Enterprise for Bioscientists - Centre for Bioscience

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A Framework for
Enterprise Development
and Entrepreneurship


A Resource Pack for Bioscience
Lecturers and students

By Zoë Dann and Jeff Gaskell

(Version June 06)

Funded by the Centre for Bioscience

Study Pack Guide

Aims, Learning Outcomes,
Content, Session Structure,
Syllabus

A Framework for Enterprise Development and Entrepreneurship

3

Study pack aims 1

1.
To emphasise the economic importance of the
need to introduce new Bioscience products and
services to market in the UK, EU and other
parts of the world


2.

To prepare the minds of Bioscientists for
enterprise. To improve the knowledge and
understanding of enterprise and
entrepreneurship in the UK HEI Bioscience
community

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Study pack aims 2

3.
To improve the confidence and capability of UK
Bioscience students to identify potentially
viable, innovative ideas and bring them to
market successfully



Either

as independent entrepreneurs



Or

as part of an ‘intrepreneurial’ business
development team working in an established
organisation

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Learning outcomes


Students who participate in this activity
should be able to:


Understand and reflect on entrepreneurial activity
and personal aptitude towards entrepreneurship


Identify and evaluate potential business ideas in
the Bioscience sector


Construct and present a business case for the
exploitation of their own business idea


NB:

No previous knowledge of business is

required but would be advantageous

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Teaching, Learning & Assessment
(TLA) framework 1

Context &
Group
Formation

Self Awareness

Idea/Concept
Generation

Idea/Concept
Selection

Project
Management

Proposal

Business plan and

presentation

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Teaching, Learning & Assessment
(TLA) framework 2

Business
planning

Intellectual
Property
Rights

Business
strategy
and risk

Market and
competitor
analysis


Marketing
strategy


The
management
team


Operations and
commercial
strategy

Financial
forecasting

The pitch

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Study pack content

1.
Learning material for 12 teaching sessions


Lecture slides with deliver’s notes


A short illustrative video clip


Suggested small group exercise


Extended exercise
-

Part completion of the Business
plan assignment

2.
An assignment: Development, presentation of a
business plan in Biosciences

3.
Resources and references

4.
Guide for deliverers

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Study topics x 12

1.
The context and group formation

2.
Self awareness

3.
Idea generation and selection

4.
Project management

5.
Intellectual property rights: Patents and Trade Marks

6.
Market and competitor analysis

7.
Business strategy and risk analysis

8.
Marketing strategy

9.
Operational strategy

10.

The management team

11.

Financial forecasting planning

12.

‘Pitching’ the idea

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“Where observation is concerned, chance favours
only the prepared mind”



Louis Pasteur (1854)

1. Context

The Nature, Importance and
Potential of Start
-
Up Businesses in
the Biosciences and the Role of
Business Planning

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Learning outcomes


By the end of this session students should be able
to:


Realise the importance and potential of the Biosciences
and Biotechnology particularly for the UK


Understand the meaning of entrepreneurship and
intrapreneurship and classification of business entities



Recognise some of the particular difficulties and success
factors of start up businesses in the Biosciences


Recognise the role of business planning in increasing
business success

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TLA framework

Context and
Group
Formation

Self awareness

Idea/Concept
Generation

Idea/Concept
selection

Project
management

Proposal

Business plan and

presentation

What is Bioscience and why

is it important?

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The Biosciences: Definitions


Any of the branches of natural science dealing
with the structure and behaviour of living
organisms.




Synonym: life science



“The application of scientific and engineering
principles to the processing of materials by
biological agents to provide goods and services”






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DTI classification of business sectors
for biotechnology pharmaceuticals

and healthcare


Pharmaceutical


Biotech


Medical Devices and Diagnostics


Industrial


Agri


Non
-
Food crop and


Marine Biotechnology

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UK performance in
pharmaceuticals


Biggest sector investor in R&D in the UK accounting
for around 24% of total investment by business


In 2004, 18% of the world's top 100 prescription
medicines originated in the UK


In world terms, the UK industry has 9% of
pharmaceutical R&D expenditure: only the USA (49%)
and Japan (15%) are ahead


The UK is the largest European recipient of pharma
R&D, accounting for 23% of total; followed by France
(20%), Germany (19%), and Switzerland (11%)


Employs around 73,000 people with about 27,000 in
R&D and generates 250,000 jobs in related industries


Source: DTI, 2006

What is Biotechnology and why
is it important?

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Difficulties in defining Bioscience/
Biotechnology


Biotechnology generally considered a subset of
the Biosciences although terminology is often
used interchangeably


Not strictly sectors as extremely diverse in
application


Inconsistent definitions across countries and
studies


Shifting knowledge base of what is considered
state of the art and therefore have moving
boundaries


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What is Biotechnology? Some
definitions


The integration of natural sciences and
organisms, cells, parts thereof, and molecular
analogues for products and services (European
Federation of Biotechnology)


Technology in which biological systems,
established and controlled through the
application of molecular biology, cell biology or
microbiology are used for practical purposes


Biotechnology is a range of enabling technologies
offering a set of new processes employed in
existing industries to produce new products or
processes i.e. new drugs, diagnostic tools, plants,
animals and industrial processes

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‘Traditional’ v ‘new’ Biotechnology


‘Traditional’ Biotechnology


Conventional techniques used for centuries to
produce beer, wine, cheese, bread and in the
treatment of sewage



‘New’ Biotechnology


Genetic modification by recombinant DNA and
cell fusion techniques and the modern
development of traditional biotechnological
processes.


