Organizations and Innovation within the Biotechnology Industry in China: An Interdisciplinary Perspective

Volume 6 · Number 3 · 2014

167

Organizations and Innovation within theBiotechnology Industry in China:An Interdisciplinary Perspective

Kai WangUniversity of Science and Technology of China, Department of History of Science and Scientific

Archaeology, Hefei, [email protected]

ABSTRACTThis article explores the research patterns and organizational features within R&D sectorin China’s biotechnology industry, delineating the innovation in knowledge productionand industrial development. The more recent development of China’s biotechnologyindustry is briefly overviewed from an interdisciplinary perspective, whilst a set ofsalient features embodied by social actors are envisaged as have so far strongly shapedthe market-based, commercially driven mode of scientific knowledge production in theR&D activities. Furthermore, this mode serves as a premise to the innovation of theinteraction-network. The implications derived from this analytical work shed a new lightupon policy-making both at the level of S&T governance and in the management practicein China’s biotechnology industry.

1. INTRODUCTION In forecasting the rising of bioeconomy, OECD [1] depicts its vista by 2030 and notes that thebiotechnology industry has become increasingly relied on knowledge production carried out in theR&D sector. It is particularly true in China’s case, and biotechnology industry R&D activities havebeen accorded with top priority in the past decades. As the bioeconomy evolved and expanded globallyat an accelerating speed, biotechnology industry has been the subject of industrial governanceaspirations particularly in field of S&T policy for decades in China since its opening and reforming in1978.

The enormous biological resource China is entitled to, together with the rich biological diversities itenjoys, has offered the country an ideal starting point to develop its biotechnology industry. Such adevelopment, as a matter of fact, is also under heavy pressure. With a population of approximately 1.3billion, China faces serious challenges brought forth by healthcare, agricultural development andenergy crisis. In addition, with the “family planning” policy will have to be implemented in the longterm, the problem of aging population is becoming urgent. 12% of China population is over 60 yearsold as of 2010, as per the statistics by People’s Daily [2]. On the one hand, such an aging populationgrowing at even a faster speed will cause huge pressure on medical and healthcare section in China’sdevelopment of biotechnology industry. On the other hand, the recently emerged energy crisis also callsfor the application of biotechnology to renewable energy in the near future so as to maintain China’seconomic growth. Largely drawing on examining the pressure of these two sorts, Chen et al. [3] assertthat the development of biotechnology industry is of critical significance to the sustainabledevelopment of China.

Recent years, particularly the 5-year period commencing 2003, have witnessed an acceleratedgrowth in China’s biotechnology industry with the two-digit compound annual growth rate (CAGR) interms of market value. In 2007, according to Datamonitor [4], the Chinese biotechnology marketexpanded by 24.9% to reach a value of $5,565 million; overall, it achieved a remarkable CAGR of18.2% on average in the whole period. It is worthwhile to note that in order to accommodate the issuesbrought about especially by problem of increasingly aging population, the sector of medical andhealthcare in China’s biotechnology industry has been laid the heaviest emphasis. As can be identifiedin the market segmentation in 2007, the medical and healthcare sector has generated up to 91.5% of thebiotechnology market in term of value, whilst food and agriculture occupied 6.7% of total share,technology service 1.1%, environmental and industrial processing 0.4%, and service provider 0.3%. It

is thus natural that China has managed to embrace the highest growth rate, despite the fact that theglobal biopharmaceutical market was largely monopolized by the US and Europe. As of 2004, Chinarepresented a 28% annual increase and was ranked ninth highest on the list of ten countries which wereresponsible for 85% of global drug market.

Wang et al. [5] assess the breakthroughs recently achieved in key areas of academic research andindustrial R&D sections underpinning the rise of China’s biotechnology industry, revealing a variety ofproblems the industry encountered. The insufficiency of talents and lack of original innovation, a poorcoordination, scattered R&D investment from enterprises or venture capital, weak translational systembetween scientific research and industrial application, together with the legal system lagging behind thenational S&T development have all thrown a wrench into the efficiency of its growth and expanding.To tackle these problems, a series of effective strategies have been implemented both on national andindustrial levels jointly by academic communities and policy makers in China. However, there is lessattention being paid to the relationship between the organizations involved in scientific knowledgeproduction practice in R&D section and innovation within the biotechnology industry in China than itshould be.

