The healthcare industry in Benelux is growing fast.
Its economic share in the gross domestic product (GDP) of the main regions is now 10% in Belgium, 11.1% in the Netherlands and 11% in Luxembourg. In the Netherlands specifically, the healthcare industry’s share within GDP is the second largest in the world. Only the US has a bigger share, at almost 18%.
Growth within the healthcare sector is being driven by both private and public investment. According to the Belgian General Society for the Pharmaceutical Industry, total investment in R&D in Belgium amounts to 2.5 billion euros. The number of start-ups within the healthcare sector is also growing rapidly. The value of funding secured by Medtech start-ups in the Netherlands and Belgium is further evidence of the trend. These young companies are diverse, ranging from consumer products to industry-driven start-ups. Some examples are G-Therapeutics (26 million euros, implants), OncoDNA (7.7 million euros precision medication) and BlueBee (10 million euros, DNA analytics).
Ireland is experiencing similarly impressive growth in the healthcare industry, particularly within Medtech. For many years, Irish companies have been showing themselves to be innovators in the field of medical equipment. Ireland is now one of the largest exporters of Medtech products in Europe. The industry provides 27,000 jobs and contributes 8.5 billion euros in export value in Ireland. Of this 8.5 billion euros in 2014 and 2015, a total of 960 million euros was invested in R&D, allowing Ireland to develop an intelligent infrastructure in research facilities. Multinationals have been key to these Medtech developments.
Despite this huge growth, The Boston Consulting Group expects disruption to continue, driven by pricing, regulation and market dynamics. These trends will force Medtech companies to adopt a new approach to R&D and innovation. Partnerships and close collaboration between companies will be central to sustaining innovation and creating new opportunities for start-ups. Innovation processes must adapt to these quickly changing conditions.
Within this context, network organisations that stimulate collaboration between parties will thrive. Focus is shifting from a central to a decentralised approach, nationally and internationally. For companies in Ireland and Benelux, that makes it wise to enter into international partnerships and work together on new innovation processes.
Innovation models in the Medtech sector
The combination of Ireland’s leading role in Medtech R&D and Benelux’s strengths in healthcare has the potential to support partnerships that focus on innovation. Increasing public and private investment in Ireland and Benelux can also help both to achieve strategic advantage over international competition.
A successful example of that process is Irish company Neuravi. In 2015, Neuravi received 15 million euros in funding from the Dutch investment company Life Science Partners. At the same time, Neuravi became the exclusive distributor of the product Embotrap® in the Netherlands. Neuravi focuses on clinical solutions for patients who have suffered a heart attack. In addition to the medical devices they develop, Neuravi also focuses on clinical research to support the treatment of heart attacks.
In the high-tech medical sector, many innovations originate with manufacturers. Due to a quickly changing market and organisational structures, companies are increasingly switching from merger and acquisitions to a partnership model. One example of this trend is Fleming Medical. Through a partnership with TNO, Fleming has introduced a new type of plaster that allows medical professionals to monitor the progress of wound healing. The collaboration is an example of high-tech product development in which research centres help drive innovation.
Advantage in Ireland and Benelux
We see numerous opportunities for potential partnerships between companies in Benelux and Ireland. These partnerships are welcome as they can help deliver a strategic advantage for the academic and business worlds in both markets. Funding is flowing from both the government and the private sector to sharpen this focus on innovation.