiences and future actions by the firms studied here.

Table 4-12 Past Experience And Future Strategies of Firms

~ Past Future

e

National Shantha, Dabur Shantha, Dabur

(1) (2) (1) (2)

Global Panacea, Biocon Shantha, Panacea, Biocon

(I) (I) (1) (I) (1)

Lmkage Product category: (I)- b10-genencs, (2)- Innovative research

It may be seen from the Table 4-12 that Panacea's flagship product 'Polio

Vaccine' which is an outcome of the global linkage with firm Biocine SpA Ltd, Italy has

shaped its future linkages, influenced by the global orientation. Similarly, the 'bio-generics'

category of the flagship product also has influenced the future linkage product innovative

category as well. The firm has been able to easily access the global resources and

appropriate the knowledge for the development of the bio-generic products such as Hib

vaccine and combination vaccines etc., which enabled the firm to reap early profits

(See Table 4-3). The global bio-partnering is highly preferred by Panacea because of better

understanding of the needs/ requirement of technology development (personal discussion

with the chief R&D).

128 .

Likewise, the flagship product of 'Shantha', Hepatitis-B Vaccine developed

indigenously as an outcome of the national effortsllinkages with the public research

institutes namely CCMB, Hyderabad and Osmania University, Hyderabad in developing the

'concept of proof' defined its future linkages pattern, resulting in a mix or a balanced

orientation of national/global linkages. The flagship product category i.e., 'bio-generics' has

influenced its innovative category 'linkage products' as well. The firm has been able to

easily access the national and global resources for the development of the 'linkage products'

such as Japanese Encephalitis Vaccine, Typhoid Vaccine and Combination Vaccines etc.

and as a result, the firm enjoys a 13th rank among the Top 20 Indian biopharmaceutical

firms (for more details see Table 4-3).

The company 'Biocon' started as joint venture with Biocon Biochemicals Ltd.,

Ireland and was able to export the enzymes to USA from the very next year of its

production. The success of the joint venture and its flagship product (enzymes) has largely

influenced the firm's forthcoming linkages and 'linkage product' innovative category. The

firm has been able to forge global alliances to gain access to new knowledge and technology

for the development of products such as food enzymes, oral insulin etc. and is ranked 2nd

amongst the Top 20 Indian biopharmaceutical firms (See Table 4,..3)

The firm 'Dabur' is unique among all the firms involved in the knowledge intensive

or drug discovery research platform since inception. As the drug discovery is a long term

activity the firm has been actively pursuing the innovative research with . the knowledge

alliances mainly with the national public research institutes (rather than other firms) such as

CCMB, Hyderabad; Delhi University, Delhi; Hyderabad University, Hyderabad and

Jawaharlal Nehru University, Delhi etc. The firm has built strong internal capabilities and

has carried out several contract R&D projects/assignments for other national firms as well. 12

The investment for research has been mobilized mainly through internal resources, through

the joint projects involving public research funds as well as from the government loans.

Thus, firm linkages type's, nationality and product category path is strongly influenced by

the past experience of achievements i.e. the firm linkages reveal path dependency and

follow a technology trajectory.

4.6 Discussion and Issues

The literature reveals that in Indian context, the integration of biotechnology in to

health domain as well as the growth of new health biotechnology companies gained

momentum during 1990s. A glimpse of this is evident from the large number of linkages

being established by the case study firms during the 1990s and beyond to access the

knowledge and capabilities in the biotechnology domain, although 3 out of 4 study firms

were established much before 1990.

The results have shown that firms adopt different strategies in terms of the nature,

type and extent of linkages. New firms have established more linkages as compared to the

older firms. Internationalization appeared as a major driver of 'Firm- Firm' linkages

constituting nearly 75% of the over all linkages (including sub-types) by the study firms.

