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Turbulence in the Biotechnology Sub-sector of the Western Cape Regional Innovation System.


Biotechnology is seen as one of the major growth industries in many countries with applications in different fields, such as health care, agriculture, food and the environment among others. (1-6) Involvement of Small-to-medium size enterprises (SMEs) in the biotechnology sector are the key forces in revealing the biotechnology products and processes to the global marketplace. (3,7) For instance, biotechnology in the United States was pioneered by small biotech firms in the early 1980s. (4) Biotechnology start-up (i) companies require a strong knowledge of the relevant science and a familiarity of business principles, market development and venture capital. (7) Above all else, one of the important factors needed to develop a biotechnology industry in a region is to have a strongi entrepreneurial culture meaning that university scientists (researchers) should also look at the commercial exploitation of their results. (8)

Biotechnology spin-off culture in South Africa is much younger than in developed countries. By employing case study methods and with the aid of the three pillars of successful biotechnology commercialisation from the literature, this paper aims to understand the genesis, the characteristics and the trajectories of the biotechnology spin-out companies in Western Cape region, South Africa.

In this paper we are posing the question 'what happened to the university spin-offs and start-ups since their inception?', i.e. we trace their trajectory from genesis to growth, or sadly, their demise. We pursue this question with two broad notions in mind:

a. The essential pillars that underpin growth in biotechnology spin-offs and start-ups (effective management, sufficient capital, and access to technology);

b. The role of institutions and other actors in the Western Cape, aimed at supporting innovation.

The research was initially designed to complete the study (ii) with an investigation of the growth stories of the biotechnology spin-offs from the universities in the study. When it became evident that several of the firms targeted for this in-depth story, were no longer in existence, a more important question became 'why did they fail?' In the search for answers to this question, a tale of turbulence in the sector, and particularly in the environment in which they were to innovate and grow, emerged. Turbulence, in the literature on economics of innovation, refers to entry and exit of firms in an industry or sector. (9-12) In general terms, turbulence also refers to discontinuities and changes that occur in the environment in which the firm operates, especially the institutions in the national and regional innovation systems that have or are supposed to have supportive linkages to the firms. We use the concept of turbulence here in both senses.

The merit of this paper lies in the fact that it draws together many of the useful insights from previous papers and the literature, and with the aid of the case studies, show how a complex series of internal (to the firms) and external factors (in the national and regional innovation systems) combined to lead to the failure of the biotechnology spin-offs.

The rest of the paper is structured as follows. After expanding on the three central requirements (the so-called 'pillars') for success in biotechnology commercialisation, we proceed to the case studies, discussing the methodology and providing the information on the ten biotechnology firms that were initially targeted for in depth study, where after we present the case studies. We derive lessons and policy implications in the discussion section and conclude in the last section.


According to the literature, there are three structural elements which are called the "three pillars" that are essential to gain success for a biotechnology start-up company: (i) effective management, (ii) sufficient capital and (iii) access to new technology that leads to products.6,13-14 (see table 1).

The following section gives brief information about each pillar.


Managerial talents are one of the most fundamental challenges and the weakest pillar in most biotechnology companies. R&D poses difficult managerial challenges because it is the most critical aspect of bringing a product to market and it is costly. Hence, biotechnology firms need a complex range of knowledge, skills and talents. (6,13-16) York et al. (2009)17 state that such a bio-entrepreneur should have cross-disciplinary knowledge and talents including marketing, the basics of Intellectual Property Rights (IPR), early-stage technology finance, and knowledge of scientific, regulatory and ethical issues. Moreover, bio-entrepreneurs should also have special communication, emotional and social intelligence skills like self-awareness, self-control, and social awareness.14 This feature, having technical and commercial skills, is mostly found in biotechnology companies where the biotechnology start-up companies have a dual decision team, with an executive manager (CEO) and a scientific manager (CSO). (18)

