Systemic Interactions in Life Science Innovation

Adopting a sectoral systems of innovation approach, this paper seeks to explain the remarkable long term robustness of the innovation trajectories of pharmaceutical and agrochemical multinational companies. Three case studies, GM crops, pharmaco-genetics and stem cells, are used to explore the circumstances that determine whether innovative technologies have incremental or disruptive impacts on firms, and if the latter, the extent of that disruption, for example in leading to a Schumpeterian wave of creative destruction. The experience of agro-biotechnology companies in developing GM crops has some parallels with the stresses being faced by pharmaceutical companies today. Our analysis identifies particularly the onerous nature of the regulatory systems for these industry sectors and also the specialised nature of the markets, in acting as a barrier to entry for new firms, as being primarily responsible for the overall stability of the sectoral innovation systems to date. However, we also point to the importance of simultaneous impacts of innovative technologies on regulatory systems, markets and sectoral innovation systems as potentially providing a challenge that is sufficient to shift the overall innovation trajectory in life sciences.