This review summarizes the theoretical and empirical literature on the importance of linkages between universities and industries in the development of commercial applications of biotechnology. These linkages range from formal agreements, such as patent licenses and research alliances, to informal collaborations, such as joint research, copublication, and consulting. Because biotechnology involves a new research method, the tacit knowledge embedded in it became critical to its commercialization. Specifically, it requires the direct involvement of star scientists who have this tacit knowledge and are well remunerated for it. This process is facilitated by the passage of the Bayh–Dole Act, which allows universities to retain ownership of crucial patents and provides incentives to the star scientists to cooperate in development and commercialization. Over time, a complex web of collaborations and alliances has evolved in therapeutic, diagnostic, and pharmaceutical biotechnology, whereas extensive consolidation has occurred in agricultural biotechnology.