The paper aims to take stock of China’s recent biopharmaceutical industry development by analyzing product innovation and changes in the firms’ product portfolios during the…
Abstract
Purpose
The paper aims to take stock of China’s recent biopharmaceutical industry development by analyzing product innovation and changes in the firms’ product portfolios during the five-year period between 2012 and 2017.
Design/methodology/approach
The paper introduces a classification of biopharmaceutical products. By applying the classification to the product data of China’s drug regulator, the CFDA, it becomes possible to trace the developments within the sector by looking at changes in the number of firms within each subgroup and changes in the number of subgroups in which each firm is involved. The classification allows an evaluation of the latest product innovation achievements.
Findings
The paper demonstrates a mild shakeout of firms in the relatively long-existing domestic market segments, a trend toward more specialized product portfolios and an enduring prevalence of innovation strategies aimed at exploiting relatively unpopulated domestic market niches instead of pioneering entirely new products. Especially the capability of upgrading to second-generation protein therapeutics has become a key criterion for separating the wheat and the chaff in China’s domestic sector. The paper moreover points out the relevance of acquisitions as a corporate growth strategy.
Research limitations/implications
The research does not consider complementary indicators, product pipelines in particular. Future research should compare patterns across emerging economies.
Originality/value
The paper is unique in using the CFDA database for systematic academic research on (bio)pharmaceutical innovation and in introducing a biopharmaceutical product classification to trace innovative activities and changes in corporate product portfolios over time.
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Keywords
The purpose of this paper is to analyze the dynamics of China's health biotech clusters from an interregional perspective. By treating clustering as the result of firms'…
Abstract
Purpose
The purpose of this paper is to analyze the dynamics of China's health biotech clusters from an interregional perspective. By treating clustering as the result of firms' localization choices, the paper examines whether and why different types of firms agglomerate in the various locations.
Design/methodology/approach
The paper employs a demographic approach that is inspired by the 2006 work of Romanelli and Feldman on cluster development in the USA. It categorizes China's clusters based on differences in the degree of policy support and the nature of the science base. Then, it draws a sample of 75 of China's most visible firms and analyses them in terms of entrepreneurial origin, their location and, if applicable, the location of their subsidiaries. By matching types of firms with types of clusters, the paper highlights some characteristics of China's regional development.
Findings
Studies on China's high‐tech agglomerations unanimously complain about a lack of “creative buzz” compared to the vibrant clusters of for example, the Bay Area in the USA. The analysis indicates that the lack of a creative culture is associated with the anatomy of cluster development. China's clusters grow to a significant extent by attracting enterprise subsidiaries to their sites. The authors argue that these particular cluster anatomies are founded on China's capital market. As the capital market is not prepared to provide pre‐revenue firms with sufficient funds, firms have to earn revenue quickly in order to ensure their viability. Therefore, they concentrate on building up manufacturing capacity and exploiting given technologies. The main point is that local governments as major providers of financial support are instrumental in this process. The establishment of manufacturing subsidiaries in various locations rests on the rationale of collecting funds. This leads to the conclusion that national capital markets either reinforce or inhibit clustering depending on how much it allows the mobility of financial capital. Local government funds do not travel far. This has an impact on the firms' localization decisions and their business strategies, which, in turn, affects the “culture” inside the clusters.
Research limitations/implications
This argument is based on a limited number of interviews conducted by the authors or other researchers. In order to corroborate the link between the capital market and local development trajectories, more evidence needs to be collected via interview surveys and other means to extract financial information.
Originality/value
Unlike other research on Chinese clusters, this paper offers an interregional perspective based on a demographic approach. The argument is original in linking regional cluster dynamics with the national institutional set‐up.
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The purpose of this paper is to explore patterns as well as determinants of regional specialisation in China's biopharmaceutical industry. It identifies and characterizes…
Abstract
Purpose
The purpose of this paper is to explore patterns as well as determinants of regional specialisation in China's biopharmaceutical industry. It identifies and characterizes different types of enterprises engaged in the biopharmaceutical sector in terms of their business organisation and regional set up.
Design/methodology/approach
Based on data compilations not yet employed in academic analysis as well as personal interviews in China, structural determinants and driving forces of development are analysed against the background of the innovation systems literature.
Findings
The geography of innovation in China's biopharmaceutical industry is determined by both, government policy and the strategic location decisions of entrepreneurs. While local‐government support of firm clustering has contributed to a dispersion of industrial activity throughout China, the firms” networks are spanning clusters. Effectively, domestic firms are turning into multi‐regional companies locating activities such as R&D and manufacturing at different clusters.
Originality/value
The paper adds to the literature in so far as it throws light on an until now under‐researched field of China's innovation system. It identifies the concept of multi‐regionalism among domestic non‐state enterprises as an important parameter for understanding success and regional distribution of the industry.