Internal and external sources of innovation in the Italian biotech sector

A common view among many academics and policy makers is that biotech offers enormous opportunities for improving competitiveness and economic growth. For this reason there is a growing need to set up appropriate policy to improve the adoption and diffusion of biotech innovation. Nevertheless, there are many interpretative problems about the identification of the biotech firms, due to the uncertainty about the border of the sector itself. This paper provides a contribution to better define and understand the biotech industry, pointing out the differences inside the sector and the different behaviour of the firms according to their typology. In fact this paper, basing on a previous work of classification of the Italian biotech firms according to the OECD standards, uses such a classification in order to better understand the different importance, inside the biotech sector, of the internal and external sources of knowledge, in the production of innovation. Our hypothesis is, in fact, that the relation between internal and external source, on one side, and innovation, on the other side, has different characteristics if we distinguish between the different classes in which the production activities are divided, according to the OECD classification. We try to test this hypothesis trough the analysis of the data coming from a questionnaire we submitted to several Italian biotech firms.