Innovation Will Come via Investment
Q: Considering the financial pressures faced by OEMs, what will be the impact to R&D and innovation in the medical device industry?
We see funding for new medical devices driven by private investment from individuals or private companies. These bold investors are capable of quick decisions as they meter the funding to match progress and discover the real market opportunity. Large companies and venture capital firms want a sure thing. No longer can you flip a new technology for a big return. OEMs definitely have opportunities in this environment.
The projects have necessary size and complexity limitations. Plans must show breakeven cash flow in the first or second year of sales using an easy to execute sales model. This reflects back through the R&D process. You need reliable predictions of technology development and production costs. There is no room for over optimistic scenarios. Each R&D player needs flexibility to increase or decrease efforts. Projects being funded may involve transforming a proven technology into a real product, or creating an innovative design for a product with a predictable 510k approval path. There is no perfect project template, so artful management is required to move fast and effectively. With every aspect of development running concurrently, the OEM’s team needs to be disciplined in the face of chaos, open to blunt communication, and adaptable to change.