Science-based Industries Research Articles

The politics of management science: an inaugural lecture

One of the key ideas born in the twentieth century and now inherited from it is the doctrine of managerial essentialism. Management is thought of as a generic practice abstracted from particular situations, processes and objectives, and yet, in virtue of that very abstraction, applicable to all of them. It is the taken-for-granted assumption running through a vast body of knowledge now locked in place by powerful institutional interests, in education, consultancy, quasi-academic punditry and existing managerial cultures. Management abstracted in this fashion can only engage with the practices to be managed through a process of imaging. Because expertise in these practices is excluded from management, they must be modelled so as to appear comprehensible to its conceptual apparatus and amenable to its technologies of control. Inevitably this process of imaging involves simplification and distortion. Because the power to control resources and policy is now largely wielded through the medium of abstracted management, its modelling of practices tends to function as a self-fulfilling prophecy. By managing practices as if they were their simplified, distorted models, they tend over time to approximate to these models. The practical consequences are an empirical question in each case, but they are unlikely to be benign. In this inaugural lecture, delivered at the University of Keele, I develop these rather abstract ideas through three examples. The first is an attempt to develop a means of managing product aesthetics using the techniques of market research. The second is the use of activity-based cost management to manage staff departments. The third is the current attempt to kick-start the development of science-based industries through the stimulation of entrepreneurship.

The relationship between R&D and physical investment of firms in science-based industries

The relationship between R&D and physical investment of firms in science-based industries

The relationship between R&D and physical investment of firms in science-based industries

The relationship between R&D and physical investment of firms in science-based industries

The relationship between R&D and physical investment of firms in science-based industries

This study is motivated by the one-way-inducement hypothesis that R&D induces (Granger-causes) physical investment, but physical investment does not induce R&D, raised by Lach and Schankerman (1989) and Lach and Rob (1996). It is demonstrated that their results do not hold, after extending the sample that matches their criteria by including more time periods and/or more firms. Namely, it is found that the Granger causality between R&D and physical investment occurs both ways. It is also shown that their contemporary relationship, derived by dynamic simultaneous expressions, is positive in both ways, from current R&D to current physical investment and from current physical investment to current R&D. Moreover, previous R&D affects current physical investment, and previous physical investment also affects current R&D.

The Competencies of Regions – Canada's Clusters in Biotechnology

Knowledge-intensive industries tend to concentrate geographically, because of the many spillovers that they generate. Thus new biotechnology firms often set up in regions that have innovative firms, government laboratories and universities, which attract them to enter. In this paper we unveil some of the characteristics of Canadian clusters in biotechnology: the key regions, their relative importance, and the main firms and government laboratories that attract new entrants. Moreover, we develop the concept of regions as nexus of competencies, a notion already put forward for firms, but that may be relevant to regions within nations and, ultimately, to nations as well. Capabilities of organizations and regions vary, and a thorough study of organizational and regional capabilities should precede the analysis of knowledge spillovers. Toronto is the main center of biotechnology in Canada, followed by Montreal, and Vancouver. The total population of the metropolitan area (a proxy for immediate market size and venture capital) explains the size, location and characteristics of most Canadian clusters. University research is also a key factor explaining the size of the biotechnology clusters, once population is held constant. Within nations, scientific and technical competencies vary strongly among regions. Some regions within countries concentrate a disproportionate share of the capabilities of all developed and developing nations. Moreover, regions tend to concentrate competencies on a few domains of expertise. This is what literature calls "agglomeration effects": companies active in the same field of technology tend to cluster geographically. They do so in order to share a common labor pool, and to obtain ready access to research institutions such as government laboratories and universities, or to key markets and customers, such as large assemblers or government facilities (Feldman et al., 1999). The specialized literature calls these institutions and key markets/customers "entry attractors" (Swan et al., 1998). In many types of science-based industries (SBIs), such as biotechnology, information technology and advanced materials, the major attractors are universities and government laboratories. In a few more mature SBIs, including aerospace and aircraft, large assemblers tend to naturally attract smaller producers of, components and specialized software. In this respect Canada is similar, to other nations (Niosi, 2000). Its competencies cluster around a few large and medium-sized urban agglomerations, such as Toronto, Montreal, Vancouver, Ottawa, Edmonton, and Calgary. Specialized clusters have also developed around smaller cities. This study builds a theory of the competencies of regions using biotechnology as a case study. Government laboratories, as well as universities and a few large firms, attract entry. The goal of the paper is to examine – using quantitative data – the relative competencies of regions in biotechnology, and the role of NRC laboratories and university research.

