Relocating high-tech industries to emerging markets: case of pharmaceutical industry outsourcing to India

Abstract

Offshore outsourcing has evolved from cost-only strategy to growth strategy in knowledge-intensive industries (KIIs) such as the pharmaceutical industry. This paper explores the case of offshore outsourcing of pharmaceutical manufacturing to India. An extensive literature review shows that firms do engage in offshore outsourcing to India have access to talents, infrastructure as well as markets. Despite the bright future of offshore outsourcing of pharmaceutical industries to India, inadequate protection of intellectual property rights (IPRs), scarcity of highly skilled manpower and institutional shortcomings can pose serious challenges. The study finds that institutional policy framework for promotion of collaborative research and development (R&D) as well as investment in infrastructures and human capital development can keep the momentum in this sector of high-tech industry.

Keywords:

• Offshoring
• pharmaceutical manufacturing
• emerging markets
• India
• KIIs
• R&D
• IPRs

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 Confederation of Indian Industry study, September 2004.

2 The Patents (Amendment) Act, 2005, accessed July 6, 2009, www.patentoffice.nic.in/ipr/patent/patent_2005.pdf