The role of open innovation in research translation: a critical analysis of the Australian Regenerative Medicine Industry

Abstract

Innovation and entrepreneurial activities are regarded as twin engines of long-term economic growth. Open Innovation is a contemporary concept that has been postulated to improve research and development, commercialization capabilities and organisational performance. Open Innovation has also been said to be applicable in complex industries that have high levels of uncertainty. The regenerative medicine industry is one such example. According to the Resource Based View, firms must possess both technology- and market-related capabilities in order to realize the value of their innovations. Unfortunately, faced with resource constraints and high cash burn rates; regenerative medicine start-ups are typically forced to forgo process development until the last possible moment. Early evidence of business model failures have made regenerative medicine start-ups with strong scientific cultures, realize that achieving superior therapeutic efficacy is no longer a guarantee of competitiveness or success in the healthcare market. While open innovation encourages start-ups to reach beyond its organizational boundaries to acquire or leverage upon the competencies of their partners, little is known about how internal and external resources interact to bring about competitive advantages. To address this gap in knowledge, a number of research questions were developed to determine if the pharmaceutical supply chain could support regenerative medicine business strategies and the applicability of open innovation in the Australian regenerative medicine industry. Management research in regenerative medicine lacks empirical literature. The ability to generalize is complicated due to different types of therapies requiring different business models. In addition, the commercialization process involves a variety of entities and myriad of possible collaboration methods, which may vary from therapy to therapy. Therefore, a case study design was selected in my research, for its ability to derive and convey rich information obtained from complex real world contexts. The case studies showed that by adopting open innovation practices, new manufacturing capabilities can be developed through process innovations. These new manufacturing capabilities have the potential to assist in process development by reducing the impact of environmental factors such as contamination, to create an ideal environment for cellular therapy production. From a business point of view, process innovations resulting from open innovation practices not only improved the cost of quality but also enabled start-ups to patent their manufacturing process to protect its intellectual property. Furthermore, my thesis argues that regenerative medicine firms should not adopt the pharmaceutical supply chain due to potential incompatibilities between the manufacture and distribution of their therapies against the pharmaceutical model. Therefore, the development of new manufacturing capabilities via open innovation practices is important for regenerative medicine firms as manufacturing capabilities are critical in developing both supply chains and business models that are appropriate for their therapies.