Maryann P. Feldman University of North Carolina, Chapel HillNuada Pharmaceuticals 8. Phase...
Transcript of Maryann P. Feldman University of North Carolina, Chapel HillNuada Pharmaceuticals 8. Phase...
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Maryann P. Feldman University of North Carolina, Chapel Hill
Firm Strategy and the Wealth of Regions
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Ewing Marion Kauffman
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Motivation • Questions of regional growth & viability
– Why some places grow and thrive? – What factors are instrumental for new firm formation &
growth?
• Need for more theoretical development – Is Silicon Valley the archetype or one archetype? – Boulevard of Broken Dreams
• Appreciate theorizing
– Even our understanding of Silicon Valley evolves – Is Silicon Valley the archetype or one archetype
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Route 128
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Research Triangle Park
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Proximity vs. Political Geography
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I NNOVATI VE DATA SOURCES FOR REGIONAL
ECONOMI C ANALYSIS
Maryann Feldman, Alex Graddy Reed, Lauren Lanahan,
Glenn McLaurin, Kari Nelson, and Andrew Reamer
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How do firms benefit from location?
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How do firms benefit from location?
How does location benefit from firm actions?
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Porter’s Conceptualization of Strategy
• Limited to Competition
– Framework to understanding competition (1998:2)
– Microeconomics-based approach to economic development useful government (1998:7)
• Nothing to inform cluster genesis
• Firm strategy notably absent
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Constructed Locations
• Building a Cluster while Building a Firm
• The existence of knowledge spillovers implies a subsidy
– Rent seeking
– Capacity building
• Geography as a Platform for Innovation
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The Concept of Corporate Strategy
“Corporate strategy is the pattern of decisions that …. defines the kind of economic and human organization it is or intends to be and the nature of the economic and noneconomic contributions it intends to make to its shareholders, employees, customers and communities.”
-- Andrews 2003: 52
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The underappreciated role of firms in regions
• Enforcement of Non-Compete Agreements – Gilson ,1999; Mars & Fleming ,2010
• Make or Buy Decisions/local – Poppo and Zenger, 1998; Cassiman & Veugelers ,2006
• Philanthropic Contributions – arts & culture – Gardberg & Fombrun ,2006 – infrastructure – Lowe & Feldman 2010
• Employment Conditions – Stock options/Profit sharing – Educational Benefits – Skunkworks – Severance packages
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Entrepreneurs as Organizational ByProducts
• Technical and product knowledge – Agarwal et al., 2004; Chatterji, 2009; Sørensen and Phillips, 2011)
• Market related know-how – Agarwal et al., 2004; Klepper and Sleeper, 2005
• Reputation and legitimacy signals – Gulati and Higgins, 2003
• Ties to customers and suppliers – Ferriani et al., 2012; Semadeni and Cannella, 2011
• Affiliations to financial and social capital – Phillips, 2002; Burton, Sørensen and Beckman, 2002; Roberts,
Klepper and Hayward, 2011
• Transfer Organizational Practices - HR practices rather than Strategy – Feldman, Reichstein & Ozran 2013
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GlaxoSmithKline & its antecedents Year Event NC Impact
1970 Burroughs Wellcome production facility moves to Greenville, North Carolina.
+1,900 by 1995
1971 Burroughs Wellcome opens RTP research site + 339 employees 1971 +2,100 by 1995
1983 Glaxo Inc moves Headquarters to RTP & manufacturing to Zebulon
+200 production jobs 1983 +3,000 by 1995
1995 Glaxo and Wellcome merge as Glaxo Wellcome. -1652 layoffs - 535 early retirements
1998 Glaxo Wellcome and Smith Kline Beecham enter into initial merger discussions (fails to materialize)
High layoff predicted
2000 GlaxoSmithKline is formed through the merger of Glaxo Wellcome and SmithKline Beecham.
-400 layoffs
2005 + Restructuring and the Great Recession -Various layoffs
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142 Glaxo/Burroughs Spawns
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New Firms Started with Links to GSK
Non-Merger Year
Merger Year
Accidental Entrepreneurs -- fall or is pushed into an opportunity
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Firms Started After Glaxo-Burroughs Wellcome and Glaxo Wellcome-SmithKline Beecham Mergers
Glaxo-BurroughsWellcome
GlaxoWellcome-SmithKlineBeecham
31 Firms 59 Firms
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45%
26%
16%
10%
Merger 1: Glaxo-Burroughs Wellcome
Drug Discovery & Medical Devices CROs Business Services ICT
Industry Sector for Glaxo-Burroughs Wellcome Spawns ollars
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45%
26%
16%
10%
Merger 1: Glaxo-Burroughs Wellcome
63% 15%
12%
10%
Merger 2: Glaxo Wellcome-SmithKline Beecham
Drug Discovery & Medical Devices CROs Business Services ICT
White “Shirts” versus White “Coats”
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13 GSK Spawns Founded 80% of 2nd Generation Spawns
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13 Leading Spinners
1. Lineberry Research Associates
2. DJ Pharma 3. Inspire Pharmaceuticals 4. ProviderLink 5. Cytospect Pharma 6. Healthmatics 7. Nuada Pharmaceuticals 8. Phase
BioPharmaceuticals 9. Pozen, Inc. 10. SARCO 11. Triangle Pharmaceuticals 12. Victory Pharma 13. Zen-Bio
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The Character of Place
• Business Strategy can build Prosperity – Places & Regions are intertwined
– Government can’t do it alone
• Investments in Place – Sentimental? Altruistic?
– Feasible for the long term for the private sector?
• New Logic of Economic Development
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Thank you
http://maryannfeldman.web.unc.edu