An empirical analysis of innovation strategies of biotechnology firms in the U.S.

The paper explores the strategies of biotechnology firms in the U.S. through a mail questionnaire study. Based on the responses of 89 companies we have developed strategy archetypes of these firms in R&D, marketing, and technology acquisition. In R&D, we found the firms to follow either incremental or radical strategy. In marketing, the firms use either a defender or an innovator strategy. In technology acquisition, firms differ in terms of their emphasis on licensing or developing new technology. The interrelationship among the strategy groups is weak. The R&D and technology acquisition strategies are related in the sense that aggressive technology strategy dictates radical R&D behavior with emphasis on development of new technology. We have found that firms following aggressive technology strategy tend to follow conservative marketing strategy. This is consistent with an earlier study by of German firms where it was found that firms tend to balance their technical and marketing risks. The paper also provides additional information about the factors considered to be important in product decisions for various strategies.     

Cognitive and interpersonal abilities related to the primary activities of R&D managers

This study attempted to identify the primary activities performed by R&D managers at different supervisory levels, and the cognitive and interpersonal ability requirements that underlie these activities. A task inventory containing 244 managerial tasks was completed by 117 R&D managers in nine organizations. The 48 tasks which managers rated as having spent the most time were factor analyzed, resulting in the identification of three primary activities: project management, personnel supervision, and strategic planning. Furthermore, these activities varied with supervisory level, with R&D managers performing a wider range of these activities with the progression from first-line to upper-level management.Thirty R&D managers later rated the degree to which 19 cognitive and interpersonal abilities were required for performing these primary activities. Strategic planning was rated as requiring significantly higher levels of oral expression, logical reasoning, originality, fluency of ideas, oral defense, and resistance to premature judgement than was required for the other two primary activities. Personnel supervision required a higher level of social sensitivity than was required for the other two activities. Project management required high levels of information ordering, oral fact- finding ability, problem sensitivity, and oral and written comprehension. Implications of the findings for understanding R&D managerial performance and personnel staffing functions are discussed.     

Knowledge transfer and R&D in pharmaceutical companies: A case study

This paper analyzes the consequences for the knowledge transfer and the organization of R&D of pharmaceutical companies after the acquisition of biotech companies. Based on four in-depth case studies, this paper comes to the conclusion that there is no systematic biotechnological know-how transfer from the biotech to the pharmaceutical company after the acquisition. Instead, the biotech companies remain independent and take over the role of centers of excellence for R&D within the pharmaceutical companies because that is the only way of preserving the innovative capabilities of the biotech company.     

The characteristics of industrial R&D—A study of major manufacturing industries in Hong Kong

An empirical study of 69 firms in Hong Kong identifies the characteristics of industrial R&D activities. Results of the study show that R&D intensity is highest in the manufacture of professional equipment, electronics, scientific, photographic and optical goods; the type of R&D activities is mainly confined to product research and development, and R&D strategies are mainly the ‘follow-the-leader’ strategy complemented by the ‘me-too-strategy’. Through the analysis of the results, recommendations have been made for the promotion of industrial R&D activities in Hong Kong.     

Does innovation lead to global orientation? Empirical evidence from a sample of Italian firms

This paper analyses the relationship between innovation at firm and industry level, and the global vs regional strategy of multinational enterprises (MNEs). Based on data from a sample of large Italian manufacturing firms, the analysis shows that technological assets affect a firm’s ability to overcome the liability of (regional) foreignness: the extent to which MNEs can exploit their firm-specific technological advantages is greater within their home region, but they also exploit them outside it. Furthermore, the results show that a firm’s foreign (outside the home country) and global sales (outside the home region) are higher, the greater the technology intensity of the industry in which they operate. These findings suggest that, although MNEs tend to operate regionally rather than globally, their strategic orientation is contingent upon firm- and industry-specific factors. Managers need to take the potential for globally exploiting R&D investments into account, even if it may not be equally successful within and outside the home region, and may be constrained by a number of inter-regional barriers.     

The role of supplier innovation performance and strategies on the smartphone supply market

The paper analyses the supplier-side of buyer-supplier relationships examining the linkage of innovation performance and strategies with suppliers' market performances. The research has been conducted on the smartphone industry. A patent-based framework allows the investigation at the product level using techniques deriving from content analysis. The methodology is tested on a sample of 100 couples' component supplier gathered from the Nomura report. Results confirm the positive relationship between suppliers’ market shares and innovation elements. First, the market performance of suppliers depends on the performance of R&D activities carried out to develop smartphone-related technologies. Second, when companies adopt specialization strategies, concentrating on the end product the development of component technologies, the market shares are higher. From the methodological point of view, the work suggests how to operationalize patent data to perform analyses at the product level. The suggested framework can be employed by companies as a managerial tool.     

