Model Structure and Dynamic Behavior for High-Technology Firms in Transition to Growth Phases

Abstract

The previous sections address entrepreneurship in biopharmaceutical high technology. The purpose of the start-up model is to understand the causes of corporate failure and to design robust policies that improve the likelihood of start-up success.¹Decision rules are not only proposed to guide founding conditions of high-technology firms; policies that reduce the length of start-up periods are also introduced. The remaining sections of this study concern the economics of research contracting and economic value creation from high technology.²In order to investigate issues of both domains, the start-up model’s structure is expanded and tested in the following sections.³The structural extensions are labeled “transition model.” The term “transition” refers to the period directly following start-up success until the time the biotechnology firm receives major revenue streams from a portfolio of drugs on the market. The following diagram illustrates, on the highest level of aggregation, the scope and boundaries of the transition model.

Article Footnote

¹Section 2.1.1 describes the term “robust policy.”

²Refer to Section 1.2, Figure 6, which illustrates the three research areas on which this study is focussed

³Section 2.1.1 defines the term “structure” for system dynamics studies