The Health of Innovation: Why Open Business Models Can Benefit the Healthcare Sector

Innovation is central to the healthcare industry; future developments in the fields of micromechanical systems, stem cell research, nanotechnology and remote medical informatics have the potential to dramatically change the accepted clinical patient care pathways. As well as this technology push, because of widespread internet access by the public, the patient who visits their Doctor today is generally much better informed about their treatment options; which results in a patient pull for innovations that may be as least 5 to 10 years from market as a result of necessary and rigorous regulatory hurdles. Companies operating in this environment today face huge challenges in terms of realising the latent economic potential from new innovations. In the current environment, however in order to innovate effectively, you increasingly must innovate openly (Chesbrough, 2006). Open innovation offers the prospect of lower costs for innovation, faster times to market, and the chance to share risks with others. By developing open business models healthcare technology companies can capture the multifaceted ideas of scientists, engineers, clinicians and indeed patients at an earlier stage allowing the good and necessary technologies to reach the health service more promptly. An open business model will also enable SMEs to release ideas and work with large global players to develop emerging innovations that they could not afford to bring to market as a result of the large cost of international clinical trials required by the regulatory bodies such as the FDA and the European Commission.This exploratory study uses a qualitative approach to investigate the explicit and implicit business models within healthcare technology companies of a range of sizes and organisational structures. Hence the paper opens the discussion on how organisations within the healthcare sector can work together to improve how new medical technologies are brought to the patient.