What Role Does Scientific Human Capital Play?

In a recent working paper that I have with my collaborators Poornima (National University of Singapore) and Kwang (Melbourne Business School), we study how biotech firms benefit from collaborating formally with their partners, such as universities and other biotech/pharmaceutical firms, while they invest substantially in their scientists, who also collaborate informally with their esteemed peers in the scientific community at large. The findings of our study reveal that not all investments in scientific human capital and R&D collaborations generate returns to the biotech firms (an abstract of our paper is available in the article column).

The premise of our study is that the performance effects of R&D collaborations with different types of partners (firms versus universities) differ depending on whether the scientific human capital (firm scientists) of the firm bridges open and proprietary science. Traditionally, proprietary and open scientific models are quite distinct. However, the production of modern science in industrial firms today is governed by interconnected norms of open and proprietary practices. Contrary to the industry movement that all firm scientists should be trained to conduct commercially driven science, we find that pure scientists who conduct basic research play an even more important role in biotech firms as long as these firms continue to rely on external collaborations for the development and commercialization of academic discoveries.

Business-driven Scientists or Science-driven Entrepreneurs?

National Research Council (NCR) new president recently orders scientists to focus on market drivers in their research. This new order touches on many issues fundamental to science-based business. Does this make scientists more entrepreneurial? Who are these scientists who decided to take the jobs at NCR in the first place? There is a selection bias issue here: more business-driven scientists would have taken up advisory roles or become entrepreneurs themselves in new ventures because of strong IP or market incentives; and scientists do pay to be scientists because of their preference for science (read Scott Stern’s paper). The new order will force capable scientists to consider alternative institutions that value priority of discovery.