Entrepreneurship Chapter Notes | Biotechnology for Class 12 - NEET PDF Download

Concept of Entrepreneurship

• The term 'entrepreneur' originates from the French word 'enterprendre,' meaning 'to undertake.'
• An entrepreneur is an individual who undertakes an activity, foreseeing a business opportunity, organizes resources needed to start the enterprise, and bears the associated risks.
• Entrepreneurs fulfill three prominent roles: innovator, organizer, and risk bearer.
• As innovators, entrepreneurs introduce new products to the market.
• As organizers, they coordinate factors of production to capitalize on market opportunities.
• As risk bearers, they shoulder uncertainties associated with the venture.
• Definitions of entrepreneurship include:
  • Howard Stevenson (1983): "Entrepreneurship is the process by which individuals pursue opportunities without regard to the resources they currently control."
  • Debbie Roxarzade, founder and CEO of Rachels Kitchen: "Entrepreneurship is the persistent progression towards an innovative solution to a key problem. It’s the constant hunger for making things better and the idea that you are never satisfied with how things are."
  • Bruce Bachenheimer, Clinical Professor at Pace University: "At its core, [entrepreneurship] is a mindset – a way of thinking and acting. It is about imagining new ways to solve problems and create value. Fundamentally, entrepreneurship is about...the ability to recognise [and] methodically analyse [an] opportunity, and ultimately, to capture [its] value."
  • James Bedal, CEO of Bare Metal Standard: "To be a successful entrepreneur you must have a passion for learning – from customers, employees and even competitors."
• Importance of entrepreneurship:
  • Entrepreneurship is considered the best way to enhance economic growth, significantly contributing to economies like the USA, Japan, and India.
  • Entrepreneurs drive innovation, introducing new products that improve societal living standards.
  • They facilitate capital creation by mobilizing people’s resources.
  • Entrepreneurs are pivotal in creating employment opportunities, increasing people’s purchasing power and standard of living.
  • By diversifying employment among small entrepreneurial units, they promote community development, stability, and a higher quality of community life.
  • Entrepreneurship serves as a solution for unemployment, empowering individuals through self-employment and fostering social change for community development.
• Qualities of a successful entrepreneur:
  • Initiative: Entrepreneurs take proactive steps to launch ventures, enduring the challenges of starting a new enterprise.
  • Knowledge and skill: They possess relevant expertise in industry trends, economic conditions, consumer preferences, technology, and future growth prospects.
  • Risk taker: Entrepreneurs accept uncertainties and have the foresight to pursue long-term success, willing to withstand short-term risks.
  • Adaptability: They monitor and adapt to changes in the business environment as they start and grow their ventures.
  • Self-confidence: Entrepreneurs trust their decisions, with self-belief acting as a catalyst for taking risks and achieving success.
  • Wealth creators: They translate innovative ideas into commercial success, generating wealth for themselves and the nation by providing valuable employment opportunities.
• Difference between entrepreneur and intrapreneur:
  • Entrepreneur and intrapreneur share values of innovation and creativity but have distinct differences.
  • An entrepreneur is an individual who takes risks to start a business venture for profit, foreseeing opportunities and coordinating production factors to establish an enterprise.
  • An intrapreneur is an employee within an organization who promotes innovation among colleagues, hired to drive success in a business venture.
• Planning and resourcing an enterprise:
  • Planning and resourcing are critical for transforming a business idea into a sustainable venture.
  • Planning involves setting clear objectives, defining the business model, analyzing the market, and outlining strategies for operations, marketing, and growth.
  • Planning includes identifying potential risks and developing contingency plans.
  • Resourcing focuses on securing necessary inputs like financial capital, skilled personnel, technology, raw materials, and infrastructure.
  • Resourcing requires evaluating resource availability, sourcing strategies, and cost-effectiveness while aligning with the enterprise’s goals.
  • Effective planning and resourcing ensure the enterprise is prepared to navigate challenges, leverage opportunities, and achieve long-term success.
• Story of Dr. Krishna Ella, founder of Bharat Biotech International Ltd.:
  • Dr. Krishna Ella, Chairman and Managing Director of Bharat Biotech International Limited (BBIL), co-founded the company with his wife in 1996 in Hyderabad, Telangana.
  • Born in Nemili village, Tamil Nadu, he began his education there, later studying Life Sciences in Madras, and earning degrees in Agriculture from Maharashtra and Karnataka.
  • He gained marketing experience with a pharmaceutical company’s Agricultural Division in India.
  • Ella pursued a Master’s in Plant Pathology at the University of Hawaii and a Ph.D. at the University of Wisconsin, Madison, on a scholarship.
  • Post-Ph.D. in 1993, he joined the Medical University of South Carolina, shifting focus to human and yeast molecular biology and exploring ideas for a Recombinant Hepatitis B Vaccine.
  • In 1996, he returned to India, setting up a small laboratory in Hyderabad with encouragement from his wife and mother, aiming to innovate affordable vaccines and biotherapeutics.
  • BBIL, established in 1997 with angel investor funding, chose its name to reflect India’s innovation.
  • BBIL has produced over 4 billion doses of vaccines for diseases like Hepatitis B, Rabies, Diphtheria, Rotavirus, and COVID-19, supporting India’s Universal Immunisation Programme and 120 developing countries.
  • COVAXIN, BBIL’s 17th vaccine and India’s first COVID-19 vaccine, was developed in eight months and approved by WHO for emergency use since December 2020.
  • Dr. Ella emphasizes solving future public health problems through innovation and believes in students’ potential to shape India’s future through academic excellence.

