A network wherever he looks

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For Toby Stuart, the things that spark the most interesting lines of research do not always emerge from the books or papers of other academics.

The professor of organisations and strategy at Columbia Business School, who is considered a leading figure in the field, finds that tapping into the conversations around him often leads him to his most compelling findings. “It’s a case of listening till you hear something you’re interested in,” he says. “That’s what takes you where you’re going.”

One such conversation took place during a series of brainstorming meetings at the University of Chicago where academics and private equity investors were trying to establish why, despite possessing having educational institutions that rivalled those of the San Francisco Bay area or Boston, Chicago had virtually no life sciences industry.

“Someone said, ‘The problem with Chicago is that it needs Hybritech,’ and I said, ‘What’s that?’” explains Prof Stuart, who was then professor of organisations and strategy at the University of Chicago.

Hybritech, it turned out, was a young San Diego-based biotechnology company acquired by pharmaceutical giant Eli Lilly in 1986. Soon after, Hybritech’s chief executive and chief financial officer left to start a venture capital firm, which went on to fund 13 spin-off biotech companies from the former Hybritech in the San Diego area. A single acquisition had therefore created a wave of entrepreneurial activity in the region.

“Those series of meetings gave me the ideas that became four or five different papers,” says Prof Stuart, who has subsequently – working with Olav Sorenson of the Anderson Graduate School of Management at California’s UCLA – conducted research into what it takes to emulate the industrial conditions that gave rise to Silicon Valley. “So what you wait for are the times where someone says ‘we need Hybritech’, and you say, ‘that’s really interesting – I bet you’re right and I bet I can look at it’.”

At the heart of all his investigations, however, is a dominant theme – networks. “At the broadest level, I consider myself to be a networks person,” says Prof Stuart. “There’s a network in every paper I’ve written.”

He cites several examples. First, there is what he calls the “syndication network”, which is created among venture capital firms when they jointly invest in companies.

“If you look at the history of the industry in all of the syndicated financing rounds, they create a series of formal inter-firm relationships and one can then trace the
residue of that over time.” he says.

Another area that yields results for Prof Stuart is the process of patenting. Here, he has found a rich seam of networks in the information surrounding the filing process. Since those hoping to secure a patent for their inventionare required to present documentation and information about whytheir invention,is unique and how it contributes to the world of technology applicants include material relating to existing technologies. By comparison with these technologies, applicants can demonstrate how their idea is different from others by comparing it with existing technologies.

“In effect, it’s a genealogy of ideas,” explains Prof Stuart. “There are now about 7m US patents available electronically that lay out technological evolution and all the protagonists involved. So you can find out about the evolution of people and firms.” It’s architecting the web of patented knowledge.”

Yet another example, he says, is the mass of networks created by inter-
corporate alliances in sectors such as those in the biotech and pharmaceuticals industries. “You now have about 15,000 deals between pharmaceutical companies, biotech companies and universities that have accumulated over the years.”

A quick quick glance through Prof Stuart’s research papers gives some indication of how important this network-focused line of thought is to him. With titles such as “Social networks and entrepreneurship” and “Syndication networks and the
spatial distribution of venture capital investments”, and “Positional causes and correlates of strategic alliances in the semiconductor industry”, these papers paint a picture of an academic who sees networks in all sorts of corners of the business world.

Prof Stuart, 37, who is also academic director of the Eugene Lang Entrepreneurship Centre and co-head of the Management Department PhD programme at Columbia, was not always as closely focused on networks as he is today. At the Stanford Graduate School of Business, while working
on his PhD, his interests initially leaned more heavily towards technology-related topics.

However, his adviser was Joel Podolny, now dean of the Yale School of Management, who is known for his research on economic sociology, complex organisations and social networks. The time the two spent together had a lasting impact on Prof Stuart’s research: “Joel and I started working together and I became a networks person, doing a lot of work in technology-related fields.” he says.

When it comes to teaching, of course, Prof Stuart covers a lot of ground, and his reading encompasses plenty of areas on which he will teach but not necessarily embark on research. However, what he finds most satisfying here are the parts of the class in which he can engage students in the subsequent discussions with students about some of the areas he has been investigating.

“Not only do you have the most supporting examples to invoke, but you also tend to get a bit more animated, because it’s something that you’re more passionate about,” he says. “And the students respond to that, so you then get into richer

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