Urenio Watch Watch: Business Models

New Paper_DIY Laboratories and Business Innovation Ecosystems: The case of pharmaceutical industry

This paper examines and clarifies the basic mechanisms towards the integration of DIY laboratories into R&D networks of the pharmaceutical industry. It  explains the interdependent relationship between DIY laboratories, CROs, pharmaceutical firms and venture capitals in an innovation ecosystem.  

According to the authors, this paper depicts a clearer picture of relationships between different entities in the biopharma ecosystem, in which different players are less bounded by loose hierarchical or market controls but more by layers of mutually beneficiary relationship models. Moreover, this paper provides important evidence of how economic returns and societal benefits are generated by inclusive innovation models while it answers previous calls for research on how business ecosystems will benefit the industry and the society.

From a business ecosystem perspective , the authors propose that, since DIY laboratories and pharmaceutical firms are previously isolated entities, an agent hub should be in place to connect these two parties into the biopharma innovation ecosystem. They further propose that contract research organisation (CROs) can act such a hub role.  In particular, the important hub role played by CROs will also call for further attention from investors and policy makers to better regulate and improve services of CROs, which can be a centre element in the contemporary biopharma innovation ecosystem.

This paper provides an important practical guidance by mapping two knowledge transfer models (IP + CRO and VC + IP + CRO) through which grassroots knowledge from DIY laboratories can be converted into commercialisable products while  generating both commercial and social returns from more effective R&D activities.

This study reveals three major findings. First, DIY laboratories, contract research organizations (CROs) and pharmaceutical firms interdependently position and link with each other in an innovation ecosystem for new drug development. Second, through properly managing the issues of resource utilization and innovation appropriability, CROs play important hub and knowledge broker roles in coordinating and aligning different priorities and expectations of the key players in this innovation ecosystem. Third, this study maps and verifies two knowledge transfer models through which novel research findings in DIY laboratories can be converted into real commercial returns.

This paper is structured as follows. Section 2 reviews the relevant literature and develops a conceptual framework. Section 3 explains the research method adopted in this study. The conceptual framework is examined, verified and extended by an embedded case study in Section 4. Section 5 further discusses how a CRO acts as a hub to manage resource utilization, knowledge transfer and innovation appropriability among DIY laboratories, pharmaceutical firms and the newly introduced venture capitals in a biopharma innovation ecosystem. This paper concludes by summarising the main findings, limitations and future research directions.

You can find the paper here.