Knowledge Base Convergence and Corporate Diversification in the Face of Technological Complexity: the case of industrial and health biotech

LAVARELLO PABLO

Curitiva - ¨Parana

Seminario; Advances in Economic Dynamics and Development: Economics and Complexity; 2013

Federal University of Paraná ? UFPR

The purpose of this paper is to analyze corporate technological diversification in industrial and health biotechnology. In the course of late twentieth century, successive waves of molecular biological revolutions (recombinant proteins, monoclonal antibodies, genomics, proteomics, stem cells, tissue engineering, gene therapy) have emerged in the context of globalization. As a result of these scientific new areas, technological knowledge base has become more complex - opportunities are dispersed across a broad range of technological fields, technologies are potentially used as complements and firms that seek to exploit these opportunities have became more multi-technological. However, innovation and management studies have been ambivalent about this process. Part of the literature suggested that technological activity is highly industry-specific and accumulative (Patel and Pavitt, 1994, 1997). On the other hand, innovation and management literature at the firm (corporate) level has recognized that firms now operate in a broader range of technological areas than historically and that there has been corporate diversification (Fai and Cantwell, 1999). Such literature ambivalence reflects in fact the complexity of empirical micro-macro relationships. Corporate strategy is at the center of the tension between both micro process of technological diversification and inter-industrial processes of technological convergence/divergence. One of the main empirical results of this paper is that inter-industrial convergence is localized covering some subsets of "industrial biotechnology" products (enzymes, biopolymers and food ingredients) not including "health biotechnology" industry. Secondly, patent data at the micro level enable to distinguish between different kinds of technological diversification / specialization depending on the technology coherence of firms' strategies (Salviotti, 2002): whereas health industry adopt conglomerate biotechnological diversification resulting from a non coherent course to fusion and acquisitions (F&A), industrial biotechnology corporations adopt a more coherent technology diversification enabling innovation and (dynamic) efficient growth.