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Frank Rothaermel, Angel and Stephen M. Deedy professor of strategic management
Frank Rothaermel, Angel and Stephen M. Deedy professor of strategic management

Study: Researchers Document the Commercialization of Biotech By Tracking Scientists

When high-performing researchers in the life sciences leave academia, they tend not to jump right into their own entrepreneurial biotech ventures, despite popular belief. Usually they first join large pharmaceutical companies that offer research settings somewhat similar to a university, according to a new study documenting the commercialization of biotechnology by tracking scientists’ publication activity.

Published in the leading IEEE Transactions on Engineering Management journal, the study was conducted by Georgia Tech strategic management professor Frank Rothaermel with Andrew Hess, an assistant professor of commerce at the University of Virginia who earned his PhD at Georgia Tech.

Titled "Intellectual Human Capital and the Emergence of Biotechnology: Trends and Patterns, 1974-2006," their study is one of the most fine-grained analyses of the different types of roles biotech and pharma scientists play (star versus non-star) and how they move from organization to organization (universities, pharma companies, and biotech firms).

"Understanding how and when individuals of differing talent and expertise are employed allows us a glimpse into the motivations and actions of firms attempting to commercialize scientific advancements," the researchers write.

To track the status and mobility of pharma and biotech scientists, the researchers followed the publication trail. Their dataset included research publication and citation records for 248,302 scientists (tracked at the individual level) from 1976 to 2006.  These scientists published close to 1.2 million academic articles that were cited more than 16.2 million times.

The researchers explain that as the first biotech drugs reached the market in the 1980s (made possible by recombinant DNA technologies), pharma companies had to play catch up with biotech startups, hiring more leading scientists to beef up their research and development efforts beyond traditional chemical-based drug-development techniques.

While leaving academia for industry was once frowned upon in academic circles, it gradually became more accepted as large pharma companies created environments conducive to attracting star scientists. In addition to offering greater compensation, these firms also provided larger research departments and continued opportunities to publish their findings in open science journals.

After enjoying the tenure-like job security of large pharma companies, scientists might feel ready to move into the more uncertain but less bureaucratic entrepreneurial setting of biotech firms once they have some corporate experience under their belts, explains Rothaermel, who holds the Angel and Stephen M. Deedy Professorship at Georgia Tech.

"Therefore, pharma firms foster the intellectual human capital that may eventually form the basis for a competing biotechnology firm," Rothaermel and Hess write.

But leading scientists (as measured by their publication output) rarely maintain their "star" status after leaving for biotech firms. That could be because they opted for managerial roles instead of an active research agenda, the narrower strategic focus of the firm, or fewer resources.

According to Rothaermel and Hess, the importance of hiring star scientists at large pharma companies seems to have peaked in the mid-1980s. It lessened after these firms developed strong footing in the world of biotechnology.

"Although non-star scientists attract less attention, they play an important complementary role in a firm's innovation efforts," Rothaermel explains. "They are more likely to pursue activities closely aligned with commercial goals, resulting in more patents and new products, rather than publications in the open science literature. However, the star scientists frequently create the exploratory knowledge that non-star scientists build upon."

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