Resolving the economic and commercial challenges faced when developing a new product requires a completely different set of skills from conducting research on technology and its application. In this case, a successful management team must encourage scientific staff to work on the one or two products that will lead the company to its success. Frequently, a scientific team has a wide range of potential products; however, most of the time they lack the resources to exploit several products commercially at any given time. On the other hand, established pharmaceutical companies are experimenting with a wide range of technologies and products in order to find that one blockbuster. (6)

Finding appropriate talent is an international problem. A recent report describing the Singapore cluster, for example, noted that their biggest problem is its continued shortage of entrepreneurial scientists and managers.14 Similarly, Volery et al. (2007) (16) revealed in their research that Switzerland faces several key challenges in management of young biotechnology companies, which include funds management, planning strategies, marketing and sales, IP and administration. Nosella et al. (2006) (4) gave another example from Italy. Managerial skills at university start-ups are mostly lacking in the scientific staff working at the university. Rutherford and Fulop (2006) (19) found a similar lack of expertise in Australian biotechnology start-ups. The authors observed that business awareness of science is low and scientists lack the entrepreneurial skills to commercialise their research. To overcome these problems, Rutherford and Fulop (2006) (19) and Nosella et al. (2006) (4) suggested respectively to train and equip scientists with the necessary commercialisation and managerial skills and to get assistance from TTOs in terms of organisational and financial support. Nosella et al. (2006) (4) suggested another solution that can solve the problem in Italy which is a joint scientific and managerial competency where the founders could be a team of both academic scientists and industry managers.


Capital forms the second pillar of any biotechnology company's struggle, because biotechnology is capital intensive and in many cases requires huge amounts of funding for many years. At the early stages, in many cases, a biotechnology company struggles to have enough funds. (6,13,15-16) The process of bringing a drug into the international market is costly and time consuming. Some experts have pointed out that it takes approximately US$1 billion and additional ten years of research and clinical trials to finally release a drug. Lately over 200 new medical treatments and vaccines have gone through this process which includes products that treat cancer, diabetes, AIDS and other autoimmune disorders. (6)

Therefore, bio-entrepreneurs should spend considerable time on cultivating financial resources for their young companies. (13) Konde (2012)20 echoes this finding, stating that early stage biotechnology start-up investing is a resource-intensive business, where entrepreneurs need to build strong partnerships with local and global investors, with corporations and government entities. (20)

This is a big problem in developing countries as well as developed countries. Byrd (2002) (21) found that the major problem faced by Canadian biotechnology spin-off companies is access to the capital to develop the company. One of the biggest challenges faced by biotechnology start-ups in Singapore is getting sufficient funding to keep them going. In the high-risk early stage start-ups, companies mostly rely on angel investors. (22) This is also the case for India. The Indian biotech firms mainly rely on private equity (PE) and venture capital (VC) funds. In recent years, Indian start-up biotech companies have been left vulnerable by the decline in early stage funding. Main reason is that the private investors move to later-stage investment strategies, due to the lack of money to invest in new and risky projects. (20)

In both developed and developing countries, governments are the most important funders of the biotechnology sector. In South Africa, a developing country, government support is more important than private investments. Financing for biotechnology in South Africa is strongly government-led, with the BRICs (iii) (part of the TIA (iv) now) instruments. However, compared to other countries, South Africa is still falling behind in this level of finance. We return to the South African situation in the case study analysis.


Phenomenal scientific partnerships such as Cohen and Boyer, Kohler and Milstein have set the foundation for the biotechnology industry based on the recombinant DNA and the monoclonal antibody breakthrough technologies, which emerged in the mid-1970s. This is the third essential pillar which most companies are built upon. To this day, most biotechnology companies still look at universities first for sources of new technology. Universities are essential components for discovering new technology, because they are often the most fertile grounds for producing such discoveries. Important policies such as the Bayh-Dole Act and other legislations that encourage academic institutions to license discoveries from research that have been conducted with government funding still continue to fuel and are the backbone of the biotechnology revolution. (13)

