Social Networks, Learning, and Flexibility: Sourcing Scientific Knowledge in New Biotechnology Firms

Abstract

This paper examines the organizational arrangements used by New Biotechnology Firms (NBFs) to source scientific knowledge. Using data from two highly successful NBFs, the paper shows that both firms relied principally on hierarchies and networks to source scientific knowledge; market arrangements were insignificant. Most interesting, each firm had a very large, diversified set of boundary-spanning collaborative research arrangements, mostly involving university scientists. It is argued that these external research networks enabled the two firms studied to compete more successfully in a highly turbulent and highly competitive industry environment.