The Role Of Innovation In Health Care Essay 

Innovation in health care has aroused interest in many different fields. The role of innovation presented in this paper is dual 1) Innovation is a tool for necessary changes in the health care systems to adapt to demographical and epidemiological conditions. 2) Innovation is the way to develop new treatments and cure illness. Public financed health care is an activity in the innovation system on local as well as national and international level. It is also an arena for entrepreneurship where entrepreneurs and academic researchers in medical technology, medicine etc. share the workload to transfer knowledge into clinical practice and routine care in the health care facilities. This is an important and demanding task, as health care organizations are typically considered resistant to innovation. All activities health care related or not are dependent on policy issues, hence innovation policy must be designed to facilitate and accelerate innovation processes not only in firms and academia but also inside public organizations. The Role Of Innovation In Health Care Essay Paper

Introduction
Innovation is a hot topic, and the term is circulated in several contexts in society. In the political debate, on a national as well as an international level, innovation is considered a condition for welfare and growth (Zahra et al, 1994; in Baregheh, 2009). Historically, Swedish industry, both medical technology and pharmaceutical industries, has been successful in this regard. Fostering products such as Losec, Xylocain (drugs), the implantable pacemaker and the Lexell gamma knife, Sweden, as an innovative nation, is considered globally to be high standing. (Action Medtech report, 2007) The development of medical technology as well as pharmaceuticals and health care services is dependent upon the possibility to perform clinical trials and to test concepts together with patients and health care professionals. Highly advanced technologies available in health care today save lives, and as long as mankind is at risk of incurable diseases innovation for development of functional diagnostics and therapies will be required. In order to meet the challenges we face, with demographical changes and high pressure on the health care system, there is a need for technology, which facilitates the organization and the activities of health care in the future. (Ilinca et al, 2012; Thakur et al, 2012) There is also an interest for ‘frugal innovation’ with more cost-efficient products. This is expected to open up for new markets in developing countries and to decrease the costs for the industrialized countries. The Role Of Innovation In Health Care Essay Paper

In Sweden, the amount of clinical trials is decreasing (Pettersson, 2013) and big companies such as St Jude Medical and AstraZeneca move their R&D facilities abroad, as of June 18, 2014, the last 200 researchers at St. Jude medical have been given notice and all R&D activities are to be moved from Uppsala. The relationship between industry and health care providers are today regulated due to ethical concerns, procurement regulations and business reasons (LIF, Swedish labtech, Swedish medtech, SKL, 2013).

Since health care is a civic function, predominantly financed by the public, the assignments on hospitals and other health care facilities are politically governed. The space for clinicians to participate in research activities and external collaborations beside the daily workload taking care of patients (and administration) has been diminishing. Subsequently, the space for individual clinicians to take part in innovation processes at work is limited. Nonetheless, worth mentioning is that university hospitals perform research and there are still positions combining the roles as professor at the medical faculty and chief physician in the hospital. The Role Of Innovation In Health Care Essay Paper

The ability and willingness to adopt innovations is dependent on a mixture of factors and these phenomena can be analyzed on individual as well as organizational level (Rogers, 2003; Greenhalgh et al 2004). The hierarchical organization between and among the professional categories working in health care is one aspect, both considering the capacity to adopt innovations and the conditions for the individual to be innovative. Regarding innovation in general, it is estimated that one third is based on research and the other two thirds originate from other sources (M??ller H, 2014). The Role Of Innovation In Health Care Essay Paper

In order to facilitate innovation in Swedish health care, hospital management and county councils organize innovation departments e.g. ‘Innovationsplatsen at Karolinska University hospital’ or ‘SLL innovation’, where the first coordinates collaboration and innovation with companies and the latter helps health care professionals innovate themselves, i.e. clinicians who come up with ideas that could be developed into products or services.