An essential component for any biotechnology company, from its inception, is to have a well-defined and well-articulated product focus. Whether the product is directed towards the development of a specific technology or whether it is focused towards a certain disease area, the company still needs to set a clear vision regarding its foundation for future revenues. (13) For biotechnology start-ups it can be a difficult task as they can only focus on one or two avenues of research, hence they are not as successful as big pharmaceutical companies with regards to developing a successful drug to enter the market or even other biotechnological avenues. (6)

The great challenge for any bio-entrepreneur in this time of ubiquitous opportunities is to maintain a rigorous focus on the chosen product and its underlying technology. (13) Having explained the key requirements for successful biotechnology commercialisation, we can now proceed to the empirical work, where we will apply these insights in the South African cases.



Following a literature survey and our initial survey on university spin-offs, we ventured into the field to establish whether our biotechnology spin-offs identified in the survey were still in existence, and whether new ones have been created since. This exploration resulted in ten biotechnology firms being identified, two from the University of the Western Cape, four from the University of Cape Town (UCT) and four from the University of Stellenbosch.

For the purposes of these in-depth case studies, we initially set the criteria that the companies should have been created after 2000 (to be comparable), must be active in biotechnology, and particularly in manufacturing, product development or research. We therefore excluded service-type and consultancy firms (four); one firm that was created in 1997 and closed down in 2007; and a company which was created in 2011. Four companies fitted the criteria. However, when we continued the investigation, we found that more companies had gone under than survived (only one firm still alive). The more important question to pursue, became 'why the failure?'. Two of the companies that failed, were willing to participate in the in-depth interviews. One was from UCT and one from the University of Stellenbosch. To garner the perspective of the supporting agencies in the regional innovation systems, we arranged and conducted interviews with senior staff at the company, at the universities' technology transfer offices (v) and the TIA. The interviews yielded a considerable amount of information, which, as we will show in our analysis, tell a tale of failure that holds important lessons for practitioners and policy makers.

In the next section, we elaborate on the company histories. The companies are coded Company A and B.


Company A

Company A, was a University of Stellenbosch pre-startup company, which at the time of its establishment, represented and opportunity to realise the commercial potential by bringing to market the technologies developed, and capitalising on the research proficiency and extensive knowledge generated at the Institute of Wine Biotechnology (IWBT) at Stellenbosch University. (30-32) This company was officially launched in 2005. It was a biotechnology-based pre-start up with the aim of establishing a sustainable product and technology development process that would combine the research output and intellectual property generated by the IWBT with sound commercialisation and marketing practices. (30-31,33)

To pursue this pioneering initiative, the IWBT appointed a team of five researchers to work only on Company A projects, and a Project Manager to guide the commercialisation and business needs of the venture in 2005. The research staff members at the IWBT assisted the team, each contributing their expertise and knowledge to the Company A projects. There was a Project Leader who is a full Professor in a department at Stellenbosch University. (30)

The company focused on the areas of genetic enhancement technologies, conventional development of unique yeast and bacterial strains, and development of quality control niche service offerings (chemical and microbiological) to the wine industry. Their projects were designed to generate a large number of hybrid and/ or recombinant wine yeast strains. Research aimed, amongst others to develop yeast strains that are able to enrich wines with antioxidants and nutritional supplements. Company A also wanted to make the fermentation process more efficient through the production of yeast strains with enhanced levels of key fermentation enzymes, and reducing the reliance on sulphur dioxide during the fermentation process. (30-31,33) These research and technology developments were believed to hold an important strategic advantage for the South African wine industry in the global market. Company A sought to actively commercialise the novel technologies at the IWBT, thus contributing towards the global competitiveness of the South African wine industry. (31)

To initiate the company, funding was obtained from CBI. The venture was in a three year project development phase after which it is envisaged that a private company will be incorporated, representing the commercialisation arm of the Institute for Wine Biotechnology. (30-31,33)

There was much hope that this company would be a successful example for future biotech spin-offs. Scott (2007) (34) reported that a California-based businesswoman noted that biotechnology start-ups could provide a critical kick-start to South Africa's economic growth as well as fight poverty. The example she gave referred to the fledgling Stellenbosch University company, Company A, which was one of fifteen Western Cape "baby biotechs", financially supported by the CBI and designed to commercialise and utilise academic discoveries. Unfortunately, Company A was terminated in 2010. Some of its projects reverted to the IWBT and are pursued there.

