The Role of Location and Regional Networks for Biotechnology Firms in Israel

This article presents results of a study of the Israeli biotechnology sector. The findings of the study show that despite the small geographical size of the country, the Israeli biotechnology industry tends to a great extent to cluster around leading research institutes. Based on a survey of 109 high-tech projects, the study suggests that the relatively weak business background of the entrepreneurs, the fact that most of them have worked at research institutes and that most new biotechnology firms were originated from ideas that came out of universities or research institutes, can provide possible explanations for this geographical concentration. The research emphasizes the relative importance biotechnology entrepreneurs ascribe to networking, both in very early stages as well as in advanced stages of the firm development process. It is argued that although the focus of the network changes over time, both geographically and in content, its links to local research partners are maintained. It is suggested that earmarked regional support policies are crucial to the development of networks required by new biotechnology firms.