Innovation Ecosystems: A Path to Sustainability and Equity
Adam Skali
I have experience on healthcare innovation and thrive in diverse, multidisciplinary teams. Together, let's unlock the future of transformative healthcare solutions.
Summary: Innovation, the catalyst for both development and environmental stewardship, is pivotal in addressing healthcare's unsolved dilemmas. Historical milestones like the discovery of vaccines and antibiotics highlight innovation's potential to transform healthcare, saving millions of lives. Yet, innovation's journey is marred by challenges, necessitating ecosystems that foster creative thinking and collaboration. This journey, akin to a marathon, demands perseverance, understanding of complex pathogen-host dynamics, and a blend of entrepreneurship and science to transition breakthroughs from lab to market. The article underscores the significance of ecosystems, emphasizing the role of trust, entrepreneurship, and systemic thinking in driving sustainable and equitable healthcare solutions. It challenges the concentration of resources and the necessity for a decentralized approach to innovation, advocating for inclusive progress that considers the socio-economic and cultural context.
Questions for Reflection:
Summary of the main ideas in each section
?Innovation as a tool for development, and its role in healthcare
- Innovation is essential for development, driving economic and social growth.
- It can lead to sustainable solutions, reducing environmental impacts.
- Crucial in healthcare for addressing unsolved problems and improving quality of life.
?Innovation’s impact in healthcare
- Historical breakthroughs like vaccines and antibiotics have been pivotal.
- Innovation has significantly reduced mortality rates from infectious diseases.
- It continues to unlock new value through product development and process improvement.
?Innovation in healthcare is a marathon
- Sustained innovation is needed due to evolving pathogens and incomplete biological understanding.
- Historical epidemics illustrate the constant battle against disease.
- Emerging Infectious Diseases (EIDs) and climate change highlight the ongoing need for innovation.
?The role of entrepreneurship in innovation
- Entrepreneurship turns innovation into impactful solutions.
- Startups and entrepreneurs play a critical role in addressing healthcare challenges.
- It's essential for moving research discoveries to market and creating sustainable businesses.
?Why we shouldn’t focus only on individual entrepreneurs: Reductionism, Expertise, and Innovation
- Challenges the reductionist approach and highlights the importance of ecosystems.
- Critiques "The Great Man Theory" and emphasizes systemic innovation over individual contributions.
- Discusses the limitations of expertise and the need for a broader perspective on innovation.
?Innovation never happens in a vacuum
- Effective innovation requires simultaneous advancements in technology, society, and culture.
- Technology as both a tool and a system that evolves with societal input.
- The integration of innovations into economies and societies is crucial.
?What is interactionism and why is it important?
- Introduces interactionism as a means to understand complex systems and emergent properties.
- Critiques reductionism and emphasizes the importance of considering both parts and wholes in understanding systems.
?System thinking and innovation ecosystems
- Advocates for a systemic approach to innovation to address complex, real-world phenomena.
- Highlights the importance of understanding the interplay of various factors in innovation ecosystems.
- Emphasizes the role of context in driving effective and sustainable innovation.
?Why focusing on ecosystems can increase impact in sustainability and equity
- Discusses the "10/90 gap" in global health research funding and its implications.
- Highlights the role of social determinants in health inequities.
- Argues for the importance of innovation ecosystems in addressing healthcare challenges globally.
?Why we need more innovation ecosystems: The benefits of decentralizing innovation
- Makes the case for decentralizing innovation to address healthcare challenges and inefficiencies.
- Discusses the role of trust and relationships in fostering innovation.
- Highlights the potential for low- and middle-income countries to contribute to global healthcare innovation.
?What do we need to start an innovation enabling ecosystem?
- Outlines the steps and components necessary for establishing a healthcare innovation ecosystem.
- Emphasizes the importance of entrepreneurs, research, supportive networks, and an enabling environment.
- Discusses the challenges of creating a thriving ecosystem and the need for trust and community support.
?Trust in technology, and what is needed for digitalization to prosper
- Discusses the importance of trust in the adoption of digital health solutions.
- Highlights the challenges of safeguarding patient data and the need for modernized policies to support innovation.
Innovation as a tool for development, and its role in healthcare
Innovation stands as the cornerstone of development, acting as a catalyst for growth and evolution both economically and socially. It is through innovation that countries and industries can craft new products and services, enhance productivity, and ignite development and improvement in quality of life.?
While some argue that innovation introduces a paradox, due to its dual role as both a catalyst for human progress and a contributor to environmental degradation.
Innovation has historically driven human advancement but also contributed to environmental issues. Yet, it holds the key to sustainable solutions. For instance, fostering responsible consumption and production can significantly reduce resource use through more circular economic models. Similarly, transforming energy systems to be carbon-neutral and making food and water access more sustainable are critical steps toward a better future. Sustainable urban development and the responsible harnessing of digital technologies further exemplify innovation's role in achieving sustainable development.
Innovation is crucial for navigating towards more prosperous and sustainable futures, not only towards minimizing environmental impacts, and addressing global challenges like climate change, but even more so in a field like healthcare where there are many unsolved problems that “can’t be left to nature”.
