Managing knowledge in strategic alliances in the biotechnology sector
Business and Law
Biotechnology is a rapidly expanding field of science that has led to the formation of a large number of companies that together form a significant sector within the Australian economy. Even though there has been considerable growth in the Australian biotechnology sector as a whole, a large percentage of Australian biotechnology firms are small and medium sized enterprises (SMEs) that suffer from a lack of funding and expertise. The development and management of effective strategic alliances are critical to the success and development of biotechnology firms as they provide opportunities to share resources and expertise, access funding and develop new ideas. However, developing and managing strategic alliances is fraught with difficulties which are compounded by size and resource asymmetries and the nature of the biotechnology market. In addition, the isolation of Australia from the larger US and European markets means that Australian biotechnology firms have to consider strategic alliances with overseas firms to take advantage of marketing, distribution and commercialisation opportunities. In this paper, we identify the difficulties faced by biotechnology firms and examine the role that strategic alliances can play in overcoming these problems with special reference to the Australian context. We examine the knowledge and expertise that are required to be effective in developing strategic alliances in the biotechnology sector and suggest that critical systems approaches are needed to manage the various forms of knowledge associated with strategic alliances.