Strategic and Innovation Networks in the Flanders Biotechnology Industry

For organizations in high-technology industries, knowledge is a critical resource that can be accessed through inter-organizational networks. However, for industries characterized by a heterogeneous set of actors, little is known about how different networks within the industry interact. Therefore, our research question is: How similar are the strategic network and the innovation network in the biotechnology industry? To answer our research question, we study two networks of interest. First, the Board-of-Directors-network serves as a proxy for the strategic network that fosters strategic knowledge transfer between organizations. Second, we analyze the innovation network by using the patent network that emerged from collaborative innovation activities. Subject of analysis is the Flanders biotechnology industry, which is characterized by strong performing research institutions, large firms and innovative SMEs. We use social network analysis methods to measure the similarity of both networks and to identify their key actors. We find that a connection between two organizations in the strategic network increases the probability of forming a new connection between the same organizations in the innovation network, or vice versa. This shows that collaborations between two organizations on one network level can lead to an interlocking of the organizations at other network levels. Our results also suggest that few companies establish and maintain a strong position in the biotechnology innovation network. This network is dominated by academic institutions, which are the key producers of scientific knowledge. Interestingly, the BoD-network has a more balanced composition and power structure and knowledge on strategic issues is transferred across a wide range of industrial actors. We also highlight the strong position of spin-off companies in the BoD-network and the absence of large firms in both networks. Our findings call for more research on the causal mechanisms of network formation and on the relationship between multiple networks within one industry.