The intended effect of business parks is minimal

However, this certainly does not apply to the pharmaceutical industry, as Sandra Phlippen discovered. Physical proximity between organisations plays a much smaller role than expected when it comes to gaining access to valuable external knowledge about new medicines.

On Wednesday 5 November 2008, Phlippen will be defending her dissertation Come close and co create. Proximities in pharmaceutical innovation networks, at Erasmus University Rotterdam, the Netherlands.

For her dissertation, Sandra Phlippen examined how different forms of proximity between organisations affect their capacity for strategic collaboration, which in recent years has become increasingly important in the pharmaceutical industry. Previously new medicines were mostly brought out by the laboratories of the large pharmaceutical companies, but their long period of hegemony is well and truly over. The lack of successful internal medicines, the expiry of patent rights from past successes, and finally the enormous expansion of alternative technology for the development of medicines have prompted pharmaceutical companies to explore opportunities for working together with external partners. As a result, innovations in the biopharmaceutical industry generally occur through partnerships between biotech companies, universities and pharmaceutical companies.

Phlippen made a distinction in her research between the effect of co-location (geographical proximity), the effect of being embedded in a network (relational proximity) and the effect of being in a common knowledge field (cognitive proximity). She discovered that the effect of geographical clustering is very limited, in spite of the many billions that are being invested in setting up business parks for companies and universities. “It is much more important for organisations to be ‘embedded’ in (often international) networks based on previous strategic partnerships. New partnership links for developing medicines are primarily the result of both organisations having a common partner with whom they have worked in the past. What matters, therefore, is not where you are, but whom you know,” explains Sandra Phlippen.

Once a collaborative partnership between two organisations has been established, it is important that there is sufficient common, that is, overlapping. knowledge between them. At the same time, the number of external partnerships cannot be too great, because knowledge about new medicines is so complex that the transfer of knowledge between two organisations requires the same researchers to work on both external and internal projects. It is only under this condition that knowledge that has been acquired externally can be successfully applied internally.