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The Economic Dynamics of Modern Biotechnology

Edited by Maureen McKelvey, Annika Rickne and Jens Laage-Hellman

This book offers a novel insight into the economic dynamics of modern biotechnology, using examples from Europe to reflect global trends. The authors apply theoretical insight to a fundamental enigma of the modern learning society, namely, how and why the development of knowledge and ideas interact with market processes and the formation of industries and firms.
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Chapter 12: Examining the Marketplace for Ideas: How Local are Europe’s Biotechnology Clusters?

Steven Casper and Fiona Murray


* Steven Casper and Fiona Murray 1. INTRODUCTION Competitive advantage in the biotech industry depends on several key factors: the existence of vibrant academic institutions (Kenney 1986), venture capital and other forms of risk financing (Lerner 1995; Powell et al. 1996; Sorensen and Stuart 2001), managerial talent, (Gulati and Higgins 2002) and the embeddedness of firms in collaborative inter-firm networks (Powell et al. 1996; Carlsson 2002). Such factors certainly provide considerable explanation for the explosive development of the biotech industry in regions of the USA such as San Francisco and Boston. However, the slower growth of regions such as New York, Chicago and several European biotech clusters requires a more detailed and nuanced understanding of the emergence of local biotech clusters. In this chapter we propose the concept of a marketplace for ideas: the social context in which ideas are brought together with human and financial capital to build a vibrant cluster. The notion of the marketplace highlights both the key resources that provide the foundation for the formation and growth of biotech firms and the more social network-like setting for these interactions in contrast to a pure neoclassical market. This chapter uses the marketplace conception of biotech cluster development to examine the following question: Why do some clusters develop superior capabilities to commercialize science than others? In particular we ask whether or not this marketplace is geographically bounded and operates within a local context or alternatively if firms are clustered locally but draw on the resources of a global...

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