Entrepreneurship in Pharmacy Lecture 4 & 5

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Questions and Answers

What are the three types of intellectual capital?

Innovation capital, intellectual property rights, organizational capital

Organizational capital, human capital, financial capital

Human capital, social capital, customer capital

Organizational capital, human capital, social capital (correct)

What is the proportion of patents that make money?

5 percent

Larger companies frequently utilize complementary patents as a strategy for protection.

True

Micro-organizations have between ______ employees.

1-9 Signup and view all the answers

Which innovation category is associated with small and medium-sized enterprises (SMEs)?

Diversity innovation Signup and view all the answers

What term describes firms that grow rapidly and contribute significantly to employment or revenue growth?

Gazelle firms Signup and view all the answers

Match the following organizational sizes with the number of employees:

Micro-organizations = 1-9 employees Small organizations = 10-99 employees Medium-sized organizations = 100-249 employees Large organizations = 250+ employees Signup and view all the answers

What did Schumpeter believe about innovation?

It allows economic systems to avoid repetition. Signup and view all the answers

According to the content, entrepreneurship is considered the fourth factor of production.

True Signup and view all the answers

What is a primary role of an entrepreneur?

To restructure a value chain. Signup and view all the answers

Invention is not __________.

innovation Signup and view all the answers

What is one aspect that distinguishes modern entrepreneurs?

They use innovative methods. Signup and view all the answers

What are the three classical factors of production?

Raw materials, labor, and capital. Signup and view all the answers

What is the importance of entrepreneurship in a high unemployment environment?

Entrepreneurship leads to self-employment. Signup and view all the answers

Study Notes

Entrepreneurship in Pharmacy (Lecture 4 & 5)

Two ways companies make progress: efficient exploitation of existing ideas or innovation.
Intellectual capital is turning human thought into value.
Three types of intellectual capital: organizational, human, and social.
Organizational capital includes patents, processes, databases, etc., owned by the company.
Human capital includes the skills, capabilities, and knowledge of employees.
Social capital involves the quality of relationships with partners, customers, and suppliers.
Proportion of patents making money is 5%.
Larger companies often submit multiple complementary patents to deter attackers.
Smaller companies focus on diversity innovation.
Micro-organizations have 1-9 employees, small organizations have (10-99 employees), medium-sized organizations have (100-249 employees), and large organizations have over 250 employees.
Large organizations often have significant invention innovation.
Innovation in organizations can be categorized as invention, creation, and diversity innovation.
SMEs (small and medium-sized enterprises) are better positioned for diversity innovation but rarely use formal invention innovation.
Multi-specialists are responsible for around 40 times more innovations than single-specialists.
Employees with diverse skills are more innovative and useful, such as trans-migrants.
Trickle-down mechanisms (successful innovation) are more prevalent in mature markets compared to immature markets.
Adaptation-Innovation (A-I) Theory describes mature markets as 'adaptive' and immature markets as 'innovative.'
In mature markets, employees in a consensus group are more likely to solve problems conventionally.
In immature markets, ideas from different groups may be regarded as risky or peripheral.

Patents and other formal IPR (Intellectual Property Rights)

The proportion of patents that make money is 5%.
Larger companies often submit multiple complementary patents to deter attacks.
Smaller companies often encourage the 'smaller' forms of innovation, e.g., diversity innovation.
Size classifications for organizations include micro, small, medium-sized, and large organizations.
Large organizations typically have substantial invention innovation.

Innovation in Organizations

Innovation can be categorized as invention, creation, and diversity innovation.
Simple size and structure considerations demonstrate that SMEs (small and medium-sized enterprises) are better positioned to use diversity innovation.
SMEs rarely utilize formal invention innovation.
SMEs often spend a lot on their patents and may lack enough financial resources to defend them.

Human Capital, the Lifeblood of Small Companies

Trickle-down mechanisms for innovation are more prevalent in mature markets.
Employees in mature markets in a consensus group often lead large projects, while individuals from outside the consensus group might be less likely to succeed.
In mature markets, major projects have a high failure rate.

Who is Especially Innovative?

Research studies indicate that individuals with broader skill sets and abilities are more innovative.
Individuals with multiple specialization demonstrated a 40 times increase in innovation compared to single specialists.
Multi-specialists, such as a pharmacist with management skills, can frequently encounter resistance due to a strong tendency that "adaptive" administrators don't favor multi-skilled employees. Employees in a consensus group tend to favour innovation that aligned to the existing organizational strategy.

Mixing Skills Promotes Innovation

Combining "hard" skills with "soft" skills is significantly impactful in promoting innovation.
Multi-skilled individuals, especially trans-migrants, are noted to be exceptionally innovative.
Multi-skilled individuals demonstrated a more extensive influence on generating innovations ( 60-80 times greater) compared to single specialists.
Transmigrants are seen as problem solvers with high-quality solutions and creative innovations.

Trickle-Down Rebound

Under 'adaptive' conditions in mature markets, highly qualified foreigners/trans-migrants are unlikely to have their ideas adopted; conversely, in more extreme mature markets, it's even less effective.
The 'trickle-down' rebound phenomenon arises when non-native individuals in mature markets are often viewed negatively by senior management based on their speaking style and other external cues, despite having high education and skills.

Harvesting Human Capital

The situation where a multi-skilled trans-migrant is outside the consensus group in a mature market context leads to a bottom-up diversity innovation, with the originator outside of the normal innovation channels.
This can result in conflicts between the norms of the company's organization and potentially the best interests of the organization itself.
This suggests that some companies in mature markets consciously try to remain entrepreneurial by harvesting the innovations and ideas of their employees.

Intrapreneurship, or Corporate Entrepreneurship

This is the process of corporate employees initiating innovative changes in mature companies.
Change agents, such as individuals with a dominant voice, are imperative in the successful implementation of new innovations.
Senior management support is essential for successful intrapreneurship efforts.

Technology Transfer

Innovation within a company doesn't always stay there; it commonly spreads between companies.
SMEs may find it challenging to maintain a rigorous monitoring of competitors, leading to a brief advantage enjoyed by the first innovator but eventually copied.
Word-of-mouth is a common method of transmitting low-complexity knowledge, and can also be formalized.

Technology Transfer (Strategic Alliances)

Companies can spread innovation through licensing agreements (exclusive or not).
Licensing arrangements can involve knowledge transfer in the form of personnel secondment or help desks.
Licensing arrangements are commonly employed between universities and private companies.

The Ins and Outs of Strategic Alliances

Alliances are often between businesses in a B2B (business-to-business collaborative model).
Vertical relationships occur between customer and vendor, often in long-term and customized agreements.
Horizontal relationships are common between vendors or companies in different localities to share resources and build technical skills.

Mergers and Acquisitions

Mergers and acquisitions are a means of strategic alignment, often in shrinking markets.
Also used in expanding markets where companies often acquire other firms to gain access to advanced technology to keep up with the pace of innovation and expansion.

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Explore the dynamics of entrepreneurship within the pharmacy sector, focusing on innovation and intellectual capital. This quiz covers various types of capital, company sizes, and strategies used by organizations to foster growth. Test your understanding of how patent dynamics and organizational structures influence entrepreneurial success.