The Evolution of Integrative Capability: Innovation in Cardiovascular Drug Discovery

Abstract

Recent research has highlighted the ability to integrate fragmented knowledge across boundaries within a firm as a potentially potent source of competitive advantage. Yet this research raises a potent tally puzzling question: if these capabilities are so central to competitive advantage, why do they not instantaneously diffuse across an industry? This paper draws on a detailed field study of the development of hypertensive drugs in 10 major European and American firms to explore this issue. I suggest that any particular integrative competence rests on a complex set of interlinked factors that usually evolve only slowly over time. Those firms that were fortunate enough to have focused early on more 'rational' modes of drug discovery have been much more successsful in developing the integrative capabilities fundamental to modern drug discovery than those that initially achieved great success with the more traditional 'random' method of drug discovery. The results thus speak directly to evolutionary theories of competence development. They also raise intriguing questions about the relationship between the development of competence and the larger institutional context of the industry, since - both the wealth and prominence of public sector biomedical research and the use of mechanism of action as an integrative device appear to have shaped the formation of capability in the industry.