networks of knowledge · the evolution of r&d networking in the biotech industries,...

Networks of knowledge

Pier Paolo Saviotti Eindhoven Centre for Innovation Studies (ECIS), School of Innovation Sciences, Eindhoven University of Technology

Department of Economics, University of Hohenheim, Germany INRA GAEL, Grenoble, France

GREDEG CNRS, Sophia Antipolis, France

A general (not complete) definition of knowledge

• Knowledge as

• A correlational structure

– Knowledge establishes correlations, or connexions, between variables

• A retrieval/interpretative structure

– Existing knowledge allows agents to retrieve similar knowledge

Units of knowledge

• Defined at different levels of aggregation

• Variables the lowest, but some more aggregate units can be used, such as technological classes in patents, classifications of scientific publications, themes etc.

• Data used: Patents, publications but any text can in principle be used

A representation of knowledge

• Based on the previous definition knowledge can be represented as a network

• Nodes/vertices = units of knowledge (variables, concepts, themes etc)

• Links/edges = correlations /connections/co-occurrence)

Only some variables are correlated

Knowledge as a network

x1

x2

x3 x4

x5

x6

x7

x8

x10

x11

x12 x13

x14

x15

x16

Knowledge dynamics

• New nodes are created as new observables are discovered and as new variables to represent them are created.

• Connections/correlations between different variables are subsequently, and not instantly created.

• The network of knowledge has a variable number of nodes and of links, generally increasing in the course of time.

The knowledge base of firms and organisations

• Knowledge base = collective ((i) and (ii) ) knowledge that firms can use to achieve their objectives.

– (i) it depends both on the elements of knowledge of individual members and on their interactions

– (ii) same individuals in different organisations different outcomes

Rhône Poulenc, Hoechst, Aventis

• Rhône Poulenc and Hoechst were previously mostly chemical firms, but at different times ( end of the 1980s- mid 1990s) decided to become life science companies.

• This change in strategy involved a change in their KB

• Aventis was created in 1999 from the merger of Rhône Poulenc and Hoechst. Its strategy quickly became to become a pharmaceutical company.

Example: Rhône-Poulenc 90-92

Biotech subset

Chemical subset

A61K

Example: Rhône Poulenc 96-98

Biotech

Chemical subset

A61K

KB Hoechst 90-92

Biotech subset

Chemical Subset

A61K

KB Hoechst 96-98

A61K

Biotech subset

Chemical subset

KB Aventis

A61K

Aventis summary

• The two firms before the merger changed their KBs in the direction indicated by the change in strategy

• In intermediate phases the KB was segmented with the old part (chemical) very weakly connected to the new part (biological)

• After the merger there was followed an improvement in the integration of the two components of the KB

Variation of network density

Hoechst Rhône-Poulenc Aventis

P2

(1993-1995)

P3

(1996-1998)

P2

(1993-1995)

P3

(1996-1998)

2002

Nodes

(N) 33 22 31 32 24

Links (L) 55 36 46 54 73

L/N 1.67 1.64 1.48 1.69 3.04

Monsanto (1)

From foundation (1901) until end of 1970s = diversified chemical company (agricultural chemicals, polymers, fibres etc)

End of 1970s important start of strategic reorientation away from chemistry

The search for new fields included plants genetics, pharmaceuticals, products for electronics, fluid technology etc

Amongst these possible fields plant genetics emerged as the dominant one

Monsanto (2)

1980s acquisition of knowledge and competencies in 3rd generation biotechnology by alliances and collaborations, M&A

Initially life science company (wide rage of products belonging to different markets by common (transversal) knowledge base, biotechnology

Later, abandoned the life science company strategy & focused on agrochemistry

Monsanto, First Period <=1979 Chemistry Agrochemistry USPTO Patents

Organic compounds -- part of the class 532-570 series

Plant protecting and regulating compositions

Compositions: coating or plastic

Liquid purification or separation Synthetic resins or

natural rubbers -- part of the class 520 series

Fabric (woven, knitted, or nonwoven textile or cloth, etc.)

Monsanto 2nd Period, 1980-1985, Agrochemistry, Plant Biotechnology

Stock material or miscellaneous articles

Polymers, plastics & fibers Organic compounds

Synthetic resins or natural rubbers


Drug, bio-affecting and body treating compositions

Monsanto, 3rd period 1986-1996 Life Sciences, Plant Genetics

Organic compounds Compositions

Synthetic resins & related


Chemistry: natural resins or derivatives; peptides or proteins; lignins or reaction products thereof

Multicellular living organisms and unmodified parts thereof and related processes

Chemistry: molecular biology and microbiology


Monsanto 4th

period, after 1996

Seeds, genetics, agriculture




Multicellular living organisms and unmodified parts thereof and related processes

Chemistry: molecular biology and microbiolog

Synthetic resins or natural rubbers -- part of the class 520 series

Organic compounds

Monsanto summary

∆ strategy → ∆ KB (minus classes corresponding to 'old' products + new technological classes corresponding to pharmaceuticals & agricultural chemistry (life science company)

Only agrochemicals survive now (Seeds & complementary herbicides)

Q: How was knowledge used to create new products?