Science, enterprise and profit: ideology in the knowledge-driven economy

Key policy documents relating to the 'knowledge-driven economy' show that policy makers, university heads and other interested academics have come to view the task of creating science-based industries through the lens of enterprise ideology.Proceeding on the assumption that the scientific fundamentals are already in place, the belief is that industrial applications can be achieved by infusions of enterprise. Such a framing is attractive to those unwilling or unable to engage with the complexities of scientific research or new product development. It offers a surface intelligibility combined with an apparent amenability to straightforward policy interventions. At the same time it is quite unclear, apart from the taking of risks, what attributes and behaviours are actually involved in enterprise. Even the relevance of risk is questionable. Despite the ideological pressure to demonstrate a link between entrepreneurship and risk, none of the relevant research has succeeded in doing so. Nor has risk been a prevalent feature of new venture creation in general and science-based start-ups in particular. The policy is an act of faith, based neither on research nor on experience. Its reliance on enterprise is less a solution than a hope that one will spontaneously appear.

The importance of technology-based intersectoral linkages for market share dynamics

The Importance of Technology-Based Intersectoral Linkages for Market Share Dynamics. — The paper introduces technology-based intersectoral linkages (or technological spillovers) in an empirical model of international market share dynamics. The Pavitt taxonomy is applied as a yardstick for interpreting the empirical results. Overall, the results appear to be broadly consistent with the criteria behind the taxonomy, on the relative importance of the different factors of competitiveness in the different sectors. In particular, unit labour costs appear to play the largest role in supplier-dominated industries, ‘own sector’ technological activity plays the largest role in science-based industries, upstream linkages in scale-intensive and downstream linkages in specialized-supplier types of industries.

Designing Dolly: interactions between economics, technology and science and the evolution of hybrid institutions

This paper analyses the economic dimensions and implications of the processes that led to the cloning of Dolly, the sheep. It is shown that economic processes interacted intimately with technological and scientific processes in the designing of Dolly. Two contributions are made. The first provides a detailed example of the ways in which economic, technological, and scientific processes interact, thus contributing to the view that sees technology and science, not as exogenous forces driving economic change, but as endogenous processes in that change. The second contribution involves an analysis of the institutions within which the economic, technological and scientific processes were embedded. Attention is drawn specifically to the `hybrid firm' that has emerged in science-based industries, embedded in the institutions of government research institutes and universities. The challenge posed to economists and social scientists is to enrich their theories of the firm in order to better capture the complexities of the hybrid firm and the institutions in which it is embedded.

Science-based industries: a new Schumpeterian taxonomy

Science-based industries (SBIs) are the fastest-growing sector of the knowledge economy. SBIs have been categorized in traditional Schumpeterian typologies that are unable to explain their many differing industrial dynamics. However, new concepts already exist to improve our understanding of SBIs, including many coming from evolutionary theories (such as technological trajectories, path dependence, lock-in, self-reinforcing mechanisms, etc.), to develop the main theoretical issues, including a new typology, of these industries. Such is the goal of this paper.

Intermediate General National Vocational Qualification (GNVQ) Science: A missed opportunity for a focus on procedural understanding?

