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Why Industry Associations Matter for Healthcare Industries in Emerging Countries: Evidence from the Indian Biotechnology and Medical Device Industries

Kale, D   Watkins, A   Papaioannou, T   Mugwagwa, J

13th Globelics International Conference

Havana, Cuba

September 23 – 25 2015

This paper focuses on the often neglected role and potential of industry associations in facilitating growth and development of healthcare industries in emerging countries. Using case studies of the Indian biotechnology and medical device industries, the research presented here shows that industry associations and related umbrella organisations played a critical role in the development of the Indian biotechnology industry, while lack of similar representation created regulatory and industrial policy hurdles for the Indian medical device industry. Early on, biotech industry associations in India were proactive in lobbying the government to set up an appropriate regulatory and technology policy regime and over the years entered into a strategic partnership with government to promote entrepreneurship and affordable healthcare. By contrast, in the case of medical device industry, the diverse nature of products and underlying knowledge bases made it difficult for policy makers to fully grasp specific industrial and regulatory policy requirements. This lack of understanding was further accentuated by the absence of sector-specific industry association, creating a communication gap between government and industry and leading to the neglect of the medical device industry. This research emphatically highlights that ‘industry associations’ play critical role of plugging communication and information gaps between government and industry, promoting entrepreneurships and diffusion of regulatory policies among its members. The ability of industry associations to reduce transactions costs makes them a critical and indispensable part of national innovation systems in general and healthcare systems in particular.

The accepted version of this paper can be downloaded here.

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