Profiles of corporate technological capabilities - a comparison of large British and German pharmaceutical companies

This paper analyses corporate technological capabilities and trajectories of large German and British firms in the science-based pharmaceutical industry. An index of relative technological advantages based on patent statistics is used to assess whether the corporate development of technological competencies is predominantly influenced by the country-specific environment or by industry-related forces. The evidence suggests that national factors have led to a higher degree of cohesion in German trajectories than in British ones; however the industry-specific impetus appears to dominate the technological development. This paper also maintains that technological diversification remains closely linked to firm size. Findings here are consistent with results of recent studies which suggest that the nature of recent technological change has been characterised both by increasing inter-relatedness of technological activities and by consolidation of existing technological competencies. It is argued here that an "industrial optimum" of technological diversification exists; firms will over time converge towards it. The smaller pharmaceutical specialists have not yet reached their "optimal" balance of technological diversification, and thus continue to diversify. The larger, widely diversified chemical corporations, however; appear to have been consolidating their technological competencies to a persistent level of specialisation. These trends are largely independent of the national background (C) 1998 Published by Elsevier Science Ltd. All rights reserved.