Incorporation of knowledge through acquisition in the pharmaceutical industry

Abstract

This article focuses on the incorporation of knowledge conducted by large pharmaceutical corporations through the acquisition of small enterprises. The objective was to evidence to which degree the incorporation of knowledge is performed by a sample of 8 large pharmaceutical companies. In order to do this, we rely on qualitative methods, based on a sample of eight companies and 54 small enterprises they acquired in the period from 2005 to 2012. From the sample we compiled the patents granted to the small firms within the USPTO. The analysis conducted develops two central actions. The first is theinventor’s usage, defined as the small enterprises inventors, which when incorporated by large pharmaceutical corporations started to develop patents through the acquiring larger company. The second is the incorporation of research trajectories, which means how inventors cite their past work as they are incorporated into the larger companies. This article concludes that the incorporation of inventors is a relevant strategy among the large companies studied so that these companies can incorporate external knowledge bases from the acquired smaller enterprises; however, just a few inventors are incorporated, which shows that just a small group of people conducts innovative research for large companies. This article contribution was to categorically evidence the incorporation of knowledge through new metrics, being them: inventor’s usage and research trajectory incorporation.