The biotechnology industry, which is characterized by new products/processes of unusually high market value, differs from other high tech industries because it is driven by hypercompetition, intellectual property issues that are arising faster than the laws to govern them, and high levels of uncertainty in the incubation and commercialization of new products and processes. These conditions have allowed for risk-balancing organizational arrangements, such as alliances with universities and other firms, to promote innovation. Furthermore, the completion of the human genome project has introduced endless possibilities of research and product/process development, which cannot be accomplished within the boundaries of a single firm. This study will address two key questions: (1) to what extent do biotechnology firms depend on regional clusters of other biotechnology firms and universities to form research and development (R&D) alliances? (2) Do R&D intensive biotechnology firms, which have forged alliances with other firms and universities, exhibit better innovation performance than their counterparts? The research questions are based on two major limitations of recent studies of innovation in the biotechnology industry: (1) the effectiveness of different types of alliances has not been examined under one framework of analysis, that is, the role of formal/informal and domestic/international partnerships in promoting innovation has not been studied, and (2) the role of geography has been limited to the analysis of whether linkages are localized, that is, the role of regional clusters of biotechnology industry in the development, growth, and impact of these linkages on innovation has been largely ignored. The research will conduct a postal survey of the entire population of biotechnology firms in human diagnostics and therapeutics and interviews of appropriate scientific and managerial personnel in a selected group of firms. Both quantitative and qualitative analyses will be utilized to analyze the data. The study is expected to show the importance of location-based advantages in the development of a network, both formal and informal, conducive to scientific advancements and technological development.
The proposed study will offer an understanding of the specific processes influencing the organization of innovation in the biotechnology industry. The study is expected to explain how regional clusters influence the organization of innovation in the biotechnology industry and how new technologies develop dominant centers of innovation. Firm-level behavior in a highly competitive and uncertain environment, where barriers to innovation can stifle growth and cause premature demise of brilliant scientific efforts, will be understood. Findings from the study will be used to determine how innovation trajectories are indicative of urban and regional development based on yet-to-be developed cutting-edge technologies. Broader societal implications on university-industry partnerships, the protection of intellectual property rights, and the Federal regulation of innovation will be provided.
