Barriers in Health Tech Startups: Insights for Growth
The role and significance of technology are expanding in healthcare with the advanced use of digital or ICT technology for healthcare monitoring and treatment solutions. In this context, the world has witnessed the emergence of several health tech startups in recent years with the purpose of providing remote, affordable, and innovative customised healthcare solutions to patients.
However, we observed that these startups faced several business disruptions and uncertainties due to various internal and external barriers. This study contributes by assisting the healthcare industry and other external stakeholders to understand the barriers faced by health-tech startups.
These barriers, once identified, can be managed or reduced due to policy changes and the support of industry and government. The study first identifies different barriers or challenges faced by these startups during their inception or while continuing their operations. The study interviewed 51 health tech startup firms in the UK, and based on their experience and feedback, four main barriers have been identified that they have 06 faced during the inception and postimplementation phases of their businesses.
These barriers are known as systemic barriers, sectoral barriers, human barriers, and implementation barriers. These barriers were further categorised as a macro (large systemic barriers), meso (challenges at the organisation or group level), and micro (one-to-one individual or personal level) barriers. The study discussed these barriers in detail with these firms and observed some major concerns, including a lack of funding and investors in the domain, high competition for funds, and a lack of awareness about these funds as one of the main systemic barriers.
The study advised policymakers to understand these concerns and provide regulatory guidelines to support these start-ups and fulfil their funding requirements by easing norms and procedures. It is also advised that there is a need to create awareness about various funding schemes and create easy access to these funds to promote health tech start-ups. It is also advised that these startups must understand these barriers in detail to avoid delays and disruptions in their business.
In addition, complex legal procedures and fund-related covenants, challenges due to the traditional bureaucratic system, high competition for funds, limited assistance in understand funding requirements, and legal policies are a few major concerns experienced by these start-ups.
These barriers are identified under macro-level barriers. By understanding these challenges in detail, firms may adapt to these disruptions effectively. There is also a need for the government and industry to support these startups to overcome such legal barriers. The study also explained the concerns of these startups due to high investment and operation costs, high capital expenditure, and slow investment growth of the business.
This affects their long-term profitability and sustainability. These firms confirmed that it is difficult for them to convince investors due to a lack of clarity and awareness about technological advancements. Further, being a new and limited-explored domain, they faced several challenges to growth or establishing their business.
Firms should consider guidance from traditional business houses, and such partnership or resource-sharing opportunities should be promoted by policymakers to help start-ups. The study also indicated some micro-barriers, such as new technology resistance among employees or medical staff due to fear of unknown technology and resistance to change. Even so, they are facing several operations issues, including data protection and migration issues.
Lack of technical expertise and difficulty in finding the right talent are also observed to be the main challenges. There is a need to create social and awareness programmes to explain the benefits of these services and the importance of these health tech startups. Also, tight regulations or privacy policies are required to provide safe and protective services to stakeholders.
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The full research paper can be accessed here Singh, N., Alshibani, S. M., Misra, P., Nawaz, R., & Gupta, B. (2023). Unravelling barriers in high-tech technology start-ups: practical insights and solutions for healthcare enterprises. Journal of Enterprise Information Management, 36(6), 1708-1726 DOI: 10.1108/JEIM-06-2023-0318