PARTNERSHIP AND INNOVATION IN THE LIFE SCIENCES - Innovation in the Biopharmaceutical Industry - page 113

with key informants, we identify the nature of the partnerships formed and the
key challenges faced by partnering institutions. We focus our study on partnering
between universities and the pharmaceutical sector.
Innovation and Partnering in R&D
In addition to the “eureka” moments, innovation relies on the confluence of technol-
ogy and knowledge. Schumpeter (1934) described innovation as “the carrying out
of new combinations”, arguing that breakthrough technologies occurred as a con-
sequence of bringing together existing knowledge from different sources: a view
shared by Dasgupta and Stiglitz (1980), who analysed the economics of industrial
structures and the nature of innovative activity, and by Hargadon (2003), who argued
that “breakthrough innovations come by recombining the people, ideas and objects
of past technologies” and that “the future is already here — it is just unevenly
distributed”.
Partnering strategies to increase innovation in R&D
Technological information is a key output of R&D that may be used by firms to
enhance productivity and market opportunity (Zeckhauser, 1996), and partnering
enables access to this technological information.
Partnering strategies can be viewed from two perspectives. The first, a resource-
based view of the firm, argues that its performance is a function of its ability to
marshal internal resources that are difficult to imitate (Penrose, 1959; Wernerfelt,
1984; Teece, 1989). In the second, performance is viewed as a function of the
competitive market and the firm's competitive environment in which it operates
(Porter, M, 1980). A firm could enter into a partnering arrangement to enhance or
complement its in-house capabilities or to improve its competitive environment.
Innovation requires knowledge, which may be acquired from R&D or market
research, and the ability to implement and diffuse the arising ideas and inventions
from this knowledge (Schumpeter, 1934; Dasgupta, and Stiglitz, 1980; Wernerfelt,
1984; Fiol, 1996; Kline, 2000; Hargadon, 2003). Partnering or outsourcing to access
new technology allows the firm to gain internal leverage using external capabilities
(Teece, 1986), and is seen by James (1994) as a key driver for structural change in
an industry. Partnering can also help in other ways: by establishing social networks
that facilitate collaborative learning (Burt, 1992; Cohen et al. , 2002); by providing
access to emerging science and technology, as well as the necessary organisational
capabilities (Powell, 1998); and by encouraging “open innovation” and “collaborat-
ing to compete”. As Chesbrough (2003) argues, “the rise in excellence in university
scientific research and the increasingly diffuse distribution of that research means