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P-037Innovation Trajectory of Brazilian Innovative Pharmaceutical CompaniesAline Figlioli, Cely Ades, Priscila R.Costa, Fernanda Ribeiro, Guilherme Plonski, School of Economics, Business and Accountingat the University of São Paulo, BrazilGeciane Porto, School of Economics, Business and Accounting of Ribeirao Preto at the University of São Paulo, BrazilIntroductionThis study aims to analyze the innovation trajectory of Brazilian innovative pharmaceutical companies. Specifically, we seek to(1) verify the process of innovation, (2) characterize the internal structure of R&D; (3) mapping the flows of knowledge andtechnology, and (4) examine the alignment between innovation activities (open and closed) and business model.Since innovation is considered as an essential element of competitiveness for companies in this sector, its relevant to study theBrazilian companies that could break the vicious circle of company risk-averse - technological follower - who fear the culturaland commercial diversity. The analysis of the innovation process of innovative companies will result in discussions that could beused as the conceptual basis and as a generic parameter of innovation by entrepreneurs from developing countries in thepharmaceutical industry.Literature review2.1 InnovationWe start defining what is innovation using for it Hesselbein et al. (2002/xi apud BARBIERI, 2004) Drucker (2003), Schumpeter(1982) and OCDE (2005). We aproach the innovation process as a sistemic cicle (LACERDA, 2001; TIDD ET. al., 2008) andshow the phases of innovation Schumpeter (1988). In the same line, we show the value chain innovation model of Hansen eBirkinshaw (2007).Then, we deal with the competences to innovate (PRAHALAD, HAMEL, 1990; WOODWARD 1965 apud Fleury, 2003) and thefive innovation trajectories (TIDD et. al., 2008). The types of innovation are approached using Tidd et al. (2008) and Oslo Manual(OCDE, 2005).In the last section of this topic we deal with innovation models: close and open paradgim (CHESBROUGH, 2003; 2006).Specifically to the open innovation approach, we present its processes (GASSMANN, ENKEL, 2006, apud ROHRBECK;HÖLZLE; GEMÜNDEN, 2009), the categories of users (KEUPP; GASSMANN, 2009), the key factors that determines itssuccess (CHESBROUGH; CROWTHER, 2006), the estrategies to overcame the chalenges of open innovation (WEST;GALLAGHER, 2008) and the need for balance in its adoption (ENKEL; GASSMANN; CHESBROUGH, 2009).2.2 The Pharma IndustryWe start with an overview of the pharma chain and presents some data about the Brazilian Pharma Industry (ABIQUIF, 2009;Sindusfarma, 2009), as revenues and its evolution, import and exportation. Then we present the Big Pharmas (Fortune Global500, 2010), and some data about the sector in the world (IMS Health, 2010; RADAELLI, 2006).We present the innovative variables and the main forms of alliances/partnerships in the pharma industry (PAVITT, 1984, apudRADAELLI, 2006; MCCUTCHEN, SWAMIDASS, 2004).3. Research MethodWe performed a descriptive qualitative study by means of two case studies in the pharmaceutical industry: Cristalia Laboratoriesand Recepta Biopharma.The choice of the companies studied was defined according to three criterias: (1) 100% brazilian capital, (2) act in thepharmaceutical sector, and (3) to be innovative.Primary data were collected through in-depth interviews with senior management of the companies and secondary sources ofevidence were also consulted.4. Contributions and implicationsThe survey results shows the innovation process of the studied companies, describes the internal structure of R & D, shows theflow of input and output of knowledge and technology and demonstrate the alignment between innovation activities (open andclosed), the business model and the limitations of the companies strategy, and the ability to coordinate social networksregardless of company size and resources available.The trajectory of innovation study shows that although both of the companies are dependent on scientific basic research, theymanage to coordinate the work, their technology sources and opportunities in order to "maintain power”, regardless of companysize.Madrid, October 20, 21 & 22 - 2010100