Beedie School of Business

This study analyses the relationship between clusters and the growth performance of new U.S. technology-based firms. It is argued that firms benefit because clustering provides access to specialized resources that cannot be developed internally. The empirical results indicate that distance from a cluster is negatively related to growth, but clustering has a greater positive impact on biotech firms. Proximity to a cluster within a diverse metropolitan area is associated with superior growth performance only for firms that rely heavily on broad, downstream supply chain effects (that is, for information and communications technology firms).

As scientists are able to understand and manipulate ever smaller scales of matter, research in the fields of biotechnology and nanotechnology has converged to enable such radical innovations as lab-on-a-chip devices, targeted drug delivery, and other forms of minimally invasive therapy and diagnostics. This paper provides a descriptive overview of the emerging bio-nano sector, identifying what types of firms are entering, from what knowledge base, where they are located, and their strategic choices in terms of technological diversity and R&D strategy. The firms engaged in bio-nano research and development span the range from start-up firm to multinational pharmaceutical, biotech, chemical, and electronics firms: two thirds of bio-nano firms are relatively young and relatively small. The United States dominates this sector, with more than half of all bio-nano firms located in the USA. Even within this sector which epitomizes the convergence of technology, there is a broad range of technological diversity, with the most diverse firms overall coming from a base in electronics, the most diverse start-up firms coming from a base in nanomaterials, and the most narrowly focused firms coming from a biotechnology/pharmaceutical base. We find that hybridization has been the dominant knowledge diversity strategy, with 93% of the bio-nano firms with nano-patents holding multiclass patents.

Nanotechnology is frequently heralded as the next wave of technological advance, poised to enableradical innovation across many industries. But as yet little is known about how firms will ultimatelycreate that value. We do know that nanotechnology is based on process innovation, a category of innovation less well understood than product innovation. And we know that new ventures are animportant vehicle for commercializing radical technology. As new ventures seek to commercialize nanotechnology, they evolve value creation strategies to better link fundamental scientific advancewith the creation of value for users and investors. This paper asks ‘‘How do the successful value creationstrategies of technology ventures differ in process vs. product-based innovation?’’

An investigation of 12 ventures representing the extremes of value creation through process-based (nanotech) and product-based (fuel cell) innovation reveals significant differences in their valuecreation challenges, in the mechanisms of technology–market matching and alliance building, and intheir levels of experimentation. Ventures exploiting process innovation faced greater uncertainty intheir value chain positioning, market breadth, customization, and the changes required of theircustomers in contrast to product-based ventures. Our evidence shows that nanotechnology venturesbenefit from prioritizing technology–market matching, alliance building and experimenting withtechnologies in new value networks.

Science-based businesses have become the main drivers of commercialization for radical technological advances, but face high technology uncertainty over long time frames, the need for significant complementary assets and require substantial financing. Advanced materials ventures are a sparsely studied type of science-based business, though sufficiently different from others, such as biotech, to merit individual study. What strategies do advanced materials ventures use to overcome their daunting commercialization challenges? To address this question, this paper draws on literature on value creation and advanced materials commercialization, and presents new evidence from a sample of 43 advanced materials ventures from 3 countries. Through a hierarchical cluster analysis, the sample is subdivided into nanomaterials, performance materials, and fuel cell ventures and subgroup commercialization characteristics are described and compared.

We find empirical support for an earlier model of value creation by advanced materials ventures, and identify successful commercialization strategies according to subgroup. Our findings suggest that embracing uncertainty enhances value creation for nanomaterials and performance materials ventures but can diminish value creation for ventures commercializing fuel cell technologies. Successful firms commercializing nanomaterials and performance materials leveraged the generic nature of their technologies to achieve higher value creation, but tailored the technology to each target market. In contrast, successful fuel cell firms integrated further forward along their value chains and standardized their products across target markets.

Abstract: How do advanced materials ventures overcome the daunting commercialization challenges of the sector: high technology and market uncertainty over long time frames, and the need for significant complementary assets and substantial financing? Does uncertainty enhance or obstruct value creation?

Elicia Maine's research interests are in technology management, technology entrepreneurship, and the commercialization of innovation. She is most interested in understanding the growth of science-based ventures in the advanced materials, nanomaterials, fuel cell, biotech, and nano-bio sectors. Dr. Maine has published in leading technology management journals, such as Research Policy, R&D Management, and Technovation. She has also developed an investment methodology for materials, a strategic tool used to assist seed capital firms in assessing early stage material innovations. Dr. Maine is the Academic Chair of SFU's Management of Technology MBA program, and teaches the graduate course Managing Technological Innovation. . Most notably, his experience with fuel cell durability and manufacturing and recent work experience at Ballard Power Systems are directly applicable to the present research. Kjeang worked as a research engineer in Ballard's R&D team and his contributions resulted in improved fuel cell performance and significantly reduced manufacturing cost. This industrial research experience is a cornerstone of his new research program at SFU in fuel cell technology and sustainable energy systems. Kjeang is currently leading a $12M university-industry collaborative project on the development of next generation heavy duty bus fuel cells funded by Ballard and Automotive Partnership Canada.

This research explores two entrepreneurial decision-making processes utilizing effectuation and causation modes in the context of new venture creation in the biotechnology industry. Using a case study approach, we investigate the evolution of three biotech ventures from the start of the venture, featuring major decisions over a period of 10 to 20 years. Assessment of qualitative interviews with founders and CEOs demonstrates that, initially, each company began in effectuation mode and, over time, transitioned to a spectrum between effectuation and causation. The two ventures which retained effectuation logic did not engage in clinical trials. Decision making processes in this study illustrate the interplay between entrepreneurs' ability to manage technological and market uncertainty and circumstantial changes arising from change leadership, venture capital funding and development of lead candidates in the clinical stage of product development.

The confluence of nanotechnology and biotechnology provides significant commercial opportunities. By identifying, classifying and tracking firms with capabilities in both biotechnology and nanotechnology over time, we analyze the emergence and evolution of the global nanobiotechnology industry.