First Movers in a Pandemic: How Knowledge Expertise Impacted Global Biopharmaceutical Innovation

Abstract

Creating safe and effective innovative treatments in the biopharmaceutical industry is a knowledge-intensive and risky business, even under the best of circumstances. Until recently, research into deadly infectious diseases was on the decline and attracted negligeable investment, despite growing global health authority warnings. The coronavirus pandemic uncovered the socio-economic dangers of neglecting infectious disease research. Drawing upon our unique database of COVID-19 innovations, we explore how firms innovated in the early stages of the pandemic when little was known about the virus. We elucidate how firm knowledge expertise, in terms of breadth and depth, played a pivotal role in first-mover innovations. Our discoveries suggest how different types of knowledge provided distinctive opportunities to develop a wide-range of new and repurposed innovations needed to detect, treat, prevent, and manage its effects. Our findings suggest that deeper expertise is associated with higher rates of new innovative solutions whereas broader expertise led to more repurposing of existing innovations. We provide new insights about the heterogeneity of infectious disease research across countries. Our discoveries have implications for policy makers and business leaders and suggest that further theorizing is needed to disentangle the ways in which firms use knowledge to innovate under public health emergencies.