Digitalisation is changing how medical devices are developed and manufactured. Fresh business models are required, and new relationships between suppliers and customers must be established; how can micro and nanotechnology innovators best take advantage of a rapidly evolving market?
Everyone is talking about industry 4.0, or smart production. Every new medical manufacturing development is influenced, directly or indirectly, by digitalisation, which has already started to change how patients are dealt with and diseases are treated.
Micro and nanotechnology companies are an important part of this change. Innovative business models will evolve, as must new kinds of collaboration between suppliers and customers. Beyond this, the effects will reach research institutions, influencing how students are taught.
Neither the ‘internet of things’, nor the digitalisation of the healthcare system, is possible without MEMS (micro-electromechanical systems), sensors, actuators or other microstructures: this means huge opportunities for microtechnology companies.
Microtechnology networks and associations such as IVAM started appearing a couple of decades ago, when national economies began to rely less on things like steel and coal, and more on high-tech products. Micro and nanotechnology companies serve many different markets, arguably the most significant of which is medical technology, to which it has brought huge benefits. It can help in a variety of cases, such as ambient assisted living, preventive medicine and sports, or in the production of pharmaceuticals with bio-MEMS applications.
Until recently, the business model was simple: new technologies and products like sensors or actuators are developed, mainly by smaller businesses, and then sold to OEM companies. All a developer has to do is deliver an excellent component, leaving its client to worry about the final product and end user.
The digitalisation of the healthcare industry is changing all of this. The internet and cheap, fast computer systems offer a lot of possibilities, and products must now be ‘intelligent’. Simply building a good sensor is no longer enough; devices need electronics, software and maybe even an app, all of which must be supplied by the same company. Companies must therefore understand the overall product, how it will be used and by whom. Achieving this requires closer collaboration within the value chain.
Mobile health (mHealth) is an important driver of digitalisation in healthcare. As defined by the World Health Organization, this term covers medical and public health practice supported by mobile devices, and includes medical applications that connect to medical devices or sensors in bracelets or watches, or that act as personal guidance systems, providing health information and medication reminders. The GSM (Groupe Speciale Mobile) Association estimates that total mobile health market revenue will reach €18.8 billion by the end of 2017. The main source of revenue will not come from application downloads but from mHealth hardware sales.
Some companies have changed their market approach already. Sensor specialist Sensirion has created the world’s smallest differential pressure detector. The firm also develops electronic hardware, which can be added to mobile phones. Industrial and private users are able to control and display the results of the sensors on their handset.
Consumers have been asked what they expect from health apps. The main answer is that they want to gain some understanding of their own symptoms or medical conditions. People still want contact with doctors but the way that consultation takes place may change. For example, in some cases it might be better to receive advice via mobile communication, rather than by actually visiting a physician.
The healthcare sector is one of the largest and most promising markets in the world. An ageing population, the increase of chronic diseases, and growing health and fitness awareness are combining to create unprecedented opportunities for digital products in the public and private sectors.
More than 40% of the population in industrial countries already uses private mobile devices for digital health purposes. The most attractive segment of mHealth is monitoring. According to a study conducted by PricewaterhouseCoopers, this will generate more than 70% of mHealth revenue in 2017. Thanks to advances being made in wearable devices, the monitoring of vital signals is expected to increase in the coming years. The most popular medical apps are those related to nutrition (calorie and step counters, for example). mHealth is therefore seen as having a significant role to play in supporting the shift towards preventive medicine. According to consulting firm Arthur D Little, the global market for digital health products will exceed $200 billion by 2020.
A big part of the turnover is made from hardware. Many people believe that services and software will claim most of the profit, but without hardware no software will work, and no services can be performed.
Digital products for healthcare are in different degrees of maturity. Many health apps are already accepted technologies in sports and fitness programmes. Products such as Google Glass are currently in a ‘disillusionment phase’, having fallen silent after all the hype two years ago. Google and others are working on the technology, however, and will soon unveil more sophisticated systems.
Wearable technologies, especially in combination with the intelligent use of big data, are being discussed in terms of monitoring, diagnostics and disease treatment, but many technological problems must be solved before these
are commercially viable. Implantable technology, meanwhile, like brain chips or 3D bio-printing, is still in its infancy.
New business concepts are necessary. MEMS manufacturers will not sell the pure technology any more, but rather the function, which requires them to know more about applications. They will have to combine different hardware components, add the software, write apps and so on. MAZeT offers a successful example. The German firm makes products for specific applications in the field of measurement, control and automation engineering, and components, some of which are used in medical products, wirelessly controllable and come with proprietary mobile apps.
These new types of products also require a novel marketing approach. Component manufacturers must contact potential users to find out what patients require. This is challenging, especially for SMEs, but it also creates a lot of opportunities for innovative companies. The use of information and communications technology in healthcare enables new business models to be established to enhance efficiency and, at the same time, maintain high quality. It is expected that, in 2020, 77% of turnover will be created by new businesses. Only a small portion will be from redesigning or improving established products.
Digitalisation has also been proved to reduce healthcare costs. The Fraunhofer Institute for Systems and Innovation Research estimates that integrated digitalisation of data and processes could save €9.6 billion in the German healthcare system annually.
Big pharmaceutical companies are already reacting. Most of those investing in digitalisation expect competitive advantages but also believe it will get them into new markets. A survey by bitcom asked pharma companies which new technologies, services and products they would have to provide in the near future, and many disclosed that they would be focusing on implantable chips for chronic diseases. This type of technology includes automatic medicine supply, monitoring of vital parameters and even organ replacement. As well as producing chemicals, pharma companies must become technology providers. They will not only provide medicine, but also sensors, MEMS and apps. Pharma companies already offer several digital services, like apps for health management, references, activity management, and recording and analysis of symptoms.
Medical technology, digitalisation and microtechnology need each other to form sophisticated healthcare products. Wearables, for example, show a great deal of medical potential and might include contact lenses with glucose monitoring; hearing aids with sensors measuring the oxygen content of the blood; and wrist bands that measure heartbeat, blood pressure and burned calories. All these components need sensors, actuators, external communication, internal data transfer, data processing and an energy source. A lot of development is still required, however. Energy supplies, for example, must be small, light, easily rechargeable, and long-lasting.
Berlin-based Fraunhofer has made a jacket from OLED materials, with stretchable circuit boards connecting displays and sensors to monitor vital parameters. The electronics and batteries required to power it are integrated into a belt. It was created to help dementia patients find their way while enabling caregivers and doctors to monitor their whereabouts and health.
Digitisation in healthcare will help to optimise treatment, decrease costs and open up new business opportunities.
All companies in the value chain – equipment manufacturers and pharma companies, as well as component manufactures using microtechnologies – will have to change their market approach. The main driver will be the patient. All future developments, no matter which part of the value chain they address, will have to take patients’ wishes and needs into account from the very start. Successful high-tech companies must work in cooperation with all partners in the value chain.