5.8 Research and development questions for IB Business Management

Negev MedTech Ltd (NMT) is an Israeli company that has patented a low-cost portable ultrasound scanner. It plans to manufacture and sell the scanner in a large emerging economy where demand from rural clinics is high. To win government hospital contracts there, foreign firms must make products locally with a local partner, which would receive NMT’s designs. The country’s courts are slow to enforce patents, and copies of foreign medical devices have appeared in the past.

Examine the threats to NMT of operating in this market.

Sacha Leaf S.A. (SAL)

Read the resources and answer the questions that follow.

Sacha Leaf S.A. (SAL) is a social enterprise in Tena, in Ecuador’s Amazon region, founded in 2015 by Paola Andrade and Wilson Grefa, a Kichwa community leader. It buys leaves of guayusa – a rainforest tree whose leaves contain caffeine and have been brewed for centuries by Kichwa families at dawn gatherings – from 1 200 Kichwa farming families who grow it among other forest trees rather than clearing land. SAL pays 30 % above the local market price, dries and packs the leaves, and sells loose tea and bottled iced guayusa in Ecuador. Sacha means “forest” in Kichwa. SAL now wants to sell abroad.

Image: a glass bottle of pale golden iced tea with dewdrops on it, beside a handful of glossy green guayusa leaves on a wooden table. Label: “Sacha Leaf Guayusa – the Amazon’s morning drink. Natural energy, living forest”.

Resource 1 – News article from *Andean Trade Monitor*

Amazon leaf eyes a place in the world’s energy drinks

Consumers in North America and Europe want “clean energy” drinks with natural caffeine and no added sugar, and guayusa has attracted interest from drinks companies. But some Indigenous organizations warn that big brands may use their traditions in advertising without sharing the benefits. Exporters must also meet each market’s labelling and food-safety rules and, in Europe, show a long history of safe use.

Table 1: SAL’s guayusa sales (tonnes of dried leaf)

SAL’s farmers could supply up to 300 tonnes a year. Ecuador uses the US dollar.

Resource 2 – Social media posts from Nina Grefa, a Kichwa student and SAL farmer’s daughter

Every morning my grandmother brewed guayusa before dawn and told us stories. Now people in Quito drink it too, and my family earns enough for me to study at university. Our forest is still standing. [1/2]

But I saw a foreign brand selling “Amazon Shaman Energy” with a fake picture of an Indigenous man. If SAL goes abroad, it must tell our story truthfully – and our communities must share in the money. [2/2]

Resource 3 – Internal email from Paola Andrade to SAL’s board

From: Paola Andrade, CEO

To: Board of directors

Subject: Three routes abroad

A. USA – licensing: TrailMark Natural Foods would make and sell bottled “Sacha Leaf” iced guayusa in the US using our leaf. It would buy 150 tonnes a year at USD 9 per kg and pay a 4 % royalty on its sales (it forecasts USD 8 million of sales a year). TrailMark would control recipes, prices and advertising.

B. Germany – exporting: Teehaus Brandauer, an organic tea importer, would buy 60 tonnes a year of certified organic, fair-trade loose tea packed in SAL’s own brand, at USD 22 per kg. Packaging costs us USD 2.50 per kg and certification about USD 45 000 a year. EU approval would take about 12 months.

C. China – joint venture: a Shanghai tea company proposes a 50/50 joint venture selling guayusa online. SAL would invest USD 400 000. No forecasts yet.

Our direct cost of dried leaf, including the farmers’ premium, is USD 5.50 per kg.

CONFIDENTIAL: this email and any attachments are intended only for the named recipients.

Resource 4 – Results of consumer taste tests (200 people in each city)

Resource 5 – Statement from the Napo Kichwa Federation

“We support SAL because it pays our families fairly and protects the forest. Any export agreement must: use Kichwa culture only with our approval; include a community fund of at least 5 % of SAL’s export revenue; and never allow guayusa to be grown on cleared land. Guayusa is part of who we are, not just a product.”

Resource 6 – Hofstede scores for selected countries (0–100)

Nizampet Pharmaceuticals Ltd (NPL)

[1] NPL is a public limited company in Hyderabad, India, that researches, makes and sells medicines. For ten years its most profitable product has been Rheumora, a patented treatment for arthritis. NPL’s patent on Rheumora expired at the end of 2024. Within months, four rival firms launched generic* versions at less than half of NPL’s price.

