Buying the future: Amgen and Exxon
I have had projects with the biotechnology company Amgen for 10+ years. And when I was a graduate student I worked for them (via a temp agency) for a year. Through this- working with and for Amgen- I have seen the corporate culture, and how they do business, change dramatically. They are a far less efficient company now; unable to innovate. But they have the resources (size) to buy other’s innovation and profit tremendously from it.
Ten years ago, from my perspective, Amgen was a great company. They were fun to work for and work with. Employees were happy and well cared for. And employees, in turn, were very productive and creative; Both in their ability to develop new therapies, but also their ability to develop new techniques for efficiently synthesizing and screening targets. Good people and good science was the foundation for the company- and they were very successful.
This decade I have seen many barriers put in place that makes innovation and efficiency much more difficult. They are no longer fun to work with; And the layers of lawyers and HR are 3x as thick, when I do decide to work with them. But, more broadly important, they no longer develop drugs in house. They have made the decision, like most pharmaceutical companies, to reduce applied research. They buy and develop targets from small, innovative, efficient companies.
Their 2007 sales were 6.7 times greater than their 1997 sales ($14.7 Billion compared to $2.2 Billion). However, by any metric of innovation, creation, efficiency- they are capable of doing far less Now than they were ten years ago. (disclaimer- this is my opinion) They are, however, much more able to buy others’ innovation.
And this brings me to Exxon. Exxon is innovating nothing (not innovating anything?). They are using 100 year old technology to pull oil out of the ground. Yes, the methods have improved, and they can go far deeper- but they are still pulling oil out of the ground.
Exxon’s profits are insane (nearly $15 Billion 3Q 2008)- but very little is going into R&D.What they are doing is buying their own stock. They are ensuring survival and dominance.
Despite the absence of investment- they will OWN energy for the next century. Why? Because they have the resources to buy innovation when they know it will be profitable. Exactly what Amgen and other big pharmaceuticals companies do. The innovators will be bought out, and they will benefit from the purchase. But the risk/reward is weighted heavily towards big companies who can buy when the risk has been removed.
Big cannot innovate. Big is not efficient. Big makes for a shitty place to work. Big stifles the future of this country. Big is un-democratic. Big is less capitalistic. (yes, these are generalities)
But big wins in this country. And will continue to win without big change. The US will not be successful in the World’s marketplace with this system.
God bless the USA. And God help us. Yes We Can!!