Individual Collaborations, Strategic Alliances and Innovation: Insights from the Biotechnology Industry

The knowledge intensive areas of our economy are characterized by rapid innovation fueled by technological and scientific advances. For firms competing in knowledgebased industries, continuous access to new information, know-how, and ideas is essential to success (Bierly and Chakrabarti, 1996). Firms create new knowledge through investments in R&D but, given the rapid pace of knowledge development around the world and the numerous scientific and technological frontiers along which innovation takes place, no firm can internally develop all the knowledge needed for success. Firms must, therefore, continuously access knowledge from other organizations including domestic and international firms, government laboratories, and universities (Arora and Gambardella, 1990; Powell et ai., 1996). One of the approaches taken by firms to monitor external knowledge development, and to absorb this knowledge when useful, is to engage in strategic alliances. Strategic alliances are used in numerous industries to gain access to ideas, knowhow, and expertise from other organizations (Inkpen, 1998). Empirical research has confirmed that alliances are an important source of scientific and technological knowledge (Mowery et at., 1996; Powell et at., 1996; Ah~ja, 2000) and contribute to firm success (Stuart, 2000)