Academic journal article Innovation: Organization & Management

The Enabling Role of the Public Sector in Innovation: A Case Study of Drug Development in India

Academic journal article Innovation: Organization & Management

The Enabling Role of the Public Sector in Innovation: A Case Study of Drug Development in India

Article excerpt


ANational System of Innovation (NSI) is defined as a complex of innovation actors and institutions that are directly related to the generation, diffusion and appropriation of technological innovation and the interrelationship between innovation actors (Chung 2002). This concept was developed in the seminal work by Freeman (1987) and further elaborated by Lundvall (1992), Nelson (1993), Freeman (1995, 1997), Fritsch (2003), Fagerberg (2006), Neito & Santamaria (2007) and Giuliani (2007). The concept of NSI captures the process of networking and is in particular useful for analyzing developments in knowledge intensive sectors such as biotechnology (Mehra 2001). As advanced R&D in biotechnology is mainly localized in industrialized countries, many studies have been conducted to analyze the role of public and private sectors (Fransman 1991; Fransman & Tanaka 1995; Powell 1998; Mehra 2001). The major concern in this concept is how to forge relations and links between major innovation actors such that flow of information occurs at appropriate time in order to generate innovation successfully. The interconnectivity amongst the three main pillars - i.e. government, academia and industry - is one of the fundamental factors in the innovation chain. To build these relations, government sometimes acts as a mediator such that seamless networking is achieved. Embarking the role of a facilitator/mediator, the government assumes a key position in the innovation chain. This is enabled by the institutional setting which promotes the vision, initiatives and ability of decision makers in the respective organizations to guide innovation projects by maneuvering through the hurdles standing in its way.

This paper analyzes the process of interactions and collaborations between the public and private sector on the successful commercialization of an indigenously developed drug for the underprivileged. It also evaluates the role of government vis-à-vis the role of other actors as organizations or as individuals within national innovation system approach. The case of indigenous drug development (liposomal Amphotericin B) thus has been discussed within the context of institutional, organizational and incentives structures. It was an innovation in terms of an affordable and effective antifungal drug in Indian context. In this paper the pattern of knowledge links, key factors and the relationships amongst specific actors essential for the development and diffusion of the drug are being analyzed. The first section of the paper dwells on the development of conceptual framework based on literature review for analyzing the case. The next section is about the case study on liposomal Amphotericin B. Then it is followed by discussion analyzing strengths of NIS in favour of the case and also the existing gaps which possibly delayed the process or involved an extra effort of some individuals within organizational settings for making a successful innovation to happen. In the end conclusions emerging from the study are stated.


Freeman (1987) introduced the modern version of the full concept of national innovation system into the literature taking into account the intra- as well as inter-organizational characteristics of firms, corporate governance, the education system and not least the role of government. Nowadays, it is well accepted that innovations are brought forward through an interactive process of knowledge generation and application among the actors from science, business and policy areas (Todtling et al. 2009). This makes partnerships crucial to promote research and technology adoption. Therefore in order to understand the innovation process it is necessary to understand the role of actors, their interactions and the evolving relationships.

Lundvall (2007) states that firms, institutions and people do seldom innovate alone and innovation emanates from cumulative processes of interactive learning and searching. …

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