New Biotechnology revolution
began in 1970s, 1980s


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Classification of


‘modern’ Bioscience


Biotechnology companies
:


Encompassing entrepreneurial biotechnology companies
using modern biological techniques to develop products
and services


Suppliers and service companies
:


Including suppliers of chemicals, glassware and related
plastic disposables, research products, imaging
analytical and automated equipment, contract research
organisations, companies who employ a niche R&D
function


Diagnostic and device companies
:


Including companies producing bioanalysis, test kits,
medical diagnostic kits relating to biotechnology,
medical devices and surgical implant developers

Source: Ernst and Young, in DTI BIGT, 2003

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Outputs of biotechnology


Information process, research and development


Drugs and therapeutic products


Veterinary drugs


Diagnostics


Genetically engineered seeds and plants


Bioherbicides and pesticides


Foods and Animal foods


Food additives and processes


Waste
-
treatment processes and micro
-
organisms


Fuel alcohol and other biological sources of energy


Educational kits


Intermediates, enzymes, feedstocks and reagents


Source: Walsh and Green, 1993

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UK performance in the


biotechnology


UK is the Biotechnology industry leader in Europe


It is number two in world after USA


There are approximately 455 dedicated biotechnology
businesses in the UK employing around 22,400, with
revenues of around £3.6bn in 2003


UK biotech companies spent £1.23bn on R&D in 2003


The UK is well placed in the European biotechnology
scene because of its greater maturity and much stronger
product pipeline


Source: DTI, 2006

What key technological
developments are driving the
Bioscience revolution?

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Technology drivers of the
Bioscience revolution


Gene sequencing



E.g. mapping of human genome to understand
human physiology


E.g. sequencing of genomes of viruses and
bacteria to help fight against infection


The development of molecular techniques


E.g. manipulation of genes to study function
for industrial or therapeutic purposes


E.g. gene chip arrays to determine gene
activity

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Technology drivers of the
Bioscience revolution


Advances in imaging techniques


E.g. fluorescence to observe genes in real time


The IT revolution


Bioinformatics: data capture, analysis,
modelling and sharing for very large
international teams collaborating and sharing


Nanotechnology


E.g. for Biosensors and drug delivery methods


Source: DTI, BIGT, 2003

What is entrepreneurship?

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Entrepreneurship defined


The act of starting or growing a business through
innovative risk assuming management


The creation of a new economic entity centred on a novel
product or service or, at the very least, one which differs
significantly from products or services offered elsewhere
(Curran & Stanworth, 1989)


The process of creating something different with value by
devoting the necessary time and effort, assuming the
accompanying financial, psychic and social risk and
receiving the resultant rewards of monetary and personal
satisfaction (Fry, 1996)

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Intrapreneurship defined


Intra
preneurship is entrepreneurship by
employees in existing organisations



Source: Antoncic and Hirsh, 2003

What businesses do
entrepreneurs create?

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Businesses as legal entities



A classification

Unlimited liability


Sole traders


Partnerships (can also have Ltd. status)


Limited liability (Incorporated)


Private: Shares not traded in public. Have
company name and suffix
Ltd


Public: Shares traded in public have company
name and suffix
PLC


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Classification of ‘Social Enterprise’

Co
-
operative



Owned and controlled by members, incorporated
under the Industrial and Provident Societies Act


Regulated by FSA


Company limited by guarantee



Similar to Limited Liability described above but
with
members not shareholders



Liability is limited to a nominal sum

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What is limited liability?


Liability of the owners for the debts of their companies is
limited to the paid
-
up value of the shares they own i.e.
the amount they agreed to pay for the shares when they
bought them


Reduces risk of business failure on owners and transfers
it to customers and suppliers who would not receive
goods/services or payments



Company evolution in the
Biosciences

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Stages of company evolution in
the Biosciences

1. Idea generation and validation

2. Early stage

3. Late stage

Source: DTI, BIGT, 2003

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1.
Idea development

and validation


Secure assignment from University of Intellectual
Property


Technology validation


‘Proof of concept’


Develop commercial prototype products


Early pre
-
clinical trials





Source: DTI, BIGT, 2003

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2. Early stage
-

Start up


Start developing technology platform/product
pipeline


Broaden Intellectual Property base


Hire a management team and scientific group


Start to engage in corporate partnering


Secure premises and build company
infrastructure




Source: DTI, BIGT, 2003

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3. Late stage


Expansion/public
company


Build scale, role out technology platform.
continue with clinical development (even launch)
and prepare exit (likely IPO


Initial Public
Offering)


Continue with expansion stage activities, with
ultimate aim of cash flow, break even,
profitability




Source: DTI, BIGT, 2003

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Example: Typical route of
commercialisation from university

University

Incubator

Start
-
up

Seed capital

Venture Capital

Technology Transfer

Difficulties and success factors
for Bioscience start ups

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Difficulties for Bioscience

start
-
ups 1



Long lead time from concept to market e.g.
typically 10
-
15 years for some pharmaceutical
products


High cost e.g. $1B/year for some
pharmaceutical products


High risk. Failure rates can be high e.g. 9/10
pharmaceutical products fail to make it to
market at Astra Zeneca


Low cash flow stream in early years


Difficulty in accessing funding

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Difficulties for Bioscience

start
-
ups 2


Rigorous and dynamic legislative and regulatory
framework at national, trading block and world
levels e.g. Federal Drug Administration, patent
law


Dynamic competitive environment e.g. many
mergers, take
-
overs, alliances, new business
start
-
ups


Negative public sentiment towards some products
and testing procedures e.g. GM crops, transgenic
animals, animal testing


Lack of management/business expertise of
scientists

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Success factors for Bioscience 1


The company must efficiently develop viable
products or services


The company’s Intellectual Property (IP) must be
defensible and other patents cannot block the
path to commercialisation


A clear business strategy for generating a
significant profit


Target a large and/or rapidly growing market.


Management should have the skills to implement
the business plan

Source: Ithaka Life Sciences, 2004

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Success factors for Bioscience 2


An organisational culture that encourages and
nurtures enterprise and entrepreneurship


Strong management team and company board


Clear business plan with realistic targets that can
be met before cash runs out


A route to market identified and costs covered


Competition identified and assessed


Valuable accessible market


Credible business and revenue model


Technology that provides customer benefits


Cutting
-
edge technology that is well protected

Source: NatureBio, 2003

The importance and nature of
business planning

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What is a business plan?


A document that explains and justifies the
business concept.



It attempts to answer three questions:



Where are we now?


Where do we intend going?


How do we get there?

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Three basic objectives of

business plans


To identify the nature and the context of the
business opportunity


why does the opportunity
exist?


