Structure, Employment and Performance in Biotech Firms

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Structure, Employment and Performance in Biotech Firms

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Title: Structure, Employment and Performance in Biotech Firms
Comparison of Danish and Swedish drug discovery firms
Author: Lund Jensen, Rasmus; Dahlgren, Henrich; Valentin, Finn
Abstract: This report studies employment effects associated with the adoption of modern biotechnology in Danish industry. In this context we also examine industry structure, patterns of job creation, key outputs such as patents and the pipeline of projects in clinical trials. To see the development of Danish biotech firms in a relevant context we compare a Danish segment of biotech firms with a matching Swedish segment. From an overall assessment modern biotechnology, despite the three decades elapsed since the first genetic manipulation, is still in a stage of experimentation, learning how to turn its new tools and approaches into an operational, reliable, cost-effective technology, sufficiently "pluggable” with other technologies. Therefore employment directly related to biotech is particularly visible and identifiable in firms focused on R&D. Outside this core of R&D activity other industries appear as early adopters of biotech, but only parts of their activities relate to modern biotechnology. From the outside it is difficult to isolate what share of their employment is attributable to their activities within biotechnology. In pursuit of clarity on the role of biotechnology this report studies a segment of Drug Discovery Firms (DDFs), which almost exclusively are based on capabilities in biotech research. This delimitation gives the advantage of studying a homogenous segment of firms. At the same time, this segment of biotech research firms is an informative indicator of the ability of the Danish economy to perform in the transition towards knowledge and sciencebased competitiveness. That is so because DDFs to an unusual extent depend on the ability of their framework to perform as an innovation system, by which we refer to advantages growing out of interactions and complementarities between e.g. universities, firms and venture capital. That makes DDFs a sensitive "seismograph" for the ability of the Danish innovation system to foster new science-based technologies. Key words: Employment, Biotechnology, Firm size distribution, Industry structure, Firm performance JEL Codes: J21, L11, L22, L25, L65, O57
URI: http://hdl.handle.net/10398/6781
Date: 2007-01-02

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