¹ A widely accepted definition of biotechnology is that of the Organization for Economic Co-operation and Development (OECD), which defines it as: “the application of scientific and engineering principles to the processing of materials by biological agents to provide goods and services.” See Bull, Alan T., Holt, Geoffrey, and Lilly, Malcolm D., Biotechnology: International Trends and Perspectives (Paris, 1982), 18Google Scholar. Biotechnology is not an industry per se, but rather a set of techniques and applications relevant to a wide range of applications and industries, including agriculture, waste management, and biopharmaceuticals. This essay considers only biopharmaceuticals.

² Powell, W. W., Koput, K. W., and Smith-Doerr, L., “Interorganizational Collaboration and the Locus of Innovation: Networks of Learning in Biotechnology,” Administrative Science Quarterly 41 (1996): 116–45CrossRefGoogle Scholar.

³ “Old” biotechnology refers to the manipulation of the external environment of microorganisms, as is the case in fermentation techniques used in brewing and food production. In contrast, “new” biotechnology involves techniques that enable the manipulation of the inner structure of microorganisms. These include recombinant DNA, hybridoma technology, monoclonal antibodies, established enzyme technology, and the support instrumentation technology involved in the automated sequencing of DNA and proteins, and for the synthesis of oligonucleotides and peptides. See E. Jaworsky, “Major Trends in Science, Technology and Applications: The Next Ten Years,” in OECD, Biotechnology: Economic and Wider Impacts (Paris, 1989), 22Google Scholar; Bud, Robert, The Uses of Life: A History of Biotechnology (Cambridge, 1993Google Scholar).

⁴ Office of Technology Assessment, Commercial Biotechnology: An International Assessment (Washington, D.C., 1984), 7Google Scholar. The report also stated: “Japanese companies in a broad range of industrial sectors have extensive experience in bioprocess technology. Japan does not have superior bioprocess technology, but it does have relatively more industrial experience using old biotechnology, more established bioprocessing plants, and more bioprocess engineers than the United States … [T]he Japanese government has targeted biotechnology as a key technology of the future, is funding its commercial development, and is coordinating interactions among representatives from industry, universities, and government.”

⁵ Miyazaki defines technological competence as “the ability to deploy and, especially, expand the range and implications of core capabilities.” Miyazaki, K., “Building Technology Competencies in Japanese Firms,” Research Technology Management 42, no. 5 (1999): 39–45CrossRefGoogle Scholar.

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⁶ Schumpeter, Joseph A., The Theory of Economic Development (Cambridge, Mass., 1934), 66Google Scholar; originally published as Theorie der wirtschaftlichen Entwicklung (Leipzig, 1912Google Scholar).

⁷ It is noteworthy that before Schumpeter there was no distinction between entrepreneurs and capitalists. See Cantillon, Richard, Essai sur la nature du commerce en général (Texte manuscrit de la Bibliothèque municipale de Rouen, 1755Google Scholar); Say, Jean Baptiste, Mélanqes et correspondance d'economie politique (Charles Comte, 1820Google Scholar); Marshall, Alfred, Principles of Economics (London, 1930Google Scholar); originally published in 1890.

⁸ Schumpeter, Joseph A., Capitalism, Socialism and Democracy (New York, 1942Google Scholar).

⁹ Schumpeter, Capitalism, Socialism and Democracy, 134.

¹⁰ Nelson, Richard R. and Winter, Sidney G., “In Search of a Useful Theory of Innovation,” Research Policy 6 (1977): 36–77CrossRefGoogle Scholar; Nelson, Richard R. and Winter, Sidney G., An Evolutionary Theory of Economic Change (Cambridge, Mass., 1982Google Scholar).

¹¹ Lynskey, Michael J., “Introduction,” in Lynskey, Michael J. and Yonekura, Seiichiro, eds., Entrepreneurship and Organization: The Role of the Entrepreneur in Organizational Innovation (Oxford, 2002Google Scholar).

¹² Livesay, Harold C., “Entrepreneurial Persistence through the Bureaucratic Age,” Business History Review 51 (1977): 415–43CrossRefGoogle Scholar.

¹³ Thomas Blake Glover (1838–1911) was a Scottish merchant who arrived in Nagasaki in 1859, in the closing days of the Tokugawa Shogunate. He provided technical know-how for shipbuilding and mining, introduced Japan's first railway locomotive, and constructed the first Western-style shipyard in Nagasaki in 1869. This shipyard company later grew into the industrial multinational conglomerate, Mitsubishi.

¹⁴ In 1949 there were three breweries in Japan: Asahi Breweries, Nippon Breweries and Kirin Breweries, with market shares of 36.1 percent, 38.7 percent, and 25.3 percent, respectively. See Nakajo, Takanori and Kono, Toyohiro, “Success through Culture Change in a Japanese Brewery,” Long Range Planning 22 (1989): 29–37CrossRefGoogle Scholar. Kirin became Japan's largest brewing company in the 1950s and retained this position for forty-five years, until 1998, when Asahi acquired a 39.9 percent share of the domestic beer market, while Kirin's share was 38.8 percent. Incidentally, Asahi Beer Pharmaceutical Company was established in 1994; and it became Asahi Food and Healthcare Company in 2002.