To present the approach the entrepreneur will
take to exploit the opportunity


To recognise the factors that will determine
whether the venture will be successful

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Role of business planning in
business success

1.
It enables the entrepreneur to understand an
opportunity and what it will take to exploit

2.
It provides a framework for managing the
business in the future

3.
It will help recruit partners and management
team

4.
It should be capable of attracting new capital to
the venture

5.
It can refocus and rejuvenate a business after
start up

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Typical requirements of

business plans 1


To clearly identify product, service and unique
selling point (USP)


Justify its competitive advantage through patent
search data and competitor analysis


Determine market attractiveness i.e. size and
potential growth through identification of
potential customers, market trends


Determine route to commercialisation including
technical development, patenting, licensing and
marketing

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Typical requirements of

business plans 2


Justify potential income and expenditure for
products, IPR, licenses, human resources,
patenting, equipment and running costs


Demonstrate credibility of management team


Demonstrate financial rewards and loan
requirements for potential investors


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Key point summary 1


Bioscience/Biotechnology enterprises are an
important part of a rapidly expanding part of the
economy


Bioscience and Biotechnology have a wide range
of applications in health care, agriculture, food &
beverage and chemical production


USA leads the way in Biotechnology; Europe is
second; Japan Third


UK is an important player globally


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Key point summary 2


‘Start up’ is considered the main mechanism for
entrepreneurs to exploit their business ideas


There are a range of businesses legal entities
that entrepreneurs can use as vehicles for
enterprise


Biosciences have particularly long and complex
new product development and commercialisation
routes


Business planning vital in setting new business
entity and exploiting ideas


2. Self Awareness

Entrepreneurial Traits

and Motivation

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Learning outcomes


By the end of this session students should
be able to:


Recognise the typical aptitudes and motivations
of entrepreneurs and difficulty in evaluating them



For the assessment students should:


Evaluate their own competencies against traits
and motivations of entrepreneurs


Identify ways in which competencies, aptitude
and skills can be developed to enhance
entrepreneurialism

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TLA framework

Group
Formation and
Context

Self awareness

Idea/Concept
Generation

Idea/Concept
selection

Project
management

Proposal

Business plan and

presentation

Who are entrepreneurs?

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What is an ‘entrepreneur’?


Meaning of the word entrepreneur:
“one who
takes between”

(French)



An individual who establishes and manages a
business for the principal purpose of profit and
growth. The entrepreneur is characterised by
innovative behaviour and employs strategic
management practices in the business.
(Cartland, 1984)

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Well known entrepreneurs


Julian Richer



Richer sounds


Richard Branson


Virgin


Stelios



Easy Jet


Alan Sugar


‘You’re fired


Anita Roddick


Body shop



Less well known
women



Meg Whitman


founder of e
-
bay


Ann Gloag


Stage coach

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Who are well

known entrepreneurs in
the Life Sciences?


Sir Christopher Evans


Dr Andy Richards


Dr Jonathan Milner


Dr Keith McCullagh



Source: Centre for Bioscience, 2006

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What is the typical profile

of an entrepreneur?


There is a strong gender bias towards male
founders. Men are twice as likely to set up a
business as women


There is a distinct age
-
launch window of business
start ups (30
-
40)


Family support is a significant factor for success


The majority are reliant on personal equity for
start up finance


Source: Deakins, 1996

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Women entrepreneurs in the UK


Gender Gap
-

Under representation 15% of
businesses are majority women owned compared
to 60% male owned


However, in the US, 30% of businesses are
majority female owned. Number of women
owned businesses grow at twice the rate of all US
firms


Encouraging signs that entrepreneurial activity is
increasing


more self employed women in UK
over last 20 years


Source: DTI, Promoting Female Entrepreneurship, 2005

What motivates people to
become entrepreneurs?

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Typical triggers to the start up
decision
-

’Pull’ factors


‘It works’



A product that finally works after many years e.g.
Dyson


‘Eureka’


An idea out of the blue, but which is often simply a new
way of packaging old ideas e.g. Ben and Jerry’s Ice
Cream


‘If only’


Dissatisfaction with existing goods and services.


If only
I could buy products in smaller packages’ (Anita
Roddick, Body Shop)


‘High Comfort Level’



Goal fulfilled with lots of support from family and
friends

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Typical triggers to the start up
decision
-

’Push’ factors


‘Friendly Push’


The path is made clear for some one who has talked
about setting up a business for a long time


‘Misfit’


Leaves large organisation because of dissatisfaction to
set up a new business


‘Unfriendly Push’



Redundancy or unemployment


‘No alternative’


Brought about by illness or disability


‘Grey to White’


Moonlighter selling products on the fringe of the black
market economy whilst in full employment

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Why be an entrepreneur?

Rewards of Entrepreneurship

Profit

Financial gain
proportionate to
personal achievement

Personal
Satisfaction


Enjoyment of a
satisfying way of life

Independence

Power to make own
decisions

Personal
Fulfilment

Contribution to the
community

Freedom


Escape from
undesirable situation

Source: Entrepreneurial Incentives
-

Lockerneck et al, 2006

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Potential drawbacks of
entrepreneurship


Uncertain income


Risk of losing entire invested capital


Long hours hard work


Low quality of life until business gets established


High levels of stress


Complete responsibility discouragement

What skills/traits/characteristics do
entrepreneurs have?

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Building blocks of successful
entrepreneurship

Technical Skills



Product/service
knowledge



Market/industry
understanding

Management
Competencies




Marketing



Finance



Human relations

Personal
Attributes



Innovation



Determined



External focus

Source: Stokes, 2002

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What are the traits or
characteristics of entrepreneurs?


