In the medical device business, the capacity for innovation is commonly regarded as a key competence and a powerful response mechanism for companies operating in our complex and highly competitive environment.
Innovation is generally recognized to be a complex and multi-dimensional phenomenon and understanding how it works continues to be a challenge.
The purpose of this post is to help MedTech professionals to better understand the different types of innovation. As a professional, you’ll find this guide useful, so please follow along.
Innovation: The definition
Peter Drucker defines innovation as:
“Innovation is the specific tool of entrepreneurs, the means by which they exploit change as an opportunity for a different business or a different service. It is capable of being presented as a discipline, capable of being learned, capable of being practiced. Entrepreneurs need to search purposefully for the sources of innovation, the changes, and their symptoms that indicate opportunities for successful innovation, and they need to know and apply the principles of successful innovation.”
Innovation classification
Using a framework described by Frank Rothaermel where on the x-axis is the degree of newness technology and on the y-axis is the newness of the market, we can analyze medical innovation as you’ll soon see.
From this matrix emerge four types of innovations: incremental, radical, architectural, and disruptive. I’ll discuss each in more detail below.
Incremental innovation
Most new medical products are the result of incremental innovation.
This type of innovation involves making small improvements or modifications to existing products or services. It is a gradual and continuous process of refining and optimizing existing technologies and products, to improve their performance, functionality, or usability.
Incremental innovation allows companies to stay relevant in a rapidly changing marketplace without distancing themselves from existing core technologies.
There are numerous examples of incremental innovations in new medical products. For example, currently, all the new orthopedic implants (like hip and knee) can be considered incremental innovations.
The concept of the drug-eluting stents is another example of incremental innovation.
Drug-eluting stents have shown superiority in preventing coronary artery restenosis in multiple trials in comparison with bare metal stents.
For this reason, they were considered a disruptive innovation.
However, given that this technology was based on the original innovation of bare metal stents, it can be argued that drug-eluting stents are more accurately described as an incremental innovation.
Not minding the fact that the companies launching these enhanced products are trying to promote them as game changers and radical innovations.
Radical innovation
These products or services are completely new and they fundamentally transform existing markets or create entirely new ones.
Thanks to products based on radical innovation, customers gain access to products and services that solve unmet needs. Moreover, radical innovation can create entirely new markets or customer segments that were previously not touched.
Magnetic Resonance Imaging (MRI) is an example of radical innovation introduced to the medical field.
Thanks to its success, two researchers, Lauterbur and Mansfield, were awarded the 2003 Nobel Prize in Medicine, and millions of patients have their lives saved or significantly improved.
Disruptive innovation
Disruptive medical innovation means that the innovation has the power to permanently change the way of doing things.
Disruptive innovation can create a new market or deeply modify an existing one by introducing a new product that is significantly different from existing offerings.
It typically originates from outside established industry players; for example, MedTech start-ups frequently focus on disruptive innovation. If the new product gains traction and becomes a niche competitor, eventually the traditional market leaders would move to the same market with internal development or acquisitions.
This kind of medical innovation can fundamentally change the way that products are used and perceived.
Laparoscopic cholecystectomy technology is an example of disruptive medical innovation within the field of elective surgery. In a few years, this approach has almost entirely supplanted the open surgical technique for benign gallbladder disease.
Architectural Innovation
In this case, companies can innovate by leveraging existing technologies into new markets. Architectural medical innovation involves changing the structure or the design of a product. It generally requires reconfiguring the components of a technology, meaning it alters the overall architecture of the product.
An architectural innovation, therefore, is a new product in which known components, based on existing technologies, are reconfigured in a novel way to create new markets.
The company can create a new architecture offering new functionalities, new benefits or significant cost savings by reconfiguring the underlying components, modules, or subsystems of a product.
Furthermore, architectural innovation implies changing the fundamental structure of a product to sustain its current position in the same existing market.
The application of -omics technologies (genomics, proteomics, metabolomics, etc.) in the field of personalized medicine is an architectural innovation as it refers to the use of an existing technology within an unprecedented field. Other examples are the smart watch using existing cell phone technologies repackaged into a watch and non-contact medical thermometers using infrared technology.
Final thoughts
Innovation is very common in the healthcare industry, often coupled with adjectives like radical, breakthrough, disruptive, game changer, and so on. Unfortunately, not all innovations belong to these categories, as a matter of fact, most are incremental innovations.
Poor identification of the type of innovation can lead to a poor understanding of its characteristics and full potential. This can contribute to wrong positioning and marketing activities, and delay in its translation into tangible clinical, economic, and emotional benefits.
Moreover, with poor identification, we could fail to understand the specific potential barriers to adoption and increase the journey to translation and diffusion of the innovation.
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Thanks for reading.