Activity 3.1.3: What is Health Innovation?

In Activity 1.1.3, we were tasked in groups to define what is Healthcare innovation through different lenses. Now considering sustaining and disruptive innovation, this definition can be amended or expanded to include the role market-mediated influences. In his milestone work "The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail, Harvard Business School Professor Clayton Christensen's argument of innovation following a business cycle that inherently repeats itself leads us to understand how sustaining innovation and disruptive innovation dominate at opposite ends of this cycle (Brescia, 2015).

When incumbents invest in new products targeting existing customers, the continuous investments and  improvements of these products means that they surpass the the needs of existing customers and even potential customers, subsequentially increasing the price of these products (Brescia, 2015). This enables new entrants into the market to target the needs of these low-end customers, offering products with a different set of attributes that are often not feasible for existing market incumbents to provide (Brescia, 2015). Thus we see how critical are market mediated influences on driving sustaining innovation for current market incumbents, while new market entrants often push disruptive innovation to appeal to a low-end customer base. Over time, these new entrants will improve their product by offering features that are more attractive to a wider and higher base of customers. Thus, these entrants begin using sustaining innovation to broaden their reach and improve their products while charging competitive prices. This cycle culminates when the new entrants reach a point where their product meets the needs of the wider customer market rather than their initial customer base.

I have noticed this trend in the smartphone market without being able to understand it before learning about sustaining and disruptive innovation. Smartphone manufacturers Huawei and OnePlus entering the market with technology scaled at a cheaper price that was accessible for many new global customer bases and then transitioning into business models normalised by established industry players such as Apple and Samsung are an example of how innovation can be traced to the balancing of demand and supply. In the healthcare industry, telemedicine, 3D Printing, wearable devices, point-of-care devices, blockchain and machine learning resemble a similar trajectory to Huawei and OnePlus: Entering the market through disruptive innovations that increase the accessibility, quality, usability and functionality of practices in the industry.

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Thus, an extended definition of Healthcare innovation would include its embeddedness in global open markets (by influencing and being influenced by open markets) and following/initiating the business cycle.

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References

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Brescia, R. H. (2015). What we know and need to know about disruptive innovation. SCL Rev., 67, 203.

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