This paper considers the role of a new vocational science qualification in the UK (Intermediate General National Vocational Qualification (GNVQ) science) and how it relates to science-based employment. Studies into employers' requirements are reviewed and found to indicate that an ability to understand and evaluate scientific evidence is valued highly. This part of science is not currently taught explicitly either in GNVQ or elsewhere in the science curriculum. The authors report the results of a small intervention study in which ideas about evidence were explicitly taught within Intermediate GNVQ science. The findings suggest that it is feasible to incorporate such teaching into the qualification but that, if it is not part of the formal assessment process, the teaching tends to be undervalued by the students. By contrast, the teaching staff involved in the project recognised that these ideas fill a gap in the qualification and valued the teaching materials developed for this purpose. A means of incorporating the assessment of such understanding into the current assessment procedures is put forward. Such a modification to the assessment process would add rigour to the qualification and provide a better preparation for employment in science-based industry.

Why Should We Care About Russian Science?

T en years ago, the Soviet Union's collapse resulted in financial catastrophe for its scientific establishment. Lavishly supported during the Soviet period with military funding and showered with privilege most unbefitting a classless society, post-Soviet scientists met the new age with shock, despair, and sometimes anger. The world's largest scientific community had been pauperized overnight. Appeals to save research institutes, “schools,” and even Russian science as a whole, abounded. Today, the picture does not look quite so bleak. Science in Russia and the other countries of the region, while not exactly flourishing, is far from dead. The West has responded, to a surprising degree. Whereas in late 1990, French President Mitterand evoked amazement by calling for a $100 million fund to save Soviet science, since that time not one, but several, international programs have poured many hundreds of millions of dollars into the effort. Have these efforts saved Soviet science? No—nor was that ever possible. What is emerging in its place, however, is interesting and important: a much leaner, more cosmopolitan, less defense-oriented, more competitive community of scientists and engineers who have learned, the hard way, how to survive in today's grant-driven environment. It is also a community with several critical defects, such as a missing “middle generation” of scientists in their 30s and 40s who have left either Russia or science or both, a decaying infrastructure, and continued isolation—now economic, not political—from the international literature and conferences. Why should we care? The answers are surprisingly diverse. The U.S. government's primary focus, understandably, has been on the need to control the destructive legacy of Soviet science—weapons technology and know-how. By far the bulk of U.S. government support for ex-Soviet scientists in the past 10 years has been in support of this goal. But important as they are, these programs are not primarily science-driven, and their impact beyond the relatively narrow “closed cities” is limited. Factors intrinsic to science—the quality of research and training—are also important. Traditions of excellence in theoretical physics and mathematics persist, despite the impact of emigration, and outstanding young researchers in their 20s continue to emerge in molecular biology and other fields, many of them going on to take post-doc assignments abroad. A glance at lists of cooperative research projects sponsored by U.S. and European organizations will reveal a rich fabric of mutually beneficial collaboration. This is not a portrait of a scientific community that has little to offer. Another justification that was fashionable in the early 1990s focused on scientists as bearers of democratization and reform. It was this tradition—the great legacy of Andrei Sakharov and a deep historical tradition of the “intelligentsia” as guardian of truth and morality—that George Soros has cited as an underlying reason for his emergency assistance to the scientists of the region in 1993–1995. But in today's market environment, the Soviet scientific intelligentsia's moral influence has virtually disappeared, and it is by no means clear, if it ever was, that being a scientist means being a reformer. However, the most compelling reason to support science—because, sooner or later, it produces value and improves the quality of life—has not been lost on Russian President Vladimir Putin, who has stated that Russia's future depends on high-tech, science-based industries. Translating this vision into budgets will take time, and it should not occur at the expense of basic research, but it is on target. U.S. assistance programs, which have almost universally excluded science and technology in deference to other endeavors where there is more visible, short-term payoff, should now respond in kind—not as a nonproliferation or humanitarian or even science issue, but as a positive investment in Russia's future. In a region that has turned to exports of raw natural materials to shore up its sagging economy, its science and technology is in fact its major untapped resource.

