An analysis of R&D, innovation and business performance in the US biotechnology industry

Abstract

This study examines the relationship between R&D intensity, innovation and business performance in the US biotechnology industry. A related objective is to analyse the similarities and differences in innovation strategies, factors affecting business performance, and barriers to innovation in R&D and product/process oriented biotechnology firms. The data for the study are gathered through a postal survey and personal interviews with company personnel involved in R&D. Results show that, during the study period (1993- 1998), R&D intensive firms were successful in obtaining both domestic and international patents as well as contract revenue through licensing agreements. Product/process oriented firms showed some commercial success in that some of them note a growth in pre-tax profit. Both R&D and product/process oriented firms note some differences in rating the importance of specific innovation strategies and barriers. However, both groups agree that quality control is important and collaboration, specifically with university scientists, is important for continued success. All firms rate regulations in the US and in foreign markets as major barriers to innovation.