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In the biotech business: it's not what you know, it's what you know about who you know
10 February 2011
The opportunities that arise and whether or not they are exploited by biotechnology entrepreneurs depends to a large extent on how well connected is an individual business person and how well they mobilise their social network.
Cristina Sousa and colleagues at "INETI", the National Institute of Engineering, Technology and Innovation, in Lisbon, Portugal, explain in the International Journal of Entrepreneurship and Small Business how they have combined studies from the technological entrepreneurship and social networking literature to uncover patterns in different network configurations. They looked at network origins, composition and structure and investigated how these variables affect the way key resources, both tangible and intangible, are used and how those affect and are affected by credibility and mediation.
Previous researchers have shown that new enterprises in biotechnology are important to development of the industry. This is especially true in countries that are at an intermediate stage of development because they have a good science base and highly skilled people but usually lack the investment of large biotechnology companies. As such scientific entrepreneurship can improve knowledge transfer and increase market value through human mobility, which is a critical factor in the growth of the biotechnology industry.
Sousa and colleagues affirm that the transformation of a technological opportunity into a commercial technology, product or service is a convoluted process, the success of which hinges on both the competence of people at the technological and non-technological level and the resources available. Success, they say, is determined, not only by an entrepreneur's capacity to identify an opportunity, but also by their ability to mobilise resources and skills. An entrepreneur's established network and the ability to create new, useful connections is usually the key.
The team's preliminary analysis of 23 case studies from a collection of 61 biotechnology companies in Portugal suggests that their approach to analysing the networks of the founding entrepreneurs will offer important insights into how the dynamic structure of a social network can influence the formation and success of start-up companies in this burgeoning industry. They also suspect that their ongoing analysis will reveal which kinds of connectivity within the network between companies and other organisations will affect likely success.