Networks and Rapid Technological Change: Novel Evidence from the Canadian Biotech Industry

Former studies on inter-organizational relationships have fallen short of properly identifying networks and elucidating factors that cause firms to entertain relationships in one type of network rather than another. This study adopts a methodology that is both empirical and comparative and thus constitutes a methodological departure from these previous studies. It also explicitly accounts for two structural characteristics of networks, namely, interactions and learning, to identify four types of networks, accumulative advantage networks, follow-the-trend networks, homophilies and multiconnectivity networks. It then investigates factors that cause firms to participate in any of these networks rather than another. Results show that even though networking is a common practice among biotech firms, most of them would rather keep this activity to a minimum. In addition, participation in these networks is found to vary according to the firm's size, stage of development and its sector of activity.