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The medical industry is undergoing rapid and pervasive change. New approaches to patient-centered care will address the whole of their lives rather than focusing on specific episodes for treatment. The traditional medical equipment technology (MET) market is therefore likely to lose more and more of the growth potential it has displayed over the past decade. It is therefore crucial for companies in the sector to find new approaches to maintain growth as disruptive innovation in this high-tech area becomes increasingly hard to achieve.
The aim of this point of view is to outline three future top growth opportunities for medical equipment manufacturers in the context of the healthcare megatrends driving the industry today and in the future. In this point of view we will explain why the next generation of healthcare providers could possibly be a traditional furniture trader; how Internet-based R&D will uncover previously hidden sources of knowledge; and what joint production could mean for hearing-aid manufacturers.
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The annual growth rate of the medical equipment technology market was comparably high 10 years ago. However, the markets’ percentage growth rate has slowed in recent years and is not expected to experience substantial increases in future growth. To remain competitive in the high-tech medical equipment market demands continuous innovation.
The industry is moving from a traditional model built on regulatory approval and selling to claims, to one of medical evidence and proven economic effectiveness through improved analytically-derived insights. This shift will open the opportunity to drive competitive advantage by creating a robust analytics capability and harnessing integrated ‘real world’ patient level data.
Securing growth as the industry develops will require a new approach. We have identified three game-changing growth opportunities, which we believe can fundamentally shift the market and stakeholders’ perceptions of the healthcare eco-system. The three game changers are finding a new path to growth; what furniture will tell you about your health; and melting frozen knowledge, a new model for outsourcing R&D.
Products are well developed and offer a huge variety of features to meet customers’ needs. Rather than looking for growth opportunities in existing business models and markets, companies need instead to identify the potential for disruptive innovation. The largest growth opportunities are where new markets evolve, rather than from following existing paths.
Integrating medical devices with home furniture is one possible future growth opportunity. However, it’s a field in which device manufacturers could face serious competition from furniture makers themselves. Producing integrated home devices that enable customers to monitor their own health data accords with the trends of chronic diseases, an ageing society and connected health. But the chance to innovate is not restricted to medical device manufacturers.
‘Melting’ the ‘frozen’ knowledge available through Internet-based research will let a company use data and results quicker and more purposefully than others. This option further allows companies to reduce costs of in-house R&D and offers the opportunity to extend investments towards a wide field of external sources (partnering with precise internet-research experts is one possible alternative).
To prosper in this fast changing future, medical equipment technology companies will need to carefully evaluate and forecast fundamentally new market approaches and merge these into their present business models and strategies.
The three growth opportunities we have identified can be seen as examples for the nature of how growth could be achieved. Sustainable growth requires a radical change in behavior in order to variously design new products, create new business models or offer cheaper, simpler or faster solutions to the customer.
Companies will need to carefully analyze the opportunities this changing market presents, and ensure that they redirect and review their investments to ensure they can maintain performance and create sustainable businesses for a future that looks very different.
July 23, 2012
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