ABSTRACT
Because the biotech industry is still in its infancy – having ‘as a whole . . . never been profitable’ (Ernst & Young 2003: 5) – it represents an ideal research subject in both economic sociology and science and technology studies (STS) for those wishing to study the development of a technology market. The current cross-fertilisation of ideas between these two disciplines makes it a particularly germane topic (see Callon 1998a; MacKenzie 2003; Woolgar et al. 2005; Barry and Slater 2005). It has also been of relevance to United Kingdom and European policy-makers concerned with the development of the knowledge economy, exemplified by hi-tech industries like biotechnology (OECD 1996). However, the current policy emphasis on biotechnology as a saviour of our economy and the planet (see BIGT 2003 foreword by Tony Blair) also makes such research an increasingly important activity because this policy discourse tends to disguise the political and economic motivations for such policy changes and instead concentrates, contradictorily, on the natural innovativeness of hi-tech as a potential boost to competitiveness. Thus it deliberately ignores the effects of national political decisions on economic activity, highlighted by Laura Tyson (1992), and their economic and social implications. Furthermore, according to Paul Krugman (1996) the very concept of competitiveness leads to a biased industrial and trade policy focused on export-driven manufacturing sectors – which can represent a small proportion of a country’s overall production – to the detriment of service sectors. Herbert Gottweis (1998: 159) argues that the specific European concern
with competitiveness in biotechnology has developed because the United States biotech industry ‘attain[ed] a mythical status in the European policy discourse’, a status that drove subsequent policy.1 This myth predated the emergence of the biotech industry by some years, with the West German federal government even changing its constitution in 1969 so that it could support large-scale research (Gottweis 1998: 183). More recently, European Union (EU) drug regulation has been deliberately reoriented to promote European R&D and competitiveness (Abraham and Lewis 2000),
which has had an important impact on the wider global, not just the European, regulation of medicines (Abraham and Reed 2002, 2003). In the UK the USA has also been characterised as a threat to UK biotechnology competitiveness over several decades, starting with the 1980 Spinks Report (ACARD 1980). The rhetoric of the ‘threat’ to the UK then persisted, being reiterated in a 1993 House of Lords Select Committee on Science and Technology report and again in the report from the government’s most recent initiative, the 2003 Bioscience Innovation and Growth Team (BIGT). Whilst the USA has always dominated the biotech industry, illustrated by
the annual Ernst & Young reports (2000, 2001, 2003), the reasons for this are not always as clear-cut as mainstream accounts contend. According to these accounts, US dominance was achieved through several factors particular to the biotech industry (see Sharp 1996; van Reenen 2002). First, the US benefited from first-mover advantage. For example, Celltech (the first UK biotech firm) was founded in 1980 when Genentech (founded in 1976) went public and doubled its share value in one day (Owen 2001: 6). Second, the US had a more entrepreneurial environment that encouraged the formation of ‘dedicated biotech firms’ (DBFs) keen to exploit the new technological opportunities (see ACARD 1980; Walsh et al. 1995; Acharya et al. 1998). Third, the US makes a larger investment in the biological sciences and has done so from an earlier time than other countries (Walsh et al. 1995). The US public funding agencies spend nearly half of the total public science budget on biotech research, amounting to $21.3 billion at their disposal in 2003 (Cooke 2003), creating a virtuous circle of inward investment as foreign firms sought to benefit from US capabilities by investing in US firms (Buctuanon 2001: 29). Consequently, European pharmaceutical firms have collaborated with US biotech firms more than with their national biotech firms (Sharp 1996). Fourth, US DBFs engaged in a larger and denser series of collaborative arrangements – networks of complementary firms and public research organisations (Acharya et al. 1998; Acharya 1999). Finally, European financial markets were and are more stringent in their regulatory requirements stifling investment in DBFs (Acharya et al. 1998; Prevezer 2003). The following discussion has been designed to illustrate how these dif-
ferences in the biotech industry arose as a result of deliberate legal and political institutional change in the USA, motivated by a fear of lost competitiveness. As such I will first seek to expound a social explanation of the biotech market by highlighting several interconnections between science and technology studies (STS) and economic sociology that problematise economic theories of technological change. This will, in particular, draw upon the work of Karl Polanyi (1957) in his discussion of markets as ‘instituted process’. Second, I will detail a series of deliberate changes to law and industrial policy in the USA designed to benefit the biotech industry and thereby construct a specific technological market. The focus is centred on the USA because these changes have been instituted most clearly there
as part of a political programme of national interest. In the final section, I will explore what the construction of the biotech industry means for global distributive justice, especially in relation to US government policy and its impact on foreign countries.
