Academic collaboration and organizational innovation: the development of research capabilities in the US pharmaceutical industry, 1927-1946*

This article investigates the historical conditions that contributed to the birth of in-house research and development (R&D) capabilities in the early US pharmaceutical industry by examining qualitative and quantitative data on university-industry interaction between the 1920s and 1940s. This evidence suggests that labor markets, collaborative research, and contract research were the principal mechanisms by which early university science contributed to the development of in-house research capabilities in the emerging US pharmaceutical industry. This article further demonstrates a pattern in which firms with lesser R&D capabilities were generally constrained to work with local partners, while firms with greater internal R&D capabilities primarily engaged local partners for smaller-scale projects requiring generalist skills and distant partners for larger-scale efforts and extraordinary projects. We conclude by examining the implications of collaboration for those firms that did engage university academic partners. Our findings suggest that pharmaceutical firms that collaborated with universities during this period achieved higher rates of patenting and laboratory growth.