Technology Dynamics, Network Dynamics and Partnering. The Case of Dutch Dedicated Life Sciences Firms

Abstract

Organisations active in the life sciences make use of developments in modern biotechnology. Modern biotechnology constitutes a broad field of enabling technologies impacting different industrial sectors. Due to the potentially pervasive character of this set of enabling technologies, their development is considered important in stimulating sustainable economic development. However, this field is still in a nascent stage of development: new technological developments succeed one another rapidly, generating uncertainty about which technological opportunities to seize, and lead to the distribution of knowledge and competences across firms. New firms founded on the basis of promising inventions within this emerging technological field need to cope with a lack of external legitimacy. Engaging in partnering can contribute to this improving this legitimacy. Both the characteristics of biotechnology as an emerging technological field, as well as the lack of external legitimacy of the firms operating in it, make organisations inclined to engage in partnering. However, these characteristics may also be conceived as reducing the likelihood of a firm to find other organisations interested in collaboration as they generate uncertainty with regard to the chances of the firm's survival. The aim of this thesis is therefore to address the factors that contribute to the ability of technology-based firms active in an emerging technological field to collaborate with other organisations. The empirical focus is on Dutch dedicated life sciences firms (DDLSFs). This thesis addressess technology dynamics, network dynamics, resource-based explanations for partnering and processes of partner search. Data on the same population of firms are used to address these different aspects of importance to interorganisational collaboration. With regard to technology dynamics, it was shown that from 2000 to 2004 on the level of the population of newly founded firms the technological diversity increased rather than decreased. It was also shown that many firms are specialists, either working on one technological subfield or main field. The network of interorganisational collaboration compiled by DDLSFs became slightly more structured from 2002 to 2004. The individual relationships were volatile. While the hubs in the networks of 2002 and 2004 were research institutes, different research institutes are most central in 2002 and in 2004. On the micro-level, the primary inducement of DDLSFs for partnering is to gain access to the technological knowledge of its partner. However, some aspects were found to interfere with this seemingly rational structuring of partnering. On the level of the firm, business development, both prior and current, were found to positively influence the partnering rate of DDLSFs. This implies that relatively more positive prior and current business development provides a DDLSF with opportunities for partnering. A positive effect on partnering was also exerted by venture capital acquisition. With regard to the search for partners, satisficing behaviour seems to be exhibited by the DDLSFs involved. This finding indicates that for many DDLSFs partnering can be characterised by trial and error learning, rather than adhering to a strategy that has been determined beforehand. This might significantly influence the subsequent chance of success of the established partnerships.