Technological Regimes and the Evolution of Networks of Innovators: Lessons from Biotechnology and Pharmaceuticals

Abstract

In this paper, we analyse the relationships between technological regimes, regimes of local interaction, and the global structure of an industrial network. Given the complexity of the task, we follow a semi-inductivist approach, combining quantitative empirical analyses and simulative exercises. We show that the topological properties of the R&D network in pharmaceuticals are the result of neither a purely random nor of a cumulative process of growth. Instead, they emerge from a mixture of the two generative processes, under a regime of intense and stable entry. This paper should be considered only as a first step towards the understanding of some general determinants of industry networks growth. Despite its limitations, it provides a parsimonious and general framework to reverse engineer the growth of networks in different industries. Some of the current limitations of our analysis could be overcome, in the future, based on a higher availability of data on real systems and, in particular, of detailed topological and economic information on real-world networks. While currently such data are rare, the increasing interest in industrial networks should soon lead to the development of suitable data sets, offering further guidance for modelling and interpreting the growth of these complex and important economic systems.

Keywords: network evolution, technological paradigms, pharmaceutical industry, biotechnology, network growths