Company B

Company B was created in 2006 by a PhD student who developed the technology at the University of Cape Town. It was a start-up biotechnology company developing a production process for the manufacture and marketing of natural products derived from microalgae. The objective of its project was to produce natural astaxanthin from microalgae for the local and international markets using closed system cultivation technology for better process control35 The astaxanthin project used technology developed at the University of Cape Town by the founder, who also received assistance from the Professor who supervised his PhD research and heads the Centre for Bioprocess Engineering Research (CeBER) in the Department of Chemical Engineering at UCT. The research group at the university provided Company B with inocula (starter algal cultures), maintaining the algal culture to mitigate the risk of contamination at the Upington site, as well as providing routine analytical support. (36)

Company B was incorporated in March 2006 after receiving funding of 3.8 million Rand (~USD 600.000) from the CBI, who funded the start-up operation, linking in with their other algal initiatives in Upington. (35-36) Available funding for this project was used to further develop the technology and to establish a pilot production facility. Company B uses facilities in Upington for its manufacturing and piloting studies where the climatic conditions are favourable to algal growth. Company B was in a three year development phase from 2006 to 2009. After this phase a full scale plant capable of producing up to 2 tons of 100% astaxanthin were to be established. Company B was then in need of a second round of funding to progress to full scale production. (35) Not succeeding in acquiring the needed funds, the company was terminated in 2011.


Using the insights from the literature discussed earlier in the paper and the information garnered from the interviews, we tabulate the factors linked to the failure by the interviewees in Tables 2 and 3. This allows us to systematically identify similarities and differences in the reasons for failure advanced from the different perspectives.

We group the relevant factors for analytical purposes in terms of internal (firm-specific) factors and external (relating to the environment in which they operated, and specifically to the relevant institutions or organizations in the national (vi) and regional (vii) innovation systems (NIS, RIS) respectively).


Managerial skills and leadership

Out of the three interviews conducted for Company A, only the TTO representative and the senior staff member at the TIA identified managerial factors as contributing to the demise of the company. According to the senior member of staff of the Company A the managers' skills were not such a big problem, because the early challenges were of a scientific and technological nature. She believes the need for business and financial skills would only become critical once the firm became a fully-fledged company. She stated that the company had created a pleasant and healthy working environment where the team, including the founders worked well together. The only hiccup was the fact that they had lost a project manager to another company and had difficulties finding another one. According to senior staff member at Innovus, the TTO at Stellenbosch University, the company did not have a CEO or a clear leader to take the projects further and this resulted in instability and uncertainty. That the company did not have a feasible business plan and disagreed with the funder about it, also complicated matters (more on this below). According to the senior staff member interviewed at the TIA, the right person, with the right leadership and managerial skills, especially to drive the commercialisation and 'hunt money', rather than research output, would have made all the difference. In this interviewee's mind, the business model of chasing revenue from licensing, rather than further commercialisation was not the right one. The company already had something to commercialise, but the focus was too much on R & D, and not commercial products.

The same interviewee also asserted that Company B failed because it had no managerial and technical (engineering) skills.

Insufficient capital

Both companies had funding from the Cape Biotech trust to fund start-up and development costs, but in both instances they were not able to muster enough funding to scale up operations to produce marketable products. From the firm's perspectives, the trouble started when the TIA absorbed Cape Biotech in 2010, with resultant uncertainty and changes (staff turnover, loss of key contacts in Cape Biotech), new business plan investigations and viability studies. The end result was that the TIA concluded that the Company did not fit their mission, and funding was terminated. The Innovus representative lamented the timing of this upheaval:

"Company A needed about four more months of funding to get the desired results that would generate income, but the TIA decided to terminate the venture in November 2010. If they could just have continued for another season, they could have had wonderful results."