As described above, health care has been an arena for innovation, through research findings and high tech products such as drugs, pacemakers and radiation therapy. Health care is also mentioned as a context ‘where innovation happens’ in the Oxford Handbook of Innovation (Fagerberg et al, 2006). This is somewhat puzzling since the organization providing health care can be regarded quite resistant to innovation. (Nilsen et al, 2010). In addition, the entrepreneurial mindset is not the most commonly mentioned trait among health care professionals. The Role Of Innovation In Health Care Essay Paper
Aim of the study
The objective of this study is to elaborate on the discussion of the role of innovation in health care based on theoretical underpinnings found in the course literature on innovation and entrepreneurship. An interdisciplinary perspective on innovation presented by Baregheh et al. (2009) is reflected on, as a compliment to the original Schumpeterian definition, since the ‘production’ in health care constitutes of services. To frame the discussion, the scope of this paper will focus on the following questions: What is the role of innovation in healthcare? And what is the role of the healthcare system in the national innovation system? Is it reasonable to expect health care to contribute to national growth? The Role Of Innovation In Health Care Essay Paper

The remainder of the paper is structured as follows; the first section summarizes the concept of innovation and entrepreneurship from the course literature. The theoretical part then moves on to innovation systems and the aspects of innovation and growth highlighted by Edquist and colleges. Internationalization and globalization of innovation will be shortly mentioned in relation to ‘frugal innovation’ i.e. medical technology devices that are ‘ultra-low cost, durable, easy to use, draw sparingly on raw materials and minimize environmental impact, they are often well suited to any health sector under growing pressure to achieve better outcomes at significantly lower costs.’ (Dandonoli, 2013 p.2). From Edquist’s contributions on innovation systems I will touch on the role of growth, which pushes the discussion to the works of Delmar (2011) on entrepreneurship and growth. Here, knowledge spillovers from clinical research fostering entrepreneurs are mentioned. The last topic for discussion is the knowledge translation from academia to clinicians might take place thanks to the system with double roles for professors in academia who also have part-time engagements as clinicians in the hospitals. In the end, the discussion is summarized and conclusions are drawn. The Role Of Innovation In Health Care Essay Paper
Theoretical background
This part of the paper will present and utilize commonly used concepts and definitions in entrepreneurship and innovation research in order to analyze and discuss the role of health care in the innovation system.

Entrepreneurship
Already the ancient Greeks have referred to the phenomenon of entrepreneurship. Although entrepreneurial activities have taken place ever since, the research field is quite young. Some of the great economists that have had strong influence on the research field and the approach to entrepreneurship are Schumpeter, Kirzner, Knight and Gartner. (Davidsson 2004; Landstr??m 2010; Landstr??m 2012) The Role Of Innovation In Health Care Essay Paper

According to the first, Schumpeter (1912), the entrepreneur creates imperfections in the market by introducing new arrangements of existing resources, resulting in innovation. Kirzner (1973), in contrast, presents an entrepreneur aiming to remove imbalances by means of entrepreneurial alertness. From Kirzner’s perspective there is a clear distinction between innovation and entrepreneurship, while in the Schumpeterian view, they two are intertwined. Hence, Schumpeter’s entrepreneur forms something new, but not Kirzner’s, at least not primarily; The perspectives are complementary as the first ‘generates uncertainty at the market’ and the second ‘recognizes and act on it’. In behavior science, entrepreneurship has been explored with a strong focus on the entrepreneur as an individual and definitions related to personal traits. Already Cantillon (1755) described the entrepreneur as a ‘rational decision maker who assumed risk and provided management for the firm’ (in Landstr??m, p. ). This connects well to Knights reasoning on risk, uncertainty and true uncertainty as prerequisites for entrepreneurship. (Landstr??m 2010, Landstr??m 2012). The Role Of Innovation In Health Care Essay Paper

The individual-focused approach was criticized by William Gartner who contributed to change the way of thinking in entrepreneurship research in his book ‘Who is the entrepreneur is the wrong question’ (1988). Gartners addition to the discussion is his argumentation on entrepreneurship and the development process of a new organization. Venkataraman and Shane (1997, 2002) ‘focus on the emergence of opportunities, before/ ahead of the emergence of organizations’ (in Landstr??m ). From their vantage point, entrepreneurship research should be concerned with why, when and how 1) opportunities for creation of services/goods occur, 2) some people manage to discover and exploit these opportunities, and 3) diverse approaches are applied to exploit and take advantage of opportunities. (Landstr??m, 2010). The Role Of Innovation In Health Care Essay Paper

Innovation
The concept of innovation was first introduced by Schumpeter (1912, 1934), presented as a driving force for economic development. The term is defined as ‘new combinations of existing resources’ (Fagerberg et al., 2006, p.6). Examples of innovations are new products, new methods of production, new sources of supply, exploitation of new markets and new ways to organize businesses. Schumpeter worked on ‘the role of innovation in economic and social change’. He categorized innovations as incremental (marginal), radical (introduction of new types of technology/organization etc.) or technological revolutions (i.e. clusters of innovations that have higher impact when put together than they would have separately). Schumpeter emphasizes the tendency of innovations clustering in certain areas or businesses. (Fagerberg et al., 2006; Fagerberg et al., 2012)

