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Knowledge integration using product R&D outsourcing in biotechnology

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  • Kamuriwo, Dzidziso Samuel
  • Baden-Fuller, Charles

Abstract

We build on systems integration literature to explain how and why knowledge integration of non-modular products is based on a strategic choice between internalizing and outsourcing core R&D. The under-researched choice of outsourcing core R&D on an on-going basis appears to face risks of higher transactions costs and loss of control. We illuminate these choices in a comparative analysis of two longitudinal cases that compare an internally focused R&D intensive firm and an externally focused R&D intensive firm; and we show how the externally focused approach can avoid risks by framing non-modular outsourcing as modular even though it is not so and by engaging in a social process of communication to achieve a common agreement between partners concerning the direction of efforts and thus effectively reduce highly iterative knowledge exchange between modules. Our findings add to our understanding of the systems integration literature; the nature of firm product system strategies, as well as firm boundaries in a knowledge economy.

Suggested Citation

  • Kamuriwo, Dzidziso Samuel & Baden-Fuller, Charles, 2016. "Knowledge integration using product R&D outsourcing in biotechnology," Research Policy, Elsevier, vol. 45(5), pages 1031-1045.
    • Handle: RePEc:eee:respol:v:45:y:2016:i:5:p:1031-1045
    DOI: 10.1016/j.respol.2016.02.009
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    7. Fossett, Sarah J. & Wunnava, Phanindra V., 2017. "Active Ingredients: Exploring the Key Factors Affecting the Rising Cost of Developing New Drugs," IZA Discussion Papers 10817, Institute of Labor Economics (IZA).
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    9. Rosana Zau Mafra & Dimas José Lasmar & Dalton Chaves Vilela Júnior, 2019. "Interorganizational Relationships in the Amazon Biotech Industry Based on Entrepreneurs´ Perceptions," RAC - Revista de Administração Contemporânea (Journal of Contemporary Administration), ANPAD - Associação Nacional de Pós-Graduação e Pesquisa em Administração, vol. 23(5), pages 672-695.
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