Social Networks and Actual Knowledge Flow in the Irish Biotech Industry

ABSTRACT

This paper presents an analysis of networks among small and medium-sized enterprises in the Irish biotech sector. The study applies social network analysis to determine the structure of networks of company directors and inventors in the biotech sector. In addition, on the basis of interviews, this article analyses the extent of actual knowledge flow through these industry networks. The paper makes both a theoretical and methodological contribution to innovation network research. In relation to theory, the findings of the social network analysis indicate that the extent and path of knowledge flow are influenced by both the type of knowledge in question and whether the network is of a formal or informal nature. Methodologically, the results of this paper raise questions about the application of social network analysis in innovation studies.

Acknowledgements

This paper draws on research conducted by The OPAALS Network of Excellence (Open Philosophies for Associative Autopoietic Digital Ecosystems), funded by the EU Framework Programme, Priority 2—Information Society Technologies. The authors would like to thank the partners for their comments on previous drafts of this paper. In addition we wish to thank Jerker Moodysson and Bjorn Asheim at the Centre for Innovation, Research and Competence in the Learning Economy (CIRCLE), Lund University for giving us access to their interview questionnaires and Sarah Maloney for her excellent research assistance.

Notes

1. The formal vs. informal distinction is closely related to the distinction between structural social capital and relational social capital as recognized by Nahapiet and Ghoshal (1998) and applied in the context of the Cambridge biotech industry by Myint and Vyakarnam (2004).

2. The Fame data set provides ownership, governance and financial data on UK and Irish companies. For further details, see www.bvdinfo.com/Products/Company-Information/National/Fame.

3. This data set also contains information on the founders of each company, serial entrepreneurs who form numerous companies and spin-off companies. The database also identifies whether these spin-off companies emerged from existing private companies or universities. The date of establishment of all spin-offs and existing companies is also included in the data set.

4. On the basis of the pilot interview, it was decided to condense know-why and know-how type knowledge into a single, category named “technical knowledge”.

5. The OECD (2006) defines biotech as the application of science and technology to living organisms, as well as parts, products and models thereof to alter living or nonliving materials for the production of knowledge, goods and services. In order to narrow the definition to “modern” biotech, the OECD employs a list-based definition that includes various techniques and activities: synthesis, manipulation or sequencing of DNA, RNA or protein; cell and tissue culture and engineering; vaccines and immune stimulants; embryo manipulation; fermentation; using plants for cleanup of toxic wastes; gene therapy; bioinformatics, including the construction of databases, and nanobiotech.

6. See www.hea.ie for further details.