Sources of Funds

• In entrepreneurial terminology, a 'start-up' is a popular term defined under the Startup India Action Plan per G.S.R. notification 127 (E) dated 16 January 2019.
• Start-ups eligible for recognition must provide supporting documents during application.
• Eligibility criteria for start-up recognition:
  • Must be incorporated as a private limited company, registered partnership firm, or limited liability partnership.
  • Turnover must be less than INR 100 crores in any previous financial year.
  • Considered a start-up up to 10 years from incorporation.
  • Must work towards innovation or improvement of existing products, services, or processes, with potential to generate employment and create wealth.
  • Entities formed by splitting or reconstructing an existing business are not considered start-ups.

• Six sources of financing a new venture:
  • Personal investment: The entrepreneur is the first investor, demonstrating long-term commitment to bankers and other investors by investing personal funds.
  • Venture capital: Investors seeking technology-driven, high-growth potential enterprises (e.g., IT, biotechnology) take equity positions to develop high-risk ventures, expecting high returns and potentially exiting once the business is established.
  • Angel investors: Wealthy individuals, often industry leaders, invest money, ideas, and experience in early-stage promising start-ups.
  • Business incubators: Also called accelerators, they support high-tech sectors during various development stages, often based in academic institutions or industrial cooperatives, typically lasting two years.
  • Government grants and subsidies: Government agencies provide financing to promote business development.
  • Bank loans: A common funding source requiring a compelling business plan and often a personal guarantee from the entrepreneur.

Entrepreneurship in Biotechnology

• Biotechnology entrepreneurship involves activities to build and sustain enterprises based on biotechnological innovation, blending science and business.
• Definitions include:
  • Damian Hine and John Kapeleris (2006): "Biotechnology involves the use of living organisms or parts of living organisms through biological processing to develop new products or provide new methods of production."
  • A.D. Meyers (2008): "Bio-entrepreneurship is the process of creating value from life science innovation, referred to as bioscience entrepreneurship, life science entrepreneurship, or bioscience enterprise, focusing on moving life science discoveries from research to commercial markets."
• Biotech entrepreneurs are the backbone of the biotech industry, driven by a vision to impact lives positively.
• Reasons for starting biotech companies:
  • Belief that their ideas can solve real-life global problems.
  • Altruistic motives in initiating enterprises.
  • Financial rewards as motivators to prove discoveries can achieve commercial success.