Innovation’s impact in healthcare
The discovery of the first vaccine is a landmark in medical history. Edward Jenner, an English physician, made this breakthrough in 1796. Jenner observed that milkmaids who had contracted cowpox, a relatively mild disease, seemed immune to smallpox, a highly contagious disease estimated to have killed more than 300 million people since 1900 alone.?
Building on this observation, Jenner developed the smallpox vaccine by inoculating individuals with cowpox virus, effectively creating immunity against smallpox. This pioneering work laid the foundation for modern vaccination practices and ultimately led to the “eradication” of smallpox, declared by the World Health Organization in 1980 as one of the greatest achievements in public health.?
Another great example is the case of antibiotics. Alexander Fleming's discovery of penicillin in 1928 changed medicine and earned him the Nobel Prize in Physiology or Medicine in 1945. Fleming, a Scottish bacteriologist, accidentally stumbled upon penicillin while studying Staphylococcus bacteria. He noticed that a mold called Penicillium notatum produced a substance that killed bacteria, leading to the development of penicillin as the first antibiotic.?
Penicillin's introduction transformed the treatment of bacterial infections, with an estimated 500 million lives saved by penicillin. and significantly reducing mortality rates from diseases such as pneumonia, tuberculosis, and bacterial meningitis among others.
The essence of innovation lies in creating change that unlocks new value. Whether it’s through developing new products, improving processes, or creating entirely new markets, innovation enables organizations to surpass traditional boundaries and explore untapped opportunities.
However, fostering innovation requires more than just private funding, or government initiatives; it demands the creation of ecosystems that encourage and nurture innovative thinking. These ecosystems provide the necessary infrastructure, policies, and culture that enable individuals and organizations to generate transformative ideas and solutions. For innovation to truly drive social and economic growth, there must be a concerted effort from both the public and private sectors to cultivate these environments.
Innovation in healthcare is a marathon
This dilemma is illustrated by the control efforts against yellow fever, a disease with a long history of epidemics and a high mortality rate, transmitted by the Aedes aegypti mosquito. The resurgence of this mosquito species towards the end of the 20th century, due to the decline in vector control programs, exemplifies the difficulties in sustaining public health achievements without continued support and investment. This resurgence has led to increased incidence of diseases like dengue fever, surpassing previous epidemic levels in the Americas.
Innovation, especially in healthcare, isn’t a one time thing, it has to be sustained. In the same way as we consistently need a supply of food to maintain our societies, we also need a constant supply of “healthcare goods and processes”, mainly because of two reasons:?
1) In healthcare we have an added complexity/burden we have to deal with constantly changing pathogens, many times changing faster than we can adapt.
2) We still don’t understand how the human body and biology work, at least not well enough to make consistently accurate predictions.
We just have to look at history to observe this tendency. The plague, caused by the Yersinia pestis bacterium and spread by fleas found on rats, manifested in several pandemics throughout history, each leaving a stark imprint on human civilization.??
The disease's bubonic form had a fatality rate of 40%–70%, and the pneumonic form was almost always fatal without treatment. Key pandemics include the Justinian plague in the 6th century, the Black Death in the 14th century in Europe, and the 19th-century outbreak in India and China. These pandemics resulted in massive mortality rates and catalyzed significant social, economic, and cultural transformations.
Pathogens, from a scientific perspective, have functions rather than purposes. They didn't appear on Earth with the mission of causing diseases or controlling host populations. They are simply part of the natural world, made up of individuals striving to survive in their environment. In their quest for survival, they interact with their surroundings, including hosts, in various ways. Most people only pay attention to pathogens when they negatively impact species they care about or have economic interests in, or when they affect human health, but pathogens are always there.
Evolution doesn't aim to eradicate pathogens or host species. It's not a story of relentless warfare where either the hosts or the pathogens triumph, or both annihilate each other through escalating conflicts. Nor is it about hosts fleeing to some mythical pathogen-free haven.?
Evolution is about resolving conflicts: it eliminates pathogen-host interactions that can't coexist. When species mix during periods of ecological expansion, pathogens that can infect new hosts have a chance to broaden their range. The new hosts, lacking resistance, may experience disease outbreaks in the early stages of this interaction.?
Over time, natural selection increases the proportion of resistant hosts, and acute diseases become less of an issue. Pathogens then persist as an element of the environment, like a form of pollution.?
This is how evolution leads to enduring pathogen-host relationships. These relationships are not random or perfect; they are simply functional. This explains why Emerging Infectious Diseases (EIDs) are an expected outcome as the biosphere copes with climate change, leveraging its immense evolutionary capacity.
So, while we might wonder if climate change could lead to the extinction of pathogens, it's more likely that climate change could lead to the extinction of hosts, with pathogens surviving and potentially causing new problems.?
The role of entrepreneurship in innovation
While many argue that the main benefits of entrepreneurship lie in its capacity to create economic growth, or to generate new jobs, I believe that its potential and true benefit for society lie elsewhere. Entrepreneurship is a “tool” to create engines that support impact. As this part is something that might distract from the current article I will treat it in more depth at a later time.