[2] NPL spends 7% of its revenue on research and development (R&D). It has two new medicines in clinical trials, but on average only one in ten medicines that enter clinical trials is ever approved for sale, and development takes 8 to 12 years.

[3] NPL’s chief executive, Dr Aparna Rao, wants to increase R&D spending to 12% of revenue to build a stronger “pipeline” of new patented medicines. The finance director, Vikram Shetty, disagrees. He argues that NPL should keep R&D at 7% and focus on making generic versions of other companies’ medicines when their patents expire, plus small improvements to existing products such as easier-to-swallow tablets.

[4] Financial information is shown in Table 1.

*generic: a copy of a medicine, made by another firm after the original patent has expired

Table 1: NPL financial information (₹ million)

Saltbush & Seed (SBS)

Read the resources and answer the questions that follow.

Saltbush & Seed (SBS) is a social enterprise owned by an Aboriginal women’s corporation in the Northern Territory, Australia. Its 40 harvesters, all Aboriginal women, gather Kakadu plum – a small green fruit with one of the highest levels of vitamin C of any food – and other bush foods on their traditional lands, using knowledge passed down for thousands of years. SBS freeze-dries the fruit into powder and sells it to food and health companies. Profits fund the corporation’s programmes for elders and young people. SBS’s chair is Aunty June Wilson; its general manager is Sarah Liddle.

Image: a weathered hand holding a cluster of small, pale green Kakadu plums against a background of red earth and eucalyptus trees. Below, a jar of fine golden powder with the label: “Saltbush & Seed – Kakadu plum. Wild harvested by Aboriginal women, on country”.

Resource 1 – News article from *Australian Bush Food Business*

Kakadu plum: superfood boom raises old questions

Demand for Kakadu plum from cosmetics and health companies has grown rapidly because its extract is rich in vitamin C and antioxidants. But Aboriginal communities have warned against “biopiracy”: in the past, overseas companies tried to patent uses of the plum that Aboriginal people had known about for generations. Most of the value of the bush food industry still goes to non-Indigenous businesses.

Table 1: SBS sales of Kakadu plum powder

Resource 2 – Social media posts from Kirra, a young SBS harvester

Out on country with my nan and aunties today, picking gubinge (Kakadu plum). Nan showed me which trees her mother picked from. This job means I can stay here, earn money and learn our culture at the same time. [1/2]

Saw an ad for a fancy face cream “with ancient Australian Kakadu plum” – $140 a jar! Our powder sells for a few dollars a jar’s worth. Who really benefits from our knowledge? [2/2]

Resource 3 – Internal email from Sarah Liddle to SBS’s board

From: Sarah Liddle, General Manager

To: Aunty June Wilson and board members

Subject: Lumière Botanica proposal

Lumière Botanica, a French cosmetics multinational, proposes to spend AUD 1.2 million on research to develop a Kakadu plum extract for a new skincare range. It would own any patent on the extract and the formula. In return it would buy 3 000 kg of powder a year at AUD 200 per kg for five years and pay SBS a royalty of 3 % on sales of the range, which it forecasts at AUD 20 million a year.

Alternatively, scientists at a university in Darwin would work with us on our own extract and serum brand. The research would cost about AUD 450 000 over two years; a government research and development tax incentive would refund 43.5 % of eligible spending. We would own the results.

To supply 3 000 kg we would need about 100 harvesters, and we would have to harvest further from our communities.

CONFIDENTIAL: this email and any attachments are intended only for the named recipients.

Resource 4 – Statement from the elders’ council of the women’s corporation

“Our knowledge of gubinge belongs to our people. We are not against sharing it, but it must be with our free and informed consent, with fair benefit for our communities, and our name and culture must not be used without permission. We must also care for country: if too much fruit is taken, there is none for the birds and animals, or for next year.”

Resource 5 – Forecast for an SBS own-brand Kakadu serum (year 3)

Resource 6 – Notes from a meeting with an intellectual property lawyer

• A patent protects a new invention (e.g. a new extraction method or formula) for up to 20 years, but traditional knowledge itself cannot usually be patented by the community that holds it.

