Picture, for instance, the situation of a pharmaceutical firm in 1975, when the discoveries of recombinant DNA and monoclonal antibodies (Goujon, 2001) had just opened the door to industrial applications of biotechnology. An incumbent LDF needed to decide whether, how and when to commit itself to the new biotechnology. It was not an easy commitment, since the knowledge base of pharmaceutical firms had previously been constituted mainly of organic chemistry. In other words, incumbent pharmaceutical firms had a large cognitive distance (Nooteboom, 2000), or equivalently, a low absorption capacity (Cohen and Levinthal, 1989, 1990), with respect to the new biotechnology. The change in strategy that incumbent firms were facing was drastic, involving the replacement of a very large share of their existing research personnel by researchers with new and very different competencies. Such a process could only be envisaged as occurring over a long period, with a longer timescale for larger firms. The creation of absorptive capacity in incumbent LDFs could also be seen as taking a long time. However, the emergence of a new type of industrial actor, the NTFs, which in the case of biotechnology were known as dedicated biotechnology firms, provided incumbent LDFs with an alternative strategy. NTFs, particularly in the case of biotechnology, were often founded by scientific entrepreneurs who had previously worked in PRIs. Their knowledge proximity to the new biotechnology and the small size of the firms they founded allowed them to be very fast learners of the new biotechnology. However, NTFs in general did not have the complementary assets (Teece, 1986) required to transform knowledge into final outputs. A relationship of complementarity was created between NTFs, which had the new scientific and technological knowledge, and LDFs, which had the complementary assets (finance, marketing etc.). It soon became clear that the collaboration between LDFs and NTFs could create new pharmaceutical products faster than internal development of either LDFs or NTFs (Pyka and Saviotti, 2005). In these circumstances INs were a better form of industrial organisation than either the market or the large corporation. To analyse the problem in a slightly different way, one could say in the external environment of the late 1970s neither Schumpeterian entrepreneurs nor large corporations could alone provide the best industrial development route for a new technology. This was the result of a discontinuity represented by the emergence of new paradigms and by the increasing rate of creation of new knowledge.