Creating competencies through collaboration:: The case of EUREKA R&D consortia

This article discusses the originality of European EUREKA consortia. Formed at the initiative of member firms, these consortia generally adopt a decentralised structure. Their main purpose is to conduct applied research, with the ultimate goal of exploiting its commercial opportunities. The consortia strive to ensure collaboration among firms in different countries, and at times, from different industries. Examining the management of R&D consortia, this article focuses primarily on the creation of new knowledge and competencies and on the benefits that member firms can reap from collaboration. Based on 20 interviews with project managers, the article brings to light two main observations: (1) the leader's positioning is a determining factor, and (2) a perfect balance between the firm's technological development and the consortium's strategic orientation facilitates the acquisition of competencies.     

The moderating effects of home region orientation on R&D investment and international SME performance: Lessons from Korea

Drawing from the resource-based view, we investigate how firm and country combinations affect international SME performance. Using a sample of 2676 international Korean SMEs, we explore the relationships among SME R&D investment, home region orientation and financial performance. Results show that R&D investment has a horizontally inverted S-shaped relationship with performance reflecting cost leadership, stuck in the middle, and differentiation strategies. We also find that a home region orientation moderates the relationship between R&D investment and performance. Home region orientation positively moderates the relationship when R&D investment reflects cost leadership or differentiation but negatively moderates a stuck in the middle strategy.     

Strategic planning in smaller rapid growth companies

The research reported in this article is based on a study of the strategic planning practices of the 500 fastest growing privately held smaller companies in the United States ranked according to percentage of sales increases from 1978 to 1982.^p1 Based on the information provided, a clear picture emerges regarding the actual role of strategic planning in rapid growth companies.     

R&D,productivity, and market value: An empirical study from high-technology firms

Although prior research has addressed the influence of production activity and research and development (R&D) on productivity, it is not clear whether production and R&D affect the market value of a firm. This study proposes and verifies an R&D value chain framework to explore the relationship among productivity, R&D, and firm market values, as measured by Tobin's q theory. By doing so, we attempt to link new theoretical insights and empirical evidence on the effects of R&D efforts and basic production activities to the market valuations of high-technology firms. The value chain data envelopment analysis approach was proposed to estimate parallel-serial processes of basic operations and R&D efforts. This approach can be used to simultaneously estimate the profitability efficiency and marketability efficiency of high-technology firms. This area has rarely been studied, but it is particularly important for high-technology R&D policies and for further industrial development. Using the R&D value chain perspectives of model innovations and extensions proposed in several previous studies, we examined the appropriate levels of intermediate outputs. Production efficiency and R&D were combined to estimate the appropriate levels of intermediate outputs for high-technology firms. Based on the intermediate output analyses, we developed an R&D efforts decision matrix to explore and identify operational and R&D efficiency for high-technology firms. Our sample firms are displayed on a four-quadrant action grid that provides visual information on current short-term operational efficiency and decision making on long-term R&D strategic positions. The empirical findings from the R&D value chain model can provide information for policymakers and managers and suggest the adoption of various policies that place more emphasis on profitability and marketability strategies.     

Identifying strategic technology directions in a national laboratory setting: A case study

We present a case study of strategic technology planning in a large, mission-oriented division of Los Alamos National Laboratory. The Division, Nonproliferation and International Security, was strongly oriented around its eponymous mission. The challenge for our planning process was one of scale: identifying a manageable handful of science and technology thrusts that would drive that mission forward. Based on a detailed analysis of future missions and technology possibilities, we identified three strategic directions: (1) computer-enabled understanding, (2) networked and intelligent sensors, and (3) physics applied to sensors. The lessons we learned apply to strategic planning in other diverse R&D organizations.     

A framework for understanding commitment in the R&D organization

The complex and long-range nature of technological innovation makes commitment particularly important to the R&D organization. Using findings from previous and current research, this paper develops a conceptual framework for understanding commitment in the technology-based organization that may be more precise and meaningful than the traditional, global conceptions. Three general conclusions emerge. First, organizational commitment has positive benefits not only for the organization but also for the individual. Second, given the popularity of the project form of organization in R&D and the deep commitments individuals sometimes make to those projects, some allowance should be made for multi-commitments. Third, one of the most important and least investigated antecedents of organizational commitment is the verbal behavior of the project manager. Some implications of this perspective for future research are presented.     