This article aims to incorporate theoretical frameworks from the fields of innovation research andS&T policy into the analysis from an interdisciplinary perspective. The foci include interdisciplinaryresearch (IDR) pattern emerged in scientific knowledge production in R&D section within thebiotechnology industry in China, and the interplaying connections between the organizations andinnovation of the industry.

2. ANALYSIS ON THE BOTTLENECKING ISSUES IN R&D WITHIN CHINA’S BIOTECHNOLOGYINDUSTRYDespite the vast scale and the high rate of growth China’s biotechnology industry has achieved, itscompetitive power in international biotechnology market still remains significantly weak. As in 2007,China generated merely 14.9 % of Asia-Pacific biotechnology market value with contrast to itsneighbor Japan with a dominating share of 46.8% [6]. Biotechnological research as a science-basedactivity, according to Zhao [7], derives its strength for further development primarily from academicresearch. To date, all the seminal discoveries in field of biotechnology as well as their applications inbiotechnology industry have originated from the public science mainly contributed by universities orresearch institutes rather than by research units in industrial firms themselves. The innovation-orientedorganization of R&D as following-up social activities of academic research, therefore, has become thefocus in the hot debates over how to better improve the competitive capacity of China’s biotechnologyindustry. Furthermore, from the upstream stage of R&D activities in China’s biotechnology industry,academic institutions play a crucial role in providing a foundation of knowledge and skills upon whichcommercial exploitation in mid or downstream of biotechnology R&D can be built. The switch fromlaboratory production into industrial applications calls for a closer linkage between industry andacademic institutions.

2.1 AIR: the Dominant Alliance in China’s Biotechnology Industry R&D The biotechnology R&D cycle is initialized with some basic research designed to provide a betterunderstanding as well as knowledge accumulation in life sciences and some other fields related,nonetheless, industrial product development with intention of commercialization consists of muchmore distinct steps and is highly costly and risky. As in biopharmaceutical industry, the total leadtimevaries from 3 to 5 years for a sample product and up to 20 years for a completely new drug. Moreover,R&D for new pharmaceuticals is on the cutting edge of biomedical sciences [8]. Due to technologicaldiscontinuity and prevailing uncertainty, R&D activities in biopharmaceutical industry arecomplemented with an extremely low success rate. Additionally, the biopharmaceutical industry is oneof the most research-intensive industries; R&D costs in the industry are more than 10 per cent of itssales [9]. Seen from the academic end, however, R&D outcomes in biotechnology industry are also themain outlet of biomedical and other related research activities conducted in academic institutions,which contribute to the justification of investment in those researches in return. In order to reduce entrybarrier by lowering R&D costs for commercialization as well as to accelerate the development ofacademic biology and life sciences, academic-industrial relationship (AIR) serves as an idealorganizational means in facilitating the development of China biotechnology industry.

168 Organizations and Innovation within the Biotechnology Industry in China:An Interdisciplinary Perspective

International Journal of Innovation Science

The AIR in China biotechnology industry, as Figure 1 illustrates, was initially created by NationalScientific Research Programs. Among the programs, priority areas for R&D in China’s biotechnologyare genetic breeding of high-yield and high-quality crops, transgenic technology and animal cloning,bio-reactor, gene- and protein-engineered vaccines and drugs, gene therapy and drugdiscovery/development [10]. Academic research institutions working in biopharmaceutical or the areaswith relevance include the Chinese Academy of Sciences (CAS), the Chinese Academy of MedicalSciences (CAMS), the Chinese Academy of Military Medical Sciences (CAMMS) and various medicalschools located within or affiliated to research universities. On an empirical basis set by Wang et al.[11], it is safe to put forward that the AIR makes the happy marriage possible between China’sacademic communities and biotechnology industry powers, which gives rise to the strengthening andexpanding of the industry.

