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Knolwedge organisation and Firms ’ specialisation in the biotech industry

By Ludovic Dibiaggio and Lionel Nesta


The relationship between firms ’ strategic directions, the evolution of its technological knowledge and the competitive conditions on the market place is an intriguing question that remains largely unclear in the literature. Following Smith (1776), specialisation is presented as a natural consequence of the knowledge production process (Loasby, 1998). It is not clear, however, what are the consequences of this specialisation on business firms. The traditional competence based approach suggests that firms tend to build their competitive advantage by specialising around specific competencies (Prahald and Hamel, 1990), thus reducing the range of their technological knowledge and focusing on their expertise field. This is consistent with the evolutionary view of industrial organisation explaining that firms in a given sector remain endowed with idiosyncratic technological characteristics (Nelson, 1991). Others argue, on the contrary, that firms tend to increase the diversity of their technological knowledge (Granstrand et al., 1997), even when they reduce the range of product. Competition, here, is not related to technological expertise, which tend to be similar between firms in the same sector. This seems to be particularly verified in when products exhibit the highest rate of technical change (Patel and Pavitt, 1997, Gambardella and Torrisi, 1998)

Year: 2011
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