¹⁵ Higgins, K. T., “How the Top Firms Stack Up,” Food Engineering 73 (2001): 40–48Google Scholar; Higgins, , “The World's Top 100 Food & Beverage Companies,” Food Engineering 74 (2001): 32–43Google Scholar.

¹⁶ Interview with Jun-ichi Koumegawa, 16 Feb. 2000. The list of interviewees appears as a footnote on the first page of this article. It is instructive to compare what was happening in the United States at this time. In October 1982, genetically engineered human insulin became biotechnology's first product, as developed by the fledgling biotechnology firm Genentech. Kirin, therefore, was an early entrant to the emerging field of modern biotechnology.

¹⁷ The government increased the alcohol tax by as much as 20 percent in 1984, with the result that overall alcohol consumption, including beer and wine, declined by 3.2 percent in the first year, and whiskey sales fell by 19.9 percent. See Richard Phalon, “Whiskey Rebellion – Japan's New Alcohol Tax and Changes in Bottling is Giving Distillers the Shakes,” Forbes, 1 July 1985.

¹⁸ Shuji Konishi, quoted in “Japanese Companies again Diversifying Product Lines,” Wall Street Journal, 22 Feb. 1983.

¹⁹ Jun Kojima, administrative manager, Kirin Pharmaceutical Division, quoted in Gary Schaefer, “Brewer Taps into Pharmaceuticals Market: Kirin Seeks Ways to Ease Reliance on Alcohol Sales,” San-Diego Union-Tribune, 22 Mar. 2000, C5.

²⁰ Interview with Jun Kojima, 27 May 2002.

²¹ Penrose, Edith T., The Theory of the Growth of the Firm (Oxford, 1959Google Scholar).

²² Shigeru Morotomi, deputy manager, Kirin Pharmaceutical Division, quoted in Kazufumi Taniguchi, “Japan's Major Beer Brewers Target Pharmaceuticals to Diversify,” Reuters News, 6 Dec. 1991.

²³ Office of Japan Affairs, National Research Council, U.S.-Japan Technology Linkages in Biotechnology: Challenges for the 1990s (Washington, D.C., 1992), 31Google Scholar.

²⁴ See Bevan, P., Ryder, H. and Shaw, I., “Identifying Small-Molecule Lead Compounds: The Screening Approach to Drug Discovery,” Trends in Biotechnology 13 (1995): 115–21CrossRefGoogle ScholarPubMed; Galambos, Louis and Sturchio, Jeffrey L., “Pharmaceutical Firms and the Transition to Biotechnology: A Study in Strategic Innovation,” Business History Review 72 (1998): 250–78CrossRefGoogle Scholar; Henderson, R., Orsenigo, L. and Pisano, G. S., “The Pharmaceutical Industry and the Revolution in Molecular Biology: Interactions among Scientific, Institutional, and Organizational Change,” in Sources of Industrial Leadership: Studies of Seven Industries, eds. Mowery, David C. and Nelson, Richard R. (Cambridge, 1999), 267–311CrossRefGoogle Scholar.

²⁵ Dr. Koichiro Aramaki, vice president, Kirin Pharmaceutical Division, quoted in David P. Hamilton, “Suds and Drugs: Japan's Kirin Brews Success in Biotechnology Venture,” Asian Wall Street Journal, 14 Jan. 1993, 1.

²⁶ Y. Inaba, “Multinationals Take to the Offensive,” Tokyo Business Today, June 1987, 50.

²⁷ Ibid.

²⁸ M. D. Dibner, “Biotechnology in Pharmaceuticals: The Japanese Challenge,” Science, 20 Sept. 1985, 1231.

²⁹ Miyata, Mitsuru, ed., Nikkei Baioteku Nenkan 87/88 [Nikkei Biotechnology Annual Review 87/88] (in Japanese) (Tokyo, 1987), 17Google Scholar.

³⁰ Dibner, M. D. and White, R. S., Biotechnology Japan (New York, 1989), 8Google Scholar. BIDEC was subsequently superseded by the Japan Bioindustry Association (JBA).

³¹ Japan Economic Journal, 29 Oct. 1988, 23.

³² Fransman, Martin and Tanaka, S., “Government, Globalisation, and Universities in Japanese Biotechnology,” Research Policy 24 (1995): 13–49CrossRefGoogle Scholar; Fransman, and Tanaka, , “The Strengths and Weaknesses of the Japanese Innovation System in Biotechnology,” in The Biotechnology Revolution? eds. Fransman, Martin, Junne, Gerd, and Roobeek, Annemieke (Oxford, 1995), 431–83Google Scholar.

³³ OECD, “The Industrial Policy of Japan,” in McCraw, Thomas K., America versus Japan: A Comparative Study of Business-Government Relations (Boston, 1986), 9Google Scholar.

³⁴ The companies were Ajinomoto, Asahi Chemical, Daicel Chemical, Denki Kagaku Kogyo, Kao Soap, Kyowa Hakko, Mitsubishi Chemical, Mitsubishi Chemical Institute of Life Sciences, Mitsubishi Gas Chemical, Mitsui Chemical, Mitsui Toatsu, Takeda, Toyo Jozo, and Sumitomo Chemical.

