Network Growth and Consolidation: The Effects of Cohesion and Diversity on the Biotechnology Industry Network

The growth regimes of complex networks account for many of their structural features and behavioral effects. Social and economic networks, however, tend to expand along different pathways than their technological or biological counterparts. Complex inter-organizational topologies are characterized by tight-knit clusters of prominent nodes whose dense inter-connections help forge them into an elite that can play gatekeeper and arbiter roles in an expanding network. The characteristics of such emergent elites, however, depend intimately upon the structural locations of the partners that form new ties. Systems where cores deepen their internal connections conserve their position, but may calcify. Those that expand their reach by forming connections to newcomers and to the network’s periphery increase responsiveness at the possible cost of incoherence. We draw on twelve years of dynamic network data from the international biotechnology industry to demonstrate that a mix of expansive and conserving ties account for that industry’s particular combination of stability and responsiveness. This structural view of network growth offers new insights into the distinctive features of social and economic networks, while linking models of network dynamics to debates in organizational theory and innovation studies.