Medtech innovation needs redefining in a new health economy that is focused on value and convenience

81% of medtech execs plan to work with strategic partners on innovation

To assess the state of company-level innovation in medtech, HRI involved more than 50 companies in the research, including those doing business in in-vitro diagnostics, disposable medical products, medical equipment, diversified life sciences, implantable devices, as well as other healthcare companies and new players in the field. HRI interviewed more than 30 top executives and conducted a survey in summer 2013 of more than 35 medtech companies, almost half of which reported revenues in excess of $1 billion US dollars.

The research includes a web-based innovation scorecard that assesses companies based on leading practices in organizing, managing, and fostering innovation.

Key research findings include:

The value of a device is no longer solely in the product itself.

While clinical efficacy is a must, the true value in medtech today is a company’s ability to provide information, services, and other assistance to customers to solve additional problems such as improving diagnostics, increasing operating room efficiency, reducing length of hospital stays, monitoring patients remotely, and keeping people out of the hospital.

New competitors are staking their claim.

At least 18 companies have entered the medtech space, and are driving innovation at the pace of technological, not healthcare, change.

New integrated services and business models that address clinician and
consumer needs are becoming more important.

But, medtech executives were almost twice as likely as executives across all industries to say that product innovation was their top priority in the coming year (46% compared to 29%) and just 8% said that business model innovation was next year's priority.

Medtech executives expect a higher level of innovation over the next three years, but they lack formal processes to achieve their goals for new services and
business models.

Medtech executives expect more breakthrough and radical innovations in services and business models, but just 14% said that they coordinate and manage innovation processes for maximum efficiency.

Medtech companies have been slower to apply new social, mobile, analytic, and cloud technologies that other industries have used successfully.

Half of medtech companies appear to be using such technologies to at least some degree to engage customers and patients in managing their health and to enable remote monitoring. But only 12% are using them aggressively to create new business models that center on clinical and consumer dynamics. With outdated and unresponsive information technologies, companies might miss opportunities to meet the needs and demands of the next generation of consumers.

Medtech companies are looking to open innovation as a key approach to drive future growth.

However, medtech executives admit finding the right external partners with whom to collaborate is difficult. Currently, they co-create with customers or external partners on less than one-third of their products and services.

Contacts
Michael Swanick
US Pharmaceuticals, Medical Device and Life Sciences Industry Leader
Tel: +1 (267) 330 6060
Dan Garrett
Principal, Health Information Technology Practice Leader
Tel: +1 (610) 256-2055
Ed Yu
Principal, Innovation and Strategy
Tel: +1 (415) 498-​6408
Christopher Wasden
Global Healthcare Innovation Leader
Tel: +1 (646) 471 6090
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