Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • Article
  • Industrial and Corporate Change

The Evolution of Science-Based Business: Innovating How We Innovate

By: Gary P. Pisano
  • Format:Print
  • | Pages:18 
ShareBar

Abstract

Science has long been connected to innovation and to business. As early as the late 19th century, chemical companies, realizing the commercial potential of science, created the first industrial research laboratories. During much of the 20th century, large-scale business enterprises like DuPont, GE, Westinghouse, IBM, Kodak, Xerox (PARC), and AT&T (Bell Laboratories) created in-house labs capable of first-rate basic scientific research. In recent decades, however, the connection between science and business has begun to change in important ways. While the corporate lab declined, new "science-based businesses" in sectors like biotech, nanotech, and energy emerged. Universities also became active players in the commercialization of science. In short, science has become a business. This essay examines the institutional and organizational challenges created by this convergence of science and business through a Chandlerian lens. It highlights three fundamental challenges of science-based businesses: 1) managing and rewarding long-term risk, 2) integrating across technical disciplines, and 3) learning. Whereas these challenges were once managed inside the boundaries of corporate R&D labs—under the auspices of Chandler's visible hand—today the invisible hand of markets increasingly governs them. An assessment of this form of governance against the requirements of science-based businesses suggests a gap and a need for organizational innovation.

Keywords

Entrepreneurship; Governance; Innovation And Management; Risk Management; Research And Development; Science-based Business; Commercialization

Citation

Pisano, Gary P. "The Evolution of Science-Based Business: Innovating How We Innovate." Special Issue on Management Innovation—Essays in the Spirit of Alfred D. Chandler. Industrial and Corporate Change 19, no. 2 (April 2010): 465–482.
  • Find it at Harvard
  • Read Now

About The Author

Gary P. Pisano

Technology and Operations Management
→More Publications

More from the Author

    • Journal of World Business

    Variety of Innovation in Global Value Chains

    By: Giulio Buciuni and Gary P. Pisano
    • December 2020
    • Faculty Research

    Pal’s Sudden Service—Scaling an Organizational Model to Drive Growth

    By: Francesca Gino, Gary P. Pisano and Alexander Rohe
    • December 2020
    • Faculty Research

    Scaling Well by Doing Good: Motivating Talent at b.good

    By: Francesca Gino, Gary P. Pisano and Alexander Rohe
More from the Author
  • Variety of Innovation in Global Value Chains By: Giulio Buciuni and Gary P. Pisano
  • Pal’s Sudden Service—Scaling an Organizational Model to Drive Growth By: Francesca Gino, Gary P. Pisano and Alexander Rohe
  • Scaling Well by Doing Good: Motivating Talent at b.good By: Francesca Gino, Gary P. Pisano and Alexander Rohe
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Digital Accessibility
Copyright © President & Fellows of Harvard College