Implications for Economic Policy
Edited by John Finch and Magali Orillard
Chapter 12: Technology Strategy and Knowledge Dynamics: The Case of Biotechnology
Lionel Nesta and Ludovic Dibiaggio 1. INTRODUCTION Recently there has been increased interest in why ﬁrms differ, and how it matters (Nelson 1991). One of the central determinants of heterogeneity between firms is believed to be their technological profile, or core competencies (Prahalad and Hamel 1990). Firms race for technological leadership by specializing in a few technological ﬁelds. However, when we look at the technological proﬁles of ﬁrms, they appear to master similar technologies, even when focusing on a small range of products (Granstrand et al. 1997; Patel and Pavitt 1997). Thus it is not clear that technology is a source of differentiation between ﬁrms. In this chapter we look at the sources of firms’ technological differentiation in biotechnology-related industries. We investigate the extent to which competing ﬁrms may specialize in different technological ﬁelds. By specialization we do not mean the concentration of the ﬁrm’s competencies (Gambardella and Torrisi 1998). Although useful when studying the technological strategies within ﬁrms, this deﬁnition does not throw much light on the sources of heterogeneity between ﬁrms. Here we consider two types of technological specialization. On the one hand, ﬁrms may differ because they do develop competencies in different technologies. Thus, asymmetries in knowledge endowments may provide a sound basis for technological heterogeneity. On the other hand, ﬁrms may differ in the way they use technological knowledge, that is, in their speciﬁc exploitation of available bodies of knowledge. Building on Nelson (1998) and Pavitt (1998), we distinguish bodies of understanding – generalized...
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