Assimilation of two distinctly different disciplines:

• Biotechnology is a scientific discipline, but as an enterprise, it becomes a commercial endeavor, posing challenges for first-time entrepreneurs.
• Scientific research requires academic expertise, while establishing a biotech enterprise demands knowledge of economic conditions, decision-making, and risk-taking abilities.
• Comparison between general and biotech entrepreneurs:
  • Idea: Both require competitive ideas.
  • Teamwork: Both need experienced teams.
  • Risk: Both take risks with perseverance.
  • Gestation period: General entrepreneurs face low to high periods depending on the enterprise; biotech entrepreneurs face high gestation periods.
  • Degree of uncertainty: General entrepreneurs face business uncertainties; biotech entrepreneurs face additional scientific uncertainties.
  • Capital requirements: General entrepreneurs have low to high needs; biotech entrepreneurs require high capital.
  • Relevance of academic qualification: Moderate to negligible for general entrepreneurs; very high for biotech entrepreneurs.
  • Regulatory framework: Moderate for general entrepreneurs; high for biotech entrepreneurs.

• Process of starting a biotech enterprise:
  Starting a biotech enterprise requires intense planning and a clear roadmap, avoiding reliance on chance, as per Louis Pasteur’s saying, “chance only favors the prepared mind.”
  • Critical steps include:
    • Need assessment: Conduct a thorough market demand assessment, ensuring a real need for the product, protecting technology with intellectual property (IP), and securing assets, IP rights, and assurances from inventors and key personnel.
    • Identification of founders and key personnel: Recruit like-minded individuals with diverse expertise to form a team essential for realizing the entrepreneurial idea.
    • Getting a legal expert: A key partner to provide advice on corporate and business issues throughout the establishment and growth phases.
    • Incorporation as a Limited Company: Register as a Private Limited Company under the Companies Act 2013, suitable for biotech start-ups due to high capital needs and long gestation periods.
    • Design a marketing and business strategy: Develop a strategy detailing the market problem, product solution, revenue generation, fund utilization, and expected return on investment to attract funding.
    • Focus on technology development: After raising seed capital, prioritize product development milestones, maintaining consistent innovation to keep market sentiments positive.

