Open innovation in the UK biopharmaceutical industry: a multi-layered investigation

Abstract

Whilst the interest in open innovation is growing, thus far few studies have emphasised its importance beyond hi-tech industries and large multinationals. This research aims to generate an understanding of open innovation adoption within the UK Bio-pharmaceutical industry, which is chosen because of the significant growth it has experienced in recent times, and is heavy reliance on R&D. The findings of this multi-level study present a holistic view of the opportunities and barriers pertaining to open innovation in Biopharmaceutical SMEs and large firms, as well as indicating that open innovation strategies assist firms’ in terms of value creation and capture. The study also illustrates that strategies cannot necessarily be regarded as explicitly open or closed innovation, as there is a significant spectrum of approaches in the space between.

The study’s theoretical contribution develops the use of critical realism, a scientific reality which is not only about constant combinations of observable events but is also about individuals, entities and structures that exist and generate the events we witness and observe. In doing so, the study utilises an alternative to inductive or deductive reasoning, the retroductive reasoning. Through retroduction, the study to explain these causal powers, mechanisms, as well as the contingent relations of individuals that are responsible for the creation of a firm’s strategic considerations based on a multi-layered approach (micro-with individuals/meso-with various organisations/macro-with various government bodies and organisations).

The study comprises three sets of results, focusing on CEOs, knowledge brokers and senior executives respectively. The first set of results, based on 30 interviews of CEOs in Small-to-Medium sized Enterprises (SMEs), suggests that i
open innovation practices are utilised in a multi-level, but that not all SMEs adopt the open concept. This shows the reluctance of CEOs in SMEs in sharing internal information and intellectual property. The second set, obtained from interviews with 8 Knowledge Brokers in the industry, emphasised the need for an agenda when open practices are utilised and there are personal preconceptions regarding business, which are in many cases difficult to change or adjust during open approaches. The third set, obtained from a survey questionnaire with 12 executives of 10 large biopharmaceutical firms, illustrates the importance their firms place on open innovation practices, particularly in collaborating with various firms and organisations.

In spite of the industry’s recent efforts, the study identifies that benefits from the adoption of open innovation are yet to be seen, as the realisation of research and development outcomes within the Biopharmaceutical sector is a long process. Furthermore, the study clarifies that open innovation is not a monopoly of large firms in the high-tech sector, but can be adopted in various other firms in different industries.

Additionally, this study contributes to the expansion of multi-layered approaches, as they give a thorough view of the processes that are involved during open innovation adoption. Finally, the research addresses the lack of empirical work in open innovation and suggests methods that identify how and why particular processes are utilised when open strategies are adopted, and elucidates the space between closed and open innovation.

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