Indian pharmaceutical small and medium enterprises (SMEs) were traditionally less transnationalized as compared to their large counterparts. National market was their primary focus and their cost-based competitive strategies were sufficient in providing them a sustainable growth within the protective domestic environment created by strong policy interventions. With large-scale liberalization measures since 1990s these SMEs are now exposed to global competition and are forced to transnationalize their business operations to survive. Given the significance of pharmaceutical SMEs in terms of production units, drug production, workers and health security, the issue of transnationalization of these SMEs is of paramount policy relevance.
This book critically analyzes the ways in which Indian pharmaceutical SMEs can integrate themselves into the global markets with special focus on the entry strategy of exporting and outward foreign direct investment (OFDI). The transnationalization behaviour of pharmaceutical SMEs has been analyzed from the perspective of firm-specific factors such as technologies, scale of operation, learning, skills, etc., and the overall policy environment. Apart from undertaking pioneering attempt in estimating the size of SME sector in Indian pharmaceutical industry and adopting improved methodology for the analysis of SMEs' export behaviour, this book has contributed significantly in the understanding of Indian pharmaceutical SMEs' export behaviour through case study approach. It has successfully brought out various lessons that Indian pharmaceutical SMEs are required to be aware of while transnationalizing their businesses. In general pharmaceutical SMEs seem to have a great potential for transnationalization through exports and outward FDI but are constrained by limited financial, technological capabilities and inadequate policy support. After critically evaluating the existing policy framework for the pharmaceutical SMEs, the book advocates urgent need for provision of sufficient low cost finance, strengthening access to national research laboratories, discriminatory incentive rates for SMEs vis-a-vis large firms, promoting pharmaceutical SME cluster and continuous training and skill development programmes in transnationalization. The book will be of interest not only to academics, but also to policy makers, pharmaceutical companies, business analysts, students, NGOs and other interested in small and medium enterprises in general.
Jaya Prakash Pradhan (PhD) Assistant Professor, Institute for Studies in Industrial Development, New Delhi. He has worked as a faculty in Gujarat Institute of Development Research and served as a consultant to the Research and Information System for the Non-Alingned and Other Development Countries and the United Nations Conference on Trade and Development. his research interests include the developmental impact of foreign diret investment and transnational production, cross-border mergers and acquisitions, international trade, technology, Indian pharmaceutical industry, human development among other theme.
Partha Pratim Sahu Assistant Professor, Institute for Studies in Industrial Development, New delhi. he was educated at the Sambalpur University (M.A. in Economics), Orissa and Jawaharlal Nehru University (PhD), New Delhi. His research interests include issues related to industry, labour and employment. He has published several research papers mostly relating to small scale industry, labour and employment.
- Transnationalization of SMEs: Theoretical Background
- Definition, Database and Performance of Pharmaceutical SMEs
- Transnationalization through Exports Activities
- Export Performance of Selected Pharmaceutical SMEs
- Transnationalization through Cross-border Direct Investment
- Defining Government Role in Transnationalization of Pharmaceutical SMEs
- Conclusions and Policy Implications