Q: vs competitors?

Applications

• Useful to study:

• Firm strategy

• Firm organization

• Mergers and acquisitions

• Divestitures

• Innovation networks

Network of IPC technological classes, biotechnology, 1981-1985

Network of technology classes for biotechnology, 1996–2000

KB properties

• Coherence

• Variety (Knowledge): related (intra-group) and unrelated (inter-group)

• Cognitive distance

Variety of the knowledge base of biotechnology

Coherence of the knowledge base of biotechnology

Cognitive distance of the knowledge base of biotechnology

Evolution of biotechnology networks of knowledge

• A pronounced structural change occurring – (i) the emergence of new technological classes linked to biology and

partly to physics, – (ii) the disappearance or gradual loss of importance of classes linked

to the previous knowledge base, organic chemistry, – (iii) the gradual rise in strength of the links between A61K and the

emerging classes and the gradual fall in strength of the links between A61K and the older classes,

– (iv) a growth in the number of important nodes and of important links, corresponding to an overall process of diversification of the knowledge networks

– (v) the persistence of A61K, showing that the new knowledge is used to attain market objectives similar to the past ones in the pharmaceutical, industry.

Applications

• Test of concepts such as technological paradigms, trajectories, exploration, exploitation

• Technology life cycles, from random to organized search

• Identify knowledge discontinuities, their evolution and their impact on firm behaviour and performance

• Compare different firms (firm strategies)

• Compare networks of firms and networks of technological alliances

References

• Saviotti P. P., Knowledge, complexity and networks, in Antonelli C. (ED) Handbook on the Economic Complexity of Technological Change, Cheltenham, Edward Elgar (2011)

Saviotti P.P., Catherine D., Innovation networks in biotechnology, in Handbook of Bioentrepreneurship, Holger Patzelt, Thomas Brenner, David B. Audretsch (Eds) Springer (2008)

Saviotti P.P., On The dynamics of generation and utilisation of knowledge: the local character of knowledge, Structural Change and Economic Dynamics Vol 18 (2007) 387-408

Nesta LLJ, Saviotti P.P., Firm knowledge and market value in biotechnology, Industrial and Corporate Change, Vol 15, 625-652 (2006)

Pyka A., Saviotti P., The evolution of R&D networking in the biotech industries, International Journal of Entrepreneur and Innovation Management Vol. 5 (2005) 49-68.

Saviotti P.P., de Looze M.A, Maupertuis, M.A., 'Knowledge dynamics and the mergers of firms in the biotechnology based sectors, Economics of Innovation and New Technology, Vol. 14 (2005) 103-124.

Nesta L.J.J, Saviotti P.P., Coherence of the knowledge base and the firm’s innovative performance: evidence from the US pharmaceutical industry, Journal of Industrial Economics, Vol 53 (2005) 105-124.

Saviotti P.P.,Considerations about knowledge production and strategies, Journal of Institutional and Theoretical Economics 160 (2004) 100-121.

Saviotti P.P., De Looze M.A, Maupertuis, M.A., Nesta L.. ‘Knowledge dynamics and the mergers of firms in the biotechnology based sectors, International Journal of Biotechnology, VOL. 5 (2003) 371-401.

IPC Technological classes biotechnology

BIOTECHNOLOGY

A01Hnew plants or processes for obtaining them; plant reproduction by tissue culture

techniques

A61K preparations for medical, dental, or toilet purposes

C02F treatment of water, waste water, sewage, or sludge

C07G compounds of unknown constitution

C07K peptides

C12M apparatus for enzymology or microbiology

C12N micro-organis ms or enzymes; compositions thereof

C12Pfermentation or enzyme-using processes to synthesise a desired chemical

compound or composition or to separate optical isomers from a racemic mixture

C12Q

measuring or testing processes involving enzymes or micro-organis ms;

compositions or test papers thererof; processes of preparing such compositions;

condition-responsive control in microbiological or enzymological processes

C12S

processes using enzymes or micro-organis ms to liberate, separate or purify a pre-

existing compound or; processes using enzymes or micro-organis ms to treat

textiles or to clean solid surfaces of materials

G01Ninvestigating or analysing materials by determining their chemical or physical

properties

IPC classification

• A Human Necessities

• B Performing Operations; Transporting

• C Chemistry; Metallurgy

• D Textiles; Paper

• E Fixed Constructions

• F Mechanical Engineering; Lighting; Heating; Weapons; Blasting

• G Physics

• H Electricity

IPC classification (2)

• Site for more detailed IPC classification

• http://www.wipo.int/classifications/ipc/ipc8/?lang=en

http://www.wipo.int/classifications/ipc/ipc8/?lang=en



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