³⁵ Chemical companies were motivated also because of their falling rates of profit. See Itami, Hiroyuki, Why Is the Japanese Chemical Industry behind Other Industries? (Tokyo, 1991Google Scholar); Fransman, Martin, Visions of Innovation: The Firm and Japan (Oxford, 1999CrossRefGoogle Scholar).

³⁶ Aoki, Masahiko, Information, Incentives, and Bargaining in the Japanese Economy (Cambridge, 1988CrossRefGoogle Scholar); Okazaki, T., “The Government-Firm Relationship in Postwar Japan: The Success and Failure of Bureau Pluralism,” in Rethinking the East Asian Miracle, eds. Stiglitz, Joseph E. and Yusuf, Shahid (Oxford, 2001), 323–42Google Scholar.

³⁷ Tanaka, M., “Government Policy and Biotechnology in Japan: The Pattern and Impact of Rivalry among Ministries,” in The Promotion and Regulation of Industry in Japan, eds. Wilks, Stephen and Wright, Maurice (London, 1991Google Scholar).

³⁸ Miyata, M., “Toward a New Era in Biotechnology,” Science and Technology in Japan 50 (1994): 10–13Google Scholar.

³⁹ On entrepreneurship at the firm level, see Geoffrey Jones, R. and Butler, J. E., “Managing Internal Corporate Entrepreneurship: An Agency Theory Perspective,” Journal of Management 18 (1992): 733–49CrossRefGoogle Scholar.

⁴⁰ Tomoo Itoga was Kirin's senior vice president for technology. The company president during these discussions, and until April 1981, was Yasusaburo Sato, who became president in 1978. In April 1981, Shuji Konishi became president of Kirin, and he oversaw the operational diversification into the pharmaceutical industry. Another senior executive at the time, Koichiro Aramaki, became the president of Kirin Pharmaceutical Company, and eventually became president of the Kirin Group in March 2001, succeeding Yasuhiro Sato, who served as president from March 1996 to March 2001. Aramaki spearheaded Kirin's pharmaceutical business. He held a B.S. (Tokyo) in agricultural chemistry, majoring in fermentation, an M.S. (California, Davis) in food science and technology, majoring in dairy microbiology, and a Ph.D. (Niigata) in biological science.

⁴¹ Masaharu Ishikawa, product development manager, Kirin Pharmaceutical Division, quoted in Gary Schaefer, “Brewer Taps into Pharmaceuticals Market: Kirin Seeks Ways to Ease Reliance on Alcohol Sales,” San Diego Union-Tribune, 22 Mar. 2000, C5. This diversification is remarked upon elsewhere: “Kirin Brewery, a giant beer producer, spends the larger part of its research budget in gene-splicing research designed to create new beverages, drugs, and vegetables.” Leontiades, M., “The Japanese Art of Managing Diversity,” Journal of Business Strategy 12, no. 2 (1991): 32CrossRefGoogle Scholar.

⁴² Interview with Jun-ichi Koumegawa, 16 Feb. 2000.

⁴³ Interview with Jun Kojima, 27 May 2002.

⁴⁴ Interview with Akihiro Shimosaka, 15 July 2002.

⁴⁵ Alick Isaacs and Jean Lindemann discovered interferon in 1957. It was not until 1980, however, that it became widely known when it was one of the first proteins to be produced by recombinant gene technology, and at the time was seen as a wonder drug in the treatment of cancer.

⁴⁶ Interview with Jun Kojima, 27 May 2002. Toray, another Japanese “new entrant” firm, diversified into Pharmaceuticals from its core business in fibers and other synthetic materials in the 1970s and pioneered interferon in Japan. Suntory, another new entrant and Japan's largest whiskey maker, entered Pharmaceuticals in 1979 and developed gamma-interferon for therapeutic purposes.

⁴⁷ June Kinoshita, “Is Japan a Boon or a Burden to U.S. Industry's Leadership? (Biotechnology Industry),” Science, 29 Jan. 1993, 596.

⁴⁸ Dr. Masaharu Ishikawa, Product Development Manager, Kirin Pharmaceutical Division, quoted in Gary Schaefer, “Japanese Brewery Sees Future in Drugs,” Pittsburgh Post-Gazette, 23 Mar. 2000, F4.

⁴⁹ Interview with Isao Ishida, 15 Feb. 2002. In 1973, the research of Takeji Miyake of Kumamoto University became known to the renowned American biochemist, Eugene Goldwasser, of the University of Chicago, who was searching for the causal agent in blood that signals bone marrow to replace red blood cells. Goldwasser arranged for Miyake to go to the United States under an NIH grant to work with him. In 1976, Miyake and his colleagues isolated and purified EPO from the urine of humans. EPO was the first hematopoietic growth factor to be identified. See Miyake, T., Kung, C. K.-H. and Goldwasser, Eugene, “Purification of Human Erythropoietin,” Journal of Biological Chemistry 252 (1977): 5558–64Google ScholarPubMed.

