IVS/Biotech Business Seminar
Seminar with
Lori de Paauw, Doctoral Student at The Manchester Business School, University of Manchester.
The affects of institutional systems on biotech start ups: a comparative case study of the Netherlands and UK.
Abstract:
Dedicated biotechnology firms (DBFs), in their efforts to start, grow and sustain a business, face a host of challenges ranging from securing funding to accessing resources to protecting intellectual property. Many scholars have studied the biotechnology industry through many different theoretical lenses: clustering, strategic alliances, R&D collaboration, networking structures and labour mobility; however there has been little focus on understanding how DBFs survive and the institutional factors that determine the success or failure of DBF start ups.
Survival of DBFs is crucial not only for large pharmaceuticals, which have become more and more dependent on the innovative technologies and drug therapies of DBFs, but also for national economies as a prosperous biotechnology industry offers employment, environmental and health opportunities. In recent years, European countries that lag behind in the development of a viable biotechnology industry, particularly Germany and the Netherlands, have initiated public policy programmes supported with substantial funding to stimulate the creation of a biotechnology industry. Yet, the success of these programmes is questionable given that these programmes do not create the institutional systems necessary to sustain biotechnology businesses.
The main question being investigated is how the founders’ background or career history affects a DBF’s ability to secure financing and recruit key staff. The national labour and finance systems are expected to play significant roles in shaping the options available to these founders and DBFs. The research focuses on the biotechnology industries in the UK and the Netherlands and the unit of analysis is the firm. Using secondary sources and web site information, ideal types of DBFs were created, identifying three categories of DBF business models: 1) technology-focused service provider, 2) therapeutic drug discovery and 3) hybrid. On a micro level, a sample of 15 DBFs per country was selected and semi-structured interviews will be conducted to create individual firm histories. These case studies will be analysed using within-case and cross-case analysis. In addition, data will be gathered from publicly available sources (e.g. web sites, trade press, annual reports) on a wider selection of DBFs in both countries.
This paper suggests some preliminary patterns and evidence from data gathered from seven British DBFs. One of the emerging patterns highlights the difference between DBFs established by founders with industry experience and academic experience. Founders with industry experience find and secure funding more easily and as a result are able to recruit key staff more quickly. These DBFs grow more quickly (in terms of employee size) than those founded by academic scientists. DBFs founded by academics have more difficulty finding funding and executive staff and remain a very small company for a longer period of time.
The seminar is arranged by the Department of Industrial Economics & Strategy in collaboration with the Research Centre on Biotech Business.
No registration is necessary. All are welcome to attend the seminar.