4. Rational Drug Design & DBF Networks
What are the difficulties faced by DBFs in taking advantage of such nurturing
economic business environments, and in what ways are those in the USA better
placed to benefit than those in Europe? One key feature that differentiates them is the
estimated $20 billion per year that has been available for US biotechnology research
from Federal investment in, for example, the 1994-98 period studied by Senker &
Van Zwanenberg (2001). This compares with the approximately €10 billion spent by
European governments over the same period. Further, it is argued, US DBFs can
exploit the research findings of National Institutes of Health-funded research more
swiftly and efficiently due to the existence of National Science Foundation sponsored
Small Business Innovation Research grants enabling DBFs to develop ideas more
quickly thus potentially influencing venture capitalists and ‘big pharma’ to invest in
what elsewhere would appear to be more high-risk ventures. These SBIR grants arise
from a requirement that R&D spending Federal government departments must spend
up to 2.5% of their extra-mural research budgets on commissions from SMEs.
Moreover, research-minded entrepreneurs requiring continuing interaction with other
discovery firms or research institutes have more of these to choose among and thus
exploit better networking opportunities.
Jaffe et al.’s (1993) finding that knowledge spillovers from universities to firms were
relatively regional or even local was found to be true in the Senker & Van
Zwanenberg research on European biopharmaceutical firms. Exacerbating this, Owen-
Smith et al. (2001) found that public research organisations (PROs), with which such
DBFs are likely to seek to interact, have far more intensive and extensive inter-
institutional research networks than European firms. The latter had much smaller,
sometimes dyadic, networks and these were often nationally constricted, except for
occasional transatlantic contact with a US institute, and consequent potential linkage
into wider US knowledge networks. However, so few and restricted were the active
international linkages that less knowledge exploitation was feasible, and more slowly,
than in the case of the better-networked US institutes. Hence, it can be argued from a