Basic Researches' Effects on Pharmaceutical Companies' Innovative Performances : Evidence from Japan

Presenter: Hiromi Saito, National Graduate Institute for Policy Studies

Abstract

Rationale: Recently, with the rise of interest in open innovation, it is pointed out that basic researches produced in universities and public research institutes are important as the sources for knowledge that is leading to innovation. It would be usually expected that the companies actively accessing and introducing knowledge from basic researches are likely to attain innovation. However, this is not necessarily demonstrated based on evidences.

Objectives: The aim of this paper is to examine it by empirical approach introducing an original concept “rate of universities-industry cooperation” focused on joint applicants. Particularly, we take up pharmaceutical industry because we think that this industry takes most advantage of basic researches,

Methodology: We used data (142 pharmaceutical companies,1992~2005) in Japan based on data according to the IPB database of statistics on patent econometrics. In this data, the names of companies, institutes or individuals listed as co-applicants in each year are described for each company. We counted the frequency in which each pharmaceutical company appears in the list of co-applicants of universities and public research institutes by each year for each company. We define the "rate of university-industry cooperation" as this frequency divided by number of co-applicants. Moreover, we added companies' finance data from annual security report and approval drugs' data from annual report "recent drugs"(Yakuji Nippou). Using these data, we empirically analyzed how knowledges from basic researches affect on companies' innovative performances (technologies, products and so on).

Results: We confirmed that frequency of universities-industry cooperation tended to increase as a result. However, rate of university-industry cooporation was not significant on most companies' performances.

Conclusions: We indicated that university-industry cooporation has not great effect on companies' performance. This result suggests two possibility. One is that companies might not make effective use of knowledge from basic researches produced in universities and public research institutions. The other is that basic researches might not be curried out to meet social needs. Our remaining assignments are finding what are barriers between universities/public research institutions and companies and examining how we link basic research and social needs.