Luigi Orsenigo

University of Sussex · Science Policy Research Unit (SPRU)

Over the past decades, exit has been analyzed at the theoretical and empirical levels. From this rich series of contributions, two basic patterns of exit can be identified: the revolving door and the gale of creative destruction. In the first, the liability of newness plays a major role in the exit process, while in the second the displacement of n...

Four major stylized facts about spinoffs have been identified by the literature: (i) spinoffs perform better than de novo entrants, (ii) there is an inverted U-shaped relationship between the age of a firm and spinoff formation, (iii) better parents generate more spinoffs, and (iv) better parents originate better spinoffs. These stylized facts hold...

Twenty years ago, we introduced the history friendly modeling approach to formally study industrial dynamics. In this paper, we look retrospectively at the results that the history friendly literature has achieved so far and what are the challenges ahead of us. We present the main principles, methods, and building blocks of the approach, and then w...

Pharmaceuticals have been a highly innovative, marketing-intensive, internationalized and heavily regulated industry, at least since the post-Second World War years. This industry has consistently shown a remarkable track record in innovativeness, economic and financial performance. Yet, throughout its whole history, pharmaceuticals have been chara...

The notion of disruptive technologies has become in recent years a prominent concept in industrial dynamics and strategy. Yet, we still know too little about the frequency, intensity and modalities of this crucial phenomenon, let alone about the implications for strategy and policy making. There are indeed various meanings and interpretations of th...

Since the early 1990s industrial organization economists and scholars of business organization have come to recognize more clearly than before the often very great differences among competing firms in the capabilities they have to do various things, and the central role these capability differences play in determining the winners and losers in indu...

The disruptive impacts of technological innovation on established industrial structures has been one of the distinguishing features of modern capitalism. In this book, four leading figures in the field of Schumpeterian and evolutionary economic theory draw on decades of research to offer a new, 'history-friendly' perspective on the process of creat...

This essay argues that policies attempting to develop the biotechnology industry around the world have shared the attempt to reproduce the model which I label the Silicon Valley Consensus. This model is a (partial) application of the successful case of microelectronics to a different industry, which is quintessentially science-based. It is based on...

Pharmaceuticals have been a highly innovative, marketing-intensive, internationalized and heavily regulated industry, at least since the post-Second World War years. This industry has consistently shown a remarkable track record in innovativeness, economic and financial performance. Yet, throughout its whole history, pharmaceuticals have been chara...

This article provides an overview of the main traits of the historical development of the pharmaceutical industry, using the lenses of the evolutionary approach to economic and industrial change. After a brief overview of the main evolutionary concepts which guide the subsequent discussion, our presentation identifies four main eras: from the forma...

The contribution of this paper is twofold. First, it presents the results of a "history-friendly" simulation model of evolution of the pharmaceutical industry. Second, it aims at contributing to a more general methodological discussion about agent-based models by proposing an econometric analysis of the results of the simulations. The case of the p...

This paper presents an agent-based model of industry evolution in which technological and demand conditions contribute to determine both the emergence and performance of spinoff firms. We assume that two main factors characterize the emergence of spinoffs: first, spinoffs have at least some degree of product differentiation with respect to their pa...

This paper examines the evolution of the pharmaceutical industry. After a brief discussion of the main stylised facts about the industry, we present a history-friendly model that aims at capturing the underlining mechanisms and the logic that guides the evolution of this industry. Simulation results show the mechanisms and dynamic processes linking...

This paper presents a simulation model of industry evolution in which demand regimes and technological regimes shape the relationship between consumers switching costs and first-mover advantage. Our results show that the extent to which switching costs can be an effective mechanism in generating first-mover advantage depends on demand regimes: swit...

This paper examines how the nature of the technological regime governing innovative activities and the structure of demand interact in determining market structure, with specific reference to the pharmaceutical industry. The key question concerns the observation that-despite high degrees of R&D and marketing- intensity-concentration has been consis...

This paper examines how the nature of the technological regime governing innovative activities and the structure of demand interact in determining market structure, with specific reference to the pharmaceutical industry. The key question concerns the observation that—despite high degrees of R&D and marketing-intensity—concentration has been consist...

In this paper we examine the effects that user-producer interactions have on innovation and the dynamics of market structure of two vertically related industries under alternative contractual regimes. The existence of advantages stemming from users-producers relationships introduces a dynamic "matching" problem between firms characterized by hetero...