⁵⁰ Collins, H. M., “Tacit Knowledge and Scientific Networks,” in Science in Context: Readings in the Sociology of Science, eds. Barnes, Barry and Edge, David (Cambridge, Mass., 1982Google Scholar).

⁵¹ Interview with Jun Kojima, 27 May 2002. Jun Kojima confirmed: “In other words, there was a tacit part and we were unable to produce EPO simply in accordance with the papers. We could not easily replicate Dr. Miyake's results.”

⁵² Arguably, Penrose's most important contribution to the theory of the firm is the notion of “productive opportunity.” See Penrose, The Theory of the Growth of the Firm, 31–32.

⁵³ Cohen, W. M. and Levinthal, D. A., “Absorptive Capacity: A New Perspective on Learning and Innovation,” Administrative Science Quarterly 35 (1990): 128–52CrossRefGoogle Scholar.

⁵⁴ Interview with Jun-ichi Koumegawa, 16 Feb. 2000.

⁵⁵ Interview with Tadashi Sudo, 1 Mar. 2000.

⁵⁶ Ibid.

⁵⁷ Aoki, Information, Incentives, and Bargaining in the Japanese Economy, 252. Also see Coleman, Samuel, Japanese Science: From the Inside (London, 1999Google Scholar).

⁵⁸ Interview with Jun-ichi Koumegawa, 16 Feb. 2000.

⁵⁹ Interview with Akihiro Shimosaka, 15 July 2002.

⁶⁰ Allen, Thomas, “Communications, Technology Transfer, and the Role of Technical Gatekeeper,” R&D Management 1 (1971): 14–21Google Scholar; Allen, , Managing the Flow of Technology: Technology Transfer and the Dissemination of Technological Information within the R&D Organization (Cambridge, Mass., 1984Google Scholar).

⁶¹ Cross, R. and Prusak, L., “The People Who Make Organizations Go–or Stop,” Harvard Business Review 80 (June 2002): 104–12Google ScholarPubMed.

⁶² N. Buratti, A. Gambardella, and L. Orsenigo, “Scientific Gatekeepers and Industrial Development in Biotechnology,” The Management and Economic Potential of Biotechnology: A Special Publication of the International Journal of Technology Management (1993): 59–75.

⁶³ Interview with Isao Ishida, 15 Feb. 2002.

⁶⁴ Interview with Jun-ichi Koumegawa, 16 Feb. 2000. For example, in its research on transchromosomic mice and human immunoglobulin genes, Kirin worked with Mitsuo Oshi-mura in the Faculty of Medicine, Tottori University. For its human antibody project, Kirin collaborated with Kazunori Hanaoka in the Laboratory of Molecular Embryology, Kitasato University. Kirin also collaborated with public research institutes, e.g., with Michio Oishi at the Helix DNA Research Institute in Chiba.

⁶⁵ Interview with Tadashi Sudo, 1 Mar. 2000.

⁶⁶ The Microbial Chemistry Research Foundation was founded by Hamao Umezawa, formerly of the National Institutes of Health. The foundation's research is funded by patent revenues and fees from research assignments. Hamao Umezawa (1914–86) developed a succession of new antibiotics, such as kanamycin (1957), pentamycin (1958), kasugamycin (1965) and bleomycin (1969), all of which were licensed to industry and used worldwide.

⁶⁷ Interview with Akihiro Shimosaka, 15 July 2002. Fumimaro Takaku was an expert in hematopoietic growth factor and also belonged to the National Hospital Center in Tokyo.

⁶⁸ In discussing the joint venture, I acknowledge that I am presenting events based primarily on the accounts of Kirin personnel only.

⁶⁹ Badaracco, Joseph, The Knowledge Link: How Firms Compete Through Strategic Alliances (Boston, Mass., 1991Google Scholar).

⁷⁰ Amgen was founded in April 1980 by two venture capitalists–Sam Wohlsteadter and William Bowes–with a UCLA molecular biologist, Winston Salser, and about $200,00 0 in seed money. They persuaded George Rathmann, a senior scientific executive at Abbott Laboratories, to join the company. In February 1981, they attracted additional capital by selling shares privately for $18.8 million, at the time one of the largest private placements ever for a biotechnology business.

⁷¹ The U.S. biotechnology firms included Cetus (founded in 1971), Genentech (1976), Biogen (1977), Genex (1977), Molecular Genetics (1979), and the Genetics Institute (1980). It is only in recent years that biotechnology venture firms–and venture firms generally–have emerged in Japan because of the provision of venture capital and institutional change. See the following articles by Lynskey, Michael J.: “A Profile of Biotechnology and Information Technology Venture Firms in Japan: Firm-level and Managerial Characteristics,” International Journal of Biotechnology 5 (2003): 105–24CrossRefGoogle Scholar; “The Commercialisation of Biotechnology in Japan: Bio-ventures as a Mechanism of Knowledge Transfer from Universities,” International Journal of Biotechnology 6 (2004): 155–85CrossRefGoogle Scholar; “Determinants of Innovative Activity in Japanese Technology-based Start-up Firms,” International Small Business Journal 22 (2004): 159–96CrossRefGoogle Scholar; “Bioentrepreneurship in Japan: Institutional Transformation and the Growth of Bioventures,” Journal of Commercial Biotechnology 11 (2004): 9–37CrossRefGoogle Scholar; “Knowledge, Finance and Human Capital: The Role of Social Institutional Variables on Entrepreneurship in Japan,” Industry and Innovation 11 (2004): 373–405CrossRefGoogle Scholar; “Transformative Technology and Institutional Transformation: Coevolution of Biotechnology Venture Firms and the Institutional Framework in Japan,” Research Policy 35 (2006): 1389–422CrossRefGoogle Scholar.

