Clayton Christensen on the broken circle of innovation–and funding

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Clayton Christensen, who many of us know from ‘The Innovator’s Prescription’ on disruptive healthcare, in his New York Times article discusses the three-stage cycle of innovation that powers economic growth and jobs, and what has happened to break it. The circle: ’empowering innovations’ (including telehealth and mHealth)–which he defines as transforming costly and complicated products for the few into simple and cheap for the many; ‘sustaining innovations’– which improve existing products; and ‘efficiency innovations’–which reduce the cost of manufacturing and distribution. Prof. Christensen then focuses on how the existing fixation on efficiency innovations and maximizing short-term profitability, rather than restarting the circle with empowering innovations, is due in essence to a mistaken belief that capital is currently scarce. He also proposes some solutions in incentivizing investment for the long term and resetting the cycle. So the innovators who wonder why it is so difficult to get funding, and are amazed that investors are content to sit on the sidelines have not only an explanation but also an advocate for changing matters. Prof. Christensen’s prestige is of the type which can influence capital investment and perhaps–we can only hope–fiscal policy. A Capitalist’s Dilemma, Whoever Wins on Tuesday.¬†Another take on the same topic from a talk that Prof. Christensen gave at BoxWorks in October: TechCrunch. More on The Christensen website.

Comments

  1. Mike ClarkClark

    The Christensen analysis is interesting particularly for telehealth.

    In England, the NHS challenge may have been too much geared around ‘efficiency innovation’ through QIPP (Quality, Innovation, Productivity and Prevention).

    This ¬£20bn challenge by 2014 is leading to downward pressure on costs (eg drugs bill, closing a hospital service), but is not necessarily leading to adoption of ’empowering innovation’ that supports a shift to new ideas, new investment, service redesign and growth in home and community based services – telehealth, telemedicine, telestroke, use of e-mail, apps and social media for communication and consultation, big data analysis across communities to reduce variability and improve public health/reduce mortality.

    It can be argued that increased adoption of digital technologies across the healthcare sector could help to achieve what Don Berwick calls the ‘Triple Aim’ – improving the experience of care, improving the health of populations, and reducing per capita costs of health care.
    (http://content.healthaffairs.org/content/27/3/759.abstract?related-urls=yes&legid=healthaff;27/3/759)

    The current worry is that any identifiable cash ‘savings’ are clawed back (http://www.guardian.co.uk/society/2012/oct/31/treasury-billion-pound-raid-nhs) and not re-used within the NHS or social care as QIPP was originally envisaged.

    This makes it particularly difficult for service improvement and introduction of digital technologies to take place unless significant savings can be evidenced and even when they are demonstrated, the cash is banked rather than further investment in the change.

    The NHS Mandate is shortly about to be published (W/C 12 Nov?). This will set out the priorities for the new NHS Commissioning Board in England. In turn, the Board will give guidance to the 211 new Clinical Commissioning Groups. Priorities could include dementia and long term conditions. Around 70% of the £104bn NHS expenditure in England is spent on long term conditions.

    At a recent House of Lords Select Committee on what is right and wrong with health and social care it was accepted that in terms of IT and digital technologies, health and social care were way behind every other sector in adoption. It was suggested that telehealth and telecare could contribute significantly to new models of healthcare. Integration’ of health and social care services (and aspects of housing) is now becoming a stronger vision.

    We have some new faces at the NHS Commissioning Board such as Martin McShane and Tim Kelsey as well as Sir David Nicholson who will be pushing through these mandated priorities and they have a strong interest in digital technologies and innovation. They will be aware of Christensen’s innovation comments and Berwick’s Triple Aim – hopefully they can move health and social care forwards.

    Mike (@clarkmike)