Achievement orientation:
Ability to see and act on
opportunities


Committed to others


High propensity for risk
taking


Calculated risk taking


Ambiguity tolerance


Visionary


Self
-
confidence


Flexibility


Strong desire for
independence


High energy


Emotional stability


Creative and innovative
ability


Conceptual ability


Assertiveness


Ability to network


Measurement of success
by wealth


Confidence of success

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Psychometric tests for
entrepreneurs

General personality traits


Myers Briggs type assessment


Hermann Brain Dominance Instrument


LAB profile


Examples of on
-
line entrepreneurial assessment


http://www.potentielentrepreneur.ca/client/questionnairenews
ection1en.asp


http://www.wid.org/equity/2004/05/Entrepreneurs%20Quiz.d
oc

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Observed characteristics of
entrepreneurs: The 10 I’s model


‘I’ Characteristics



Independence


Interest


Insight


Ideas


Invention


‘I’ Characteristics



Inspiration


Involvement


Instigation


Insistence


I
-

will


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The 10

I

characteristics in action

in the entrepreneurial process


Step

I Characteristic

A

Recognition


Independence


Insight

B

Formulation


Interest


Ideas


Invention

C

Initiation


Inspiration


Involvement

D

Development
and Growth


Instigation


Insistence


I
-

will

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Mapping the ten ‘I’ characteristics

Plotting

overall average scores for a sample of 20 successful
entrepreneurs. Indicated by

1 Independence

2 Interest

3
Insight

4 Ideas

5 Invention

6 Inspiration

7
Involvement

8 Instigation

9 Insistence

10
I will


10


9


8

7

6

5

4


3


2


1


0

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Criticism of psychometric tests


Characteristics are not stable and change over
time


Not easily measured characteristics


Also environmental and cultural influences can
effect enterprises and management decisions


Management needs of the business might change
through time i.e. different characteristics for start
up to managing a mature business


Education training and learning can be very
valuable


Skills can be acquired

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Key point summary 1


Key traits are that entrepreneurs are risk
taking, innovative, growth and profit drive


Entrepreneurial activity is not limited purely to
private enterprise. It can exist in public
organisations and large multinationals. In the
later case this is called ‘intrapreneurship’


The characteristics approach to identifying the
potential successful entrepreneur can be widely
criticised


Although women are under represented in the
number of entrepreneurs, numbers are
increasing in UK

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Key point summary 2


Other factors such as environmental conditions
and experience play an important role in
determining the successful entrepreneur


Motivations and triggers for start up vary widely


Entrepreneurs start business not only for selfish
reasons but for welfare considerations too


Entrepreneurs are both pushed and pulled into
new business start up


Psychometric tests are used to evaluate
characteristics of entrepreneurs but have been
widely criticised

3. Idea Generation

and Selection

Thinking Creatively and Screening
Potential Business Ideas in the
Biosciences

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Learning outcomes


By the end of this session students should
be able to:


Identify a range of methods for developing and
selecting business ideas


For the assessment students should:


Use frameworks to generate business ideas


Carry out an evaluation of business idea to
establish whether it should be considered for full
business planning

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TLA framework

Group
Formation and
context

Self awareness

Idea/concept
generation

Idea/concept
selection

Project
management

Environmental

scanning

Drucker’s seven
sources

of innovation

Proposal

Business plan

‘Creative swiping’

Idea Generation

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Sources of start up ideas


Personal experience


work or home


Hobbies


Accidental discoveries
-

serendipity


Deliberate search


Drucker’s seven sources of
opportunity/innovation


Environmental scanning


Creative swiping


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Technology push or market pull?


Structured/Planned

Big Bang

Opportunistic

Completely New

Process Or Product

Major Strategy

Shift eg Switch To

E.Business

Add New

Features To

Products

Add New

Brands Or Styles

To Range

Major Product

& Process

Innovation

Response To A

Major Order In

New Market

New Products

In Existing

Markets

Existing

Products In New

Markets

Most Minor

Product & Process

Innovation

Incremental

Idea Generation

Drucker’s 7 sources of innovation

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Drucker’s seven sources of
opportunity/innovation

1.
Unexpected happenings

2.
Incongruous happenings

3.
A need for process improvements

4.
Changes in industry or market structures

5.
Changes in population demographics

6.
Changes in perception, mood and meaning

7.
New knowledge

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1.
Unexpected happenings

+ examples


Unanticipated events that lead to either
enterprise success or failure:


Increasing real and perceived threat of terrorist
attack at home and overseas


Major unpredictable shifts in weather patterns


The unexpected unavailability of cheap domestic
fuel supply


The unexpected unavailability of cheap raw
materials and other essential commodities


Pet pharmaceuticals have been very successful in
the US with more that 30% of dogs and cats now
taking medication

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2. Incongruous happenings

+ examples


Where there is a discrepancy between actual
results and what was expected:


Low fat ice cream was developed for those trying
to lose weight


Introduction of new Coke caused a huge upsurge
in demand for original Coke (Classic)


Some people who have taken nicotine chewing
gum have become addicted to it. Others use it
when they are non
-
smokers!

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3. A need for process
improvements + examples


Current technology is insufficient to address
emerging challenges.


Improved process yields in food, beverage and
pharmaceutical product production


Increased shelf life of perishable goods


Reductions in land fill volume


New fuels to deal with rising energy costs and
pollution


Increasing use of non food crops for fuel
production


Increased efficacy of

drugs

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4a. Changes in industry or market
structures + examples


Industries are in a constant state of change as
economic and other forces act on individual firms



Porter identified five critical forces:


Rivalry between the firms in all industries


The buying power of customers


The buying power of suppliers


The threat of new entrants


The threat of customers moving to substitute products
or services

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4b. Changes in industry or market
structures + examples


Porter’s Five Forces Model

Supplier

Buying

Power

Suppliers

Potential

Entrants

Substitutes

Buyers

Industry

Rivalry

Substitute

Threat

Buyer

Buying

Power

New

Entrant

Threat

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4c. Changes in industry or

markets + examples


Changes in NHS structure and funding to more
localised units ‘NHS trusts’


Changes in the nature of education management
funding… foundation status meaning more
autonomy on major spending decisions


PPP
-

Public private partnership PPP funding
packages for infrastructure building

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5. Changes in population
demographics


Shifts in population size, age structure, ethnicity, and
income distribution e.g.:


Ageing but still healthy and active
baby boom generation

born
-

born in the west in anglophone countries between
1946
-
1963.
Powerful consumer group

beginning to
retire from contributory economic activity but with no
diminishing power of spending. Rapidly growing group with
time, disposable income and increasing political influence


Generation X born between 1965


1975

and
Generation Y born between 1976


1994

much smaller
cohorts than the baby boom generation with more liberal
attitudes to work, leisure and spending than their forebears


Consistently low EU and UK birth rate


The influence of economic migrants from the new eastern
accession EU states


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6. Changes in perception, mood
and meaning + examples


Healthy eating particularly with obesity on the
rise


Generational different between baby boomers
generation X and generation Y


The direct and indirect influences of the global
War on Terror


The state pension age debate and to working
beyond the age of 1965 (in UK)


The effect of changes in world weather patterns


Attitudes of host populations to economic
migrants

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7. New knowledge + examples


Learning opens up the door to new product
opportunities with commercial potential


Gene sequencing
-

mapping of human genome


The development of molecular techniques


Advances in imaging techniques


Advances in fuel cell and electricity storage
capacity


The IT digital revolution


Nanotechnology


Source: DTI BIGT Report, 2005

Idea generation

Environmental scanning



PESTEL analysis




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What is environmental scanning?


