INTERORGANIZATIONAL COLLABORATION IN THE BIOTECHNOLOGY INDUSTRY

This paper examines the key factors that promote inter-organizational collaboration in the biotechnology industry, a field where research br eakthroughs are so broadly distributed that no single firm has all the necessary capabilities. The science of biotechnology has brought exte nsive changes to research universities and multinational pharmaceutica l companies, as well as generated hundreds of small science-based entr epreneurial companies, located mostly in the U.S. In this industry the re are severe limitations to market transactions and disincentives to vertical integration. Instead, through a combination of mutual need, r epeated interaction, and membership in a common technological communit y, networks of collaborative ventures serve as the primary institution al arrangement governing exchange and production.