Health technologies need to overcome a number of barriers to thrive, study says

Estonia has great potential for developing innovative, science-based health services. However, several challenges still need to be tackled, as highlighted in a study by the University of Tartu and TalTech. The two universities, together with Tehnopol and Tartu Science Park, will introduce a strategy for overcoming the barriers and supporting local healthtech startups later this year.
This article was written by Martin Meitern, Head of Strategic Communication, Institute of Genomics at the University of Tartu.

According to a study by the University of Tartu and Tallinn University of Technology, Estonia has good prospects for developing research-intensive entrepreneurship in healthcare. However, it is hampered by poor cooperation with hospitals and doctors in creating and delivering science-based services and products, the difficulty in reaching paying customers and testing business models due to Estonia’s health insurance system, and the shortage of patents.

Health systems worldwide are facing major changes caused, among other things, by an ageing population, increasing mental health problems and the impact of the Covid-19 pandemic. “To address these challenges, we must continuously develop new services and products, such as new diagnostics and treatments, vaccines or telemedicine. The demand for new health products and services is growing worldwide,” said one of the authors of the study, Professor Tõnu Esko of the University of Tartu. He noted that traditional solutions based on peasant wisdom are insufficient to meet the complex challenges of healthcare. “Finding solutions that work on a large scale requires a knowledge-based approach to the problem and close cooperation between researchers, doctors and entrepreneurs,” explained Esko.

Estonia has ample opportunities in the healthcare sector to create new products and services that are in demand all over the world. “Testing e-governance and e-health-based solutions, using the biobank database, strong sectoral research and development, and a convenient business environment are advantages that Estonian researchers and entrepreneurs can make use of,” Esko said.

However, according to Rainis Venta, a Technology Transfer Expert at Tallinn University of Technology, these advantages are currently under-utilized. “We don’t know how to create and sell our research-based products and services,” he said. “Publishing research articles is very important, but at the same time, we must find ways to create and patent applications derived from the research. In Estonia, for example, it takes 260% more R&D investment to create one patent than in Finland,” said Venta.

The study identified the main obstacles to creating research-intensive healthcare services and products. The four most important are inadequate skills, experience, and awareness of knowledge-based business development, getting funding and commercializing intellectual property; limited funding opportunities; too little collaboration with clinical partners; and the scarcity of startups and success stories.

According to Siim Espenberg, Head of the Centre for Applied Social Sciences at the University of Tartu and one of the authors of the study, Estonia needs to develop a comprehensive and systematic process in health technologies to support the creation of new services and products and reach patients. “As it is important to reach foreign markets to succeed in this field, supporting the companies’ international competitiveness and export is crucial. Today there are innovation-supporting services, but they need to be developed further to boost this high-potential field,” he said. According to Espenberg, analyzing and identifying the bottlenecks will allow us to take the following steps. “It should be easier for researchers and entrepreneurs in the field to find and access support that would help innovative solutions reach patients more effectively, both in Estonia and worldwide,” Espenberg explained.

A comprehensive strategy for overcoming the obstacles identified in the study and developing healthcare startups for 2023–2028 will be completed in the autumn. According to Esko, the strategy aims to reach 200 companies with global ambition in Estonia, who would bring innovative ideas from science to patients. “We certainly have potential for that,” Esko said.

Read the study report in Estonian.

The study was completed under the project “Services for the Creation and Development of Knowledge-based Start-ups and Development of the Knowledge-based Business Ecosystem in Estonia”, which aims to create and implement a systematic and comprehensive process for the creation and development of knowledge-based entrepreneurs in the field of health technologies and services in Estonia. The project partners are the University of Tartu, Tallinn University of Technology, Tehnopol Science and Business Park, and Tartu Science Park. The project is funded by the Startup Estonia program from the European Regional Development Fund and implemented in cooperation with AS SmartCap.
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