But the main ideas are that businesses serve as motors of impact, whether that is positive overall or not is another topic that many times depends on the timeframe observed, and that entrepreneurship serves as a tool to solve problems and, by using tools available at the time or developing on them, it makes use of innovation at the time and turns it into a sustainable process.
Research offers the potential to discover solutions that can enhance our quality of life and reduce mortality, but it has the limitation that it doesn't give us the tools to create a self-perpetuating system.?
Imagine a scientist who has dedicated years to researching a potential cure for cancer and is now ready to transform this breakthrough into a medication accessible to the public. This transition presents a formidable challenge: moving beyond the familiar confines of the laboratory to the intricate web of human interactions. This new phase requires effective collaboration with professionals skilled in business, management, fundraising, among other areas. Additionally, the scientist must navigate the regulatory landscape and stand out in a competitive field where many are working on similar medical advances.
The journey from discovery to market is fraught with competition, and any misstep could jeopardize the entire endeavor. This complexity often proves bewildering for many scientists. Penicillin's success wasn't just about its discovery but also about the team and company that industrialized its production, managed logistics, navigated regulations, and forged partnerships to deliver it to those in need. Business and entrepreneurship are essential in turning scientific breakthroughs into widely accessible solutions, guiding my shift towards entrepreneurship.?
This in part explains why it is normal for so many startups to pivot frequently, for the simple reason that they have to test whether the problem is “ready to be solved” at that point in time. By focusing on the long term potential of solving that problem, entrepreneurs allow us to focus on return on impact, instead of return on investment.?
By focusing in the long term, on what could be, they explore the market until they can find a fit between the problem they want to fix, the needs of the market and where society puts its attention, indirectly represented by capital, and turn it into a business, or as I am starting to think about them, a self sustainable motor for impact. One that stops needing to depend on goodwill, in the form of donations, where culture thinks we should go, in the form of grants, or visionaries, in the form of private investment, and that finally becomes a tool that shapes society by tapping into the pool of capital through its customers.
I firmly believe, I still need more work on trying to prove it, that entrepreneurship is essential for innovation and development of our society not as a tool for discovery, that is why we have research which has completely different dynamics, but rather as a tool to turn that innovation into impact.
Why we shouldn’t focus only on individual entrepreneurs: Reductionism, Expertise and Innovation
In his book "Discourse on the Method of Rightly Conducting One’s Reason and of Seeking Truth in the Sciences" or simply "Discours de la méthode," philosopher René Descartes discusses the foundational concept of modern science known as reductionism.
Reductionism is based on the notion that by breaking down a complex entity into its most fundamental parts and understanding their workings and interactions, we can comprehend the functioning of the whole. Thus, the reductionist approach focuses on grasping the "essence" of the subject of study to serve as a basis for subsequent deductions.
However, reductionism doesn't always hold true. One of the primary reasons is the technical and technological limitations of each era, which hinder a complete understanding of the basic elements. Although enough understanding can still be achieved to find practical applications, the scope of what we can predict is very limited.?
While understanding the basic elements and their interactions is crucial for comprehension (reductionism), there are limitations. For instance, predicting oil prices has consistently proven elusive despite significant efforts and resources. This way of focusing on certain elements and trying to derive all causality from them, or focusing on them while forgetting the many others that are part of the interplay to advances in society, was popularized by the so called “The Great Man Theory” developed in the 19th century by Thomas Carlyle.
The Great Man Theory, suggests that pivotal historical moments are predominantly molded by extraordinary individuals termed great men or heroes. However, this notion has faced criticism for overlooking the influence of social and environmental factors in shaping leaders and their impact. Successful leadership requires the right context and support, challenging the idea of innate superiority.?
The Talent Myth also criticizes the idea that sheer talent is the sole engine behind innovation. Simply possessing intelligence isn't enough. Despite the efforts to boost human capabilities through investments in education and science, there's a minimal link between such investments and tangible innovations. Merely having intelligent and well-trained people is no assurance of achievement.?
This is also the reason why expertise doesn't always guarantee predictive ability.? Experts' success in predictions within highly controlled contexts doesn't always translate to real-world scenarios. Experts are typically seen as individuals with deep knowledge in a field, enabling them to make, very accurate, short-term predictions in limited contexts.?
Similarly, we tend to look at successful entrepreneurs in the same lens and forget that though adept at navigating complex contexts they can also fail, and that their success always requires having the right people behind the project. We tend to fall prey to confirmation bias, focusing only on their successes and overlooking failures.?
The law of truly large numbers refers to the fact that with a sufficient number of attempts, something highly improbable at a statistical level may occur. Thus, due to the vast number of businesses in existence at any given time, and the creation of new ones daily, many may achieve success solely by chance, without any sustaining factors.?
Examples of this include websites sold for exorbitant prices solely due to having domain names with simple words like wealth, invest, or similar concepts. While this law is often applied to the supernatural realm, some business success stories couldn't be closer to this concept.
