Meeting the healthcare crisis: With leadership fit-for-purpose, Europe’s healthtech sector could supply innovative solutions

By Ryan Abbott & Martin Holm

An aging population and unprecedented pressure on legacy medical provision has pushed Europe to the brink of a healthcare crisis – and there is no sign of it easing. Demographic projections forecast that the proportion of the population aged 65 and over will rise from 20% in 2021 to over 29% by 2100, necessitating radical new health management and care solutions.

The emerging healthtech sector is set to play a critical role in addressing some of these urgent challenges, with early-stage players driving innovative approaches to diagnostics, treatment and patient care. Healthtech start-ups are designing and producing disruptive technologies encompassing AI-driven analysis, telemedicine and personalised medical solutions that have begun transforming patient outcomes.

In Europe, this burgeoning industry is benefitting from a strong medical research base; a population with a high degree of digital literacy; and substantial government support through initiatives such as the Digital Europe Programme, aimed at enhancing digital capabilities across multiple industries.

However, such rapid expansion has brought significant challenges in securing sufficient skilled talent and leadership, particularly in specialised areas such as data analysis, cybersecurity and regulatory compliance. The competition for digital professionals is intense, both within the healthtech sector, and also externally where the global tech giants offer attractive salaries, benefits and career advancement.

The evolution of the European healthtech ecosystem

Europe’s healthtech sector is a complex network of symbiotic parts, with key players including innovators, accelerators, investors and regulatory bodies. As of 2023, there were over 3,000 healthtech start-ups across the region, demonstrating the ecosystem’s vitality and potential for future growth.

Advancements in efficiency and personalisation of healthcare are supported by Europe’s widespread digital infrastructure and high level of internet penetration. This environment is facilitating the rapid adoption and scaling of healthtech solutions among the population, and a strong innovation pipeline has already been established, driven by technologies including artificial intelligence, machine learning and blockchain.

Accelerators and incubators are playing a pivotal role in nurturing early-stage ventures. One notable example is HealthCare Lab, which has been supporting healthcare innovations since 2020. The programme covers 16 countries in central, eastern and southern Europe through the operations of Roche and EIT Health.

Private funding has also escalated, providing the capital and mentorship needed to scale-up healthtech companies and support further innovation. Investment figures reached €6.4bn in 2023, reflecting a robust interest from venture capital firms and the wider investment community, with a number of funds making significant investments in promising healthtech start-ups.

The rapid, dynamic growth of European healthtech is also benefitting from the EU’s harmonised regulatory framework. Regulators such as the European Medicines Agency (EMA), alongside national health authorities, ensure that healthtech products comply with stringent EU legislation. Clear guidance from these bodies is vital for start-ups to navigate the complex regulatory landscape on the way to market approavel.

A model for healthtech leadership and talent

This rapidly expanding sector, with its unique balance of tech innovation, individualised user requirements and regulatory hurdles, requires a particular model of leadership. Senior leaders in healthtech need to be comfortable with ambiguity, and able to flex within a fast-evolving scenario.

European healthtech leadership must be able to harness the drive for cutting-edge innovation while adhering to strict regulations and standards on data privacy and patient safety, including the incoming AI Act. Ensuring compliance while fostering an environment conducive to breakthroughs in healthcare technology is a challenging balancing act.

To succeed, leaders need to be proactive, use strategic thinking to develop existing and new technological solutions, and build teams and cultures that embrace their vision. An additional ability – one some conventional medtech leaders have failed to embed in their organisations – is a true understanding of patient pathways and users’ needs. This should be twinned with a perspective of customers as development partners. Healthtech leaders have to establish strategic partnerships with the people who will employ their products day to day – healthcare providers, medical institutions and payers.

Across many sectors, there is a general push towards developing tech-savvy leaders capable of heading up digital change management initiatives, training them to handle transitions and integrate new technologies smoothly into existing systems. In European healthtech specifically, there is an added demand for leaders who are proficient in AI, machine learning, and data analytics. This trend not only calls for technical skills but also an understanding of how to utilise these technologies ethically and appropriately in healthcare scenarios.

Healthtech companies are struggling to meet this demand, because the rapid evolution of technologies in the digital health and the wider healthtech sectors has already outpaced the current workforce’s capacity and capabilities. A significant skills gap exists at all levels of seniority as many existing professionals lack the necessary digital knowledge. Recent figures show that over 70% of healthcare organisations in Europe recognise a critical gap in digital skills among their staff, which hinders effective adoption and implementation of new technologies.

Due to the need to cast a wide net to source tech talent, healthtech leaders are often required to manage multicultural teams across different regulatory environments. But, despite increased awareness about the importance of DEI at the top, the digital health industries that serve as healthtech’s leadership pipeline lack diverse ethnic and gender representation in senior roles. For example, women hold only around 10% of the top leadership positions in European healthtech ?companies. This dearth of diversity can limit perspective and innovation, impacting organisational growth and adaptation.

Establishing a sustainable healthtech sector

As the sector continues to evolve at pace, several factors are vital in ensuring its sustainable expansion. The ability to marry healthtech innovation with the clinical aspects of the whole healthcare and life science industries will be pivotal, both in understanding patient needs and pathways, and in order to appeal to the investors who are vital in the industry’s continuing development.

As well as attracting investors, the sector needs to engage tech talent in a fiercely competitive marketplace. As external talent is unlikely to meet all its workforce needs going forward, there is also a requirement to invest in internal skills development to shore up the talent pipeline.

And as in any industry, healthtech’s start-ups need to recognise that a great idea is not enough: visionary companies frequently fail due to execution risk. It’s important, therefore, not to underestimate the need for solid business experience in leadership, balancing the drive for innovation. Healthtech businesses should look to build teams that truly understand both the commercial line and the clinical baseline in order that regulatory approval and financial reimbursement can be achieved alongside technological breakthroughs.

In a deeper dive into the sector, we’ll explore the latest innovations and rapidly evolving healthtech investment landscape, identifying the investors supporting cutting edge developments in healthcare, and emerging opportunities in the market.