Innovation and Entrepreneurship in Biotechnology, An International Perspective: Concepts Theories and Cases

Citation

Warren, L. (2007), "Innovation and Entrepreneurship in Biotechnology, An International Perspective: Concepts Theories and Cases", International Journal of Entrepreneurial Behavior & Research, Vol. 13 No. 2, pp. 124-126. https://doi.org/10.1108/13552550710736947

The biotechnology industry has grown dramatically on a global scale over the last 30 years, in line with rapidly evolving scientific and technological developments. That growth has been accompanied by increasing public interest fuelled in the current media discourse by tales of gene therapy, genetically modified foods and cloning that almost seem to belong within the realms of science fiction. But this is very real. The early pioneers, Amgen and Genentech, now directly employ 15,000 and 10,000 people respectively and might be considered “big biotech”; further, these companies are responsible for employment across a whole value chain, through relationships with partners, suppliers and other associated companies. Developing countries too look to biotechnology to fight hunger through agricultural applications, or to deal with the ravages of disease. Notwithstanding grand aspirations and the success of some major players, the success of the biotechnology industry remains dependent on the success, or otherwise, of new biotechnology firms. These firms face a prolonged and difficult path to revenues as they seek to develop new products in highly regulated markets from cutting edge scientific development. This book focuses on how entrepreneurship and scientific innovation interrelate to support new firm emergence and to achieve success in a highly competitive industry.

Overall, the book offers a set of theoretical lenses on intellectual property strategies, product development, company valuation, support for R&D, alliances, networking and changing industry structures. The emphasis in the book is on the health dimension of biotechnology (biomedical, medical, human and animal health) rather than agricultural biotechnology or industrial biotechnology. The book aims to fill a gap in the area of biotechnology management, on the basis the industry globally is lacking in managers and researchers with appropriate entrepreneurial and commercial skills. It takes both a company focus (the internal environment) and also the position of the company in the (external) broader industry environment.

So how different is biotechnology management? Why is a specific text needed? The authors argue (p. 2) for the 80/20 rule: that 80 per cent of management issues are generic across industries, but it is the 20 per cent that are unique to that industry that makes up the difference. The aim of the book then, is to combine the generic and the specific as much as possible, to make a unique contribution and be distinguishable from generic texts on management and entrepreneurship. As such, the book bridges the academic and the practical, but I would argue, favours the former. The theoretical and literature underpinning is strong and each chapter ends in a well‐sourced reference list (a small negative here – the index is very weak; there are many useful examples and cases throughout the book and it would be most useful to dip into these at will; further, more descriptive detail on index entries would also aid clarity: a small point for the second edition perhaps). This richness makes the book an excellent starting point for research in the area. That is not to say that it is overly highbrow; the industry is complex and highly regulated so one would expect a closely argued text that explains a lot of complex issues in a clear manner; that is certainly the case. This is not a “how to” book, however; for example, on the subject of valuation techniques, a list of options and alternatives are briefly discussed, but there are no detailed examples. I make this comment as a clarification, not as a criticism.

Turning to the content of the book, chapter 1 sets out some “basics”, the terminology and key concepts of entrepreneurship and innovation. Inevitably this can only cover a limited amount of ground, but nonetheless, adequate foundations are laid for chapter 2, which sets entrepreneurship soundly in the biotechnology context. Here we learn about the defining characteristics of the industry and learn why entrepreneurship is important and distinctive in this industry. A useful comparison with the IT industry (p. 26‐27) illustrates the point well. Chapter 3 looks at R&D management and the innovation process. Models of planning and project development for new processes and products are set out here, with linkages to sources of finance, risk and uncertainty. Chapter 4 develops the funding theme in more detail, considering feasibility, screening, opportunity development, valuation and pathways to market. Two linked chapters on intellectual assets then follow, the first focussing on intellectual capital, absorptive capacity and knowledge management issues. This “soft side” is then followed by the management of intellectual property in chapter 6. In chapter 7, the emphasis moves from the internal dynamics of the firm to the broader industry structure, examining product life cycles, the R&D cycle and the organisational life cycle, considering the links between them. Chapter 8 develops the theme further, examining business, market and industry cycles from a wider perspective. These two chapters taken together were strong and well‐linked to the biotechnology perspective. A rather brief chapter 9 notes the challenges faced by firms in respect of policy, regulatory and ethical issues. This chapter spans just over 8 pages, which is rather too short to do the issues justice given the breadth of concern and the highly regulated nature of the industry. Chapter 10 examines biotechnology from a value chain perspective. Chapter 11 looks at the broader industry structure in terms of developing a national perspective. Chapter 12 was, in my view, rather weak in comparison with the other material presented and seemed a little out of place. Some quite basic understandings of product development and innovation diffusion are presented that would have aided understanding by coming much earlier. Finally an international perspective on biotechnology industry growth models is presented, comparing some industry metrics for the US, Canada, Europe, Asia and Australia. Thus, the international dimension to the book is satisfied. Indeed many examples and cases in the text emanate from around the world, so certainly the perspective is international as indicated in the title. Readers should be aware of course, that leaving out agricultural biotechnology leaves out significant activity in developing countries. Certainly, the management of innovation and entrepreneurship is the dominant theme of the book.

While I have indicated some weaknesses above, I enjoyed reading this book and the attempt to address the 80/20 situation generally works well with specific material being well‐linked to the generic context. Given the academic emphasis, the audience for the book would be practitioners looking for in‐depth understanding of the industry rather than practical advice, politicians and advisors directly involved in effecting and supporting management and development of the biotechnology industry, and students with a research or scholarly interest in the area.