Medical equipment, pharma top most uncertain industries

The only certainty in life is…uncertainty. That’s especially true these days in many corners of healthcare. Out of the top 10 industries facing uncertainty, medical equipment topped them all, with pharma not far behind at number four. Healthcare services also made the cut, though it didn’t crack the top 10. According to an analysis by […]

The only certainty in life is…uncertainty.

That’s especially true these days in many corners of healthcare. Out of the top 10 industries facing uncertainty, medical equipment topped them all, with pharma not far behind at number four. Healthcare services also made the cut, though it didn’t crack the top 10.

According to an analysis by Harvard Business Review, industries facing the most uncertainty fall mainly into two different categories – those that face demand uncertainty, as in will the consumer buy the product, and those that face technological uncertainty – “and how much uncertainty your industry faces depends on the interaction of the two,” HBR says in a blog post that’s worth a read.

It’s perhaps not surprising that medical equipment and pharma rank so high given the rapid shifts in the industry, ranging from payer incentives to keep people out of the hospital to scores of new technologies being applied to all aspects of healthcare.

The folks at HBR are able to somewhat quantify the uncertainty, though. From the blog post:

“Technological uncertainty results from unknowns regarding the technologies that might emerge or be combined to create a new solution. For example, a wide variety of clean technologies (including wind, solar, and hydrogen) are vying to power vehicles and cities at the same time that a wide variety of medical technologies (chemical, biotechnological, genomic, and robotic) are being developed to treat diseases. As the overall rate of invention across industries increases, so does technological uncertainty.”

Businesses are put into a four quadrant ranking. Healthcare services falls into the upper-left quadrant, which includes industries that face “high demand uncertainty but low technological uncertainty.” Those in the upper-right – including medical equipment and pharma – face high levels of uncertainty in both technology and demand.

“For example, who would have predicted that medical robots would perform surgeries? When Intuitive Surgical launched the Da Vinci System medical robot— which allows surgeons to operate using 3-D visualization and four robotic arms — the company faced significant technical as well as demand uncertainty,” authors Jeff Dyer, Nathan Furr and Curtis Lefrandt write.

Industries in the lower-left quadrant face the least uncertainty, while those in the lower-right can more easily predict challenges related to demand but face technological uncertainty. Insurance companies, for example, are contending with the rapid movement toward big data and investment analytics, but “demand is based on highly predictable demographics.”