Big Business and Healthcare: It’s Not About the Money
A global study of healthcare social enterprises shows that partnerships, not investment, are the key to healthcare innovation and new markets.
We are continually told that big business has a significant role to play in addressing poverty and in developing markets such as healthcare. Bottom-of-the-pyramid strategies offer the alluring promise of opening new markets while simultaneously creating social value; social entrepreneurs are leading the way through this nascent and high-risk field. How can a large and established business engage with this dynamic ecosystem to meet their ethical commitments while driving responsible, sustainable growth?
Recently I had the opportunity to explore this question, working as a consultant to the pharmaceutical giant GlaxoSmithKline (GSK) for the International Centre for Social Franchising (ICSF), in partnership with Oxford University’s Said Business School. We were tasked to examine how GSK’s Developing Countries and Market Access team could act as a catalyst for replicating healthcare delivery models that have significant social impact.
Before I offer some opinions on the strategic implications of our research for large corporations like GSK, which seek to create social and financial value by engaging with healthcare innovators in developing markets, here is a brief detail of our work.
To understand what healthcare delivery innovation existed, we started broadly and globally, speaking to stakeholders and collecting data from across the sector: from impact investors, commercial investors, philanthropists, industry bodies, and market builders. The Centre for Health Market Innovations (CHMI) deserves a mention here as the best single aggregate source of information we found. Our large data set necessitated a high level, manual review. We assessed 900 programs against bespoke criteria developed to align with GSK’s interests: scalability, linkage with pharmaceuticals, growth time horizon, financial sustainability, and innovation. The resulting data found clear geographic clusters of relevant innovation—24 percent of top rated projects were in India and 12 percent in Kenya, and the rest were principally scattered across Africa and South East Asia.
The global review was a useful starting point, but our team and GSK were both acutely aware that only first-hand field assessments were going to help us understand the challenges and opportunities that innovators were encountering. Using the geographic clusters to maximise our time, the team visited and interviewed 50 projects across Kenya and India, working to meet a true cross section of the sector. Our visits included a trip to Dr. Devi Shetty’s office in the impressive Narayana Hrudayalaya Hospital, an intensive heart care centre that draws patients from across India and internationally for some of the best and cheapest heart surgery in the world. We also visited Myshkin Ingawale and the start-up team at Biosense, which works out of a bare flat in north Mumbai to create a noninvasive blood analysis device that uses light sensors to measure the level of hemoglobin in a patient’s blood (see Myshkin’s TED talk). (For more information on the project please see the public report, released today on the ICSF website.)
The work was an enthralling window into the many exciting healthcare innovations being developed, and it also enabled our team to recommend tactical and strategic opportunities to GSK by synthesizing overarching and model-specific themes from the innovations encountered. Amongst our key conclusions, and to the title of this post, we found that money was not the major obstacle to the expansion of the successful businesses we saw. The current primacy of the social enterprise movement sees that, in innovation clusters like India, an entrepreneur with social impact and, critically, realistic and positive cash flow projections is fighting off investors—commercial and impact alike. The competitive investment environment, though potentially great for the entrepreneurs, creates a barrier for an investor like GSK.
Money alone is not an easy route to access innovation and new markets. A more engaged, partnership-based approach is required; corporations need to look to their capacity to meet the needs of the innovators. Integrated partnerships for mutual benefit could include sharing supply chain management systems, customer data, regulatory connections, and sales data. Such partnerships would be highly valued by the innovators we met and could drive rapid expansion for high impact businesses while simultaneously opening up new markets for major corporations.