While there are indeed outliers in each field that consistently, at least within the observed time frame, outperform the “competition”, and while the law of Pareto seems to apply to most fields, focusing on a systemic approach to innovation, focused on the ecosystem and not the individual companies still holds quite some value.?
Human civilization is relatively recent compared to the existence of Homo sapiens, and many traits evolved for survival in primitive environments. Quick decision-making based on limited information was more advantageous than understanding underlying causes.?
Our tendency to prioritize immediate reality over questioning its accuracy stems from this evolutionary history. Our aversion to uncertainty drives us to seek causal relationships, even when insufficient information is available. Thus, while expertise is valuable, it's essential to recognize its limitations due to inherent biases and cognitive fallacies. What this implies is that human decision making tends to be flawed, and it is also the reason why a good system shows an advantage in a long enough timeframe.?
While serendipity and talent can sometimes create outliers, creating a good self perpetuating system can consistently create better than average results, which in turn increases the probability of getting an outlier.?
领英推荐
If businesses are the engine that creates impacts, ecosystems are the engine that creates businesses that generate impact. This is the reason why focusing on enhancing the whole ecosystem instead of making the right bets on specific companies can have a better return on impact for society.
Innovation never happens in a vacuum
Innovation spans various domains, encompassing technological, societal, institutional, and cultural shifts. Effective innovation demands progress across these realms simultaneously, as advancements in one area alone may not bring about significant change. Take autonomous vehicles, for instance, which require not only technological breakthroughs but also societal acceptance and regulatory adaptations to become widely adopted.
This holistic perspective is vital for grasping the intricacies of the innovation process, which is often intricate, uncertain, and marked by failures that serve as valuable learning experiences for eventual success.
Technology, at its core, comprises a system designed to achieve specific goals, incorporating both technical components and social knowledge. It evolves through a cumulative learning process, with new developments building upon existing understandings. This encompasses not only the creation and utilization of physical tools but also the 'software' or know-how essential for manufacturing and operating these technologies.?
Moreover, technology must align with broader systems, such as smartphones relying on internet connectivity, underscoring the importance of comprehending the interplay between technological hardware, software, and systemic infrastructure.
Innovation and technology function as extensions of society's capacity for processing information, mutually shaping and being shaped by various societal, economic, historical, philosophical, scientific, and cultural factors over time. Consequently, technological and institutional innovations are intertwined, influencing the emergence, success, or failure of technologies and their integration into economies and societies.
What is interactionism and why is it important?
The study of sciences dealing with complex systems, such as biology, has led to the need for the development of new perspectives focusing more on the relationship between the smallest discovered elements, thus having some chance of explaining emergent properties.
The inability to fully comprehend the elements gives rise to what is known as emergent properties, phenomena that arise when a sufficient number of units of a certain type come together, and which we often cannot fully explain today. One of the clearest examples is life or consciousness, which emerge solely from the combination of cells. This has led to the development of alternative strategies for understanding phenomena, such as the interactionist perspective.
The essence of interactionism lies in understanding that the characteristics of an element are as crucial as its interaction with other elements. This perspective enables the explanation of phenomena that would have been difficult to elucidate otherwise, such as the presence of multiple copies of certain gene sequences, acting as a "safety net" in case of mutations. This phenomenon ultimately enhances species' genetic variability, as redundant copies allow organisms to reproduce despite mutations.
The interactionist perspective emerges as a critique of assuming that understanding the movement of each element will lead to understanding the behavior of the whole, liberating us from the bias of assuming perfect comprehension of the entirety.
To comprehend a system, we must grasp both the behavior of its parts and the behavior of the whole. This approach enables us to utilize changes at both scales to make more accurate predictions.
This transforms reductionism into one tool among many, rather than the sole means of acquiring genuine knowledge. Genuine knowledge must be context-based; for example, while fire is generally assumed to be detrimental to plants, there are fire-adapted plants that utilize wildfires as a signal to germinate their seeds. This strategy makes sense for them as wildfires clear competing vegetation.
Hence, every time we attempt to understand a problem, we shouldn't solely focus on the parts we've delineated. The boundary we use to determine what to include and exclude is arbitrary; instead, we should strive to comprehend both the parts and the whole to make reproducible predictions.
System thinking and innovation ecosystems
Adopting a systems perspective in understanding innovation is crucial for grasping the complexity and non-linear nature of real-world phenomena. Traditional reductionist approaches tend to oversimplify by isolating variables, often leading to incomplete or misguided conclusions. Conversely, a systems view acknowledges the interconnected nature of factors and the emergence of new behaviors and patterns that cannot be fully understood through reductionist methods alone.
Utilizing a systemic approach to innovation enables the identification of leverage points and intervention strategies for more effective and sustainable outcomes. By comprehending the underlying structures and dynamics of innovation systems, policymakers, researchers, and practitioners can develop interventions that foster positive change while minimizing unintended consequences.
This perspective highlights viewing systems as dynamic entities composed of interconnected and interdependent parts. Instead of solely focusing on individual components or linear cause-and-effect relationships, consider the emergence of phenomena and the intricate interplay of socio-environmental dynamics.