This essay discusses the strength and weaknesses of the so-called linear model (LM) of innovation. It is a reaction to the habit of criticising it as over simplistic, mechanistic, or simply blatantly wrong. We argue that, while some criticisms are of course well grounded, many others are instead based on loose interpretations and unwarranted assump...

This paper examines how the nature of the technological regime governing innovative activities and the structure of demand interact in determining market structure, with specific reference to the pharmaceutical industry. The key question concerns the observation that - despite high degrees of R&Dand marketing-intensity - concentration has been cons...

It has been long recognised that the role and effects of patents vary considerably across industries. This observation raises immediately to important sets of questions. First, can we document systematically this heterogeneity and can we provide a conceptual framework for explaining this diversity? Second, how should the patent system deal with the...

Introduction There is little doubt that over the last three decades the world economy has witnessed the emergence of a cluster of new technologies – that is, a new broad techno-economic paradigm in the sense of Freeman and Perez (1988) – centered on electronic-based information and communication technologies. Such information and communication tech...

Introduction There is little doubt that over the last three decades, the world economy has witnessed the emergence of a cluster of new technologies – that is, a new broad techno-economic paradigm in the sense of Freeman and Perez (1988) – centred on electronic-based information and communication technologies. Such ICT technologies not only gave ris...

This chapter introduces some of the most salient aspects of the debate regarding the relationships between stronger intellectual property rights (IPRs) regimes, innovation, and development. Despite increased knowledge on the subject, little is known on the relationships between IPRs, innovation, and growth, especially as developing countries are co...

In this paper, we explore the effects of alternative policies, ranging from antitrust to public procurement, open standards, information diffusion and basic research support on the dynamics of two vertically related industries in changing and uncertain technological and market environments. The two industries are a system industry and a component i...

This article provides an overview of the Italian side of Giovanni Dosi in terms of his career and works. It brings up two unpublished papers by Dosi showing in part his wider interests in philosophical themes. The article concludes by noting that by recognizing that many of the problems the world faces are not natural or optimal outcomes but are in...

This paper adopts a system-evolutionary perspective to describe the dynamics of the life science sector and reflect on regional innovation policy. It begins with a brief outline of the evolution of life sciences and of the biotechnology industry. A crucial feature of such evolution is the strong tendency towards geographical concentration of resear...

In this article, we present a history-friendly model of the changing vertical scope of computer firms during the evolution of the computer and semiconductor industries. The model is “history-friendly,” in that it attempts at replicating some basic, stylized qualitative features of the evolution of vertical integration on the basis of the causal mec...

In this work we discuss the impact of the new ICT techno-economic paradigm upon the vertical and horizontal boundaries of the firm and ask whether the change in the sources of competitive advantage has resulted in changes in the size of distribution of firms and also in the degree of concentration of industries. Drawing both on firm-level and natio...

About the book: Development and the ending of mass poverty require a massive increase in productive capabilities and production in developing countries. Some countries, notably in Asia, are achieving this. Yet ‘pro-poor’ aid policies, especially for the least developed countries, operate largely without reference to policy thinking on the promotion...

In this paper we provide an introduction to some of the most salient aspects of the debate regarding the relationships between stronger intellectual property rights (IPRs) regimes and innovation in the pharmaceutical industry. We emphasize that, despite increased knowledge on the subject, little is known on the relationships between IPRs, innovatio...

Gibrat's law is a referent model of corporate growth dynamics. This paper employs Bayesian panel data methods to test Gibrat's law and its implications. Using a Pharmaceutical Industry Database (1987–1998), we find evidence against Gibrat's law on average, within or across industries. Estimated steady states differ across firms, and firm sizes and...

(The Guest Editors of this issue invited four experts with relevant research experience Dr. Chrispin Kambili from International AIDS Vaccine Initiative Africa; Professor William Muraskin of Queens College, CUNY, New York; Professor Lynn K. Mytelka of UNU-INTECH, Maastricht and Luigi Orsenigo from University of Brescia and CESPRI, Bocconi University...

Innovation has become a major field of study in economics, management, sociology, science and technology, and history. Case studies, empirical models, appreciative analyses and formal theories abound. However, after several decades of study on innovation, and so many different types of contribution, there are still many phenomena we know very littl...

Vaccine production is now at the heart of the debate on development. This paper argues that, as well as economic policies to address market failures, development policies aimed at fostering vaccine innovation should also consider the institutional and organisational uncertainties. The International Aids Vaccine Initiative (IAVI), a product developm...