The ability to identify and interpret strong and
weak signals from the trading environment


An essential skill…


When looking for new enterprise
opportunities


To ensure the survival of established
businesses

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What environmental influences are
there on a business?

Business

Social

Political

Economic

Technology

Demographics

Infrastructure

Environment

E.g. Tsunami, green products

E.g. aging population

E.g. Internet,

‘genetic engineering’

E.g. Employment law

e.g. Low Interest rates, Taxes

E.g. Discerning customer,

greater disposable income

E.g. More roads, cheap flights

broadband

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The PESTEL framework


Scanning the trading environment can be used to
categorise and measure the shifting forces that
continually act on all traders



These forces are in a constant state of flux and
can provide both new opportunities and new
threats to survival. These are:



P
olitical forces

E
conomic forces

S
ocial forces

T
echnological forces

E
nvironmental forces

L
egal and regulatory forces

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The PESTEL framework


The PESTEL forces act and influence at a number
of different geographical levels:


At world level (WTO, Kyoto protocol, World Bank)


At trading bloc level (EU, NAFTA, ASEAN)


At national level (UK government, Bank of
England, UK judiciary)


At regional level (Regional development agencies)


At district level (Local Authority area)


At sub
-
district level (Ward level activists and
communities)

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The PESTEL framework


Entrepreneurs and enterprisers seek out
opportunities through:



Looking for new experiences


Meeting poorly addressed needs e.g. Malaria treatment.


Making things better e.g. increased yield on beers.


Matching emerging technologies to new potential users
needs e.g. Diagnostics for breast cancer using rDNA
technology


Matching older technology or failed products to new
markets e.g. aspirin for blood thinning

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Political forces


Employment legislation


Foreign trade regulation


Government political orientation and stability


Government policy to creating new knowledge


Lobbying mechanisms


Monopoly policy


Taxation policy



E.g. Increased support and government




initiatives for Bioscience exploitation

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Economic forces


Business cycles


Capital availability


Credit control


Commodity and raw material cost & availability


Government economic policy


Energy costs and supply continuity


Exchange rates


Interest rates


Unemployment and workforce skill levels



E.g. Increasing energy costs, embryonic stage of


biotechnology growth


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Social forces


Attitude and perception changes of populations


Censorship and press freedoms


Demographic trends (at world, trading block
national and regional levels)


Education and skills levels



E.g. Negative public sentiment towards some


Biotech products


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Technological forces


New developments & discoveries


Reducing product life cycles


Increasing rates of obsolescence


Rates of technological diffusion



E.g. rDNA manipulation, digital technology




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Environmental forces


Energy policies (domestic supply and transport)


Environmental protection policies


Governmental commitment to environmental
protection


Waste disposal and recycling policies


Weather pattern change



E.g. Increasing cost of domestic power supply,



global warming


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Legal and regulatory forces


National employment legislation


National health

and

safety legislation


Intellectual property protection legislation


National monopoly policy


National planning policy


National product safety law


Speed of national legislative process & the vigour
of enforcement forces



E.g. Protection offered by patents

Idea generation

Creative swiping

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Creative swiping



A technique advocated by Tom Peters for stealing
good (unprotected) ideas from competitors. The
accumulation of lots of these ideas creating a
uniqueness and differentiation for the ‘stealing’
enterprise


In his words:


“Uniqueness… comes from an accumulation of thousands
of tiny enhancements”



“The entirely unique product does not exist. Everything
stands on previous technology and established
precedent”



“It’s all about the relative novelty of innovation”


Idea Screen/Selection

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Product development funnel

filtering in an R&D environment

Source: Wheelwright, 1992

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Product development funnel


filtering in a start
-
up enterprise

Source: Wheelwright, 1992

Screen 1

Screen 2

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Idea screening 1


Some organisations use filtering processes to
screen new ideas and projects


Used as projects progress through from concept
to full scale development in the product ‘pipeline’


Typically used in R&D environment


Uses employee facilitators who seek out and
attract other employees to offer ideas for
innovation.


The ideas are then initially screened by specialist
‘gatekeepers’ against given criteria

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Idea screening 2


Success or selection criteria can be used to filter
projects at various points of the development
funnel or pipe line


Each review point is called a ‘gate’


A go/kill decision is made based on meeting the
success criteria


If further funds are committed at the gate then
they are often called ‘toll gates’


Fulfilment of the success criteria means a
commitment of resources to further development


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Idea screening 3


Typically:


40% get through the initial screening process


18% are supported through a subsequent
selection procedure by in house ‘champions and


4% may be realised commercially



Successful examples of idea screening processes
need to be subject to commonly understood
group rules, be open, be systematic and iterative

Filtering criteria

What makes a potentially
successful business idea

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Filtering/selection criteria


Ideas can be screened on the following criteria:


Market factors


Competitive advantage


Management capability


Fatal flaws



Usually a mixture of these proves to be beneficial
in selecting prospective business propositions





Source: Longenecker, 2006

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Filtering/selection criteria


Market factors


Well identified need for the product


Reachable, receptive customers


Significant value created by product or service or
customer


Long life of product


Emerging industry not highly competitive


Significant market size


Significant growth rate


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Filtering/selection criteria


Competitive

advantage


Low cost producer?