Systems Thinking emphasizes examining the interactions and relationships within a system, recognizing that changes in one part can have cascading effects throughout the entire system. This perspective encourages holistic analysis, enabling a deeper understanding of the underlying structures and feedback loops that influence innovation.
To truly grasp innovation, whether it's technological or otherwise, one must delve into the surrounding circumstances. Take, for example, the introduction of the Bismarck Model in the late 19th century. It serves as a prime example of how the socio-economic challenges brought about by industrialization demanded innovative social welfare solutions.?
These solutions effectively blended economic development with societal needs. Moreover, the impact of the industrial revolution, marked by phenomena like urbanization and the emergence of new social classes, emphasized the urgency for policy innovation to adapt to evolving socio-economic dynamics.
Philosophical and political ideologies played a significant role in shaping the course of innovation. Concepts such as pragmatism and Realpolitik influenced decision-making, highlighting how practical considerations and the realities of the era influenced policy formation. Additionally, the societal shift towards industrialization created a demand for advancements in public health. This demand led to innovations driven by the acceptance of germ theory, showcasing the role of scientific progress in shaping healthcare policies.
Whether historical, cultural, economic, or social, context is paramount in comprehending and propelling innovation forward. This understanding of context is essential for crafting effective, sustainable solutions that tackle contemporary challenges head-on. It shows why a thorough comprehension of ecosystems is needed in the innovation process.
Why focusing on ecosystems can increase impact in sustainability and equity
The "10/90 gap" highlights a severe mismatch in global health research funding, where less than 10% of resources target the diseases that account for over 90% of preventable deaths worldwide, predominantly in developing countries. This disparity stems from several barriers to healthcare innovation in these regions, including limited access to funding, the centralization of talent in developed areas, and the lack of supportive local ecosystems for innovation.
Social determinants like education, income inequality, and pollution exacerbate health inequities, influencing outcomes significantly. For instance, pollution increases the risk of diseases, while income inequality and lack of education hinder access to healthcare.
The WHO's statistics highlight global health disparities, with life expectancy, infant mortality rates, and disease prevalence varying significantly between developed and developing countries. Children under five represent a substantial proportion of deaths, underscoring the persistent challenge of communicable, maternal, perinatal, and nutritional conditions. The decrease in deaths from these causes, from 5.94 million in 2000 to 4.12 million in 2019, indicates progress yet emphasizes the continued need for health system improvements.
One of the main causes of this problem lies in the inherent biases of innovation, most of the time unintentional and born from a lack of diverse context and differences in priorities and circumstances. For example, a lack of diversity has led in many cases to medical devices not adapted for different bodies, such as the problems that so many FemTech companies are trying to solve, or therapies that ignore phenotypic variations across populations.?
Technological solutions, including telemedicine, AI, and advanced therapies, are often proposed to bridge these gaps. However, the centralization of innovation poses long-term challenges. For example, in the context of fairness in machine learning, researchers have highlighted that machine learning systems can show bias, based on attributes like age, race, gender, or socioeconomic status. A lot of research has shown that AI systems can be biased and this issue becomes a monumental problem in the field of medical imaging, where AI is increasingly used.?
Climate change introduces another layer of complexity, altering the global distribution of diseases in real-time. Diseases once confined to specific geographical areas now threaten to expand their reach, creating emergent health crises that demand urgent attention. The individuals who have coexisted with these shifting disease patterns since childhood are uniquely positioned to lead the charge in preempting future pandemics, leveraging their firsthand experiences to forge innovative solutions.?
By focusing on creating more and better innovation ecosystems, we are making it easier for entrepreneurs to turn their ideas into self sustainable businesses, by lowering the hurdle to create solutions to problems that would otherwise require more time and investment and that as such wouldn’t be developed. Focusing on systems, raising the average, makes it easier for entrepreneurs to focus on “less profitable problems” that focus on a longer term perspective, and that would otherwise be too risky for inventors, or public money to finance.?
The essence of their approach lies in recognizing the intricate web of social determinants that contribute to health disparities—ranging from socioeconomic status to racial and gender, among others. By integrating innovation, advocacy, and policy reform, social entrepreneurs can help dismantle structural barriers that perpetuate inequities, crafting a healthcare ecosystem that is inclusive and responsive to the needs of all communities.
Why we need more innovation ecosystems: The benefits of decentralizing innovation
The concentration of resources in specific regions represents both a healthcare challenge and an economic inefficiency that slows global healthcare innovation. This discrepancy between health research funding and the needs of developing countries necessitates a new approach to resource distribution.?
Drawing on Herbert A. Simon's concept of bounded rationality and the insights of Daniel Kahneman and Amos Tversky into human biases, it's clear that existing economic structures and innovation hubs might not optimally reflect efficiency, as evidenced by the rising healthcare capabilities of nations like India, China, and Singapore.?
Resource distribution, influenced by historical and trust-based networks, may not reflect actual transaction costs, impacting health and economic growth. Effective innovation requires acknowledging overlooked social, psychological, and informational factors, crucial for understanding broad trends from micro-level insights.
