Keywords: biotechnology, collaboration, innovation, alliances, outsourcing, research and development
The collaborative economy of biotechnology: alliances, outsourcing and R&D
Collaboration is playing a major role in the development of biotechnology. Most biotech enterprises in existence today might not have survived without the support provided by the many collaborative arrangements that have developed in this sector. However, the question of whether collaboration provides stronger support for biotech innovation and research is still an open one. This contribution provides significant empirical evidence on the effect of the most important collaborative modes on biotech research and development (R&D) and on its association with major enterprise characteristics, such as employment, costs, revenue and assets. The context of collaboration in biotechnology is considered first, along with the need to sustain continuous innovation. The two most important modes of collaboration, alliances and outsourcing, are then discussed and related to their potential support for biotech R&D. Extensive statistical analyses, utilising a unique database of biotech establishments from three 4-digit SIC categories, provide insights on the effects of alliances and outsourcing on biotech R&D. Establishments in alliances with pharmaceutical firms are differentiated, along with those that subcontract out and are subcontracted for both R&D and other (non-R&D) activities. In general, collaboration was found to be strongly supportive of biotech R&D, particularly when it occurred through alliances. Alliances with pharmaceutical firms were found to be most supportive of R&D. Outsourcing was also found to be supportive, except when establishments subcontracted out their own R&D.