Patents,R&D investments and post-IPO strategies

This paper empirically investigates the effect of going public on the evolution of high-tech entrepreneurial firms, focussing in particular on the interaction between innovation variables and financing and investment strategies. Specifically, I confront the effects of the IPO on firms with higher R&D investments versus firms with more patents. Firms with higher R&D investments typically view the IPO as a mechanism to raise external equity, used to pursue investments and to acquire participation in other companies, whereas those with more patents raise more debt capital and invest less after the IPO, as compared to high-tech entrepreneurial firms. I suggest that a large number of patents is an index of technological maturity for high-tech ventures, even more than age and size, that helps investors to individuate firms with a lower level of risk.     

Casting a Wide Net for Innovation: Mediating Effect of R&D Human and Social Capital to Unlock the Value from Alliance Portfolio Diversity

This paper examines the performance effects associated with different alliance portfolio configurations in terms of geographical location and partner type. Based on these distinctions, the authors hypothesize that more diverse alliance portfolios enable firms to gain and exploit innovation opportunities. Additionally, the mediating effects of R&D human and social capital on the R&D alliance portfolio diversity–innovation performance relationship are explored. The authors reason that the absorptive capacity of R&D intellectual capital determines a firm's potential gains from highly diverse alliance portfolios. From panel data of manufacturing firms in Spain for the period 2008–2013, the results confirm the inverted U‐shaped relationship between alliance portfolio diversity and firm innovation performance, implying that both insufficient and excessive alliance portfolio diversity may be detrimental to firm innovativeness. Additionally, R&D human and social capital partially mediates the R&D alliance diversity–innovation performance relationship, emphasizing the importance of internal capabilities to leverage the benefits of highly diverse alliance portfolios. These findings add a dynamic dimension to the conceptualization of alliance portfolios and how firms create value by balancing explorative and exploitative alliances.     

Understanding technological substitution: Generic types, substitution dynamics, and influence strategies

This article develops a framework for analyzing substitution threats posed by young industries to firms competing in more established industries. The discussion delineates three generic types of technological substitution—functional, product, and asset—and explores how long-term substitution patterns may be shaped by (1) the dominant design that emerges for the new product and, (2) improvements that occur in the traditional product. Asset substitution threats are especially serious for an incumbent firm since they can erode the value of the company's existing R&D/ manufacturing capabilities for competition in its principal markets. Possible strategies for influencing the type of substitution that ultimately occurs are considered. The strategies entail entering the young industry and attempting to shape the dominant design that emerges for the new product, or attempting to improve the traditional product along specific price-performance dimensions. The propositions suggested by the framework and the implications discussed should help to provide direction for future research.     

Strategic planning for research and development

This paper examines the need for and the difficulties in implementing strategies for planning the research and development activities of a company. The author does not accept that research planning reduces creativity, though he is of the view that planning's exclusive concentration on economic aspects of a company's activities, such as turnover or profit, can lead to erroneous decisions in the research and development field. This paper outlines a number of specific and explicit research strategies which can be followed, and relates them to the company's strategic objectives. Furthermore, the author explicitly categorizes different types of research and comments upon the relevance of strategic planning to each.     

How companies keep abreast of technological change

This paper reports on a study of the incidence and organizational form of monitoring of the technological environment by U.K. companies. Four organizational structures are distinguished for companies undertaking the monitoring of the technological environment: dedicated central units; inclusion within a central group function; diffusion throughout the complany; and decentralizaton. The practice of monitoring the technological environment is found to be related to the absolute size of a company, its capital intensity, planning horizon, degree of diversification and the importance attributed to technological factors in the strategic planning of a company.     

Separating research from development: Evidence from the pharmaceutical industry

From an organisational point of view, corporate research and development (R&D) has always been viewed as one function. That view, however, has undergone some changes in the last few years, and many major corporations have changed their R&D organisation or re-thought their overall structure on the basis of their technical competencies.With the example of the pharmaceutical industry, in which R&D has a particularly strong role to play, Vittorio Chiesa reports on a survey of nine major pharmaceutical firms which have recently instigated such changes. Among the changes are a separation of the ‘research’ and ‘development’ activities organisationally and sometimes physically. The author puts forward explanations for this trend and weighs the advantages and disadvantages.     

Linking R&D with the strategic management process of the firm

An examination of the problems associated with integrating R&D activities with the overall strategic planning process of the firm is presented. A model which links R&D to other functional activities as well as to strategic planning by a technical planning committee is proposed. The implementation of this integrative process requires organizational structural and communications adjustments.