Innovation thrives on relationships rather than mere contracts, with internal connections within organizations reducing transaction costs and facilitating efficient operations. The essence of innovation lies in cultivating timely and appropriate relationships, regardless of the organizational form.
Historical barriers, including geographical, social, and cultural differences, along with trust deficits, have traditionally increased transaction costs, hindering market efficiency and collaboration. While these issues are not faults of current ecosystems, and likely arose by chance, reevaluating and addressing these constraints is essential for progress.
The concentration of resources in specific regions represents both a healthcare challenge and an economic inefficiency that slows global healthcare innovation. While many regions might lack access to top-tier experts or cutting-edge technology, the essence of impactful solutions often resides in the intuitiveness and contextualization unique to those who are intimately familiar with the problems at hand, and might help provide new answers to other challenges we struggle with.?
Entrepreneurs in these areas, having lived through the challenges themselves, possess an intrinsic ability to discern the necessity of a solution and the most effective form thereof, offering a fresh perspective to old and new challenges. Despite infrastructure challenges, evidence of patents obtained from grants and initiatives like the WIPO Global Health Innovation Fellowship illustrates the latent potential in low- and middle-income countries (LMICs) for significant healthcare innovation.
These ventures benefit from an environment where the cost of innovation development is lower, allowing for less economic risk and a more agile and responsive solution crafting. Additionally, some regions have streamlined their processes to embrace rapid technological adoption, demonstrating a commitment to innovation with reduced bureaucratic hurdles. Although this is not the case in all regions and will require developing go to market strategies that fit the context, there is potential.?
As we stand on the brink of a technological renaissance, heralded by breakthroughs such as CRISPR and paralleled to the transformative impact of the app revolution, the limitations of maintaining a localized hub approach to healthcare innovation become increasingly apparent. The potential for rapid, inclusive progress in addressing the world's most pressing health challenges is magnified when we broaden our perspective, embracing a global view that values diversity, inclusivity, and the democratization of innovation.
What do we need to start an innovation enabling ecosystem?
The first step is to know that one of the main indicators of health related outcomes is the “ZIP code”. It has been shown that this element, which is usually related to the PIB of the country, the investment in healthcare, the kind of healthcare system, the purchase power of the person and other “attributes” has a big part in healthcare.?
Establishing a healthy healthcare innovation ecosystem requires understanding the effect of context and how the different interelated factors influence each other. A model that works in the USA, might not work in Spain or in Kenya. A big part of establishing a good ecosystem is also in identifying the social determinants of health and improving them.?
We need to understand that as we try to build an ecosystem, and/or be part of one, we are working as economists and this means that we can’t limit ourselves only to what we know and think we should know, but rather to explore the different interactions that make up that ecosystem. Our main goal is to understand the context and translate it into a strategy that can be put into practice. Information is the essence, and partnerships are the blood.
The most important thing for an innovation enabling ecosystem are entrepreneurs. Unless you have people willing to push against adversity and with a sense of mission it's almost impossible to establish an ecosystem. There are too many obstacles in a budding ecosystem, so unless someone is very well connected, or has enough drive it will be hard to take all the steps to get the product in the market. They are the ones who will take the time of finding ways to adapt the solution to the context of the country.
If for example we choose increasing the number of “Unicorn” startups, as one of the key indicators of a healthy ecosystem we can get a better idea of what startups really need. A “Unicorn” can only be born if there is a mature ecosystem where they can access the required funding, connections and understanding of the policies.?
Finding a Healthcare Innovation --> Conducting Market Research and Validation in the Healthcare Industry --> Developing a Healthcare Prototype or MVP --> Building a Specialized Team with Healthcare Expertise --> Seeking Seed Investment for Healthcare Solutions --> Launching the Initial Healthcare Product --> Acquiring Users and Traction in the Healthcare Sector --> Securing Series A Funding for Healthcare Expansion --> Scaling Healthcare Operations --> Series B Funding for Further Healthcare Development --> Expanding into Additional Healthcare Markets --> Series C Funding for Healthcare Market Penetration --> Continuously Innovating Healthcare Solutions --> Potential Additional Funding Rounds in the Healthcare Sector --> Reaching Unicorn Stage in Healthcare (Valuation of $1 billion or more).
Based on all the steps required, we can see that to get a healthy innovation ecosystem we need more than a certain number of players and stakeholders, that can help promote the growth of the companies and products in the different stages.
To create a healthy ecosystem one needs an understanding of the state of the different elements in this “process”, and to know which are the “cul de sac” and as such are stopping the progress. To achieve this, we need a deep understanding of the ecosystem and a network that supports hypothesis testing and solution development.
Startups need an enabling environment
At the heart of a thriving healthcare ecosystem are the entrepreneurs. Their resilience and mission-driven approach are indispensable in overcoming the myriad challenges inherent in early-stage innovation. These individuals must be equipped with an enabling environment that includes education in entrepreneurship principles, tools, and objectives. Such an environment not only fosters their drive but also empowers them to tailor solutions to the specific needs of their society. Therefore, developing a framework that identifies, educates, and nurtures entrepreneurial talent is paramount.