The literature shows that international alliances or linkages are considered an

important element in the international strategies of a growing number of companies due to

increasing competition. However, the continuance of international alliances is also a matter

of trust, commitment and understanding developed through constant relationships. The

12 Dabur is intensively involved in the new drug discovery and new drug delivery system in the area of oncology and one of its new chemical entity (through indigenous R&D), a peptide based drug for the treatment of cancer has been presently undergoing Phase-II clinical trials and another Nano-particle delivery for the cancer has also moved to Phase- II clinical trials as well.

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international linkages help the companies to muster international sources of R&D,

production and supply apart from the foreign market entry and other intangible foreign

assets.

The firms differ in terms of linkages (technological, production and marketing)

including their sub-types (technology in-licensing, collaborative R&D, joint venture etc)

and nationality. The technological and marketing linkages are the most preferred linkage

types with the technology in-licensing as the linkage sub-type. The firm linkage

characteristics i.e. nature, type and the outcome are to a large extent pre-structured by the

existing linkages and the outcome. In 'other words, firm linkages itself exhibit path

dependency and its outcome a particular technology trajectory hypothesis.

It is evident that linkages form a 'core' of the strategy by the firms to acquire new

global knowledge to strengthen R&D, manufacturing capabilities, marketing or geographic

expansion of products to capture and sustain its hold on to .the market. In other words,

linkages have resulted in building and strengthening the innovation capability of firms with

the difference in firm linkages leading to different innovation strategy or firm behavior.

Linkages are observed at various stages of the innovation chain and strong

complimentarity exists between technological and non-technological linkages to acquire

global capabilities. The strong thrust on exports13 and the Top 3 linkages by the study

firms (See Table 4-7) support and validate the argument of the presence of both

technological I non-technological linkages.

A large number of linkages established by the case study firms with the public

research organisations are confined mainly to the upstream innovation activities. These

13 Exports require both technological and market capabilities.

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involve knowledge acquisition, technology transfer, scientific mobility, short-term problem

solving consultancy and utilisation of advanced facilities.

The linkages with the government agencies/departments under the 'Others' category

relate to other innovation activities such as soft loans for commercialisation of technology,

R&D recognition/incentives among others. The strength of interactions of the case study

firms with the aforementioned categories reveal the importance of the public research

organisations and various programmes or instruments initiated by the government from time

to time in fostering biotechnology innovation in the country.

The mobility of the scientists, an important indicator of the fluidity of the knowledge

flows in innovation systems, led to enhancing the innovation capability of firms such as

Dabur, Panacea and Shantha. However, this results in a permanent loss of talented scientific

manpower for the public sector organizations and is a cause of serious concern. This may

have a cascading effect on the research environment of the reputed research institutions

associated with the study firms namely National Institute of Immunology (Nil), New Delhi

and Centre for Cellular and Molecular Biology (CCMB), Hyderabad. In fact, in recent

years several Senior Scientists have left Nil, New Delhi and CCMB, Hyderabad owing to

lack of institutional mechanism for translation of the research results, despite the presence

of Public Technology Transfer agencies like NRDC, New Delhi and BCIL, New Delhi. The

gravity of the situation further calls for a suitable mechanism and incentive structure for

replenishment of scientific personnel. In this context, it is pertinent to study, using the NIS

perspective, the existing policies, institutions, mechanism or instruments responsible for the

dynamism and growth in biotechnology advanced countries such as USA, UK and also

Asian countries like China which has even gone to the extent of transforming some of the

research institutes into companies to manufacture medicines. The Chapter- 6, 'Institutional

Impetus to Biotechnology Innovation,' (See page 191 ), of the thesis addresses the various

132

dimensions of the national institutional mechanisms in the growth of the biotechnology

innovation.

The present chapter has so far highlighted the morphological features of the firms

linkages present in Indian health biotechnology system. The role of the linkages (purpose)

in building the firms innovation capability and how the firms have capitalized the linkages

(strategic actions) to shape their technological (including production) and market

environment in realizing the innovation are discussed in detail in the next chapter on

'Capitalization of Linkages'.

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