Horizontal diversification in the Danish national system of innovation: the case of pharmaceuticals

Abstract

The importance of advanced users in home markets as an inducement to technological innovation is now well recognised, thereby providing an explanation for important parts of international export specialisation. At the theoretical level upstream-downstream interaction has been made the generic micro-foundation of theories of national systems of innovation. However, this paper will argue that user-producer interaction is not the only (country-specific) inducement mechanism to innovation. Rather, the finding of this paper is in line with the proposition that when firms are science-based, linkages tend to be horizontal rather than vertical. The paper mobilises historical and bibliometric methods to trace the long-term development of technology at the Danish pharmaceutical company Novo Nordisk, and its links with the local (particularly university) environment. The paper demonstrates the importance of science-based competencies in moving from natural resource based technologies to those of greater sophistication, thereby influencing trade specialisation of advanced countries.