The TIA representative's view was that there were expectations that the company should have commercialised some output from the project by year 3. The TIA position was clear: commercialise or the funding would be stopped. Commercialisation was not forthcoming, so the funding stopped. Company B had, according to the TIA representative:

"a brilliant product, for which they had funding, but they could not take the project to the next level, i.e. scale it up, and therefore the TIA decided to terminate the company."


For both companies, the nature of the technologies they were trying to turn into marketable products, were such as to require a long lead time and many resources to bring the projects from production in pilot plants to production for large markets. According to the TTO representative as well as the TIA representative, the technology from Company A were still too far from being market ready, and for this reason, it was also unclear precisely which market to target to achieve the best pay-off.

Market-related factors

Both the TTO and TIA representatives identified market-related factors as problematic. Apart from emphasizing the fact that it was not yet possible to target a market for products that are still too far from market-ready (discussed above), the Innovus interviewee also mentioned that the market that Company A chose (wine producers) are still fairly conservative and not likely to adopt genetically modified products. In fact only America and Canada allow genetically modified wines to be sold.


Most of the factors in this section have to do with the impact of changes in the institutions supporting the development of the biotechnology sector, and specifically the changes brought by the establishment of the Technology Innovation Agency (the TIA, a national body) in 2010 and the absorption of Cape Biotech (a regional body) into the TIA.

Knowledge and communication gaps

When the TIA took over, much uncertainty was created, with paralyzing effects. The company interviewee opined:

"The people appointed to the TIA did not know what was going on and their communication was terrible."

Almost a year elapsed before they were informed that their funding was terminated.

Discontinuities: from Cape Biotech to TIA

The TTO representative stated that the creation of the TIA resulted in a period of chaos, shifting the focus and mandate from a regional one under Cape Biotech to a national one under the TIA. Also, whereas Cape Biotech understood that biotechnology has a very long lead time before significant revenue is generated; the mindset of the TIA was one that preferred funding companies with products and technologies close to market ready. This is an unfortunate development, in the face of the persistent refrain in the empirical literature and our earlier research, about the long and costly development paths in biotechnology and the lack of venture capital markets in developing economies. On this latter point we elaborate in the next section.

Funding sources in the innovation system

The interviewees indicated that try as they might, the management teams at the biotech start ups under discussion here, could not garner the necessary funds to ensure their survival. Private financing for biotechnology remains severely limited in South Africa. The problem in South Africa is the lack of finance available for seed and start-up companies, the bulk of the capital going into replacement capital, such as management buy-outs and black economic empowerment transactions. (41) Biotechnology companies usually run through multiple rounds of funding in order to achieve maturity. In the USA and European countries there can be as many as six rounds of venture capital funding before a company is self-sustaining or lists on a stock exchange. In South Africa, several fledgling biotechnology companies have received two to three rounds of financing but are facing the 'valley of death' with no means of support. (23,41) Government funds for the biotechnology industry are limited, and South Africa's investment community is immature in biotechnology, with having only one VC in biotechnology (viii). Without a change in this funding picture, the efforts that the government has made so far in stimulating biotechnology will be threatened. (23) In addition to the above explanations, Sherwin (2007)41 notes both the South African government and the private sector need to be realistic about the time frames and the amount of capital that required in developing the biotechnology sector. According to her, this is not a three to five year commitment, but a ten to twenty year commitment at least.

Timing of interventions

According to the interviewees at Company A and the TTO, the timing of the TIA interventions were very unfortunate. They believe that, if allowed to continue to work normally (absent the interruptions by TIA officials) and if they had funding for a few more months, they would have been able to deliver on commercialisation.

Expectations and business perspective of funder

Insights from the TTO interviewee suggest that even before the discontinuity created by the takeover of Cape Biotech by the TIA, Company A and the former were at odds over the appropriate business plan for the company. She observes that Company A did not seem to have the freedom to choose their business model or the line of products that they wanted to pursue. When the funder and the beneficiary are at odds, end goals are complicated and the desired outcomes are not clear. It may result in expectations not being met.