⁷² Until the early 1980s, EPO was only produced artificially in infinitesimally small quantities, so that its use in therapy was impossible. However, owing to the work of Fu-Kuen Lin, who discovered the gene that codes for this hormone, EPO became a widely available therapeutic candidate. Lin's first patent was filed on 13 December 1983, and other patents on the process for producing recombinant EPO were filed shortly thereafter.

⁷³ Interview with Akihiro Shimosaka, 15 July 2002.

⁷⁴ Roberts, E. B., “New Ventures for Corporate Growth,” Harvard Business Review 58 (July/Aug. 1980): 134–42Google Scholar.

⁷⁵ On Amgen's size, Jun-ichi Koumegawa said, “When we established the agreement with Amgen, it was a very small company; maybe the total number of employees was about 120.” Interview with Jun-ichi Koumegawa, 16 Feb. 2000. At the end of 1981, Amgen's staff numbered 42, expanding to 100 in 1982. See George Rathmann, B., “Biotechnology Startups,” in Biotechnology: The Science and the Business, eds. Moses, Vivian and Springham, D. G., 2nd ed. (Amsterdam, 1999), 47–58Google Scholar.

⁷⁶ Interview with Akihiro Shimosaka, 15 July 2002. According to Kirzner, “Entrepreneurial profit opportunities exist where people do not know what they do not know, and do not know that they do not know it. The entrepreneurial function is to notice what people have overlooked.” Kirzner, Israel M., “The Theory of Entrepreneurship in Economic Growth,” in Encyclopedia of Entrepreneurship, eds. Kent, Calvin A., Sexton, Donald L., and Vesper, Karl H. (Englewood Cliffs, N.J., 1982), 273Google Scholar.

⁷⁷ Interview with Jun Kojima, 27 May 2002.

⁷⁸ Akihiro Shimosaka joined Kirin in 1969 and worked initially in quality control for beer and later whiskey production. A graduate of the University of Tokyo in agricultural chemistry, he later gained a doctorate in microbiology from the Institute of Applied Microbiology, University of Tokyo.

⁷⁹ Interview with Akihiro Shimosaka, 15 July 2002.

⁸⁰ Ibid.

⁸¹ Writing on U.S.-Japan strategic alliances in biotechnology, Prevezer and Toker state that these relationships take at least a year to negotiate and develop. Prevezer, M. and Toker, S., “The Degree of Integration in Strategic Alliances in Biotechnology,” Technology Analysis and Strategic Management 8 (1996): 117–33CrossRefGoogle Scholar.

⁸² Rathmann, quoted in Marilyn Chase, “Amgen, Japan Brewery Form Venture to Make Synthetic Hormone,” Wall Street Journal, 14 May 1984.

⁸³ Philip J. Whitcome, director of strategic planning, Amgen, quoted in Victor F. Zonana, “Teaming Up: When it Comes to Forging Alliances, Japan Proves a More Willing Partner,” Los Angeles Times, 22 Feb. 1988.

⁸⁴ Rathmann, quoted in Neil Henderson, “Biotech Firms Reach Overseas for Partners–Ties between U.S. Firms and Foreign Competitors,” Washington Post, 19 May 1985.

⁸⁵ The original U.S. patent (no. 4,703,008) was issued to Kirin-Amgen, Inc., of Thousand Oaks, California, for DNA, vectors, and host cells in late October 1987, protecting its invention of “DNA Sequences Encoding Erythropoietin.” The patent text cited an estimate at the time “that the availability of erythropoietin in quantity would allow for treatment each year of anemias of 1,600,000 persons in the U.S.”

⁸⁶ Kirin's second hematology product, G-CSF (granulocyte colony-stimulating factor), was a protein that stimulates the production of white blood cells used in the creation of antibodies to help prevent bacterial infections. G-CSF was used in the treatment of cancerrelated neutropenia (low white-blood-cell count) in chemotherapy, hematological disorders, such as HIV, and bone marrow transplants.

⁸⁷ The core engineers in question were Ken Suzuki, vice president, pharmaceutical research laboratory, Kirin Brewery, Takahashi, Gunma; Hajime Ichihashi, plant manager, pharmaceutical production plant, Kirin Brewery, Takahashi, Gunma; and Atsuo Odagawa, production manager, pharmaceutical production plant, Kirin Brewery, Takahashi, Gunma.

⁸⁸ See Kunitake, R., Suzuki, A., Ichihashi, H., Matsuda, S., Hirai, O. and Morimoto, K., “Fully-Automated Roller Bottle Handling System for Large Scale Culture of Mammalian Cells,” Journal of Biotechnology 52, no. 3 (1997): 289–94CrossRefGoogle ScholarPubMed.

