Business Models and Innovation Activities within New Industries : The Case of Medical Biotechnology

The concept of business models has in recent years become popular in connection with researching company level organizational change. Using the example of medical biotechnology this paper introduces, after a brief review of the business models literature, a perspective which theorizes business models as belonging to various business model classes. These business model classes are organized according to two dimensions, where the first is running between a focus predominantly on exploration of knowledge and a focus predominantly on exploitation of knowledge. The second dimension is running between end market proximity versus end market distance. The market distant business models exclusively serve other firms, whereas end market proximate business models serve the end market with finished products or services. This analytical way of envisioning the medical biotechnology sector differs from perspectives which may over-generalize similarities, and it also differs from descriptive perspectives operating with a great amount of detail when distinguishing between business models. The matrix with nine classes of business models may be especially useful in policy contexts, since firms and their business models may be grouped according to the analytical dimensions, and subsequent policy measures can become more adapted to subaggregate levels