The history of a number of industries is marked by a succession of eras, associated with different dominant technologies. Within any era, industry concentration tends to grow. Particular eras are broken by the introduction of a new technology which, while initially inferior to the established one in the prominent uses, has the potential to become c...

The idea that innovation leads to positive economic performance has become a sort of truism in recent years. However, empirical evidence showing that innovating organizations and countries outperform non-innovating ones remains scant and scattered. In many ways, the jury is still out. First of all, there is still little agreement about what ‘perfor...

This chapter analyzes the changing boundaries of firms in terms of vertical integration and dis-integration (specialization) in dynamic and uncertain technological and market environments. In particular, it addresses the question of stability and change in firms' decisions to 'make or buy' in contexts characterized by periods of technological revol...

In this chapter we investigate some properties of the patterns of firm growth in the pharmaceutical industry. The issue of firm growth is interesting as such, but there are two particular (related) reasons why we believe it to be particularly intriguing in the case of pharmaceuticals. First, surprisingly, very little detailed statistical evidence o...

In this chapter we explore the relationships between entry, market structure, and innovation in the pharmaceutical industry, on the basis of a previous “history-friendly” model (HFM) developed by Malerba and Orsenigo (2002). The motivations underlying this modeling style have been discussed extensively in previous papers (Malerba et al., 1999, 2001...

The contributions to this book enrich from a variety of angles our understanding of how the dynamics of knowledge affect the dynamics of firms and industry structures. In this concluding chapter, we discuss some associated policy implications regarding the future of the innovation process in the pharmaceutical industry and the institutional setup s...

This paper is a first attempt at modelling the long term dynamics of market structure and innovation in the pharmaceutical industry in a history-friendly way. The model examines the relationships between the nature of the search space, demand, the patterns of competition and industry evolution in the age of random screening and in the age of molecu...

The debate on software intellectual property rights (IPRs) has not only highlighted fundamental issues regarding the scheme of protection that software enjoys, it has also pointed out major gaps in the representation of computer programs as economic goods. In this respect, various interpretations of software propose a limited outlook by referring o...

The debate on software intellectual property rights (IPRs) has not only highlighted fundamental issues regarding the scheme of protection that software enjoys, it has also pointed out major gaps in the representation of computer programs as economic goods. In this respect, various interpretations of software propose a limited outlook by referring o...

This authoritative collection covers the economics and business side of the social scientific debate about the economics of ‘modern biotechnology’ or ‘the biotechnology industry’. Biotechnology has attracted an enormous interest. Research has spawned work on a variety of theoretical issues about economic dynamics, about innovation systems and about...

Introduction: This chapter analyzes the pharmaceutical industry through the lens of a sectoral system of innovation. Intuitively, the pharmaceutical industry quite naturally lends itself to be analyzed as an SSI or as a network (see Galambos and Sewell, 1995; Chandler, 1990; Gambardella, Orsenigo and Pammolli, 2000; and McKelvey and Orsenigo, 2002)...

Este trabajo estudia la metodología y los objetivos teóricos de los modelos evolutivos denominados History-friendly (amistosos con la historia), que constituyen una nueva aproximación a los procesos de evolución industrial. Más que presentar los formalismos específicos utilizados en este tipo de modelos este artículo pretende evaluar, en términos m...

Paper prepared for the book Comparing the development of Biotechnology Clusters, Fuchs G. (Ed.), Harwood Academic Publishers, 2001 (forthcoming).

Dear colleagues: At the end of another successful year the Editors of the Journal of Evolutionary Economics would like to thank you for your cooperation as a referee and for supporting our work by contributing valuable suggestions and comments. We are ambitious to maintain the achieved quality standard and hope to count on your expertise in the fut...

The paper, as such a draft of a chapter for the second edition of the Handbook of Economic Socielogy, Edited by Neil J. Smelser and Richard Swedberg), is meant to offer some sort of roadmap accross a few fields of investigation concerning the relationships between technological learning and economic dynamics. Within this broad critical endeavour, o...

The European Council in Barcelona set an overall EU R&D investment target of 3% of GDP by the year 2010, with industry asked to contribute two thirds of this figure. To approach these levels, however, dramatic improvements are needed in the effectiveness of policies used to stimulate private sector R&D. The specific aim of this report is to offer...

This paper aims at an empirical analysis of industry-academia links by using Italian data on performance of university departments and institutes to attract funding from industrial sources. The investigation shows that conventional political strategies to support industry-academia links by building up intermediary organisations might fail, as indus...