Innovation cannot flourish without a strong foundation in research. Supporting researchers to explore and develop solutions that are relevant to societal needs is crucial. This can be achieved through establishing grant programs, akin to successful models observed in India, which provide researchers the opportunity to advance their work and assess its potential impact. These programs should be designed to bridge the gap between scientific discovery and societal benefit, ensuring that advances in healthcare are accessible and applicable to the communities they aim to serve.
A supportive network comprising hospitals, policymakers, patients, financial institutions, pharmaceutical companies, and innovation enhancing organizations (such as accelerators venture builders, venture capitals and incubators) is vital. This community should go beyond hosting networking events to facilitating meaningful dialogues and collaborations across the healthcare spectrum. Such interactions can uncover unique insights, foster partnerships, and streamline the path to market for healthcare innovations.
A clear understanding of the legal and regulatory pathways for healthcare startups is essential for risk assessment and market entry. Simplifying these processes and aligning them with international standards, like ISO, can mitigate obstacles and enhance market accessibility. This is particularly relevant in public health, where a decentralized system can introduce additional barriers to innovation. Engaging with private hospitals, which are often more responsive to market-driven innovation, can also serve as a strategic approach to introducing and scaling new healthcare solutions.
Fundamental to the ecosystem's success is the availability of resources. Financial support, primarily through grants and investment, is necessary for the research and development phases of innovation, especially in a field that requires such a long go to market process as healthcare. Beyond capital, the knowledge and expertise to transform research into viable business ventures are equally important. Programs offered by venture builders, incubators, and accelerators are invaluable in translating scientific discoveries into market-ready products and services.
While maybe one of the most important elements for a healthy ecosystem, the part of go to market is something that usually takes the longest to start developing in an ecosystem. It is essential for the meetings to be as open as possible, people need to be willing to share what really happened to them, and the lessons and mistakes learned.
How to know if the ecosystem has the necessary elements to foster impact?
Is there enough talent??
Unless we have people with the necessary skills it will be impossible to create an ecosystem.?
Are they motivated??
Healthcare requires a time that might be too long to stay in it just because of the prospect of possible profit. A healthy healthcare ecossytem needs people who care about something more than profit.?
It is also preferable for the talent to be young, as they might be more willing to take the risks required, although someone with the necessary contacts and experience might have an easier time.?
Is it a free market??
Unless the market is free enough investors and possibly even entrepreneurs will hesistate to start a project. While the risk of failure is high, if they can’t even enjoy the reward after all the work most people won’t even try.?
Is there a developed guideline for the process. Unless we know the steps required to take the product to the market its hard to expect innovation.?
Do we have a good network of high quality people??
This refers to people who have experience, and enough decision making power to make the process of trying, testing and commercializing new products easier. They should be people with a sense of mission and desire to improve.?
Although social networks are crucial for innovation, they don't always function seamlessly, with ideal connections and knowledge sharing. And the unpredictability of human interactions adds another layer of complexity. Misunderstandings and conflicts in scheduling are just some of the human factors that can hinder progress in the innovation ecosystem.?
A good innovation ecosystem focuses both on the local and international ecosystem building. While it is true that there might be many advantages to connecting with international organizations, this only makes sense once we have the right organizations at the local level, to make use of and adapt the information exchanged. We have to always remember. The ones that solve the problems are the local entrepreneurs, the ones who really know the difficulties that patients face there and the context.?
The need for trust in entrepreneurship
Entrepreneurship is inherently risky, it is based on making use of new technologies or approaches to create new markets where need still hasn’t been proven for the solution. The fact that there is a market for other solutions, is never enough assurance that a venture will succeed. As such, what we need to foster entrepreneurship aren’t only the different ingredients, but the right mix of ingredients. If the ingredients don’t mix, we can’t get the perfect dish.
And the key to this mix is trust, the idea of the importance of trust is pretty well developed in the book “The Rainforest” by Greg Horowitt, so I will just focus on some of the key ideas.?
The notion of transactions in economics, as traditionally understood, predominantly focuses on the exchange of goods, services, and financial assets. However, this perspective significantly narrows the scope of interactions that fuel the dynamics of economic systems, particularly in the context of innovation ecosystems. The concept, as broadened by modern interpretations and necessitated by the evolution of economies, extends well beyond these commercial exchanges to encompass a more diverse array of interactions that are critical for fostering innovation.
In the 1930s, Ronald Coase, through his work "The Nature of the Firm," explored why companies exist, introducing the concept of transaction costs. He argued that in an ideal market, transactions could occur through individual contracts without needing a company structure. However, Coase proposed that forming a company could reduce these costs—those associated with negotiating and executing contracts for every transaction—which often outweigh the advantages of operating independently. He suggested that companies operate more efficiently as networks that lower these costs through regular collaboration.
