Basic vs applied research: new link, network, and project governance. Lessons from four biotech research-based organizations

Abstract

Based on a qualitative research approach, this paper explores how four highly successful biotechnology organizations source their most critical input-scientific knowledge and integrate it inside. We selected matched pairs of organizations that operated under similar conditions and regulatory regimes (Southern Italy) but differed considerably with regard to ownership (public and private). We find that scientists enter into large numbers of collaborative research efforts (frequently informal) with scientists at other organizations, especially universities. Formal market contracts are also used to govern these exchanges of scientific knowledge. Inside, the main job in integrating new information and knowledge, is carried up by few critical connectors. Our findings suggest that the reputation is the real, effective intangible resource at the base of these relational activities for value creation in all the cases. We selected the Dynamic Capabilities (DCs) model proposed by Teece, Pisano, Shuen, 1997 and by Teece, 2007, as the core theoretical guideline for the present study. Following DCs, we consider the places where basic and applied research meet as the “critical-zone” for value creation in biotech organizations. Another analytical tool is the network approach to find and fix the critical organizational dimensions under network domains. Our findings enable a future research pattern based on a tested informal relation codification. It will be possible to implement a quantitative research on a higher number of observations. This thesis is divided into the following sections. In chapter I, the research topic is presented as an empirical, real-changing movement, drawing on the case of USA and its national biotech-innovation system, in other words the change in the relational dynamic between basic and applied research. As such, the formulation of the general research question emerges out of a simple consideration of the corresponding problem for the Italian context, specifically southern Italy. Chapter II deals with the method and research questions and describes the modes of organizing the analysis. As the method is qualitative and focused on case studies, this section also presents the theoretical issues we referred to for data analysis and evidence discussion. We refer, here, to the dynamic capabilities theoretical approach presented mainly in two fundamental articles by Teece et al. on 1997 and by Teece on 2007. Additional theoretical subjects are outlined in chapter III. These arguments complement the research context by providing a bird's-eye view at organization analysis and social network contributions. Our attempt is to find some insights into where strategy scholars might look for hidden resource for value. Here the fundamental contributions are those of Jones, Hesterly, Borgatti (1997), of Cross, Borgatti, Parker (2002), Cross, Parker (2004), and of Powell and Grodal (2006). The section, finally, presents the empirical analysis, starting from firms’ description, data collection and data analysis. In this section we focus more on explaining the construction of the SNA questions and the measures of DCs. In Chapter IV the findings are grouped in three key-issues: configuration of Biotech Firms’ relational and integrative capabilities and value implications, evidence in terms of process-position-path and (organizational) convergence solutions, basic vs applied research networks: governance and incentive issues. In a final section, we collected the ending notes and the future research agenda. [edited by author]