As a strategic alliance, AIR is commonly affected by two kinds of operating environment identifiedby Fahey and Narayanan [12]. The first is the task environment, mainly referring to the sharing ofsources of inputs, markets for outputs, competitors, and regulators. The other is institutionalenvironment, namely, societal, demographical, economic, political, and international elements in whichthe alliance functions. Moreover, biotechnology industry R&D is embedded in a highly regulatedenvironment in which AIR confronts two factors, as in China’s case, that negatively impact itsefficiency in carrying out the R&D activities. The problems stated previously, particularly poorcoordination, are deeply rooted in the organization of biotechnology industry R&D in China with AIRas an exemplar. Specifically, AIR requires actors in China’s biotechnology industry R&D to deal withboth operational and technical aspects of regulation while managing the political interactions withregulatory agencies, which inevitably pose strains on the industrial innovation.

2.2 ANT: Analysis on the Strength and Weakness of China’s Biotechnology Industry Network In examining China’s biotechnology industry within the model of Actor-Networks theory (ANT), Wanget al. [13] list a diverse array of factors in addition to government bodies, enterprises and R&Dorganizations by a systematic study of the development of China’s biotechnology industry. Moreover,these factors are envisaged as all knitted into networks from which China’s biotechnology industryderives its strength to develop and evolve. The framework of actor-network indeed also provides analternative but equally important perspective for analyzing the bottlenecking issues in R&D withinChina’s biotechnology industry.

In the R&D section of biotechnology, networks made by human actors, mainly scientists, engineersand administrative staff with different disciplinary backgrounds, and non-human actors (funding,facilities and so forth) that are all linked by varied R&D programs. These programs are generallyinitiated by the Chinese government by launching the translation of interests from academiccommunities to industrial world. During the stage of translation, the formation and stability of networksare ensured by funding and administration mainly from the Ministry of Science and Technology(MOST) via promoting the complementation of National Scientific Program including 973, 863, Torch,and Special Programs, National Science Funding Committee (NSFC) focused on basic research,

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Figure 1. Academic-Industrial Relationships in China’s Biotechnology Industry

National Development and Reform Commission (NDRC) specializing in industry development andindustrial policy, the State Food and Drug Administration (SFDA), CAS supporting related institutes,and Ministry of Education (MOE) regulating universities involved. Among the organizations, theBureau of Life Science and Biotechnology affiliated with CAS and Bureau of High-tech Industry inNDRC well demonstrate the position of Obligatory Passage Point (OPP), as articulated in research ofdomestication of the scallops and the fishermen of St Brieuc Bay by Callon [14], which the Chinesegovernment has set for itself in the networks. Boasting 24 research institutes, 4 biotech research bases(Shanghai, Beijing, Southwestern China, and Mid-south China), over 6000 R&D personnel, 7 focusedresearch areas, and 2 priority development areas (Biotechnology and Pharmacy), the Bureau created atoken of China’s biotechnology R&D in the form of network [15]. The successful formation andconsolidation of networks guaranteed the high-speed development of China’s biotechnology industry.China’s participation as the only one from developing countries in the Human Genome Project (HGP)and Chinese researchers’ successfull sequencing 1% of the human genome with an accuracy rate of99% [16], all indicated the country’s increasing capability in biotechnological research.

OPP position held by Chinese government bodies, however, caused a series of structural problemsin Chinese academic research institutions, resulting in over-staffing, low productivity, and fallingprofitability. The weak management and control system over R&D activities and research institutionsreveals the fundamental incompatibility between a centralized R&D management model (typically witha governmental OPP as in China’s case) and an increasingly open market. Centralized economy hascreated an incentive system that encouraged individuals and institutes to compete for state-fundedprojects, whilst providing little less (if not none at all) incentives for the commercialization of thetechnologies and discoveries arising therefrom. The R&D result has little value by itself due to theinability of individuals and organizations to exploit it commercially and the lack of an open market forscientific knowledge and technology. The main force which motivates China’s biotechnology industrygrowth process in the R&D section is the aggressive intervention together with human resource andfinancial support by the organizational administration from the state and municipal governments.Consequently, the research institutions involved in R&D sector of China’s biotechnology industrycommonly make more efforts in networking with the local government other than in coordinating withother organizations or disciplines from upstream and downstream stages. The current stage of thenetwork is featured by the financial support mainly from the government or quasi-governmentinstitutions. Following this organizational form of innovation, good relationship with the governmenthelps players in R&D sector communicate their needs with the government, such as regulation changeor the needs of basic infrastructure.