Moderate to strong control over prices costs and
channels of supply


Barriers to entry i.e.. Factors that prevent new entrants
into the market


Have or can develop proprietary information or
regulatory protection


Have or can develop, a good response/lead time
advantage


Proprietary or exclusive legal or contractual advantage


Contacts and networks


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Filtering/selection criteria


Economics


Good return on investment


Low investment requirements


Time requirement to break even or to reach positive


Management capability


Management team with diverse skills and proven
experience


Fatal flaws


No circumstance or development that could, in and of
itself, make the business unsuccessful

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How to select a reasonable idea


Brainstorm or systematically generate several
(say 3/4) ideas


Use a selection method to determine the best
prospect (Kepner
-
Tregoe Method)


You may need to carry out a further investigation
into your business idea to accurately evaluate
them


Return to the selection method again and screen
until you have finalised your selection and are
focusing on one idea



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Key point summary


Ideas are usually generated from a grounding of
technical competency or market need
(technology push v market pull)


Systematic idea generation and brainstorming
are both viable routes to generating ideas


Drucker’s sources of innovation, PESTEL analysis
provide systematic means of generating ideas


Product screening is an integral part of the
commitment of resources through the various
phases of product development


Need to evaluate idea against filtering/selection
criteria for enterprises before committing further
resource to development

4. Project Management

Controlling and Completing the
Business Plan Project on Time

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Learning outcomes


By the end of this session students should
be able to:


Recognise the nature of business planning as a
project


Build an awareness of skills and mechanisms for
planning and monitoring projects



For the assessment students should:


Use time management and project management
skills within the context of delivery of the
business plan


Reflect on this activity as part of a journal



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TLA Framework

Context &
Group
Formation

Self awareness

Idea/Concept
Generation

Idea/Concept
selection

Project
Management

Proposal

Business plan and

presentation

What is project management and
why is it important to business
planning?

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What is project management?


Project management is concerned with the
overall planning and co
-
ordination of a project
from inception to completion aimed at meeting
the client's requirements and ensuring
completion on time, within cost and to required
quality standards



Source:
www.ecbp.org/glossary.htm



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What is a project?


Any unique venture with a beginning and an end
conducted by people to meet established goals
within parameters of cost, time (or schedule) and
quality.






Source: Buchanan and Boddy ,1992

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Project key features


A unique undertaking each one differing from
every other in some respect


Project have specific objectives to achieve


Projects require budgets


Projects have schedules


Projects have budgets


Projects require the efforts of people drawn from
different disciplines


Projects should have quality measures

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Why is project

management needed?


The process of bringing IP to market can be a
complex process requiring leadership skills of the
highest order


There are numerous tasks that interrelate and
need to me integrated into the business plan


Time is critical in bringing the business ideas to
market


Resources are finite. A small team is bringing the
plan together


There are numerous ways in which this business
planning can be completed

Project players and management
skills

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Project players


Sponsor:

the person providing the resources for
the project and ensuring that the project is
successful at the business and institutional level


Champion:
The advocate for the project
promoting the cause of the project or proposal


Client or customer:
The individuals or
organisation paying for the contractual project
services


Stakeholder:

Individuals who are directly or
indirectly involved with the project, for whom the
success of the project is important in any terms

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Key project manager skills


Negotiation, obtaining agreement on the scope,
aim and objectives of project


Ensuring resources are accurately estimated and
readily available


Effective communication with project
stakeholders


Identifying clear roles and responsibilities for all
team members


Establishing ways to maintain project progress
when problems arise


Being able to fit all the pieces together

Key project management
techniques

Milestones

Gantt charts

Responsibility charts

Team meetings

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What are milestones?


A key point in the project, perhaps when
something has been achieved, for which a
deadline was set


A mechanism to monitor progress


Short
-
term goals which are far more tangible
than the foggy, distant completion of the entire
project


Maintain the momentum and encourage effort


They allow the team to judge their own progress
and to celebrate achievement throughout the
project rather than just at its end


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Why use milestones?


Identifying main goals


Establishing time and cost targets


Identifying intermediate decision points


Agreeing management information
requirements


Agreeing reporting intervals


Identifying feedback mechanisms


Focusing on critical variables



Source: http://www.wiley.co.uk/

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What is a Gantt chart?


Simple chart also known as a bar chart showing
task activities
in chronological order

and timings


The length of the bar represents the length of the
task (in time). Gantt Charts should include
milestones


Used to plan resources over time


Used in the project planning and execution phase
for monitoring progress against objectives and
task completion


Can be used to identify sequence and
interrelationship of activities

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Gantt chart example

Source:
www.smartdraw.com/tutorials/gantt/index.htm

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What is a responsibility chart?


Helps you determine “who
-
does
-
what
-
and
-
who
-
helps”


Can be useful as teams are forming, or as new
work emerges as part of a team’s responsibilities


Can be used to clarify understandings, improve
the distribution of work, and build agreements
that involve all and therefore can last


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Responsibility charts



How are they used? 1


By the team as a group


This method may be somewhat time
-
consuming but will result in a high degree of
commitment and understanding


By a sub
-
group of the team


This may be a bit more efficient. A review by
the full team and agreement on the chart
content would be an important second step




Source: http://web.mit.edu

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Responsibility charts



How are they used? 2


By each team member


The team would then need to confirm areas of
agreement and discuss areas of difference to
reach agreement


By the team leader


While probably the most efficient method in
terms of time, discussion by the whole team is
needed to ensure clear understanding and
accountability


Source: http://web.mit.edu


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What are responsibilities?


R
-

This person
is responsible

for carrying out the task, or
accountable to see that the task is done.
Every task must
have an R.


Then assign letters A, C, and/or I as needed:


C

-

This person
consults

to the R person for the task.
Consulting means that the two work collaboratively, with
both having
significant responsibility

for doing the work


A

-

This person
assists

the R person with the task.
Assisting means this person helps carry out the work but is
not as involved in making decisions about what is to be done
or how.


I

-

This person is informed about the status of the work,
including when it is done, but is not directly involved in
planning or doing the work


Source: http://web.mit.edu/

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How to construct a

responsibility chart

1.

