Industrial Change and Regional Development: The Case of the US Biotechnology and Pharmaceutical Industries

Abstract

We examine the arguments surrounding the location and organization of innovative firms and examine the prospects for industry renewal and regional rejuvenation. We examine the effect of technological breakthroughs in the biotechnology industry on the organization and location of production with respect to mature and emergent regions. We find that, despite losing much of their preeminence in research and development, traditional firms in mature regions have managed to ‘capture’ a substantial amount of manufacturing and marketing. The drug-development experience, manufacturing capabilities, and marketing channels of more established companies in mature regions are turning out to be major sources of competitive advantage.