Concept of IPR

• The proprietary aspect is a key feature of modern biotechnology, with innovations now protected within the legal framework of Intellectual Property Rights (IPR), unlike earlier innovations from publicly funded laboratories.
• The Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement of the World Trade Organization (WTO) grants IPR international legal enforcement authority.
• TRIPS-defined IPR include:
  • Rights of artists, painters, musicians, sculptors, photographers, and authors for copyright in their works.
  • Rights of computer programmers for copyright in their programs and data compilations, whether in source or object code.
  • Rights of performers, phonogram producers, and broadcasting organizations for copyright in their programs’ fixation.
  • Rights of traders in their trademarks.
  • Rights of manufacturers and producers on geographical indications for their products.
  • Rights of designers for distinctive, eye-catching designs.
  • Rights of inventors for patents on their inventions.
  • Rights of plant breeders and farmers.
  • Rights of biological diversity.
  • Rights of computer technologists for layout designs of integrated circuits.
  • Rights of businessmen for protection of undisclosed information on technology and management.
• Aspects of IPR in biotechnology:
  • Patent:
    • The Patents Act 1970, effective from 20 April 1972, replaced the Indian Patents and Designs Act 1911, based on the Ayyangar Committee Report, initially allowing only process patents for drugs, medicines, food, and chemicals.
    • India’s alignment with TRIPS required amendments to comply with international standards, including pipeline protection from 1 January 1995 until product patents were granted.
    • The 2005 Amendment Act deleted Section 5, enabling product patents in biotechnology, chemicals, and pharmaceuticals.
    • Patent criteria include novelty, non-obviousness (inventive step), and utility, and must not be on the negative list in Section 3, which excludes certain subjects like inventions contrary to public order or morality.
    • Biotechnology patents often involve DNA molecules and encoded proteins, with uncertainties in obviousness due to commonplace cloning and gene transport methods and the central dogma of molecular biology (DNA to RNA to protein).
    • In India, only inventions are patentable, not discoveries, with a clear legal distinction; subjects not on the non-patentable list are eligible, updated to comply with TRIPS.
  • Plant Breeder’s Rights and Farmer’s Variety Act:
    • Plant breeder’s rights (PBRs) protect new plant varieties for 20–25 years, granting exclusive commercial rights to market the variety or its reproductive material.
    • Protected varieties must be novel, distinct, uniform, and stable.
    • PBRs prevent unauthorized growing or selling, with exceptions for research and farmer-saved seed for replanting.
  • Trademark:
    • The Trademark Act, 1999 defines a trademark as a graphically representable mark distinguishing one person’s goods or services from others, including shapes, packaging, and color combinations.
    • A ‘mark’ includes devices, brands, headings, labels, tickets, names, signatures, words, letters, numerals, shapes, packaging, or color combinations.
    • Trademark registration requires the mark to be graphically representable and capable of distinguishing goods/services.
  • Copyright:
    • Copyright grants creators of literary, dramatic, musical, artistic works, cinematograph films, and sound recordings rights like reproduction, public communication, adaptation, and translation, varying by work type.
    • Exclusions include use for research/private study, criticism/review, reporting current events, judicial proceedings, amateur club performances for non-paying audiences, and specific sound recordings of literary, dramatic, or musical works.
  • Trade Secrets:
    • In India, trade secrets are confidential business information (e.g., formulas, processes, designs, methods) providing a competitive advantage, protected by maintaining secrecy through non-disclosure agreements (NDAs) and secure practices.
    • Unlike patents or trademarks, trade secrets are not registered; protection relies on Indian contract law (NDAs, confidentiality clauses) and tort law for remedies like damages or injunctions against unauthorized use or disclosure.
    • India, as a TRIPS signatory, protects undisclosed information with commercial value if reasonable secrecy measures are in place, enforced primarily through civil suits for breach of contract or misappropriation.

Biopiracy

• Biopiracy refers to the commercial exploitation of naturally occurring biochemicals or genetic materials, often involving traditional knowledge of indigenous people about biological features and genetic diversity passed down through generations.
• Traditional knowledge relevant to global survival includes farming/agriculture, medicinal plants, and varieties of food crops.
• Examples of biopiracy cases:
  • Neem tree (Azadirachta indica): Native to India, used for centuries in traditional medicine and agriculture for antimicrobial and pesticidal properties. In the 1990s, W.R. Grace and Co. and the USDA patented neem oil extraction as a pesticide, claiming novelty despite traditional use. The European Patent Office (EPO) revoked the patent in 2000, a victory for indigenous knowledge, setting a global precedent against biopiracy and emphasizing biodiversity and community rights protection.
  • Turmeric: Known in Indian Ayurvedic medicine for wound healing, two University of Mississippi researchers patented its use for wound healing in 1995, claiming novelty. The Indian Council of Scientific and Industrial Research (CSIR) challenged the patent with evidence from ancient texts, leading to its revocation by the USPTO in 1997, a landmark victory against biopiracy.
  • Basmati rice: In 1997, RiceTec Inc. patented certain Basmati rice strains and breeding methods, allowing them to label their rice as “Basmati” internationally, threatening Indian and Pakistani farmers’ livelihoods and the rice’s geographic identity. The Indian government and advocacy groups challenged the patent, leading to partial revocation after an international campaign, highlighting the need for Geographical Indications (GIs) to protect traditional products.
• The Traditional Knowledge Digital Library (TKDL), a pioneering Indian initiative, prevents misappropriation of traditional medicinal knowledge at international patent offices, initiated after the turmeric patent revocation effort.