1. The intra and inter-firm geography of EMNCs: India’s pharmaceuticals Rory Horner Clark University Graduate School of Geography Presentation for ‘Emerging Multinationals’ conference at Copenhagen Business School, October 2008.

2. Layout Background/context Intra-firm - How international are India’s big pharma? (sales) - Are Indian pharma establishing operations abroad? (subsidiaries) - How global are manufacturing and R&D? Inter-firm alliances - How are Indian pharma using inter-firm alliances in their internationalisation? Conclusions/future research

3. Developed countries (e.g. UNCTAD 2006) 2000s Where does developing country- FDI locate? 1980s Other developing countries (e.g. Kumar 1982, Wells 1983) Developing-country FDI

4. From intra-firm to inter-firm Traditional ‘intra-firm’ e.g. Vernon (1966), Dunning (1988) Inter-firm linkages e.g. Mathews (2006)

5. FirmTotal assets (Rs. Million) Net sales (Rs. Million) HQ location Year established Ranbaxy Laboratories34 068.235 754.4New Delhi1961 Cipla24 521.828 974.1Mumbai1935 Dr. Reddy’s Laboratories 31 860.120 058.5Hyderabad1984 Sun Pharmaceuticals Industries 32 107.616 815.5Mumbai1983 Aurobindo Pharma21 106.313 698.7Hyderabad1986 Lupin15 565.515 965.4Mumbai1968 Jubilant Organosys14 484.413 849.1Noida1978 Orchid Chemicals and Pharmaceuticals 18 132.88734.6Chennai1992 Wockhardt16 149.09600.3Mumbai1959 Nicholas Piramal India11 627.114 062.8Mumbai1988 India’s ‘big pharma’ Source: Business World India’s “BW Real 500: India’s top companies” (2007). HQ location and year established are sourced from company websites and annual reports.

6. Reverse engineering Dr Reddy’s: “We began in 1984 and, like some other players of that era in India, concentrated on strengthening reverse engineering capabilities to produce high quality bulk drugs and formulations at low costs, and sell them in the domestic market.

7. To …. The importance of these skills cannot be exaggerated, for they created the technological foundations for your Company’s successful foray into the international generics market” (Dr. Reddy’s 2002).

8. How international are India’s big pharma? Share of gross revenue from abroad for India’s largest pharmaceutical firms 2002→2007

9. Are Indian pharma establishing operations abroad? Rest of Asia Europe North America Africa Central & South America Oceania Subsidiaries locations 2002 and 2007

10. How global is manufacturing and R&D? Concentration in India More manufacturing than R&D abroad R&D focus in USA.

11. How are Indian pharma engaging in alliances and linkages? Limited evidence of industry-government- university linkages Inter-firm linkages have a distinct geography. → 93% with Non-Indian firms → 93% of those with North American or European firms

12. How are Indian pharma EMNCs engaging in inter-firm linkages? Classification of international inter-firm alliances of India’s top 10 pharma 2002- mid 2008 ManufacturingMarketing and distribution R&D Inward24356 Co/joint0522 Outward0194

13. Conclusions and future research Growing internationalisation, targeting the regulated markets Proliferation of alliances, yet still strong intra- firm advantage Sources of Indian advantage? Sustainable? How will internationalisation of these firms evolve over time? Importantly, will these EMNCs effectively serve the needs of the base of the economic pyramid?

15. Within India:

16. Within Western Europe and North America

17. Empirical focus: India’s pharmaceuticals A ‘knowledge economy’ sector Prominent in the internationalisation of Indian EMNCs Pharmaceutical industry noted for being alliance-driven (e.g. Birch 2008)

18. Manufacturing by firm

19. R&D by firm

20. Alliances by chronology