We launched the annual health value creation report on April 28th presented by Menon Economics
We launched the annual health value creation report on April 28th presented by Menon Economics, where the key analysis in the Norwegian health industry was addressed. The report clearly shows that the health industry is growing rapidly with great potential for increasing export revenues – but the government needs to keep up.
The health value creation report in its current form was first created in 2016 when Oslo Medtech identified a need for statistical facts and data in the Norwegian health industry. We invited the industry to a co-operation to create a common terminology and a common numerical basis for the health industry. The result was the consortium that is behind report, delivered by Menon Economics. The consortium consists of Abelia, Innovation Norway, Inven2, LMI, Nansen Neuroscience Network, Norwegian Smart Care Cluster, NHO, Oslo Cancer Cluster, NHO Service, the Norwegian Research Council and Oslo Medtech.
The purpose this value creation report is to describe the entire Norwegian health industry in numbers and the range and development for the Norwegian society. As Erik W. Jacobsen in Menon Economics pointed out, there is a significant change of pace, and we are still counting on further growth in the health industry. The report shows that the development of the Norwegian health industry is happening quickly, as well as the need for statistics and quantitative data. And, as pointed out by CEO Oslo Medtech Kathrine Myhre, the industry is not defined as an industry category in the SSB statistics, and facts are necessary to address any issue. And it is a booming business, we now have the numbers to prove it.
Some of this year’s key findings was related to issues around industrial barriers for growth and internationalizing.
An important finding is that the R&D investment from the industry has increased with 25% from 2014 to 2015. The total number, including the public R&D, is not published yet but this gives us a reason to believe that the already significant investment in health R&D (9 BNOK from 2014) is growing at a good pace.
The report also states that there is a good development of new companies but one of the main difficulty is the lack of risk capital. This makes it difficult for the companies to get out of the “valley of death” and into commercial sale. Another hurdle that has the same result is the rather closed public sector. It is difficult to open up a dialogue and get the hospitals/municipalities involved in the innovation. The public sector need to engage and share the risk in implementing innovative products and services.
Health companies are in need for capital for research and development, more so than other industries. In the report, the industry itself explains what it considers to be the biggest barrier to success, and the answer is quite clear: the largest bottleneck is the lack of public capital for prototyping and clinical documentation. The higher international ambitions, the bigger need for capital.
Another important barrier for innovation and development, is the lack of incentives from the government when it comes to export. The public health service does not motivate or stimulate to exporting health innovations, which is crucial for building a strong international health industry, noted Mona Skaret in Innovation Norway. This is especially important for the health ICT business, medtech and specialized subcontractors. (Kjetil Svorkmo Bergmann, innovasjonnorge.no)
It is very important for the industry to have the facts to improve the terms of business and building a sustainable health industry in Norway. And with the collective industry behind it, the report gives a realistic picture of the opportunities and challenges, giving a good basis of information for the politicians in the upcoming election.
Read the report here (in Norwegian)