The field of innovation studies emerged as a research field in the 1960s. The ‘black box’ (see Fig 1) containing the innovation process has aroused great interest in social science and a more cross-disciplinary approach. While the distribution of resources for innovation and the economic effects of innovation have been of research interest among economists. Traditionally, the main focus among economists has been on new products and production methods. The social and economic impact of product and process innovation can differ. Introduction of new products on the market may have implications in terms of income and employment while the consequences of process innovation are more uncertain, since process innovation aims to optimize and save resources. Organizational innovation may include the rearrangement of positions, actors and individuals and can ultimately result in restructuring and reorganization of industries, which in this paper is considered to include health care organizations. The Role Of Innovation In Health Care Essay Paper .Fig. 1 From resources spent on R&D to the economic effects of innovation

To distinguish between invention and innovation, invention is regarded as ‘the first occurrence of an idea’ and innovation is the first attempt to put it into practice. There is usually a time delay between these intertwined phenomena reflecting the necessities to work through the ideas and put them into practice, i.e. implementing them. The capacity, of an individual or an organization, to turn invention into innovation is a combination of factors, such as different types of knowledge, skills, resources and capabilities. The roles of the inventor and the innovator may differ. The innovator, whom Schumpeter called the entrepreneur, is the individual or organization responsible for combining the requisite factors. From the Schumpeterian perspective, innovation and entrepreneurship are very much intertwined. (Fagerberg et al., 2006; Landstr??m 2010). The Role Of Innovation In Health Care Essay Paper

According to Kline and Rosenberg (1986) invention and innovation is a continuous process; high impact innovations undertake far-reaching modifications during their lifespan. (Fagerberg et al., 2006) A limiting factor for the development of the field of innovation studies is the occurrence of disciplinary voids between different research fields and traditions considering definitions of innovation (Baregheh, 2009; Fagerberg 2010). Baregheh and colleges (2009) suggest an interdisciplinary perspective on organizational innovation based on a literature review and content analysis: The Role Of Innovation In Health Care Essay Paper

‘Innovation is the multi-stage process whereby organizations transform ideas into new/improved products, service or processes, in order to advance, compete and differentiate themselves successfully in their marketplace’
(Baregheh et al., 2009, p. 1334)

Although Baregheh and Fagerberg focus mainly on innovation in business organizations, their perspectives can be applicable for innovation in health care since the production in health care constitutes of services. However, the ‘marketplace’, i.e. the context where the ‘inventions’ are to be implemented and thereby converted to innovations, is regarded a bit different. Baregheh’s definition emphasizes innovation being a process.

Inertia to innovation is mention already by Schumpeter, and is further explored in the literature on diffusion of innovations mainly by Everett Rogers (Fagerberg et al, 2006; Fagerberg et al, 2010). Implementation science is an emerging subfield for the study of how innovation is implemented in health care. (Nilsen et al., 2010) The Role Of Innovation In Health Care Essay Paper

The System of Innovation (SI) approach
The system of innovation approach (SI) is a framework to handle the determinants of the innovation process, using the Schumpeterian definition of innovation. Focus is on the components of the innovation system rather than the consequences of innovation. SI, presented by Lundvall (1992, in Edquist 2011) can be considered at different levels e.g. regional, national or international where an innovation system consists of organizations and institutions. The innovating organizations are the actors who perform innovation. The institutions are the rules of the game, i.e. product safety regulations, tax laws etc. The objectives of SIs are to enable development and diffusion of innovations, that is, to make innovation happen. A common definition of an SI is a framework containing ‘all important economic, social, political, organizational, institutional and other factors that influence the development, diffusion and use of innovations’ (Edquist, 2011, p.4). Since it is not yet recognized which factors that are not of importance for innovation processes, it is hard to exclude any of them. The Role Of Innovation In Health Care Essay Paper

Systems of innovation can be studied based on the activities going on (Edquist et al., 2006). Those activities in the innovation system determine development, diffusion and deployment of innovations. E.g. R&D activities should provide knowledge of economic relevance, which might be the basis for innovation. Through financing, knowledge can later on be transferred into innovation and thereby commercialized. (Edquist, 2011)

‘Non-firm public organizations do not normally influence the innovation process directly but influence (change, reinforce, improve) the context in which the innovating firms operate.’ (Edquist, 2011 p. 3)