Evolution of the Life Science Industries

The life sciences have had a transformative impact on a range of innovation-driven industries. The pharmaceutical sector, in particular, has undergone significant organisational change as promissory life science-based technologies and approaches to R&D have begun to challenge the sustainability of small-molecule, blockbuster drug development and the conventional strategic management processes associated with it. The complexity of the biomedical paradigm, and the significant but diverse implications biotechnology and genomics have for various parts of the research and development pathway, has created what appears to be highly distributed innovation systems and networks1 that involve an increasingly diverse range of firms, public sector organisations and technological regimes. Large, traditional pharmaceutical companies are now increasingly reliant on the knowledge, products and expertise of external innovators, such as small dedicated biotechnology firms, as their traditional capabilities in small-molecule drug development no longer appears sufficient to sustain profitable growth. Similarly, the growth of the small-firm sector has engendered new opportunities and challenges for both global therapeutic innovation and regional economic development. National governments have been captured by the promise of biotechnology and sought to cultivate regional biotechnology industries to spur innovation and economic growth. However, the emergence of new technologies and therapeutic options has also posed significant challenges for regulators. New and evolving regulatory standards and protocols, which continue to be developed in a context of much uncertainty, have both directly and indirectly shaped industry’s innovation processes and development strategies, and also affected the relationships and interactions between different types of firm within the sector. Large and small pharmaceutical companies, with both traditional chemical-based strategies and those based on new biotechnology, are therefore facing increasingly turbulent operating environments2 as overall competitiveness in the sector increases; the basic science and emerging technologies become ever more complex, and regulators and downstream stakeholders place greater demands on industry to ensure new therapies are safe, efficacious and cost-effective.