Autarkic drug discovery in Japanese pharmaceutical companies: insights into national differences in industrial innovation

Structured interviews with eight leading Japanese pharmaceutical companies and industry data show that drug discovery in the Japanese companies occurs predominantly in-house. In contrast, European and US pharmaceutical companies rely more on alliances with university-based start-ups and other biotechnology companies for drug discovery. Personnel policies in the Japanese companies are still geared to on-the-job training for lifetime employment and the accumulation of company-specific tacit knowledge. Despite government policies that discouraged innovative drug development, Japanese companies are discovering innovative drugs at rates comparable to those of overseas rivals of comparable size. However, in view of the explosion of new biomedical knowledge, autarkic innovation may no longer be compatible with global competitiveness. Autarkic innovation may be a characteristic of most Japanese technology-based manufacturers. Thus, the competitive advantage of Japanese companies may be greatest in industries where innovation does not rely upon inputs from universities and independent companies. (C) 2003 Elsevier Science B.V. All rights reserved.