Strategies and external relationships of firms in the United States agricultural biotechnology sector
Scully, Jennifer Lynn
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This paper examines the characteristics of mainly small- and medium-sized enterprises (SMEs) involved in the agricultural biotechnology (agri-bio) sector. Moreover, it serves to build awareness of (1) firm-specific strategies used by agri-bio firms to maintain competitiveness in an uncertain business environment and (2) the relative importance of local institutions, the government (i.e., local, federal, and international), and the farmer (i.e., an intermediate user of agri-bio products) in promoting innovation and commercialization of agri-bio products. Comparing agri-bio firms with health-related biotechnology firms was a related objective of the study, which highlighted the very different paths of competitive advantage undertaken by each of the subsectors. The controversial nature of the processes used in agricultural biotechnology and the ethical debate surrounding genetically modified organisms pose an ongoing struggle for agri-bio firms in negotiating their position in society as innovators. A survey of U.S.-based firms and farmers provided the data for the study at hand. At first cut, the data suggested that firms are only worried about science; however, as the survey probed into firm-level evaluations of external actors, the importance of federal over local-regional initiatives began to stand out. While states are investing to promote biotechnology clusters, health, and other categories, the lack of perceived importance of state-local level efforts to innovators is of particular significance. How much disconnect is there between SMEs engaged in the innovation process and the policymakers? Furthermore, what effect does public opinion have on sustaining the business of agricultural biotechnology? The study raised such questions about gaps in the understanding of relationships among firms (producer), clients (user), and the government (regulator-facilitator), and now serves as the basis for this discussion.