Purpose

Defining exactly what project or work
you want to understand is a vital first step in
employing the chart. The purpose appears at the
top of the chart

2.

Across the columns, list the
people

involved

3.

Next, list the
tasks

to be done. List these at the
level of detail that seems right to you. You can
increase or decrease that level as needed, and
every task does not need be listed at the same
level of detail. Look for the amount of detail that
will ensure understanding and good distribution of
responsibility


Source: http://web.mit.edu

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143

Example chart (incomplete)

Task

Person or
role

Person A

Person B

Person C

Idea

generation

r

c

a

Concept

selection

c

r

a

Technical

Feasibility

c

c

r

Patent Search

r

c

a


etc

a

r

a

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Team meetings


Meetings used to progress the project using
agendas and minutes


They allow regular opportunities for:


Monitoring of progress of the project


Problem solving and conflict resolution


A Framework for Enterprise Development and Entrepreneurship

145

Successful meeting


To

ensure

the

meeting

is

successful,

the

leader

should
:


Generate

an

agenda

to

all

involved

in

the

meeting



Start

the

discussion

and

encourage

active

participation



Work

to

keep

the

meeting

at

a

comfortable

pace



not

moving

too

fast

or

too

slow



Summarise

the

discussion

and

the

recommendations

at

the

end

of

each

logical

section



Circulate

minutes

to

all

participants




Source: www.mindtools.com/CommSkll/RunningMeetings.htm


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Meeting minutes


Meeting minutes should contain the following
information:


Called by


The person who called the meeting


Meeting Date/Time


The time the meeting
occurred


Project
-

The formal name of the project


Purpose
-

Describe meeting purpose


Invitees/Attendees
-

Meeting attendees


Meeting Agenda


A copy of the meeting agenda


Meeting Minutes


A summary of the discussion
and action items from the meeting clearly specify
any decisions that were made at the meeting

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Key point summary


Business planning can be viewed as a project
because there is a defined goal, a set of activities
and a specific resource


It is critical particularly for complex technological
developments where there are numerous
participants working together


For business planning it is vital as there are
typically limited resources and a complex body of
information to investigate


Responsibility and Gantt charts are commonly
used tools that can aid project planning and
execution to direct and monitor the project team


Select a team leader, use minutes and agendas
for regular team meetings

5. Intellectual Property
Rights (IPR): Patenting
and Trade Marks

Nature, Importance of IPR in
Bioscience Entrepreneurship

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Learning outcomes


By the end of this session students should
be able to:


Understand the role of IPR in determining their
USP and protecting and exploiting

business
ideas

in the Biosciences



For the assessment students should:


Carry out a simple patent search on their
business idea to determine unique selling
point/competitors


Establish an approach for protecting intellectual
property for your proposed business

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TLA framework

Business
planning

Intellectual
Property
Rights

Business
strategy
and risk

Market and
competitor
analysis


Marketing
strategy


The
management
team


Operations and
commercial
strategy

Financial
forecasting

The pitch

What is IPR and why is it
important?

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Why consider Intellectual

Property Rights (IPR)?


Bioscience entrepreneurs need to consider what
intellectual property can be protected and where,
as soon as they begin to develop their business
idea and considering their business and
marketing strategy


IPR offer significant competitive advantage and in
the context of this learning pack includes:


Patent registration

to protect the invented product or
process


Trade mark registration

to protect the identifying
product or process marks

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What is IPR?


An intellectual property is:



Any product of the human intellect that is
unique, novel and unobvious that has some
application in the market place


Output of creative endeavour of literary
artistic, industrial, scientific and engineering
fields



E.g. Unique name, chemical process, drugs,

publication, computer programme,

multimedia products





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What is IPR?


A cluster of legally recognised rights to protect
intellectual property


Depend on nature of the property


Can be registered or unregistered


Vary in length of the protection


Usually involve a trade
-
off and requirement for
the right holder


Part of nation’s policy to encourage innovation
and dissemination of knowledge


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Types of IPR

Registered IP Rights



Patents


Designs


Trade Marks


Plant Breeder’s Rights

Unregistered IP
Rights


Copyright


Unregistered Design
Rights


Trade Marks and
Reputation


Traditional Knowledge


Database rights


Publication rights


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International framework for IPR


WTO TRIPS Agreement


Paris convention for the protection of IP


Patent Cooperation Treaty (PCT)


streamlined
process for international patent making


Budapest Treaty for Deposit of Micro
-
organisms


Strasbourg Agreement concerning International
Patent Classification (IPC)


International convention for the protection of new
varieties of plants


Other agreements which affect IP:


Convention on Biological Diversity (CBD)


Food Agriculture Organisation (FAO)


International Treaty on Plant Genetic Resources


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Four main types of IPR for
Biosciences


Patents



For new and improved products and processes that are
capable of industrial application


Plant Breeders Rights


Offers legal protection for the investment plant breeders
make in breeding and developing new varieties. Open to
breeders of any species of plant; agricultural,
horticultural and ornamental.


Trade marks



For brand identity of goods and services allowing
distinctions to be made between different traders


Designs


For product appearance
-

of the whole or a part of a
product resulting from the features of, in particular, the
lines, contours, colours, shape, texture or materials of
the product itself or its ornamentation


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Why is IPR important

to businesses?


IP gives a ‘competitive advantage’ by preventing
competitors from using the protected property


IP seen as asset and be a large percentage of the
market value of the business


IP can attract investors


IP is a potential source of income e.g. licensing

Patents

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What is a patent?


A
disclosure

of an ‘invention’ for exclusive
exploitation by patent owner


Limited period of protection for invention


generally lasts for 20 years


Means of preventing others making, using or
selling an invention unless permission granted
e.g. by license


Contains sufficient detail so some one ‘skilled in
the art’ can reproduce that invention


Granted by government e.g. UK Patent Office
under UK Patent Act 1977


Usually only cover single country


some
collectives exist (e.g. Europe, Africa)


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Where is the protection valid ? 1


In the UK


A UK patent filed at the Patent Office gives
exclusive rights only in the UK, Isle of Man and
the British protectorates Botswana & Swaziland


In Europe


For protection in two or more EU countries that
are members of the European Patent Convention
the application must be filed with the European
Patent Office specifying which states the patent
should cover. European patents must be
maintained in each designated state separately
which means lots of translation costs

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Where is the protection valid? 2


In the rest of the world


If you consider the potential market for your
invention covers a geographical area beyond
Europe then a Patent Cooperation Treaty makes
it possible to seek patent protection in over 100
countries with one application


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What is patentable?