The chicken or egg problem revisited: the role of resources and incentives in the integration of biotechnology techniques

During the last 15 years, most countries of the developing world have declared investment in biotechnology to be strategic to their national programs of development and yet none of them has attained an industrial competence in the biotechnology sectors comparable to that of the developed nations. Is it simply a question of inadequacy of resources or is there something more to the building of industrial competence in an emerging highly science-based industry? How do developed and developing countries differ in their capacity to exploit a new field like biotechnology? We explore the problem of creating industrial competence in biotechnology in developing countries through a case study of India. We show that underdevelopment is characterised not only by scarcity of resources, but also by inflexibility of public institutions, absence of crucial networks and myopic vision of firms. These features lower both and the degree of responsiveness to incentives for investment in biotechnology. Thus, the technology strategy in developing countries should not only concern itself with finding the optimal allocation of resources for the integration of biotechnology, but should also attempt to maximise the returns to any such investment through improving incentives.

Adaptive Strategies in the Indian Pharmaceutical Industry

How do firms react when an industry faces increased competitive pressures due to trade liberalization? Firms are believed to bring about changes in their technology, marketing and organization by reorganization and redeployment of resources, often through exit process (Buffie and Spiller 1986, Ross 1988). Pavitt's (1990) analysis of technological opportunity and innovations, Ettlie and Bridges's (1982) analysis of environmental uncertainty and its impact on technological performance seem to support this. Many research results have observed that environment can affect firms' strategies (Jemison 1981, McArthur and Nystrom 1991), and under conditions of increased uncertainty firms employ innovative strategies (Paine and Anderson 1977). However, evaluations are not so clear in a science-based industry such as Pharmaceuticals, especially if it is an oligopolistic domestic industry and imports are only imperfect substitutes for local production. Innovations are endogenous to the science-based industries and the form's have high technological options: one of diversifying into horizontal related products or altering the basic technological platforms themselves (Pavitt, 1990). This paper looks at adaptive behavior of the Indian pharmaceutical firms during the period of trade liberalization.

Les Fondements Historiques de la Domination Economique Américaine

La prééminence économique des États-Unis est l'un des traits marquants de l'histoire mondiale du 20esiècle. La domination américaine a été si nette et si évidente qu'elle semble souvent ne requérir aucune explication. L'historien Paul Kennedy écrit quant à lui, dans son étude très appréciée,The Rise and the Fall of the Great Powers:Les États-Unis semblaient possédertousles avantages économiques dontcertainesautres puissances détenaient unepartie, mais ils ne comptaientaucundes handicaps de celles-ci… A la fin de la guerre de Sécession, les États-Unis ont pu exploiter, pour se transformer à une cadence stupefiante, les nombreux avantages dont ils étaient dotés: riches etendues cultivables, importantes quantites de matieres premieres, et possibilite de developper ces ressources grace a revolution particulierement heureuse de la technologie moderne (rail, machine a vapeur, equipement minier); faibles contraintes sociales ou geographiques ; absence de menace etrangere importante ; flux d'investissements etrangers et, progressivement, nationaux... Etant donne ces avantages, tout le processus de developpement etait virtuellement inévitable. C'est-à-dire que seule une opiniatre betise humaine, une guerre civile presque incessante ou une catastrophe naturelle auraient pu hypothequer cette expansion ou dissuader des millions d'immigrants de traverser l'Atlantique pour obtenir leur part d'or et grossir la main-d'œuvre.