⁸⁹ See S. Oda, “Zouketsu Horumon Seizai de ‘Baioiyaku no Kirin’ e“ [Following Hematosis Hormone Products: A Shift towards Kirin Biopharmaceuticals] (in Japanese), Nikkei Biotechnology & Business (Sept. 2001): 106–9.

⁹⁰ “Two Groups Seek EPO Approval,” Biotechnology Newswatch 9 (6 Feb. 1989): 4Google Scholar.

⁹¹ Chase, “Amgen, Japan Brewery Form Venture to Make Synthetic Hormone”; Lawrence Surtees, “Legal Prowess Plays Crucial Role in Amgen's Biotech Race,” Globe and Mail, 11 Apr. 1988.

⁹² “Amazing Amgen–Big Time Rx Firm or Shooting Star?: EPO … A Great Way to Start,” Genesis Report-Rx, 1 June 1992.

⁹³ N. Miyadai, “Kirin Bīru: Beikoku Benchā Kigyō to no Gōben ni Yoru Iyakuhin Kenkyu Kaihatsu no Jissai“ [Kirin Beer: Realizing Pharmaceutical R&D through a Joint Venture with a U.S. Start-up] (in Japanese), Business Research (Mar. 1989): 25; “Can Amgen Follow Its Own Tough Act?” Business Week, 11 Mar. 1991, 95.

⁹⁴ The Japanese market for EPO was divided approximately equally between two manufacturers: Kirin and Chugai Pharmaceutical Company.

⁹⁵ “Kirin Brewery Expands Indications of Erythropoietin and G-CSF Preparations,” Pharma Japan, 3 June 1993, 16.

⁹⁶ “Kirin Brewery to Launch Blood Boosting Drugs,” Biotechnology Newswatch, 2 Dec. 1991, 9; “Kirin Brewery–A Profile,” Applied Genetics News, 1 Mar. 1993.

⁹⁷ David P. Hamilton, “Suds and Drugs: Japan's Kirin Brews Success in Biotechnology Venture,” Asian Wall Street Journal, 14 Jan. 1993, 1; Hamilton, “Kirin Brewery's Plunge into Biotechnology Pays Off–Ten Years Later, Japan Concern's Sales of Two Top Drugs Surpass Rivals,” Wall Street Journal, 25 Jan. 1993, B3.

⁹⁸ Interestingly, Kirin's income was higher than that of the traditional Japanese pharmaceutical companies, such as Sankyo (32nd position), Takeda (42nd position), and Yamanouchi (45th position) in 1992.

⁹⁹ “Kirin Founds U.S. Biotechnology Center, Provides Funds for 10 Years,” Biotechnology Newswatch, 21 Nov. 1988, 1.

¹⁰⁰ Toshiaki Kawakami, principal investigator, La Jolla Institute for Allergy and Immunology, quoted in Ann Gibbons, “In Biotechnology, Japanese Yen for American Expertise,” Science, 27 Nov. 1992, 1431.

¹⁰¹ NESP is a hematopoietic factor that increases the production of red blood cells. See Rhonda L. Rundle, “Amgen Net Income Rises 30%, Beating Analysts Estimates,” Wall Street Journal, 19 July 1996 B3; Charles Craig, “Amgen Posts 30 Percent Income Jump for 2nd Quarter,” Bioworld Today, 22 July 1996.

¹⁰² See Jones, K. K. and Shill, W. E., “Japan: Allying for Advantage,” in Collaborating to Compete: Using Strategic Alliances and Acquisitions in the Global Marketplace, eds. Bleeke, Joel and Ernst, David (New York, 1993), 115–44Google Scholar.

¹⁰³ Shigero Mishima, Pharmaceuticals analyst, S. G. Warburg (Japan), quoted in Hamilton, “Kirin Brewery's Plunge into Biotechnology Pays Off.”

¹⁰⁴ Lowell Sears, senior vice president, Amgen, quoted in Gibbons, “In Biotechnology, Japanese Yen for American Expertise.”

¹⁰⁵ Science and Technology Agency (STA), White Paper on Science and Technology (Tokyo, 1997Google Scholar).

¹⁰⁶ Koichiro Aramaki, vice president, Kirin Pharmaceutical Division, quoted in Gibbons, “In Biotechnology, Japanese Yen for American Expertise.”

¹⁰⁷ Rathmann quoted in Henderson, “Biotech Firms Reach Overseas for Partners.”

¹⁰⁸ Hidemaru Yamaguchi, biotechnology research analyst, Nomura Research Institute, Tokyo, quoted in Stuart Dambrot, “Strength in Fine Chemicals: Japan Moves toward International Biotech Market,” Chemical Week, 8 Apr. 1992, 44.

¹⁰⁹ Torres, A., “Unlocking the Value of Intellectual Assets,” McKinsey Quarterly 4 (1999): 28–37Google Scholar.

¹¹⁰ V. Griffith, “Amgen, TKT Patent Dispute Continues,” Financial Times, 10 Apr. 2000.

