Understanding technology adoption in the German pharmaceutical industry

At the beginning of the20th century classical biotechnology and chemical synthesis were for many purposes alternative technologies. Spite of the importance of classical bio-technology (which mainly drew on the application of enzymatic processes and microbiology for the production of good and services) at that time specially in Germany, the German drug producers made use of the organic chemical synthesis in the drug development and production processes. This technological decision was a conscious choice. Since the 1970s bio-technology plays a key role in the pharmaceutical sectoral system of innovation. The revolutionary advances in molecular biology of the early 1970s had open a new era in the drug discovery process. The advent of modern biotechnology has forced German incumbents to learn the advances in the technology they ignored 100 years before. The aim of this paper is to review historical contributions to the history of technology and the pharmaceutical industry to identify some of the factors that may have influenced the technology adoption decisions of the actors in the German pharmaceutical industry. The findings disclose that the research traditions, the organizational structures, and the firm capabilities in terms of human capital strongly influenced the selection criteria of the pharmaceutical corporations for the production of raw materials and pharmaceuticals. The analysis of the technological trajectories of the chemical synthesis and biotechnology reveals that unexpected technological breakthroughs in other technological fields radically influenced their development paths. Finally, examples of policy action disclose how that policy measures can influence technology trajectories and adoption by actors.