3. PROPOSAL: CONSTRUCTING AN INTERDISCIPLINARY R&D COMMUNITY AND MECHANISMWITHIN AN INNOVATION SYSTEM OF CHINA’S BIOTECHNOLOGY INDUSTRYUpon the analysis of the promises of China’s biotechnology industry as well as the challenges it isconfronted with, this section will follow up the discussion on the relationships among the variedorganizations involved in enhancing innovation, by constructing and consolidating the actor-networkof biotechnology industry in China. Two distinctive but co-related objectives serve as guideline; thefirst is to improve the efficiency of the governance system for China’s biotechnology industry, the otheris to build the industrial competitiveness via fostering scientific knowledge production in the R&Dsector. The analytical work in this section will arrive at a set of proposals on facilitatinginterdisciplinary R&D within China’s biotechnology industry at the level of policy making, which areincluded as main findings of this study.

3.1 Triple Helix Theory: Rethinking Governance on Scientific Knowledge Production Although the main perspectives adopted in this article are from organization studies, I also attempt toincorporate theoretical frameworks from the fields of innovation research and S&T governance into theanalysis. Etzkowitz and Leydesdorff’s [17] approach to the interactive relations among academia,government and industry provides an ideal starting point to further this discussion on the organizationand innovation issues in China’s biotechnology industry. Moreover, such a specialized examination issituated in a broader terrain of governance on scientific knowledge production in Chinese context. Inparticular, I make new connections between these two so far largely distinct categories of literature,namely the ‘Triple Helix Theory’ on the one hand and Chinese context on the other, in identifying thesalient features of the organization and innovation issues emerged in China’s biotechnological R&D.



Rather than directly assigning R&D institutes with research activities following the highlycentralized national development plans, Chinese government has recently adopted a reformingapproach to academic community and scientific knowledge production. It was dedicated toencouraging more actors mainly from industrial chain to be involved in speaking to scientific expertise.Furthermore, the national S&T programs promoting industrialization and commercialization ofscientific expertise and technological application effectively inscribed political, industrial, andacademic actors at varied levels in the biotechnology industry R&D activities, which was against thesocial context of China’s economic system transition. Unlike the government investment which is oftenspread too thin trying to please too many people and sectors, the venture funds from China’s industrialworld often lack some basic know-how to evaluate their investments. Cyranoski [18] notes that venturecapital in China has so far grown rapidly in value since 2002. Its mainstream, however, has beenassigned to conventional services and manufacturing industries, while only a small fraction of it isgoing into science-based businesses in which biotechnology industry is included.

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Figure 2. A Triple Helix of Innovation System in China’s Biotechnology Industry

The shift of perspective from AIR to ‘Triple Helix’ allows us to draw a more complete picture ofinteraction network emerging in China’s biotechnology industry, paying more attention to the risingpower of industrial sector as well as the interplay of social actors involved (see Figure 2). Holding anOPP, governmental power is leading the network made up of interactive connections amonggovernmental body, industrial chain, and academic institutions. Priority of scientific research and itscommercial development serves as one primary device in sustaining and strengthening the network.Accordingly, one of the earliest areas of policy development in biotechnology industry was thedetermination of research funding priorities. Hao and Gong [19] point out that, in China’s newlypublished 15-year plan for its S&T development, drug development was ranked as major engineeringprojects together with other 15 fields including design of large aircraft, and moon exploration.Following up this effort from policy-making, to accommodate the financial weakness, a specializedfunding channel for medical research has been proposed and backed by China’s policy makers at thetop-level including those from the MOST and the Ministry of Finance (MOF). According to Stone [20],an interdepartmental council is being conceived and will dedicate to securing and expanding thefunding channel. One trend emerged more recently in China’s industrial world could serve as a livingproof supporting this effort by the governmental power within which industrial power is also seen risingdramatically. A new stock exchange for innovation-oriented companies, ChiNext, was officiallylaunched on 30 October 2009, while 20 venture-capital funds with worth of 9 billion RMB wasannounced by the NDRC on the same day. Cyranoski [21] notes that the scheme relies heavily onprivate investors, approximately 75% of it is supposed to come from them. Some even worry that littleof the funding is likely to reach biotechnology industry, for private investors in China are usually wary

of long-term drug development. The situation that venture capital for small pharmaceutical and biotechcompanies has long been hard in China, however, is to be changed enormously by heavy investmentfrom the industrial sector with strong support from government both at central and local level.