In sum, these factors confirm the main obstacles that biotechnology start-ups face, as identified in the literature. The results further point to useful insights regarding the NIS and RIS. In RIS structure, according to Cooke (2002) (43), to capture the variety of degrees of influence and decision-making authority, the presence or absence, or weaker and stronger relationships amongst the diverse possible kinds of application, exploitation, generation and diffusion elements of specific regions and their degrees of "systemness", one needs to investigate the interactions amongst the constituent parts of the system. Although we have only focused here on biotechnology firms and certain institutions in the RIS, we have learned plenty about the weak points and potential weak points in the system. We highlight the implications of these in the conclusion.


In this study, we wanted to trace the growth paths of the biotechnology companies that spun off from universities in the Western Cape. Our efforts to find the spin-offs that were still active in the biotechnology sector, made it clear that a more relevant question to ask, would be 'why do they fail?' rather than 'how did they succeed?'.

With the aid of the three pillars of successful biotechnology commercialisation from the literature, and the information on our case study companies, gathered from interviews with the company, TTO and TIA representatives, we constructed two sets of factors that led to the demise of these firms. These were the internal, or firm-specific factors, and external or NIS/RIS related factors.

Our findings on the firm-specific factors underscore the importance of a diverse set of managerial skills, discussed here. This is an important message for several players in the NIS and RIS, for example educational and training institutions, agencies such as the TIA that must play a supporting role, and Technology Transfer Offices, some of which operate training programmes and incubators for biotechnology entrepreneurs. With respect to the factors related to the RIS and NIS, the following stand out:

* The imperative to be mindful of disruptive effects in the very sector or system that an institutional change is supposed to assist and support. In the case of Cape Biotech and the TIA, the change was clearly turbulent and competence and capacity destroying, rather than enhancing.

* Funding for seed and start-up capital is consistently identified as an obstacle to growth in a promising sector of the economy. The nature of the technology and the longer-term investment horizon required make the sector unattractive for investors with a shorter term perspective. It would now seem that the government agency tasked with promoting growth in the biotechnology sector has adopted the latter view. In addition, the venture capital market in South Africa is underdeveloped and resources scarce. Until this aspect of the innovation system is addressed more effectively, firm formation and innovation in the sector may continue to remain under its potential level.


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Ramazan Uctu is Assistant Professor of Economics, Business Department, American University of Iraq-Sulaimani, Iraq; Research Associate, Department of Economics, Stellenbosch University, South Africa

Rachel CC Jafta is Professor, Department of Economics, Stellenbosch University, South Africa

doi: 10.5912/jcb803

Correspondence: Ramazan Uctu, American University of Iraq Sulaimani, Iraq. Email:

(i) In this research spin-out firms are also known as "start-up" and "spin-off" firms.

(ii) In the prior research authors sought to understand the spin-off phenomenon whereby a new firm is created and formed from parent universities. Specifically, the objectives of the paper were to explore the nature and definition of university spin-off firms in the South African context. The authors were further interested in the motivations behind the spin off, the relationships with the parent university post spin off, as well as the most important obstacles that the spin offs faced.

(iii) Biotechnology Regional Innovation Centres (BRICs) was formed in 2002 and served as vehicles for facilitating and supporting biotechnology innovation and commercialisation. (26) Three biotechnology innovation centres were created. These are Cape Biotech Initiative (CBI) in Western Cape, the East Coast Biotechnology Consortium (EcoBio, operating under the trade name of LIFElab) in Kwazulu Natal and Biotechnology Partnership for Africa's Development (BioPAD) in Gauteng province. The BRICs focuses different areas: Cape Biotech and LIFElab focus on human health biotechnology research and development while BioPAD concentrates on biotechnology research and development in agriculture, mining, and environmental applications. (23,27)

(iv) The DST recently established an agency which is called the Technology Innovation Agency (the TIA) and is a single public agency that was formed from a merger of seven DST-funded organisations, namely, BRICs (Lifelab, BioPAD, Cape Biotech), Plantbio, Tshumisano, the Innovation Fund and AMTS (Advanced Manufacturing Technology Strategy). (28-29) The TIA is involved in several fields, i.e. industrial biotech, agriculture, health, mining, energy, advanced manufacturing technologies and information and communication technologies. (29)

(v) Unfortunately, the TTO at UCT was only willing to confirm that Company B was no longer operational and the founder of the company refused to give any information beyond what is in the public domain.

