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Social And Intellectual Capital Formation In Leading Indian Pharmaceutical Companies

Sulej, J   Bower, DJ

International Journal of Innovation Management   10 (4) 407-423

December 2006

http://www.worldscientific.com/toc/ijim/10/04

A number of Indian pharmaceutical firms have achieved high levels of success globally in product and process development. They are competing effectively in the generic pharmaceutical markets of the USA and Europe. They have progressively accumulated process development and manufacturing capabilities which meet the stringent criteria of the US and European Union regulators, and have also acquired drug "discovery" skills to a level which has gained some recognition from major Western pharmaceutical companies. This paper analyses evidence from a range of documentary sources in order to elucidate how two of the leading Indian companies have accumulated the intellectual and social capital which has enabled this degree of innovative success. It finds evidence that environmental factors have opened up opportunities which drew on the firms' early capabilities, while requiring additional skills. In response, these firms have invested in expanding their initial internal competences through a number of routes, including hiring Indian-born, Western-trained scientists and industry executives, membership of an internationally oriented industry association, etc. As their profits and reputations have grown, they have also been able to access external knowledge through Western alliances and acquisitions. It concludes that they have built a broad business and technical knowledge-base and very wide networks, which have been effectively integrated thus far in pursuit of business objectives, but raises the question of whether they should now adopt a more focused approach.