External relations in the product development process : a study of biotechnology firms in Sweden

Abstract: The purpose of the thesis is to investigate how and why firms use external relations and collaboration in the innovation process. These issues are discussed at both industry and firm levels. Both transaction cost economics and evolutionary/competence-based theories of the firm have been used and combined in order to understand and explain how and why external relations and collaboration are related to product development processes. These issues are rooted in the broader question concerning what determines the boundaries of firms. The empirical case material focuses on biotechnology-related human health care in Sweden.The empirical part of this study starts with a mapping of Swedish-based biotechnology firms involved in R&D. A database (BioSweden) was built in order to identify these firms' patterns of external relations. These patterns and fmdings are then related to a theoretical discussion about whether different types of firms develop different paths and patterns of external relations depending on differences in characteristics in technology and markets.These issues have also been investigated at the firm level, using a multiple-case study of 15 biotechnology firms. In this part the firms' origin and development over time are studied in order to shed more light onto how and why product development processes are related to in-house R&D and different types of external relations.The findings indicate that choices about governance modes related to product development are influenced by internal capabilities, resources, and competencies as well as technological and markets characteristics. It has also been shown that such choices are strongly influenced by firms' capabilities to interact with other organizations.