The Evolution of Science-Based Business: Innovating How We Innovate
Executive Summary — Science has long been connected to innovation and thus to the business enterprise. However, the nature of the connection between science and business in recent decades has begun to change in important ways. On the one hand, we have witnessed the decline of corporate industrial laboratories. At the same time, we have seen the emergence of a new class of entrepreneurial firms that are deeply immersed in science in sectors like biotech, nanotech, and more recently energy. HBS professor Gary P. Pisano examines the changing nature of the science-business intersection and describes the emergence of a science-based business as a novel organizational form. He also describes the institutional and organizational challenges created by this convergence. Key concepts include:
- Science-based businesses face unique challenges as they straddle two worlds with very different time horizons, risks, expectations, and norms.
- The professions of management and of science are still largely separate: Scientists receive no formal training in management, and MBAs receive no training in science. This is a striking gap.
- Today the "invisible hand" of markets increasingly governs science-based businesses. Assessing this form of governance against the requirements of science-based businesses suggests the need for organizational innovation.