An Analysis of the Critical Role of Public Science in Innovation: The Case of Biotechnology

Posted: 17 Nov 2009

See all articles by G. Steven McMillan

G. Steven McMillan

affiliation not provided to SSRN

Francis Narin

affiliation not provided to SSRN

David L. Deeds

University of St. Thomas - Opus College of Business; Case Western Reserve University - Department of Marketing and Policy Studies

Date Written: 2000

Abstract

Examines the link between public science and thebiotechnology industry in the United States. As knowledge plays an increasingrole in our innovation-based economy, firms at the forefront of industry mustexploit their absorptive capacity, defined as the ability to recognize newinformation, assimilate it, and apply it commercially. The most importantsource of external knowledge centers on public science, which is scientificresearch performed in and supported by governmental, academic and charitableresearch institutions. Previous studies have found that biotechnology, as a relevantly recent industrycomposed of mainly small, innovative firms, plays an important role intransferring knowledge from the university to the marketplace. In an effort toexamine this link more closely, this study focuses on scientific citations,funding sources and countries of origin, and a comparative analysis ofdedicated biotechnology firms and large pharmaceutical companies in theirlinkages to public science. Using the IPO prospectuses of U.S. biotechnologycompanies that were public traded as of 1993, 119 firms were identified. AllU.S. patents they acquired from the date they went public through 1997 wereidentified. Analysis of this patent data shows that the biotechnology industry relies moreheavily on publicly funded science than do other industries, including largepharmaceutical companies, though mostly for basic as opposed to appliedresearch purposes. The National Cancer Institute and National Institute ofGeneral Medical Sciences were identified as the two largest funding sources.Examination of the scientific papers listed in these industry-held patentsfound that the majority of citations emanate from U.S.-based authors at publicresearch institutions. Concludes that as biotechnology continues to develop andrevolutionize many fields of industry, continued public support of basicresearch will give the U.S. a strategic advantage economically. (CJC)

Keywords: Public science, Publicly funded research, Science policies, Biotechnology industry, Pharmaceutical industry, Science, Knowledge management, Public sector, Federal aid, Government, Colleges & universities, Technology transfer, Fundamental research, Patents

Suggested Citation

McMillan, G. Steven and Narin, Francis and Deeds, David L., An Analysis of the Critical Role of Public Science in Innovation: The Case of Biotechnology (2000). University of Illinois at Urbana-Champaign's Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship, Available at SSRN: https://ssrn.com/abstract=1506362

G. Steven McMillan (Contact Author)

affiliation not provided to SSRN

No Address Available

Francis Narin

affiliation not provided to SSRN

No Address Available

David L. Deeds

University of St. Thomas - Opus College of Business ( email )

1000 LaSalle Avenue
TMH 443
Minneapolis, MN 55403
United States

Case Western Reserve University - Department of Marketing and Policy Studies ( email )

Cleveland, OH 44106
United States

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