Global Bio-Nano Firms: Exploiting the Confluence of Technologies

Armstrong Murira, Elicia Maine and V. J. Thomas

New research by Prof. Elicia Maine and her co-authors (MIT’s James Utterback, Professor of Management and Innovation, Sloan School of Management and Professor of Engineering Systems; V.J. Thomas, Postdoctoral Fellow, SFU and IIT Delhi; Martin Bliemel, Lecturer at the Australian School of Business, University of New South Wales; and Armstrong Murira, Simon Fraser University PhD student, Molecular Biology and Biochemistry) highlights the economic ramifications of the confluence of the biotechnology and nanotechnology sectors.

In the paper presented at the annual meeting of the American Association for the Advancement of Science (AAAS) in Boston on 18th February 2013, they show that the confluence of biotechnology and nanotechnology is giving rise to start-up ventures, commercializing science and technology developed in university research labs.  One of the reasons that there are companies forming around the opportunity created by this confluence of technologies is that larger firms have known organizational disincentives to commercializing radical innovation.  So small science-based ventures have a better chance of success when commercializing radical innovation, disruptive technology, and – they argue – in integrating disparate technology streams.   For example, they notice that de novo bio-nano ventures (those formed around the integration of these technology fields) often have founders who have dual competencies themselves in these fields. So when the founders have these capabilities themselves, it is easier for the research teams of start-up bio-nano ventures to integrate diverse knowledge streams.

AAAS 2013 Symposium: Confluence of Streams of Knowledge: Biotechnology and Nanotechnology

“Birth of a new sector”: SFU-MIT study shows technology start-ups driving burgeoning bio-nano industry

Bio + Nano = a whole new sector


Knowledge Diversity in the Emerging Global Bio-Nano Sector

As scientists are able to understand and manipulate ever smaller scales of matter, research in the fields of biotechnology and nanotechnology has converged to enable such radical innovations as lab-on-a-chip devices, targeted drug delivery, and other forms of minimally invasive therapy and diagnostics. This paper provides a descriptive overview of the emerging bio-nano sector, identifying what types of firms are entering, from what knowledge base, where they are located, and their strategic choices in terms of technological diversity and R&D strategy. The firms engaged in bio-nano research and development span the range from start-up firm to multinational pharmaceutical, biotech, chemical, and electronics firms: two thirds of bio-nano firms are relatively young and relatively small. The United States dominates this sector, with more than half of all bio-nano firms located in the USA. Even within this sector which epitomizes the convergence of technology, there is a broad range of technological diversity, with the most diverse firms overall coming from a base in electronics, the most diverse start-up firms coming from a base in nanomaterials, and the most narrowly focused firms coming from biotechnology/ pharmaceutical base. We find that hybridization has been the dominant knowledge diversity strategy, with 93% of the bio-nano firms with nano-patents holding multiclass patents.

MIT ESD Working Paper 2012-20

MRS Proceedings 2012

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.