Organizational Learning and International Competition: The Skill-Base Hypothesis

Since the 1970s a persistent feature of the U.S. economy has been increasing income inequality, to the point where the United States now has the most unequal distribution of income among the advanced industrial economies. Sustainable prosperity - the spreading of the benefits of economic growth to more and more people over a prolonged period of time -- appears to have become an elusive objective. At the same time, in the late 1990s, after more than two decades of intense competitive challenges, the United States retains international leadership in a range of science-based industries such as computer electronics and pharmaceuticals as well as in service sectors related to such things as finance and food. The U.S. economy appears capable of innovation, but incapable of sustainable prosperity. Are innovation and equality inherently in opposition to one another? In a previous report to the Levy Institute, co-authored with Mary O'Sullivan, we hypothesized that the coexistence of innovation and inequality in the U.S. economy in the 1980s and 1990s reflects a systematic bias of major U.S. corporations against making innovative investments in broad and deep skill bases. Rather, these corporations, which exercise inordinate control over the allocation of resources and returns in the economy, are choosing to invest, and are best able to innovate, in the production of goods and services that use narrow and concentrated skill bases to develop and utilize technology. The skill-base hypothesis views both international competition and technological change as important determinants of the distribution of income. But the hypothesis is embedded in a theory of innovation and economic development in which the impacts of international competition and technology on income distribution depend on corporate investment strategies. Across U.S. industrial corporations, these strategies, and the investment in skill bases that they entail, are in turn influenced by American institutions of corporate governance and corporate employment. The rise of powerful international competition based on investments in broader and deeper skill bases may lead U.S. corporations to seek to remain innovative by investing in technologies that only require investments in narrow and concentrated skill bases.

Optimizing the number of stations in assembly lines under learning for limited production

This paper considers finding the optimal number of stations for an assembly line producing a limited quantity of a new product under learning conditions. This type of production characterizes heavy products (such as airplanes and communication systems) and science-based industries (e.g. laser cutting devices and special equipment for hospitals). These products are manufactured in assembly line fashion in small batches of a few hundred. Since the products are assumed to be totally new to the workers, the learning phenomenon is significant (i.e. task times decrease from cycle to cycle as experience is gained). Therefore, standard balancing methods are no longer applicable. Determining the number of stations has a large effect on the production rate while the actual assignment of tasks to stations helps to fine tune the cycle time. Thus, the number of stations can be regarded as a strategic decision variable . This paper discusses two ways for determining the optimal number of stations, namely as a cost minimization problem and as a profit maximization problem.

The History of the Distillers Company, 1877-1939: Diversification and Growth in Whiskey and Chemicals.

The Distillers Company (DCL) existed from 1877 until 1986 when it was acquired by Guinness. This book covers DCL's history from its founding as the merger of six firms to its position as one of Britain's largest manufacturing companies with diversified interests around the world. It is an extraordinary story of growth, acquisition, and diversification. By the 1920s DCL dominated the whisky industry in Scotland eventually acquiring the then big three blending firms - James Buchanan, John Dewar, and John Walker. With unfettered access to company records Dr Weir has been able to piece together the story of the company that was once described as concealing its activities behind a 'tartan curtain'. He traces the role of key individuals like William ross; its lobbying and campaigning activities against drink controls; its international marketing in North America, where its partners included Joseph Kennedy; and its later diversification into industrial alcohol, fuel alcohol, and chemicals to meet the demands of the growing science-based industries. This book is the first full-length study of DCL based on the company's own archives and will appeal to a wide range of readers - those interested in the history of whisky and the Scottish distilleries; economic and business historians concerned with the growth of major corporations; and management analysts studying the processes of growth, diversification, entrepreneurship, and R&D that are the necessary ingredients of the sustained growth of successful companies.

A Silicon Valley of the East: Creating Taiwan's Semiconductor Industry

A thriving semiconductor industry has been created in Taiwan over the course of the past two decades by the use of advanced organizational techniques of technology leverage and accelerated technology diffusion. By the mid-1990s, the industry had reached a level of output that placed it behind only the U.S., Japan, and Korea. Almost all of Taiwan's semiconductor industry is located in the Hsinchu Science-Based Industry Park, which was created in emulation of California's Stanford Research Park, but with more direct government involvement. This article explores the extent to which this emergent Silicon Valley in Taiwan shares the industrial ecology that has powered innovation in California and examines the extent to which the Taiwan industry suffers from weaknesses attributable to its rapid creation through technology leverage.