The actor-network of China’s biotechnology, with an interactive connection pattern of the ‘TripleHelix’ playing an increasingly important role in its R&D sector, substantiates the importance ofpolitical leadership on the issues with regards to industrial innovation including technological matters,domestic funding for research activities, the creation of appropriate research institutions, andinternational alliances for product commercialization. Such a centralized version of ‘Triple Helix’might not be unproblematic in theoretic discussions where hot debates may arise around the equivalentdistribution of importance among actors from the three categories. It nonetheless functions effectivelyin practice. It is asserted by OECD [22] that China will be an increasingly important center forbiotechnological innovation backed by the rapid increase in the supply of human resources and publicR&D expenditures. This strong supply, as suggested by analysis of actor-networks, is realizedfollowing the pattern of the ‘Triple Helix’ but highly centralized by governmental body as the OPP.

3.2 IDR: from Interaction to Integration Due to the social shaping of biotechnology in China, biopharmaceutical sector has become the mainstayof China’s biotechnology industry development. Seen from an interdisciplinary perspective, it furtherprovides an opportunity for a closer examination on industrial R&D featured as with strong relationshipwith academic research in multiple disciplines. As the objectives in biopharmaceutical industrial R&Dbecome increasingly complex and intertwined, the pattern of Multidisciplinary Research (MDR) hasbeen widely adopted in a diverse array of R&D activities, in which the participation of scientists andresearchers with multiple disciplinary backgrounds has become a prerequisite. Scientists andresearchers with different disciplinary backgrounds are making joint efforts in the dynamic process ofR&D activities in China’s biopharmaceutical industry (Figure 3.)



Figure 3. Multiple Disciplines Involved in the Dynamic Process of R&D in China’s BiopharmaceuticalIndustry

With growing support from the governmental powers, the enhancement of the AIR has beenwitnessed as fruitful and the joint R&D activities were widely carried out in China’s pharmaceuticalindustry. In May 2004, as documented by Hu et al. [23], 27 biomedical products were approved for themarket. During the year before, Wang [24] notes that nearly 80 new biomedicines received approval onclinical trials; meanwhile, over 150 biopharmaceutical products were in their pre-clinical development.

Currently, China has the ability to produce 8 out of the top 10 biomedical best-sellers in the world.Market share of biotechnological medicines has been rising continually. Interferon a1b, the first China-made recombinant medicine, has a 60% domestic market penetration. Moreover, In order to reinforcethe AIR, China government has invested 15 billion RMB (US$1.8billion) in biotech research anddevelopment in the past two decades, over 200 government-funded biotechnology laboratories arecurrently serving as the major players in R&D activities. In addition, more than 300 universities andcolleges have departments related to life science and biotechnology, cultivating about 2,000 PhDs inlife sciences each year according to data from MOE [25].

3.2.1 Interaction-network of InterdisciplinarityAll of these efforts, together with the widely employed pattern of MDR, have paved the way for theprogress to be made in enhancing competitive strength and innovation capability. Nevertheless, themost noticeable trend in current R&D section of China’s biotechnology industry is the development ofinterdisciplinarity, which is typically symbolized with the pattern of Interdisciplinary Research (IDR)in R&D activities. Upon the development of MDR, in which multiple academic disciplines participatein research activities, IDR lays emphasis on the joint efforts to be made by scientists and researcherswith varied disciplinary backgrounds crossing the traditional disciplinary barriers [26]. This switchfrom MDR into IDR emerged mainly in the academic institutions related to biotechnology industrialR&D in China in recent years. The recent establishment of the Center for Computational andEvolutionary Biology (CCEB) based in the Institute of Zoology at CAS in Beijing can reasonably serveas a good example. CCEB was founded ‘to foster interactions and collaborations between biologistsand mathematicians, statisticians, and computer scientists’ as narrated on its website [27].