• SBS can register trademarks for its brand names and logo, and a certification mark showing products are Aboriginal-owned and wild harvested.

• Contracts can include benefit-sharing and consent clauses, and give SBS joint ownership of patents.

• Legal costs of registering trademarks: about AUD 15 000; negotiating a benefit-sharing contract: about AUD 40 000.

Høregaard A/S (HG)

[1] HG designs and makes premium hearing aids in Odense, Denmark. Its hearing aids are sold only through audiologists (hearing specialists), who test each patient and fit the device. A pair costs patients about DKK 18 000. In 2025 HG’s revenue was DKK 1 400 million and it spent DKK 112 million on research and development (R&D).

[2] HG’s R&D director, Søren Lund, can afford to fund only one of two projects in 2026 (Table 1).

[3] Project A is a new model of HG’s behind-the-ear hearing aid with 30% longer battery life and better filtering of background noise. Project B is a pair of self-fitting hearing earbuds, sold online for DKK 1 500 and set up by the user with a smartphone app. They are aimed at the millions of adults with mild hearing loss who never visit an audiologist. Laws in the USA and some other countries now allow hearing aids to be sold without an audiologist.

[4] Audiologists, who sell 95% of HG’s products, have warned that they will promote rival brands if HG sells hearing devices directly online.

Table 1: HG’s two R&D projects

Selge Data OÜ (SD)

Read the resources and answer the questions that follow.

Selge Data OÜ (SD) is a social enterprise in Tartu, Estonia, founded in 2019 by Merle Saar, whose son is autistic. It employs 70 autistic and other neurodivergent adults, many of whom had never had a job, to prepare data for artificial intelligence (AI) systems: labelling objects in images, cleaning databases and checking the quality of data. Many of its staff are exceptionally accurate at detailed, repetitive tasks. SD offers quiet workspaces, flexible hours and clear written instructions. Selge means “clear” in Estonian.

Image: a calm, softly lit office with sound-absorbing panels; a young man wearing noise-cancelling headphones draws precise boxes around cyclists and pedestrians in a street image on his screen. Wall sign: “Selge Data – different minds, precise data”.

Resource 1 – News article from *Baltic Tech Review*

AI is learning to label its own data – what happens to the labellers?

New AI tools can now pre-label most images automatically, leaving humans to check and correct them. Prices for data labelling are falling fast. At the same time, social media companies are hiring thousands of people to review harmful content, work that research has linked to anxiety and trauma. Some clients now require labelling firms to install software that records each worker’s screen and keystrokes.

Table 1: SD revenue, 2025 (EUR 000)

SD’s accuracy in independent tests: 99.2 %. Industry average: 96 %.

Resource 2 – Social media posts from Mihkel, an SD data specialist

Before SD, I had 40 job interviews and no offers. Interviews are hard for me. Here nobody cares about eye contact – they care that my labels are right. I have been employee of the month three times. [1/2]

Rumour that a client wants cameras and keystroke tracking on our computers. Being watched all the time makes my anxiety much worse. I hope SD says no. [2/2]

Resource 3 – Internal email from Merle Saar to SD’s management team

From: Merle Saar, Founder and CEO

To: Management team

Subject: Three decisions for next year

1. AI pre-labelling: our largest client, a self-driving-car developer, will pre-label images with AI from next year and pay us only to check and correct them – €0.08 per image instead of €0.20. Each image would take about 9 seconds instead of 30.

2. Content moderation: a social media company offers a contract worth €1.1 million a year to review reported posts and images, some of them violent or disturbing. It would need 40 extra staff.

3. Monitoring software: another client will only renew its contract (about €300 000 a year) if we install software that records screens and keystrokes and reports each worker’s speed.

Each worker can work about 1 400 hours a year.

CONFIDENTIAL: this email and any attachments are intended only for the named recipients.

Resource 4 – Survey of SD employees (64 replies)

Resource 5 – Interview with Dr Liis Kask, an occupational psychologist who advises SD

“Neurodivergent staff often excel at detail and consistency, but many are highly sensitive to stress, noise and sudden change. Constant monitoring and reviewing violent material are among the worst conditions for them. Checking AI output, finding the errors machines make, could suit them very well – it needs exactly the accuracy SD is known for.”

Resource 6 – Extract from a market report on AI data services