German Science in a Changing World

The author is professor of biology at the University of Konstanz and president-elect of the Max-Planck-Society. It comes as no surprise that Germany, half a decade after the breakdown of a precarious political stability and facing the challenges posed by reunification and global economic markets, is struggling to find its new position in the world. Perhaps spoilt by past success, Germans are learning the hard way that a successful future depends on making the best use of one9s innovative talents. The German higher education system has undergone a hazardous, though necessary, expansion, tripling its size in the past two decades. Harmed by the losses of two world wars and the shameful expulsion or barbarous murder of a sizeable fraction of the nation9s elite, the system had not completely recovered before the onset of these reforms. Scientific standards have undoubtedly been compromised; too little care has been taken to ensure that the most talented are given the opportunity to develop in the best of challenging academic environments. Centers of excellence comparable to those in the United Kingdom or the United States are rare in the German university system, and it is urgent that they be strengthened. Fortunately, the Deutsche Forschungsgemeinschaft (the main grant-awarding agency for research in universities) and the Max-Planck-Gesellschaft (the leading institution for top-quality research) have not followed the egalitarian trend. Both have focused uncompromisingly on evaluation of research and promotion of scientific excellence. The best research centers, within and outside universities, have continued to do first-rate research, in some cases of Nobel Prize quality, and have become truly international enterprises. Few German scientists are now employed without postdoctoral experience abroad, and large numbers of foreign scholars collaborate with their German peers (thanks to the Alexander von Humboldt Foundation, among others). However, there has been criticism, particularly from foreign scientists, that too much authority is often vested in too few men and that gifted young scientists have to wait much too long for full independence. Decisive efforts must be made to deal with these shortcomings; for example, by providing more independent positions and funds for promising younger scholars, particularly women. In the past, there was no difficulty in attracting students to science and engineering, and highly productive science-based industries gave graduates attractive employment opportunities. The situation has changed alarmingly: Science student enrollment has declined, and unemployment in the science and engineering sectors has risen. It is now of the utmost importance that both academia and industry be shaken out of their self-indulgent complacency. One factor contributing to these depressing trends has been the hostility of a vocal part of German society toward high-tech developments, from nuclear energy to biotechnology. Combined with administrative overregulation, this movement has succeeded only in driving billions of marks worth of high-tech investment abroad. The scientific community has an obligation to reverse these trends, not only out of self-interest and responsibility for future generations of scientists, but because such attitudes—from the luddite to the lunatic—are endangering the economic future of the whole country. The best path for science to take is to encourage and support the highest quality and originality in all endeavors and to reform in ways that will realize the potential of the most talented. Adequate funding is a necessary but not sufficient precondition for success, though it is alarming to note that unified Germany has fallen behind major competitors in terms of percentage of gross national product allocated to research and development. However, funds will increase only when the public believes that the autonomy enjoyed by the academic and research community is used to serve the whole society. The spirit of scientific innovation could then provide impetus for reform in all sectors of German society, from overly restrictive Ladenschlus (shop closing hours) to excessive Arbeitszeitverkurzung (reduction in working hours). But it must also contribute much more: knowledge and practical solutions to problems facing not only Germans but all of humankind. Hard choices lie ahead for a Germany that has lived under the illusion that it had a subscription to economic miracles. But in returning from Wonderland to reality, it may yet find itself not too badly placed to exploit the challenging opportunities of this changing world.

Crusading for Chemistry: The Professional Career of Charles Holmes Herty.

This is a biography of Charles Holmes Herty who contributed to the industry of his region and who played a significant role in the professionalisation of American chemistry. It explains how American science-based industries developed in the early 20th century.