**The Veterinary Business Landscape: Contemporary Issues and Emerging Trends**

 Colette Henry and Lorna Treanor *Royal Veterinary College, University of London, Hatfield (Herts),* 

#### *UK*

#### **1. Introduction**

The veterinary sector has witnessed considerable change in recent years, and this has had a significant impact on the wider veterinary business landscape. Most noteworthy, perhaps, has been the change at the global level in the focus of animal welfare, with a growth in small/companion animal care and a reduction in large animal work (Lowe, 2009). This has resulted in increased competition amongst veterinary practices and the recognition that veterinary services need to be appropriately marketed. Furthermore, it has been noted that the increase in and improved access to on-line veterinary pharmacies is beginning to 'squeeze' practices' profit margins on the sale of veterinary medicines, prompting the realisation that pricing structures for core veterinary services may need to be significantly revised in order to compensate.

With specific regard to large animal work, equine services now tend to be handled by specialists, and farm animal work is considered to be in decline, with the latter prompting particular concern. Indeed, significant changes to the farming sector (i.e. declining livestock populations, a reduction in the number/size of farm holdings, new legislation and a radical change in the relationship between government and veterinarians) mean that farm animal veterinary practices now face significant competitive and sustainability issues.

There have also been significant changes to existing veterinary business models, with a marked decrease in the number of small private, independent practices and a drive toward partnerships, groups and large corporate structures with shared resources and strengthened buying powers. As a result of the latter, new management career opportunities have opened up within the corporate sector for appropriately trained and entrepreneurially motivated veterinarians to run individual clinics or sites as semi-independent business units.

Collectively, the above changes have created an extremely dynamic and highly competitive veterinary business landscape. Indeed, it is now widely recognised that managers within the broader veterinary industry need to be much more commercially aware than in the past, prompting the recognition of a significant skills gap in business and management (Lowe, 2009). This skills gap is recognised beyond the traditional practice management role, with some acknowledgement that managers in the veterinary science, diagnostics and genetics

The Veterinary Business Landscape: Contemporary Issues and Emerging Trends 5

working animals and manual labour. Eventually, modernization processes led to the industrialization of both arable and livestock farming (Ilbery & Maye, 2010), with assemblyline production systems incorporated into farming practice to help boost production and lower costs. Through a combination of mechanisation, genetics and artificial inputs, farmers were able to improve yields (Boulton, Rushton, Wathes & Wathes, 2011). As a result, in the dairy sector, milk quotas had to be introduced in the '80s to address overproduction, and this was followed by the deregulation of milk markets in the '90s. Dairy producer numbers declined, lactation yields per cow increased and there was a significant reduction in the number of dairy cattle (Boulton et al; 2011). The impact of such a radical change on the veterinary profession was becoming clear - fewer dairy cattle would eventually mean fewer 'patients' for farm animal vets. Indeed, the gradual reduction in veterinary 'patient' numbers has not been confined to the diary sector. The pig population has also halved over the past fifteen years resulting from a combination of factors including the Euro-pound exchange rate, changes to animal welfare regulations and disease problems (Henry, Baillie & Rushton, 2011). The 'Foot and Mouth' (FMD) epidemic of 2001, in conjunction with changes to EU subsidy payments, has also resulted in a reduced sheep population. According to the Department for Environment, Food and Rural Affairs (Defra), the gradual decline in livestock numbers witnessed by the agricultural sector has been developing over recent decades (Defra, 2010). The net effect of this raft of changes and events has been a reduction in the number of family-run, working farms in the UK, whilst a growth in larger corporate holdings and 'hobby-style' or supplementary-income farms has been noted (Defra, 2009;

EU enlargement, the CAP reform, changing consumer demands and globalization have also impacted negatively on the agricultural sector (Rudmann, 2008), with the scale of support provided to farmers drastically reduced (Alsos, Carter, Ljunggren & Welter, 2011). A gradual decline in income from traditional farming activities has forced many farming businesses to diversify in order to remain viable. Diversification requires farmers to combine other, typically non-agricultural activities with their core farm business. In this regard, conversion of farm buildings for alternative, tourism-related product offerings became a popular choice. Indeed, about 50% of farms in the UK have supplemented traditional incomes through some type of farm diversification (Defra, 2008, as cited by McElwee & Bosworth, 2010: 820). Again, all of this has had a negative impact on the veterinary community, as the trend toward smaller farms with fewer livestock and diversified

The veterinary profession has traditionally been a male domain, however, in recent years, there has been an unprecedented increase in the number of women entering veterinary medicine (BVA/AVS, 2008; Lowe, 2009). By way of example, in 1998, one in three vets in the UK were female, with 57% of those under thirty being women; by 2002, 37% of vets registered with RCVS were female (RCVS, 2002), whereas in 2010, seventy one percent of UK vets under 40 were female (RCVS, 2010: viii). The recent '2010 Survey of the UK Veterinary and Veterinary Nursing Professions' (RCVS, 2010) highlighted that fifty-four percent of respondent veterinarians working in practice were women; furthermore, eightyfour percent of respondents in veterinary practice were employed within clinical veterinary

activities has resulted in less demand for veterinary services overall.

Rushton & McLeod, 2006; Henry et al., 2011).

**3. The gender shift** 

areas of the pharmaceutical, bio-science and pet food industries are experiencing similar difficulties. Recent literatures further platform the need for other veterinary professionals, such as advisors in government departments and those responsible for intensive livestock production units, to acquire business and management skills. Such trends, are not confined to the UK, rather, they would appear to be global phenomena.

Against this backdrop, and by way of providing valuable context for some of the more clinically oriented chapters in this book, our chapter considers some of the recent changes and emerging trends within the broader veterinary sector and the actual and potential impact of these on the veterinary business landscape. In particular, we focus our discussion on changes and trends within three key areas related to veterinary medicine: firstly, the recent changes within the agricultural sector; secondly, the global gender shift toward a predominately female profession and, finally, the evolving veterinary educational curriculum with an emerging trend toward the incorporation of business and management topics. We argue that, collectively, changes in these areas will have a considerable impact on the veterinary sector from a business perspective, and that such impact will be both positive and negative in nature. Given that the extent of the changes and emerging trends in these particular areas is only beginning to gain recognition, little by way of robust academic attention has been paid to their potential impact from a business perspective. As a consequence, there is a dearth of research at both the conceptual and empirical level in these areas, with a clear need for extant literature to be developed and expanded.

In this conceptual chapter, we explore the above issues by reviewing relevant literatures, identifying current trends and discussing the potential impact of these on the veterinary profession. With few studies in this particular area, the authors adopt an inductive approach, designed to generate new understanding and propositions for further research (Rosa & Dawson, 2006). Following this introductory section, we examine some of the recent changes within the agricultural sector and the impact of these on the veterinary profession. This is followed by a discussion of the gender shift currently being experienced within the profession and, subsequently, the emerging trend within veterinary curricula to include business and entrepreneurship modules. With regard to the latter, the potential impact of such curricula developments on employable skills is explored. The chapter concludes with a discussion on the implications of all these changes for the veterinary sector and offers some suggestions for future research. Thus, the authors lay the theoretical foundation for future empirical work in this field by debating some key concepts and generating hypotheses for future study. Specifically, the authors posit that veterinary curricula will need to continue to adapt to ensure graduates are equipped with the relevant skills and abilities to enable them to keep pace with the dynamic and highly competitive industry in which they will eventually work. In this regard, the incorporation of business and entrepreneurship education will be critical.