¹¹¹ Amgen's annual turnover was larger than the entire British biotechnology industry in 2003. See “Financial Times Global 500 List of the World's Largest Companies,” Financial Times, 10 May 2002; Rosie Murray-West, “Evans Warns Biotech is No ‘British Success Story,’“ Daily Telegraph, 25 Nov. 2003.

¹¹² In 2005, Kirin's pharmaceutical sales increased 7.8 percent to 67.6 billion yen and operating income increased 17.3 percent to 14.2 billion yen, representing 13 percent of a record consolidated operating income of 111.7 billion yen.

¹¹³ Interview with Jun-ichi Koumegawa, 16 Feb. 2000.

¹¹⁴ Interview with Isao Ishida, 15 Feb. 2002.

¹¹⁵ Ken Yamazumi, director of planning, Kirin Pharmaceutical Division, quoted in M. Hashimoto, “Kirin Biiru Iyaku Jigyo. Sanyu 20 Nen me Ookina Kake ni Deta: Saibo Iryo to Koutai Iyaku de Shoubu” [Kirin Beer Pharmaceutical Business: A Big Bet 20 Years On: Fight with Cell Therapy and Antibodies] (in Japanese), Nikkei Biotechnology & Business (Feb. 2002): 40–6.

¹¹⁶ The others were the U.S. biotechnology firms Amgen, Genentech in San Francisco, and ZymoGenetics in Seattle.

¹¹⁷ See “Four-way Fight Brews over Long-sought Platelet Factor,” Biotechnology Newswatch, 21 July 1994.

¹¹⁸ See D. Metcalf, “Thrombopoietin–At Last,” Nature, 16 June 1994, 519-20.

¹¹⁹ Kevin W. Sharer, president of Amgen, quoted in Larry Armstrong, “Amgen Could Use a Little Growth Factor: Can it Keep Profits Up While Awaiting the Next Breakthrough?” Business Week, 31 Oct. 1994, 122; Gordon Binder, CEO of Amgen, quoted in “CEO Interview–Amgen Inc.,” Wall Street Transcript, 20 Feb. 1995.

¹²⁰ Dr. Bruce Carter, corporate executive vice president and chief scientific officer, Novo Nordisk, quoted in “Novo Nordisk Signs License Agreement with Amgen and Kirin on Thrombopoietin,” Business Wire, 15 Aug. 1995.

¹²¹ Mitsuo Ohmi, senior analyst, Smith Barney, Tokyo, quoted in “Japan's Kirin/Denmark's Novo: Builds on Strong Area,” Dow Jones International News, 18 Aug. 1995.

¹²² Stem cells are expected to play an important role in clinical applications as their use in transplantation and gene therapy widens. The worldwide market is forecast to almost triple from $24.6 billion in 2005 to $68.9 billion in 2010.

¹²³ Quoted in “Diabetes to Benefit from Tissue Engineering,” Kyodo News, 8 Dec. 2000.

¹²⁴ Katsuhiko Asano, quoted in Hashimoto, “Kirin Biiru Iyaku Jigyo. Sanyu 20 Nen me Ookina Kake ni Deta: Saibo Iryo to Koutai Iyaku de Shoubu” [Kirin Beer Pharmaceutical Business: A Big Bet 20 Years On: Fight with Cell Therapy and Antibiotics].

¹²⁵ Interview with Yasunori Yamaguchi, 1 Mar. 2000.

¹²⁶ For example, Yasunori Yamaguchi spent two years, from 1992 to 1994, doing postdoctoral research with Ralph Steinmann, the discoverer of dendritic cells, at Rockefeller University.

¹²⁷ Koichiro Aramaki, president, Kirin Pharmaceutical Division, quoted in “Dendreon and Kirin to Develop and Commercialize Dendritic Cell Therapies,” Business Wire, 10 Dec. 1998.

¹²⁸ Christopher Henney, CEO of Dendreon, quoted in Ibid.

¹²⁹ “Dendreon and Kirin Sign Research Agreement,” Business Wire, 4 May 1999; “Dendreon and Kirin Expand Their Collaboration,” Business Wire, 10 Aug. 2001; Marni Leff, “Kirin Drug Division, Dendreon Close Deal,” Seattle Post-Intelligencer, 11 Aug. 2001; “Kirin and Dendreon to Seek Cancer Vaccines,” Strategic Outsourcing Report, 1 Sept. 2001; “Kirin to Promote Cytotherapy Study, Targeting Cancer Treatment,” Japan Chemical Week, 11 Oct. 2001.

¹³⁰ A monoclonal antibody (MAB) is an exact copy of a single antibody that binds to a specific antigen–a molecule on, say, a bacterium, virus, or cancer cell. It then triggers a response in the immune system that destroys or neutralizes the interloper. The market for MABs is projected to triple in value from $10.3 billion in 2004 to $30.3 billion in 2010.

¹³¹ Human immune systems tend to recognize pure mouse antibodies as foreign and destroy them with–ironically–antibodies. The reaction, known as human antimouse antibody response, not only prevented mouse antibodies from hitting their targets but also produced side effects that were sometimes lethal. Progress was made to engineer antibodies acceptable to humans: from chimera antibodies, to humanized antibodies, and human-type antibodies. Critical mouse characteristics, however, remained and hindered effectiveness, until Kirin developed the world's first genetically engineered mouse that could produce human antibodies.

