We have written extensively about the confluence of advanced technologies and their impact on our healthcare system. Perhaps it is now appropriate to go a step further and think about which high-impact innovations could go beyond our realm of normal expectations and create true Black Swans in our industry.
Let’s use a recent article we read about pattern recognition as an example. This article connects the dots between the invention of printing press (a Black Swan for sure) and the discovery of semiconductors, and it goes like this: In 1450, when printing press was invented and people started to read in masses, some quickly realized they could not read small print, which led to the invention of reading glasses, which led to the discoveries of microscopes and then of telescopes and fiberglass. From there, we invented fiber optics, and eventually the process led to the discovery of semiconductors, which is arguably one of the biggest Black Swans in history.
Black Swans are more than inventions. They change industries and sometimes more. In the technology sector Black Swans share an important characteristic which is called “the law of accelerating returns.” In other words, technological advances have a compounding effects and at some point during that process certain kinds of rare and unpredictable discoveries challenge an industry ‘s fundamental constitution.
One of the most intriguing areas in healthcare where we see the potential for a Black Swan is at the intersection of natural sciences (mostly biology) and technology. Optogenetics is a good example of this intersection. Optogenetics is a technology that renders individual, highly specific brain cells using flashes of light delivered through fiber optic wires. This has given researchers unprecedented access to the working of the brain, allowing them not only to observe its precise neural circuity but to control behavior through the direct manipulation of specific cells. There are actual patients using this technology today, who have histories of debilitating depression or autism, that have shown impressive results and some are living normal lives.
The technology is essentially a device implanted beneath the patients collar bone which regularly sends burst of electricity into the vagus nerve which carries the signal into a deep brain structure. As this technology is perfected, imagine how disruptive this could be for the traditional pharmaceutical industry that pours tens of billions of $$ to come up with the next wonder drug for depression or Alzheimer’s. Optogenetics can certainly be a Black Swan for the pharma industry. The pharma companies already start with a disadvantage against the technology industry. The average wait time to get a drug to the market is 10-15 years. That is a lifetime in the technology field.
We are not here to predict the demise of the pharma industry. We are merely pointing out one potential Black Swan opportunity. Whether optogenetics, or tiny computers in our blood stream or printing organs with 3-D printers, our industry is in for a wild ride in the coming years.
Black Swans have three things in common; rarity, extreme impact and retrospective predictability. We may not be able to predict them but firms that are prepared to benefit from them will be the ultimate alpha performers.
To read the rest of our June 2015 Healthcare IT Review please click here.