The Role of Innovation Ecosystem in the New Business Model for STSP Medical Companies

In todays hyper-competitive market, innovation is considered a key factor for a successful industry. It is also the fundamental cause of transition from conventional economy to knowledge-based economy. In addition to new product development, a complete operation of the innovation ecosystem cannot be built up without a good profit model. Due to the increase in the global aging population, as well as the rising awareness of the value of health, the medical device industry is thought to have a great development in the future. Various studies have estimated that medical devices could contribute approximately 300 billion US dollars per year in the global market between 2013 and 2018.There are a large number of medical device companies in Silicon Valley, which has an environment that favors the development of new ideas in the field, and has a well-developed support system for the commercialization of products. Ideas for high-quality and highly marketable products originate not from technology, but from the needs of physicians, as well as from the alliances and the cooperation developed among physicians and engineers. This connection between medicine and engineering is well developed in Silicon Valley. 50% of the top 30 medical device manufacturers are in the United States. The international companies global marketing channels and physician training system also play an important role in marketing and promotion in this innovation ecosystem. The innovation ecosystem comprises two separate economies: the knowledge economy, driven by fundamental research, and the commercial economy, driven by the marketplace. The Innovation ecosystem of medical devices in the STSP has been promoted since two years ago. Manufacturers have created many innovative and high-end medical apparatuses with physicians collaboration. The medical device industry has three characteristics in the marketing model which are not easy to break. First, its a relatively closed market in comparison with other markets, and it needs super brand marketing and expert endorsement strategies. Second, the marketing of medical devices is an experience economy. The products need instructions and operation to be understood. Third, clinical data should be collected to build up physicians and patients trust on medical device products.\n\nHowever, its difficult to change the physicians habitual use of clinical approaches to treatment. Physicians are very cautious in using NEW medical devices. The situation as mentioned above causes a gap in the innovation ecosystem, which makes it hard to support the development of innovative products in STSP. Most of medical device companies in Taiwan are SMEs, which are limited by man power, technology, equipment, and capital. As a result, they can only concentrate on their R&D process, and its not easy for them to complete simulations, tests, and test production together at the R&D stage. To speed up innovation and maximize the value of the industry, professional knowledge provided by service platforms is required. Those service platforms are the driving factors of an innovative business model which allows manufacturers to profit and to be able to have more resources for innovation. For this purpose, three service platforms have been developed to support medical device companies developed in STSP.