With the rapid accumulation of genetic data in the era of genomics, higher accuracy has become anurgent need for basic research as well as R&D in biotechnology industry. To reach the accuracy inutilizing data, CCEB is initializing interdisciplinary research by joining both mathematicians who areinterested in developing statistical methods and computational algorithms for analysis of biologicaldata and biologists who potentially benefit from such methods. CCEB aspires to cover all subject areaswhere statistical methods and computational algorithms can be applied to analyzing genetic andgenomic data. By and large, research areas involved within CCEB include sequence analysis (patternmatching, similarity search, molecular evolution, molecular phylogenetics and population genetics),inference of gene/protein interaction networks, association studies to identify disease genes, and soforth.

Hulse [28] points out that biotechnologies are processes that seek to preserve or transform biologicalmaterials of animal, vegetable, microbial or viral origin into products of commercial, economic, socialand/or hygienic utility and value. The development of biotechnology calls for a large diversity ofapproaches involving perspectives from academic disciplines, which promises a fundamentalreconceptualization of the life sciences based on the development of quantitative and predictive modelsto describe crucial processes. Furthermore, the cost and complexity of emerging biotechnologies justifysignificant revision of curricula and reorganization of academic departments related to life sciences andbiotechnologies. In China’s case, active interdisciplinary cooperation in is needed both in universitiesand industries. As such, cooperation between scientists and researchers with different disciplinarybackgrounds, such as biochemists, bioengineers, mathematicians, computational scientists, systemsanalysts and specialists in bioinformatics, is activated. In the social context of China, to a larger extent,scientists and researchers involved in R&D activities within biotechnology industry must acquire moresensitive awareness of civil societies concerns and the ability to communicate with players of all kindsas connected by the ‘Triple Helix’.

3.2.2 Integration for InnovationClassical chemical engineering, as Hulse [29] asserts, is inadequate for modern and advancingtechniques of biosynthesis, extraction, isolation and purification of biological materials produced byvarious cell cultures and genetically modified organisms in biotechnology industry. Meanwhile, theacademic qualifications and experience needed by industrial bioengineers are rapidly changing. Toprovide the knowledge and skills the industrial world needs, universities must evolve from traditionaldiscipline-based, narrowly specialized departments into the integrated interdisciplinary communities.Only by this shift, can the mechanism of IDR within the biotechnology industrial innovation systemcome into being naturally.

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Disciplines are defined by their conceptual specificity, thus the encounter between differentconceptual structures is the core of interdisciplinarity as occurred in innovation of biotechnologyresearch. In investigating the collaborative projects involving several disciplines in the life sciences,Rosenfield [30] finds that disciplinary boundaries are most thoroughly transcended when members ofdisparate fields develop a common language that facilitates a shared conceptual framework crossing thedisciplinary barriers. Upon this finding, it is concluded that collaboration at this level possesses thehighest potential to nurture originality and thus innovation. To deploy complex system analysis inbiotechnology industry R&D, multidisciplinary teams of biologists, engineers and computer scientistsare working together, applying principles and techniques from engineering with concepts and algorithmsfrom computer science to solve problems. Likewise, through working on biotechnology, engineers andcomputer scientists are learning how to create new knowledge in their own disciplines. To be trulyeffective, community structures must be built to facilitate the interaction of researchers, educators andstudents from multiple disciplines. This effort is initially aimed at integrating multiple interests into oneunited community of practice. Furthermore educational programs must be re-cast to produce a new breedof researchers and get them prepared and suited to working at the interface of multiple disciplines,thereby creating an upgraded type of integration in form of a new learning community.

To build interdisciplinary R&D community in academic institutions which serve as the main humanactors in China’s biotechnology industry, the networked players of Chinese biotechnology must be fullyaware of how innovation in biotechnology industry R&D will be reorganized in the future. Providedthat scientists and engineers from life sciences and other involved disciplines work cooperatively, theearly synthesis through factory-scale process is to be integrated into an orderly organization bymathematically-trained systems analysts. In the meantime, the strong emphasis is laid on building andtesting computational models of biological systems in an interdisciplinary approach. As such, theparadigms of biotechnology industry R&D developed thereby have the potential to revolutionize theknowledge and its application in terms of biotechnologies, by providing ways of thinking, approachesto formulating questions, and framework for solving problems. It should be equally emphasized,however, that a substantial barrier to IDR is the absence of a strong mechanism designed for informalinteractions between actors and the lack of knowledge about each other’s disciplinary background. Toaddress this issue, Tadmor and Tidor [31] suggest the horizontal integration by providing a frameworkfor substantial informal interactions amongst researchers and students independent of academicdepartmental affiliation. Suggestion of this sort is of practical significance to China.