Among these expanded categories of transactions are the exchanges of emotional support, neighborly assistance, and a sense of community belonging. These non-commercial interactions play a pivotal role in the development of a thriving innovation ecosystem. Emotional support, for instance, can significantly impact the resilience and mental well-being of entrepreneurs and innovators, enabling them to navigate the uncertainties and challenges inherent in the innovation process. The assurance that there is a network of peers and mentors who understand and support one's journey can be a powerful motivator and a buffer against the stress of failure or the pressure to succeed.
Neighborly assistance, could range from sharing insights and advice on overcoming technical challenges, to offering access to equipment or laboratory space, to simply providing a listening ear for venting frustrations or brainstorming. Such assistance often occurs outside formal contractual or commercial frameworks but is indispensable for innovation.?
It fosters a collaborative environment where resources are pooled, and knowledge is openly exchanged, thereby accelerating the pace of discovery and application.
Lastly, the sense of community belonging engenders a collective identity and a shared purpose among individuals in an innovation ecosystem. This sense of belonging can inspire members to contribute to the ecosystem's collective success, not just their individual achievements. It can encourage open sharing of ideas, risk-taking, and collaboration across disciplines and industries. Furthermore, a strong community can attract talent and resources, as individuals are drawn to environments where they feel valued and where they can see their contributions making a difference.
The importance of trust is that it is what allows us to reduce the risk we feel when we make our decisions. We are afraid of that which we don’t know and understand, but through trust we create an arbitrary reference point that allows us to measure the risk.
When we trust someone we are more likely to believe what they say and listen to their advice and ideas. This is also the reason why warm intros are always recommended compared to cold ones, and also get a better reception. It is also one of the reasons why so many VCs focus only on people companies they get introduced to.
We have a limited amount of energy and attention every single day, and at some point we tend to narrow our focus and circle of acquantiances, which in turn only increases the weight that each one of them has in our decisions. As such, trust becomes somewhat of a lubricant that makes us more willing to contribute to a project, and as such is essential to foster entrepreneurship.
For an ecosystem to truly drive innovation, it must, therefore, nurture these broader exchanges. Creating spaces and opportunities for emotional support, facilitating neighborly assistance through networking events and collaboration platforms, and fostering a strong sense of community through shared goals and values are all strategies that can enhance the innovation potential of an ecosystem.
Trust in technology, and what is needed for digitalization to prosper; or why is digitalization working so well in kenya??
In many countries, the shift towards electronic health records has been a complex and slow process, hindered by compatibility issues among the various systems used by healthcare providers.??
But there are also some that have shown impressive development in this field, among them Estonia, which has had a fully digitalized healthcare for more than 10 years, or the cases of Rwanda and Kenya that have made significant progress in little time. For all of these countries, the main reason they achieved their current status, is trust. People are so used to doing almost everything with their phones, which has reduced the barrier of adoption of digital health solution in the country. While it is hard to emulate this, it's mostly something born out of serendipity, it is also a good idea to try to take as many steps as possible to promote trust in digital solutions.?
If people, the patients, nurses and doctors, don’t trust the technology no matter how good the product and innovation is, it won’t serve much. And if VCs know that people don’t trust the products there is no way for them to invest, which reduces the total cash flow and the possibilities of development.
Safeguarding confidential patient data is vital for healthcare innovation but often becomes a barrier to introducing new technologies and products. In response to security concerns, many healthcare organizations adopt strict protective measures that, while necessary, can inadvertently slow down or block the progress of innovations, particularly those dependent on digital health records. The bureaucratic complexity and inflexibility of information governance processes add to the challenge, making it difficult for healthcare services to adapt and improve.?
Additionally, existing intellectual property policies can sometimes inhibit innovation by creating obstacles for the development and realization of new ideas. There is a clear need for modernized policies and support structures that encourage innovation within the healthcare sector, backed by accessible funding, clear guidance, and equitable intellectual property management. These measures are essential for creating an environment where healthcare innovation can thrive, ensuring that healthcare systems remain at the forefront of medical advancements.
?
Reference
Kelly, C. J., & Young, A. J. (2017). Promoting innovation in healthcare. Future Healthcare Journal, 4(2), 121-125. https://doi.org/10.7861/futurehosp.4-2-121
Wagner, D. M., Klunk, J., Harbeck, M., Devault, A., Waglechner, N., Sahl, J. W., Enk, J., Birdsell, D. N., Kuch, M., Lumibao, C., Poinar, D., Pearson, T., Fourment, M., Golding, B., Riehm, J. M., Earn, D. J., Dewitte, S., Rouillard, J. M., Grupe, G., Wiechmann, I., Bliska, J. B., Keim, P. S., Scholz, H. C., Holmes, E. C., & Poinar, H. (2014). Yersinia pestis and the plague of Justinian 541-543 AD: a genomic analysis. The Lancet Infectious Diseases, 14(4), 319-326. doi: 10.1016/S1473-3099(13)70323-2. Epub 2014 Jan 28. PMID: 24480148.
Hwang, V. W., & Horowitt, G. (2012). The rainforest: The secret to building the next Silicon Valley. Regenwald.