Sectoral patterns of technological change, technology diffusion and global competition: Comparison of the semiconductor and the pharmaceutical industries

Though both are seen as “high-tech” industries, the pharmaceutical and the semiconductor industries are in fact very different in the patterns of technology diffusion and global competition. In the pharmaceutical industry, innovations are concentrated in few regions, and the industrial leaders enjoy sustainable advantages; while in the semiconductor industry, innovations gradually distribute, and the advantages of the industrial leaders are vulnerable. By comparing these two industries, this article argues that different patterns of technology diffusion and competition should be explained by different patterns of technological change. The analysis of this article shows that the differences of technological change in these two industries are mainly originated in different relationships between science and technology, which can be represented by “linear model” in the pharmaceutical and “chain-linked model” in the semiconductor industry, and which also cause different relationships between product innovations and process innovations, differences in uncertainties, costs and requirements of resources and capabilities. Finally, this article discusses the possibility to generalize the distinction between science-based and technology-based patterns of technological change.