Only an ‘invention’ can be patented. To be an
invention and patentable it has to be:


New



Something that was not known before as has not been
published anywhere else in the world
-

‘prior art’


Involve an inventive step



Not obvious to those skilled in the technical field to
which the invention relates; i.e. there must be an
intellectual jump


Be capable of industrial application


E.g. must be capable of being used as a product or in an
industrial process


Not be among the list of excluded inventions

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Excluded inventions


The excluded list consists of:


Scientific theories


Mathematical methods


Animal and plant varieties


Computer programmes


Works of art or literature



Computer programmes and works of art and
literature are covered by separate IP legislation
….Copyright


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Biotechnological inventions
unpatentable on moral grounds


Process of cloning human beings


Process of modifying the germ line genetic
identity of human beings


Use human embryos for industrial or commercial
purposes


Processes for modifying the genetic identity of
animals which are likely to cause them suffering
without any substantial medical benefit to man or
animal, and also animals resulting from such
processes

Source: DTI, 2006

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Basic patent concepts


Prior art


Published documents anywhere in the world and
common general knowledge in the field of technology of
invention before the priority date of patent application


Priority date


Date an invention’s validity is assessed


normally first
time an application for the invention is filed anywhere in
the world. In US date of actual invention is used


Person skilled in the art (PSA)


A skilled technician or worker in a field of knowledge
who is aware of all common lab/workshop techniques
and general knowledge in the field

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UK patent application

process overview


Develop idea and
examine viability. PO
conducts search.

Application
published
. If any
attempt made to copy invention
damages can be sought.


Submit detailed examination of
invention, form 10/77 and fee.


Within 12 months

Within 18 months

Within 24 months

Form 1/77 submitted to Patent
Office (PO)

Application terminated if
no further action taken

Submit set of claims, abstract
and form 9A/77 request for PO
search

Third parties can petition
PO to reject application

Detailed examination
must be submitted
within 6 months of
publication

Within 36 months

PO examines application

and
petitions from third parties
Application republished as
granted

Initial Application

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Patent application process 1

Making the application



It takes between three and four years to obtain
a UK patent.

The first step in submission

1.
An completed application for ‘Request for grant
of patent’ on Form 1/77 at UK Patent Office.

2.
A descriptive
specification

of the invention:


An abstract: describing how the invention solves
problems


One or more claims defining what the invention does
and areas that will be protected by patent.


Drawings of specification

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Patent application process 2

The specification


The detail of the invention must be very specific
and comprehensive. Including descriptions of:


All the features that could be incorporated.
Surplus ones can be deleted from latter stages of
application procedure


Advantages of the invention over previous
products or processes


How the invention can be put into practice.


Written description can be supplemented with
drawings

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Patent application procedure 3


The Patent Office allocate a patent number to
successful initial applications


The application submitter is allowed to use
‘patent pending’ or ‘patent applied for’ when the
patent number is allocated


This gives application precedence over

all other

applications submitted for similar inventions
Initially for the first 12 month phase of the
application procedure

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Typical Patent contents


Document identification


Domestic filing data


Priority data, i.e. the original country filing details


Technical and classification data including, title, search
report i.e.. Prior art and abstract written by the applicant
giving a

full description of the invention


Identification of the parties. Applicant, inventor, patent
agent. Address information.


Designated countries. This usually applies to European
Patent Convention or Patent Cooperation Treaty
specifications


Drawing

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Example: IP and lifecycle

of a new product


Example of a new product being brought to
market from a university research project


Research planning phase


Use patents to:


Identify competitors


Determine the ‘state of the art’ in existing
research


prior art


Find niche opportunities


Avoid duplication of research efforts

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IP and life cycle of a new product

Research Phase


Confidentiality and the law of trade of secrets to
safe guard:


Research direction and outcomes


Agreements with research partners


Confidentiality within the enterprise institution


Patent law considerations essential with respect
to:


Publications


Participation in trade fairs

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IP and life cycle of a new product

Research breakthrough


Outcomes must be kept confidential until patent
application is filed


A patent filing strategy needs to be adopted


Associated developments may be protected by industrial
designs and copyright

Development phase


An IPR licensing strategy is required


Trade marks may need to be developed


International patent strategy is required


Patents may be required to improve original idea


Cross licensing

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IP and life cycle of a new product

Marketing phase


Monitoring marketplace for infringement and
enforcement


Continuing evaluation of effective means of
using IPR


Continuing issues of licensing and valuation


Source: www.dfat.gov.au/publications/biotech/downloads/Module01.pdf



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On
-
line patent databases


Extensive list of country and region specific
databases can be found at:



World Intellectual Property Association


http://www.wipo.int/ipdl/en/resources/links.jsp

Trade Marks

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What are trade marks?


Signs used to differentiate the goods and services
of one business from another in the eyes of
potential customers


In consumer markets customers may recognise
the goods and services offered by your business
through the distinctive trade marks which may
consist of words, logos, 3 dimensional shapes,
colour combinations or sounds


Prevent others passing off their goods and
services as yours


The legislation that covers this intellectual
property in the UK is the
Trade Marks Act 1994

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Where is trade mark

protection valid?


A trade mark registered in the UK does not give
automatic protection overseas


For EU protection in all 25 member states


Additional applications can be made to the
Office of Harmonisation in the Internal Market
(OHIM) through the UK Patent Office


For World protection in up to 77 countries


UK applications can be used as a basis for
international applications through the World
Intellectual property Organisation (WIPO)

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Trade mark application process


Your UK trade mark design must be subject to a
Trade Mark Register search to establish its
originality and that no other similar marks are in
use in similar enterprises


The Patent Office offer a search and advisory
service which will check if the application meets
all necessary submission criteria


If search is successful then form TM3 can be
submitted to the Trade Marks Registry at the
Patent Office