This week, the digital health world's attention is on two mega events CES: 2017 and the JP Morgan Healthcare Conference.
At CES 2017 most of the consumer devices never come to market, for one reason or another. Attendees at the annual event may give tepid reviews to the shiny new toys. Many attendees are there to see each other in a
The JP Morgan Healthcare Conference which takes place about a week after CES 2017 focuses more on the nitty gritty of how investors evaluate the shiny new goods. It probably is no accident that the events are close together and in the order of which they are held.
Both of these events help to provide insights into new digital health innovations (particularly for consumers) and how key industry players perceive and use digital technologies. CES 2017 and JP Morgan Healthcare are international in scope, but U.S.-based firms have dominated the news (and buzz) coming from these events.
One of the reasons the U.S. has driven the digital health market over the last five years is that the regulatory, legal and technological trends originating here have helped to accelerate the uptake of digital innovations throughout the world. Innovators globally view the U.S. market as more open to innovation and as a place where the opportunities to build and sustain digital-focused companies are the most prevalent.
From an investment perspective, U.S.-focused funding activity has been a key metric, or proxy, for the health of the global digital health market. And, because the U.S. has been so dominant, increases (or decreases) in funding levels in America have sparked positive (or negative) reactions from market observers. However, especially in 2015 and 2016, there have been signs that global digital health investment (and innovation activity) has been increasing. In fact, the day may soon come when the U.S. is no longer the center of gravity in digital health.
The most recent evidence for this shift in the global digital health market comes from Rock Health and StartUp Health's Q4 2016 investment reports. Rock Health focuses on tracking U.S. deals ($2 million and higher). They found that overall funding levels decreased slightly year over year ($4.2 billion in 2016 versus $4.6 billion in 2015), but companies received higher levels of funding.
StartUp Health, on the other hand, which monitors global investment activity (and deals less than $2 million), reported another record year for digital health investment, a total of $7.9 billion. Interestingly a major story of 2016 was the number of significant non-U.S. investments in digital health. Steven Krein, StartUp Health's co-founder, highlighted the significance of these global deals saying (according to MM&M): "I think the international component to the industry is visible by the top two biggest deals that were done — the idea that this is not a transformation in the industry in the United States alone."
Non-U.S. Digital Health Activity Has Always Been Important, It's Just Becoming More Visible
It's no secret that the U.S. digital health market may face some difficult times in 2017. The uncertain U.S. health policy environment may cause large industry players to continue existing initiatives but be leery of making significant new investments in the short-term.
However, outside the United States, the picture is very different and digital health activity is only accelerating. In the United Kingdom, the NHS is pouring significant resources into a bid to accelerate digitization (to save money). Australia's push toward electronic medical records and the increased use of health data has been rocky, but policymakers there are committed to making it work. And, in India and China, an underdeveloped health infrastructure coupled with increasing demand for health services is spurring experimentation in a range of consumer and clinician-facing technologies, some of them have artificial intelligence baked in. These market forces have led to increased investment activity in Asia, Europe and other parts of the world.
While these developments may come as a surprise to some, digital health innovation activity in non-U.S. markets has been growing for some time. But, these trends have gone largely under-reported and under-recognized by many observers, as they have been focused mainly on the U.S. market.
In fact, as early as 2015, there were signs that innovation activity in a range of key sectors such as sensors Big Data and artificial intelligence was increasing globally. For example, take a look at the chart below. It shows where innovation activity was being reported globally in mid-March 2015 in the area of sensors. You'll notice that, in addition to the U.S., other areas of focus include the United Kingdom and South Africa.
Global Areas of Innovation Focus: Sensors, Mid-March 2015
Globally, innovation activity tends to be centered around innovation hubs so it's worth closely watching what innovations are most mentioned in relation to various major cities. Looking at London and Johannesburg (the graph below), one sees that, in relation (and addition) to sensors, Big Data, mobile and augmented reality and even robotics were also areas where sensor technology was being deployed in both countries.
Sensor-Related Innovation Areas of Focus: London, Johannesburg, Mid-March 2015
This (and other data) indicates just how active people in non-U.S. markets have been from a digital health innovation perspective for a number of years now. This activity will only become more visible as investors continue to make big bets on digital health across Asia, Africa, Europe and other parts of the world. If your digital health focus is only on the U.S. you're going to be missing an ever-bigger part of the picture.
Where Does This Data Come From & How Can You Access It?
The charts above were generated using version 2.0 of our DigiHealth Informer intelligence platform. This technology helps you track, organize, categorize and visualize real-time digital health market data from mainstream, social, research and other sources to uncover vital intelligence about investment activity, innovations, organizations, startups and other business-critical topics.
DigiHealth Informer 2.0 will launch in a few weeks with a special virtual event. During this Webinar I'll share additional data-grounded insights about where global digital health is going in 2017 and beyond. You'll also learn how you can benefit from (and access) DigiHealth Informer 2.0.
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