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Biotech companies are generally faced with the paradoxes of simultaneously managing growth and innovation, as well as addressing explorative and exploitative aspects of innovation. Scholars have urged them to re‐evaluate their business model. The purpose of this paper is to explore how biotech companies in emerging economies address these paradoxes, focusing upon the nascent biotech industry in India, in order to investigate their growth and innovation patterns, as well as identify the challenges that they may face.

A qualitative data collection, using in‐depth interviews with representatives of organizations that deal directly with improving the quality of the business environment for biotech industry in India, as well as biotech entrepreneurs and leaders were undertaken. A total of 13 interviews provided insights related to innovation and growth that is discussed in the paper.

Data indicate that Indian biotech companies are ambidextrous and have managed to transcend the aforementioned paradoxes by developing and maintaining distinct organizational capabilities. They were found to pursue an integrated model of efficiency and innovation and utilize both exploitative and explorative aspects of innovation to fuel growth and innovation. The authors also found evidence of some of the characteristics of the “India Way”, proposed by Cappelli et al.

The authors conclude that Indian companies offer an opportunity for learning for American biotech companies with respect to building new competencies and balancing growth and innovation in today's competitive environment.

Despite being labeled as the “industry of the decade”, biotechnology has been neglected in technology and innovation literature. It is hoped that the paper's findings will generate interest in the study of biotech industries in emerging economies, to help scholars develop interesting new theoretical models of innovation and aid managers in coping with the innovation and change paradoxes that they are faced with in developing new products and services.

In the enlarged European Union (EU) with 25 members, the free movement of capital, coupled with the free movement of goods and services should be a major direct attraction for both intra-EU and external foreign direct investment (FDI) inflows. EU membership does not, however, lead to a linear increase in FDI inflows as many analysts suggest (ECE, 2001). With EU accession, the structure of FDI may change substantially (Hunya, 2000; Dyker, 2001). Activities based on the existence of closed domestic markets (e.g. food and beverages) and on cheap labour (e.g. assembly activities) might be reduced, or even closed down, giving way to more knowledge-intensive activities in the new EU member countries (Kalotay, 2004a). FDI in the new EU member countries is not yet on an uninterrupted growth path. In the pre-accession phase (1995–2003), the relative importance of new EU members in global FDI flows when compared to that of the “old” members of the EU, was actually shrinking. Thus, if new members want to use FDI as one channel for catching up, they have to reverse this trend and increase their inward FDI quite rapidly.