Global R&D networks

Abstract

The pharmaceutical industry is of considerable interest because of the significance of R&D and marketing expenditures in securing competitive advantage. The vast costs and risks entailed in new product development have spawned an international network of cooperative alliances between large pharmaceutical companies and small biotechnology companies, creating a complex web of inter-organisa-tional linkages spanning the globe. Without formal acknowledgment, this essentially cooperative network pools the resources of cash and expertise required to bring radically new technologies, products and processes to the market, in an atmosphere of fierce global competition between the major companies. The paper examines the case of Merck and its carefully constructed AIDS programme, which balances in-house development with longterm alliances forged with smaller firms and sometimes with competitors.