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Embeddedness, social epistemology and breakthrough innovation: The case of the development of statins

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  • Baba, Yasunori
  • Walsh, John P.

Abstract

Radical, breakthrough innovations create not only great industrial possibilities, but also great social uncertainties. When a breakthrough medical technology is discovered, the question arises as to whether to accept the possible risks involved, or to defer implementing the innovation until more data is available, and, specifically, until others have taken up the innovation and demonstrated both its efficacy, its relative safety and market acceptance. Specifically, when a firm discovers a new candidate substance for a first in its class drug, how to evaluate the potential risks becomes a key predicament for management. This paper focuses on the role of a firm's social networks and national innovation system context in influencing the social epistemology around potential breakthrough innovations. Through an examination of the processes of drug development related to the same candidate substance in a Japanese firm and an American firm, we suggest that, in addition to organizational capabilities at the corporate level, social capital, specifically formed under a certain innovation system, plays a key role in leading to the successful introduction of breakthrough innovations.

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  • Baba, Yasunori & Walsh, John P., 2010. "Embeddedness, social epistemology and breakthrough innovation: The case of the development of statins," Research Policy, Elsevier, vol. 39(4), pages 511-522, May.
    • Handle: RePEc:eee:respol:v:39:y:2010:i:4:p:511-522
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    Cited by:

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    2. Ruiz-Ortega, María J. & García-Villaverde, Pedro M. & Parra-Requena, Gloria, 2018. "How structural embeddedness leads to pioneering orientation," Technological Forecasting and Social Change, Elsevier, vol. 134(C), pages 186-198.
    3. Gold, E. Richard, 2021. "The fall of the innovation empire and its possible rise through open science," Research Policy, Elsevier, vol. 50(5).
    4. Wesley M. Cohen & You-Na Lee & John P. Walsh, 2019. "How Innovative Are Innovations? A Multidimensional, Survey-Based Approach," NBER Chapters, in: Measuring and Accounting for Innovation in the Twenty-First Century, pages 139-182, National Bureau of Economic Research, Inc.
    5. Yibo Lyu & Quanshan Liu & Binyuan He & Jingfei Nie, 2017. "Structural embeddedness and innovation diffusion: the moderating role of industrial technology grouping," Scientometrics, Springer;Akadémiai Kiadó, vol. 111(2), pages 889-916, May.
    6. Andersen, Kristina Vaarst, 2013. "The problem of embeddedness revisited: Collaboration and market types," Research Policy, Elsevier, vol. 42(1), pages 139-148.
    7. Rob Lubberink & Vincent Blok & Johan Van Ophem & Onno Omta, 2017. "Lessons for Responsible Innovation in the Business Context: A Systematic Literature Review of Responsible, Social and Sustainable Innovation Practices," Sustainability, MDPI, vol. 9(5), pages 1-31, May.
    8. Rakas, Marija & Hain, Daniel S., 2019. "The state of innovation system research: What happens beneath the surface?," Research Policy, Elsevier, vol. 48(9), pages 1-1.
    9. Walsh, John P. & Lee, You-Na & Jung, Taehyun, 2016. "Win, lose or draw? The fate of patented inventions," Research Policy, Elsevier, vol. 45(7), pages 1362-1373.
    10. Wang, Huan & Zheng, Leven J. & Zhang, Justin Zuopeng & Kumar, Ajay & Srivastava, Praveen Ranjan, 2024. "Unpacking complementarity in innovation ecosystems: A configurational analysis of knowledge transfer for achieving breakthrough innovation," Technological Forecasting and Social Change, Elsevier, vol. 198(C).
    11. Claudimar Pereira da Veiga & Cassia Rita Pereira da Veiga & Mônica Maier Giacomini & Heitor Takashi Kato & Jansen Maia Del Corso, 2015. "Evolution of Capabilities in the Discovery Cycle of an Innovation in the Pharmaceutical Market," International Review of Management and Marketing, Econjournals, vol. 5(3), pages 141-153.
    12. Qu, Guannan & Chen, Jin & Zhang, Ruhao & Wang, Luyao & Yang, Yayu, 2023. "Technological search strategy and breakthrough innovation: An integrated approach based on main-path analysis," Technological Forecasting and Social Change, Elsevier, vol. 196(C).
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    14. Elizabeth Webster, 2017. "The source of wealth," New Zealand Economic Papers, Taylor & Francis Journals, vol. 51(1), pages 79-85, January.

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