(vi) The national innovation system (NIS) approach (37-39) places stress on the role of institutions in a system within a nation state, through their interactions, in supporting the technological development process.

(vii) Niosi and Banik (2005) (40) proposed that regional innovation system (RIS) are geographical concentrations of interacting organisations (innovative firms, research universities, government laboratories and venture capital firms) designed at the development of a specific technology.

(viii) The only private biotechnology Venture Capital was dormant in 2010 due to investing their whole portfolio (information received through interview with a manager at the TIA, 7 November 2012). The Biotech VC firm raised R80 million in funds in 2001. By May 2010, company invested R76 million in total of 8 private equity/venture capital investments and the current (2012) portfolio size was 3. (42)
Table 1: Three Pillars of Successful Biotech Commercialisation

   Three pillars                         Description

                       Effective management is not always a strong
Effective management   point for dedicated scientists who produce
                       technologies. Effectively bringing in the
                       necessary know-how is essential to succeed.

Sufficient capital     Finding adequate capital is often a challenge
                       for scientists who do not have a financial

Access to new          A start-up further needs access to good
technology that        technology and associated patents in order to
leads to products      produce revenue.

Source: Malazgirt, 2011

Table 2: Reasons for termination from different perspectives (Firm, TTO
and TIA)

                         Managerial   Sufficient   Technology   Others
                         skills       capital
                         COMPANY A
Firm perspective
Lack of knowledge and    -            -            -            o
Funding                  -            o            -            -
New mandate in TIA       -            -            -            o
TTO Perspective
New mandate in TIA       -            -            -            o
Technology was too far   -            -            o            -
from the market
Unclear market           o            -            o            -
Timing                   o            o            -            o
uncertainty in Company   o            -            -            -
Having no leader         o            -            -            -
Conservative market      -            -            o            -
Expectations             -            -            -            o
Freedom                  -            -            -            o
Not having a             o            -            -            -
sustainable business
TIA perspective
Having no leader         o            -            -            -
Having no commercial     -            -            o            -
Technology was too far   -            -            o            -
from the market
Unclear market           o            -            o            -
Business model           o            -            -            -
Expectations             -            -            -            o
R&D driven               o            -            -            -
                         COMPANY B
TIA perspective
No managerial and        o            -            -            -
(engineering) skills

Source: Authors' own construction, 2012

Table 3: Firm-specific, NIS and RIS explanations for biotechnology
spin-off failure

                                 Firms   NIS/RIS Institutions/

Firm perspective
Lack of knowledge and            -       o
Funding                          -       o
New mandate in TIA               -       o
TTO Perspective
New mandate in TIA               -       o
Technology was too far           o       -
from the market
Unclear market                   o       -
Timing                           o       o
uncertainty in Company           o       -
Having no leader                 o       -
Conservative market              o       -
Expectations                     -       o
Freedom                          -       o
Not having a sustainable         o       -
business plan
TIA perspective
Having no leader                 o       -
Having no commercial products    o       -
Technology was too far           o       -
from the market
unclear market                   o       -
Business model                   o       -
expectations                     -       o
R&D driven                       o       -


TIA perspective
No managerial and technical      o       -
(engineering) skills
limited scalability              o       -

Source: Authors' own construction, 2012
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Author:Uctu, Ramazan; Jafta, Rachel C.C.
Publication:Journal of Commercial Biotechnology
Geographic Code:6SOUT
Date:Apr 1, 2018
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