¹³² Interview with Isao Ishida, 15 Feb. 2002.

¹³³ In October 1997, a specialist antibody company called Medarex (Annandale, N.J.) acquired GenPharm (San Francisco). Cell Genesys (Foster City, Calif.) spun off its mouse technology into a separate company called Abgenix (Fremont, Calif.). See G. Stix, “Innovations: The Mouse That Warred,” Scientific American, June 2001, 34–5.

¹³⁴ Interview with Isao Ishida, 18 Sept. 2001.

¹³⁵ Interview with Isao Ishida, 15 Feb. 2002.

¹³⁶ Ibid. Ishida said that such abnormality is “similar to Down's syndrome in humans, caused by trisomy 21.” Down's syndrome is caused by one cell having two 21st chromosomes instead of one, so a resulting fertilized egg has three 21st chromosomes. Hence the scientific name, trisomy 21

¹³⁷ Ibid.

¹³⁸ Ibid.

¹³⁹ Whereas the existing technology at the time allowed scientists to insert about 0.5 to 2 million base pairs of DNA into cells and into mice, the chromosome that Ishida and colleagues at Kirin could insert represented about 20 million base pairs of DNA.

¹⁴⁰ See Tomizuka, K. et al. , “Functional Expression and Germline Transmission of a Human Chromosome Fragment in Chimeaeric Mice,” Nature Genetics 16 (1997): 133–43CrossRefGoogle ScholarPubMed.

¹⁴¹ Interview with Isao Ishida, 15 Feb. 2002.

¹⁴² Roger Reeves, associate professor of physiology, Center for Medical Genetics, Johns Hopkins University School of Medicine, Baltimore, on Talk of the Nation, National Public Radio (6 June 1997Google Scholar).

¹⁴³ Interview with Dr. Kazuma Tomizuka, 1 Mar. 2000.

¹⁴⁴ Donald Drakeman, president and CEO, Medarex, quoted in “Medarex Announces Strategic Alliance with Kirin,” PR Newswire, 10 Jan. 2000.

¹⁴⁵ Michael Appelbaum, executive vice president of finance and administration, Medarex, quoted in Lisa Seachrist, “Medarex and Kirin Brewery Enter $12m Antibody Alliance,” Bio-World Today, June 2000.

¹⁴⁶ Donald Drakeman, president and CEO, Medarex, quoted in “Squawk Box–Medarex Incorporated–CEO Interview,” CNBC/Dow Jones Business Video, 12 Jan. 2000.

¹⁴⁷ “Kirin to Step Up Protein Production to Underpin Antibody Pharma Operations,” Japan Chemical Week, 18 Oct. 2001; “Antibody Drugs May Thrive before Genetics Drugs Appear,” Japan Chemical Week, 13 Dec. 2001.

¹⁴⁸ Schumpeter, Capitalism, Socialism and Democracy, 133.

¹⁴⁹ Nonaka, Ikujiro, and Takeuchi, Hirotaka, The Knowledge-Creating Company: How Japanese Companies Create the Dynamics of Innovation (Oxford, 1995), 135–40Google Scholar.

¹⁵⁰ Schumpeter, The Theory of Economic Development.

¹⁵¹ Murray, J. A., “Marketing is Home for the Entrepreneurial Process,” Industrial Marketing Management 10, no. 2 (1981): 93–9CrossRefGoogle Scholar.

¹⁵² Cole, Arthur H., Business Enterprise in its Social Setting (Cambridge, Mass., 1959Google Scholar); Alford, B. W. E., “The Chandler Thesis: Some General Observations,” in Management Strategy and Business Development, ed. Hannah, Leslie (London, 1976Google Scholar); Minkes, A. L. and Foxhall, G. R., “Entrepreneurship, Strategy, and Organization: Individual and Organization in the Behavior of the Firm,” Strategic Management Journal 1, no. 4 (1980): 295–301CrossRefGoogle Scholar; Minkes, A. L., The Entrepreneurial Manager: Decisions, Goals and Business Ideas (Harmondsworth, U.K., 1987Google Scholar).

¹⁵³ Foxhall, G. R. and Minkes, A. L., “Beyond Marketing: The Diffusion of Entrepreneurship in the Modern Corporation,” Journal of Strategic Marketing 4 (1996): 71–93CrossRefGoogle Scholar.

¹⁵⁴ Alfred Marshall viewed the entrepreneur as an employer, a manager, and a coordinator. According to Schumpeter, however, “the Marshallian definition of the entrepreneur, which simply treats the entrepreneurial function as ‘management’ in the widest meaning, will naturally appeal to most of us. We do not accept it, simply because it does not bring out what we consider to be the salient point and the only one which specifically distinguishes entrepreneurial from other activities.” See Marshall, Principles of Economics; Schumpeter, The Theory of Economic Development, 77.

¹⁵⁵ Weber saw the “rational-legal” type of organization, or “bureaucracy,” as the dominant institution of modern society, and described it as being like a machine. Weber, Max, The Theory of Social and Economic Organization (Oxford, 1947Google Scholar).

¹⁵⁶ Minkes, The Entrepreneurial Manager.