In this paper we investigate some properties of the patterns of firms’ growth. Several recent studies about this topic are based on some version of the so-called Gibrat’s Law, which assumes that firms’ growth is erratic. We aimed at testing Gibrat’s Law, as a first step towards a more systematic investigation of the patterns of firms’ growth. Using...

This paper is a first attempt at modelling the long-term dynamics of market structure and innovation in the pharmaceutical industry in a history-friendly way. The model examines the relationships between the nature of the search space, demand, the patterns of competition, and industry evolution in the age of random screening and in the age of molec...

[fre] Les relations entre les évolutions des prix, l'expiration des brevets et la concurrence varient considérablement, selon les pays. Une distinction nette apparaît. Dans les pays (États-Unis en particulier), dans lesquels domine la concurrence de marché, une distinction claire s'impose entre les firmes innovatrices et les firmes qui imitent aprè...

Modelli history-friendly dell'evoluzione delle industrie: il caso dell'industria del computer (di Franco Malerba, Luigi Orsenigo) - ABSTRACT: In this paper, we review and discuss the main features of a new generation of evolutionary models: "history-friendly" models. They aim to capture, in a stylized form, qualitative and "appreciative" theories a...

This paper examines the persistence of innovative activities at the firm level in a comparative perspective. A new data set is used composed of six panel data, one for each of the following countries: France, Germany, Italy, UK, Japan and the USA. For each country, we use data on patent applications to the European Patent Office in the period 1978–...

This paper presents and discusses the methodological rationale, the basic structure and some first results of a new approach to the analysis of processes of industry evolution: "history-friendly" models, concerning the history of the computer industry. The specific purpose of this paper is to evaluate in more general terms the potential and limits...

In this paper, we explore some problems that industrial policy faces in industries characterized by dynamic increasing returns on the basis of a ‘history friendly model’ of the evolution of the computer industry. How does policy affect industry structure over the course of industry evolution? Is the timing of the intervention important? Do policy i...

In this paper, we investigate how underlying relevant technological conditions induce distinguishable patterns of change in industry structure and evolution. A mapping is detected between the specific nature of problem decompositions and research techniques at the micro level of knowledge bases, and patterns of structural evolution at the macro lev...

This paper discusses the development of the biotechnology industry in an Italian region, Lombardy. It asks why significant innovative activities in biotechnology did not emerge in what might have been considered at the outset a promising area for the growth of this industry and why in very recent years some timid symptoms of dynamism seem to be app...

This paper examines the evolving interplay between "policy regimes" and "technological regimes" in the pharmaceutical industry and how this interaction contributed in the long run to shape the innovative performance in the USA and in various European countries. We discuss the various and shifting motivations underlying regulatory interventions as w...

The report examines the competitive position of the European pharmaceutical companies and industries, and compares them with the pharmaceutical companies and industries in other parts of the world, particularly the US. Over the last two decades, the industry has experienced some important structural changes, mainly driven by technological and insti...

We argue that the distinction between tacit and codified knowledge is indeed very important, but it constitutes only a part of the categorization of the dimensions of knowledge relevant for understanding innovative activities and firms' and industrial evolution. In particular, we emphasize the relevance of the notion of competencies and of some fur...

This paper proposes that the specific pattern of innovative activities in an industry can be explained as the outcome of different technological (learning) regimes. A technological regime is defined by the particular combination of technological opportunities, appropriability of innovations, cumulativeness of technical advances and properties of th...

We introduce a new hybrid approach to joint estimation of Value at Risk (VaR) and Expected Shortfall (ES) for high quantiles of return distributions. We investigate the relative performance of VaR and ES models using daily returns for sixteen stock market indices (eight from developed and eight from emerging markets) prior to and during the 2008 fi...

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L'industrie des biotechnologies européenne semble bel et bien décoller depuis quelques années. Ce pourrait ětre le retentissement positif des mesures gouvernementales mises en place et de la création de nouveaux marchés, propices au développement de ce type d'entreprises.

This paper provides new empirical evidence on the patterns of technological entry and exit across sectors and over time. We define `new' innovators—firms which innovate for the first time, and `ex'-innovators—previous innovators that do not innovate any more. We distinguish also between `real' and `lateral' entry and exit. The analysis is based on...

The model presented in this paper is the first of a new generation of evolutionary economic models: 'history-friendly' models. History-friendly models are formal models that aim to capture, in stylized form, qualitative and 'appreciative' theories about the mechanisms and factors affecting industry evolution, technological advance and institutional...