Exploration and exploitation in innovation systems: The case of pharmaceutical biotechnology

This paper develops a theoretical framework for an explanation of how exploitation and exploration build on each other, in a ‘cycle of discovery’, developed in earlier research. The framework is tested empirically, in the sense of seeing whether it can help to reconstruct and understand the emergence of the pharmaceutical industry. One of the conclusions is that whereas recent literature stresses the idiosyncratic nature of the biotechnological revolution, our analysis seems to reveal that this does not seem to be as unique as suggested. From this, we conclude that the theoretical framework we propose, serves its purpose of explanation. But there are also some lessons for improving it.