Thomas Jefferson once said a couple of hundred years ago, "The best society is the one composed of the greatest number of entrepreneurs."1 History is replete with examples of leaders who pioneered the art of entrepreneurship. One of the most prominent examples is the source of a number of Tata enterprises today, JRD Tata. He not only successfully created Tata Group but also made sure that the Tata legacy continued even after his demise.
What is it that unites all these entrepreneurs, leading to incredible success in their respective areas of expertise? It is creative initiative. In simple words, they pursued an opportunity that wouldn’t have been so obvious to others. At times, there lies huge amount of uncertainty in their decision making and this is what sets them apart from the others. Also, this is where business-oriented scientists experience some conflict since science calls for precision.2 What science needs to learn and understand from business is that when calculating a commercial strategy, science becomes a means to an end and business comes ahead of science.2 With the rising number of start-ups aiming to grow into leading biotech firms, there are two areas which should be recognised. One is the risk component, which arises with reproducing science or a particular molecule and learning how to mitigate it. The other one is allocation of resources, specific deployment of scarce resources and moving up the value curve in a capital efficient manner.3 When it comes to wiring entrepreneurship in large biopharma companies, it should be done in such a way as to encourage innovation and competing with other emerging biotech companies, not just in terms of the output or drugs but also input or skills.3
Thus, as stated by Peter Kolchinsky, when it comes to a successful biotech entrepreneurship, it is less about biotech and more about good entrepreneurship.2 In a business environment where uncertainty thrives, effectuation models have proved to be of significant help. While causation focuses on a particular effect and chooses from available means to reach that effect, effectuation relies on a set of means already available and then helps determine between possible effects that can be created with the help of the means at hand.4
Depending on the goal in the mind of the entrepreneur as well as the advantages and disadvantages in a given situation, either of the two processes can be followed. The model of effectuation in particular has been explored in entrepreneurship and based on certain empirical tests; different dimensions to it have been presented specially with respect to the biopharma industry.6
Elaborating in this area, it begins with the means or financial resources that the company possesses and based on its priorities, to invest in R&D or other segments accordingly. This financial asset in the form of cash balances, borrowing capacity or stock market value forms an integral deciding factor on understanding the ‘means’ construct 6 of the effectuation model.
Apart from the financial resources, there are other categories of resources like human, organisational and physical which are unique and characteristic of a particular firm, embedded deep in its organisational fabric. It is during times of encountering setbacks that this resource based view confers a competitive advantage to the company over the others. These resources can also be defined as capabilities5 which an organisation builds and these, along with external partnerships, are what fuel the innovation system of an organisation.
Partnerships in the form of collaborations contributing significantly to product development, is evident in the biopharma industry where majority of public and private industries rely on investments funded through grants, public or private equity, and/or through resource partnerships with larger, better capitalised public biopharma firms.6 As Sarasvathy posits, strategic alliances is a way to eliminate or at least minimise uncertainty.4
To the extent we can control the future, we do not need to predict it. 4 This is suggestive of the fact that during unpredictable times it i...
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