Four years after Amgen negotiated its first joint venture with a Japanese firm, the biotechnology company's bargainers are still marveling at the speed and simplicity of the talks and at the unlikely identity of their new partner.
Amgen's previous joint ventures in the United States typically involved months of haggling, and the 40- to 50-page written agreements that emerged explicitly addressed every contingency. In contrast, the Thousand Oaks-based company struck its Japanese deal to commercialize a genetically engineered substance for treating kidney disease in just three days.
More strikingly, when Amgen bargainers read some of Kirin's two- or three-page agreements with other companies, the Americans were astonished to find such phrases as "this will be worked out," "this will be considered later" and "this will be refined."
Recalled Philip J. Whitcome, Amgen's director of strategic planning: "There was no nit-picking--the focus was on the big picture, on the long-term success of the venture. They came into the talks with a positive attitude. They weren't thinking about what their bailout position might be if things soured."
The Amgen-Kirin linkup underscores a key finding in an international survey of top corporate executives conducted by The Times and the Booz-Allen & Hamilton management consulting firm: that Japanese are much more comfortable than Americans about entering into alliances, consortiums and other cooperative ventures. In an era of rapidly changing technology, where each new advance is more costly than the one that came before, this could give the Japanese a key edge--not only in the battle against U.S. rivals but also in dealings with the other growing Pacific economic powers.
"The era of U.S. technological self-sufficiency has come to an end," said Herbert I. Fusfeld, director of the Center for Science and Technology Policy of the Rensselaer Polytechnic Institute School of Management in Troy, N.Y. "As a nation, we need to better develop our skills and our confidence to negotiate purchases of technology."
Although American executives acknowledged the growing need for cooperative research ventures, both in the United States and abroad, the survey found that U.S. firms were not as upbeat about alliances as their Japanese or other Asian counterparts. Fully 84% of the Japanese firms said alliances are beneficial, compared to 78% of the non-Japanese Asian firms and just 57% of the U.S. firms. Remarkably, almost three out of 10 of the U.S. participants in the survey said that alliances are dangerous--compared to just 4% and 5% of the Japanese and other Asian firms, respectively.
There was similar divergence on the question of whether industrywide consortiums are an effective approach to developing technology. In the United States, 33% found such cooperative ventures effective or somewhat effective; none found them highly effective. In Japan, on the other hand, 8% found consortiums highly effective and an additional 55% rated them as effective or somewhat effective.
"The urge to be self-sufficient remains strongly rooted in the American psyche at a time when economic realities dictate that neither companies nor even countries can go it alone," said Alan G. Chynoweth, vice president of Applied Research of Bell Communications Research, the research arm of the seven Bell regional operating companies.
"In our society, which glorifies the rugged individualist and emphasizes confrontation, cooperation is the recourse of last resort," added William C. Norris, chairman emeritus of Control Data and one of the most vocal backers of cooperative research ventures in the United States. "You cooperate when nothing else works."
Held Back Top Talent
"It took me 12 years and three tries to get MCC organized," he added, referring to the ground-breaking Microelectronics & Computer Technology Corp., the private sector cooperative venture in Austin, Tex., that funds long-term research aimed at significant advancements in computer technology.
When the consortium finally got off the ground, members were reluctant to send their best scientists to work there, according to retired Admiral Bobby Inman, MCC's former chief executive. Inman rejected 90%of the top researchers offered by consortium members. Today, eight out of 10 of MCC's 294 scientists are direct hires and only 20% come from member companies.
Even MCC's most ardent backers admit that it is too early to tell whether the 6-year-old venture is a success. "We're ahead on some projects, behind on others," said William D. Stotesbery, MCC's director of government and public affairs. And while some incremental product improvements have resulted--NCR recently introduced an artificial intelligence product based on research from MCC--there have been no great breakthroughs from the venture's laboratories.