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This book examines an important phenomenon for competitiveness and innovation in industry: namely the growing use of scientific principles in industrial research. Industrial innovation still arises from systematic trial-and-error experiments with many designs and objects, but these experiments are being guided by a more rational understanding of phenomena. This has important implications for market structure, firm strategies and competition. Science and Innovation focuses on the pharmaceutical industry. It discusses the changes that the notable advances in the life sciences since the 1980s have exerted on the strategies of drug companies, the organization of their internal research, their relationships with scientific institutions, the division of labour between large pharmaceutical firms and small research-intensive suppliers, the productivity of drug discovery and the productivity of R & D.