Academic journal article Review of Business

Strategic Choices in Technology Management: Lessons from Biotechnology

Academic journal article Review of Business

Strategic Choices in Technology Management: Lessons from Biotechnology

Article excerpt

Technological innovation has long been recognized as a significant contributor to economic growth. It has also been widely discussed as an important competitive force with significant strategic implications for individual companies, entire industries, and even countries. This paper summarizes selected results from an ongoing longitudinal study of the strategic choices made by established and emerging firms participating in the commercialization of new industrial technology. The ongoing biotechnology revolution provides an ideal context for this research because of the major technological changes in progress, the wide range of industries likely to be affected, and the rich variety of strategies being pursued by current and potential competitors in this new field.

The Biotechnology Revolution

Recent scientific and technical developments in recombinant DNA, hybridoma and associated technologies mark a major technological discontinuity in the evolution of the biological and chemical sciences. Though only in its emergent stage of evolution, the strategic importance of this emerging technology is apparent. As noted in one study of international competitiveness in biotechnology, "companies or countries that lead in this developing field could gain a significant competitive edge over others because products are expected to be manufactured at lower cost, at higher purity, in larger quantifies, and with decreased pollution and energy consumption.|1~ The strategies by which participants position themselves in the technologies and markets associated with biotechnology's future will help to determine the ultimate winners in this international competition.

Broadly defined, biotechnology is "the application of biological organisms, systems or processes to manufacturing and service industries.|2~ Biological organisms and processes have been applied throughout history in baking, brewing and agriculture. The appearance of antibiotics in the 1940's reflected the increasing sophistication of the biological sciences, particularly microbiology, biochemistry and microbial genetics. However, from the time the first gene was cloned successfully in 1973, attention has focused on the "new" generation of biotechnology, encompassing the techniques of genetic engineering, hybridomas and biochemical engineering. Dramatic advances have been made in understanding and applying this new technology, and the current rapid pace of technological innovation is expected to continue well into the next century.

Even the most conservative estimates of commercial impact assume widespread biotechnology applications in pharmaceuticals, agriculture, industrial chemicals and other important industries. The potential for improved biotechnology-derived products and processes provides the driving force for continuing technical progress. In the long run, biotechnology could find applications in any industry involving biological processes or in which biological processes might substitute for chemical processes. Pharmaceuticals, agriculture and chemicals are the industrial sectors most often identified as primary targets of biotechnology applications in the next decade.

In pharmaceuticals and health care, biotechnology applications are expected to improve the quality and efficacy of existing products, expand production of known compounds not now available in commercially significant quantities, and create entirely new therapeutics, diagnostics and drug delivery systems. These developments may bring dramatic improvements in the diagnosis and treatment of cancer and cardiovascular and immunological diseases, among others. Although only a few biotechnology-derived products have reached the market, significant commercial payoffs are expected in the next several years.

Both animal and plant agriculture will benefit from new biotechnology-derived products and processes. In addition to improved animal vaccines, diagnostics, hormones and drugs, biotechnology will ultimately offer the capability to alter the genetic structures of cattle and other animals to improve quality and increase productivity. …

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