Changing Patterns of Technological Leadership: Evidence from the Pharma Ceutical Industry

This paper examines the changing composition of technological opportunities and corporate leadership that affected the major British and German pharmaceutical companies from 1930 to 1990. It draws on both the theory of technological change and Schumpeter's theory of profits and growth. Evidence is derived from US patent statistics for 15 indigenous British and German pharmaceutical companies in 47 technological activities. The findings suggest that shifts in both technological leadership and opportunities tend to be gradual rather than radical. The diffusion of technology reduces, but does not fully erode, firm-specific capabilities. However, well-established leaders risk becoming locked into declining technologies. Nevertheless, the composition of leadership in the pharmaceutical industry often persists for several decades. More recent changes, though, suggest that the once dominant group of leaders is on the verge of being replaced by a different group, to the extent that the shifting cycle reflects a changing technological paradigm.