The medtech industry is growing rapidly, with projected compound annual growth rates of 5.6% worldwide from 2017, reaching $595 billion by 2024. This raises the question, where will we get the talent to support this flourishing sector? Capital is rich and last year VC investments in medtech exceeded the amount allocated to assets in biotech. So, is this a game changer or just a blip?
To bridge the innovation gap and workforce shortage, many are exploring the possibility of using AI, acting as a “co-pilot” to employees, to automate business decision support applications, streamline regulatory functions and increase efficiency in reporting and medical product development. However, a recent survey by PwC found that although 75% of health executives plan to invest in AI in the next three years, many lack the ability to implement it. Just 20% of respondents said they had the technology to succeed with AI.
Change is (always) the answer
So how can the industry overcome these limitations? One way forward is through partnerships, both within the industry and cross sector. Companies increasingly need to look to non-traditional partners to help drive innovation agendas (F1 team McLaren teaming up with GSK is one example, Google and Amazon entering the supply chain in Life Sciences is another). In December 2018, Deloitte reported that in the next two years 82% of the companies surveyed planned to collaborate with organisations outside of medtech (for example, technology and healthcare companies), almost double the percentage today (42%). R&D leaders may also need to look outside medtech to acquire the right talent and skill sets and develop robust on-boarding programmes to help ensure new people are successfully integrated into the organisation.
As an Executive Search consultant with global clients in medtech and biopharma, I spend much of my time discussing future requirements and what shapes and drives client organisations. “The only thing that is constant is change” is as relevant today as when I joined the life sciences industry some 30 years ago. Today any organisation will have to ensure credentials and leadership in three main areas; innovation, capitalisation and attracting leadership talent.
Strategic thinkers needed
In an age of M&A complexity do you pause or proceed?
The healthcare industry has traditionally been largely unaffected by transformative impacts of technology. Not so anymore. The pace and pervasiveness of digital disruption – combined with a rush of non-traditional players entering the market – is threatening growth across the sector. With pipelines stable, expectations for M&A continue to remain strong, as 44% of health organisations expect to pursue mergers and acquisitions within the next 12 months. Meanwhile, the streamlined convenient experiences consumers have in other sectors such as on-line banking, retail, leisure and wellness have them demanding more from the patient experience and from healthcare providers.
On the flip side, healthcare companies are using regular portfolio reviews to continually assess their strategic priorities and address investor demands to balance investments with the capital available for financing them. According to EY Global Health, 71% of executives have identified assets ripe for divestment either because of under performance or disruption3. As we look ahead in 2H 2019 and 2020, it appears as if private equity will be the big story; more than 1/3 of health organisations report increased interest and activity from private equity.
Better understanding of the human factor is the way forward
With change being constant my reflections and observations are that to have a sustainable business model, medtech companies need to form new alliances with academia, tech transfer hubs, behavioural scientists and consultants, improving self-awareness and motivational factors to ensure change can be managed and a healthy balance of stress level amongst executives can be the (new) norm. Culture fit, personal ethos and personality characteristics are more important than ever when selecting and assessing executive talent in Life Sciences.
Today, we have functional leaders in areas such as RA, HR, Medical, QA, Market Access, Supply Chain and specialisation across the value chain continues with new titles and responsibilities evolving, for example; Chief Patient Experience Officer, Chief Population Health Officer and Chief Incentive Officer to just name a few.
When will see executives in behavioural science make an entry into our industry?