From Invention to Innovation: Toward Developing an Integrated Innovation Model for Biotech Firms*

Abstract

A review of extant literature reveals various theories on innovation, including technology push, market pull, and an organizational approach. All of these theories have been criticized for their lack of integration and inapplicability to today's competitive environment. An integrated view of innovation has emerged that synthesizes the variables in previous approaches. However, the application of this view has been restricted to investigating the innovation processes within the computer and manufacturing industries, whereas the biotechnology industry has been ignored. This is despite biotech managers' well‐acknowledged thirst for innovation and the ability of biotech to shape the way we live. The present article contributes to the literature by applying an integrated approach to the biotech industry, thereby extending understanding of innovation management beyond the traditional field of inquiry. An integrated approach is of particular relevance to biotech companies, given the complexities of managing the industry's long development cycle and intense collaborative activities. In‐depth interviews with eight organizations in Maryland formed the basis for an investigation into the challenges of managing the innovation process in biotechnology firms. The findings revealed that biotech entrepreneurs are ill prepared to lead their organizations through several transformations necessary along the product life cycle because of their fixation on a technology‐push approach and lack of an understanding of integrated innovation. These leaders also lack the commercialization knowledge necessary to push products to markets, resulting in avoidable delays and loss of productivity. The existing research has dispelled myths associated with biotech. Specifically, it suggests biotech entrepreneurs cannot rely solely on inventions but must invest in a timely application of knowledge to organizational and market forces to take full advantage of the innovation potential associated with the industry. This article presents a conceptual framework for applying the integrated innovation model to biotech firms and makes the case for incorporating market‐oriented mechanisms, building and using appropriate organizational capabilities, developing effective collaborations, and creating parallel interactions as major elements in a general strategy toward the success and improved efficiency of biotech companies. The limitations of current research are discussed, and avenues are highlighted for much‐needed future research into the biotech industry.