The Strategic Impact of Internet Technology in Biotechnology and Pharmaceutical Firms: Insights from a Knowledge Management Perspective

This paper conceptualises the strategic impact of new Internet technology in biotechnology and pharmaceutical firms. It argues that competitiveness of modern, agile pharmaceutical businesses depend on their ability to create and commercialise new knowledge as much as on their ability to produce new products. Hence, knowledge production and intellectual property management provide a strong foundation for emerging, successful e-commerce strategies. The authors suggest Knowledge Management (KM) plays a key role in determining organizational performance levels and value creation. KM refers to technologies for processing information and generating and distributing knowledge, but also to organizational structures (such as virtual enterprise designs) that increase strategic fit and effectiveness of KM implementations. The Internet is seen as core technology enabling the creation of organizational networks (virtual teams; virtual customer-supplier communities). More specifically, this paper devises a new classificatory framework that categorises the strategic impact of Internet technology in the biotechnology and pharmaceutical industry, which is based on three key dimensions: converting information into knowledge, the redesign of the innovation process, and knowledge-oriented organisational structuring. The authors extend their framework beyond the boundaries of the firm to include relationship with customers, suppliers, intermediaries such as specialist biotech companies and healthcare professionals.

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