Organizing knowledge spillovers when basic and applied research are interdependent: German biotechnology policy in historical perspective.

The German biotechnology lag illuminates the difficulties of finding appropriate organizational forms of R&D for “embryo” innovations requiring the continued involvement of basic research scientists even after innovation has advanced to the stage of commercial product development. The analysis charts the German policy shift from largely unsuccessful “corporatist” networks (1970s and 1980s) to more promising “emergent” networks (1990s) as organizational vehicles for conducting biotechnology innovation. A constant of German R&D policy for most of the 20th century, and one underlying the initial reliance on corporatist networks in biotechnology, was the tendency to exclude universities from major R&D initiatives and rely instead on specialized research institutes. The structural inflexibilities of universities, combined with the early successes of many specialized research institutes from the 1880s on, led to path-dependent reliance on the latter for 20th-century reforms of the German national innovation system. [ABSTRACT FROM AUTHOR]