3.3 IDR Networking and its GovernanceMytelka [32] identifies a networking structure in partnering activities within the development of globalbiotechnology industry, and this partnership provides the scientific knowledge production with sourcesof financing for R&D expenses primarily through licensing and upfront fees. Moreover, it serves as riskreducer by ensure information and feedback flowing more effectively within the network, enablingbiotechnology industry R&D to consolidate its position, to identify funding opportunities and to takeadvantage of market availability. It is beyond the scope of theoretical discussion to evaluate how farthis approach is empirically correct in China’s case, however, I shall consider what it brings into theanalysis on the organization and innovation in China’s biotechnology industry. Especially, as it comesto the issues how to facilitate the innovative capability of the firms and institutions involved in China’sbiotechnology industry R&D, such a networking analysis will reveal that governance of scientificknowledge production is to be promoted.

As discussed in previous section 2.2, the structure of China’s biotechnology industry remains acomplex actor-network of corporate players, governmental powers, academic institutions, and non-human actants including those institutional. It is true that the global biotechnology market is dominatedby large firms with strong marketing capabilities, start-up firms in China nonetheless can still rest theirhope of growth on focusing on R&D. It has been long estimated that the upgrade of industrial chain inChina lies in efforts adding more value to their raw materials. In examining development of globalbioeconomy, Juma and Konda [33] propose five key areas of the governance system to be adjusted bydeveloping countries, namely market access, international biotechnology alliances, intellectualproperty protection, regulation and risk management. Given the innovation in scientific knowledgeproduction in biotechnology industry R&D is cumulatively interdisciplinary in nature, I argue thatoptimizing the structure of China’s biotechnology industry requires a governance scheme which is alsoconsistent with the organization of scientific knowledge production following the IDR pattern.



Regulatory practices in China’s biotechnology industry, as reviewed by Keeley et al. [34], tend toevolve from the country’s practical management of technology. Despite international policiesinfluencing biotechnology industry are still in the early stages of development and are only now startingbeing consolidated into a body of governance, many of the policies governing China’s biotechnologyindustry are derived from governance of the wider industrial sector. In addition to China’s existingstrategies for enhancing national competitiveness in its biotechnology industry, more policy-makingefforts, I argue, should concentrate on integrating the scientific knowledge production into globalbioeconomy by supporting R&D following the IDR pattern in the joint ventures and strategic alliances,among others.

4. CONCLUSIONThe connections between organizations and innovation in China’s biotechnology industry areformulated as the subject of S&T governance aspirations in this article, while the impacts ofbiotechnology industry are clarified as being related to the wider concerns about social and economicconsiderations of the sustainable development of China’s economy. In weighting the measuresenhancing the scientific knowledge production within its R&D sector, the interplay between socialactors is identified giving rise to the IDR pattern. As such, this article sheds new light on ourunderstanding of how innovation in China’s biotechnology industry is transforming the industrialorganization as well as China’s S&T governance agenda.

The present article reviews the prospects, challenges and governance alternatives associated with theenhancement of biotechnology industry as well as its inroads into the sustainable development ofChina’s economy. A governance regime on China’s biotechnology is proposed to foster the innovationcompetence primarily derived from its R&D sector and to expand market opportunities for all actorsenrolled into the network. Such a governance system is comprised of considerations which are sociallyshaped by the interaction-network on securing input in terms of funding and human capital so as todevelop China’s biotechnology industry R&D capabilities, reshaping national regulation so as to beapplicable to building integrated community of practice and learning as per the requirement of the IDRpattern, and improving the management of risks and benefits upon the basis of interaction betweensocial actors against the wider global context.

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Organizations and Innovation within the Biotechnology Industry in China: An Interdisciplinary Perspective