I think it is safe to say New Brunswick’s information and communications technology (ICT) sector is more entrepreneurial than most other sectors of the economy. Young entrepreneurs finding innovative ways to tease out better business intelligence from social networks or those building neat new Web-based consumer applications get lots of coverage and, increasingly, funding.
But there are other sectors of the economy that hold untapped potential for entrepreneurial activity in New Brunswick. Across the United States, the health care sector is generating almost as much buzz as the ICT sector. According to a recent article in The Economist, there have been at least four new incubators founded in the last two years to nurture health care start-ups.
Here I am specifically talking about health care start-ups that are founded on exportable products or services. New Brunswick has more than its share of entrepreneurs serving local markets – dentists, optometrists, private physiotherapy clinics and, yes, even a private MRI clinic. These latter entrepreneurs are an important part of our economy but they will not be the drivers of economic growth.
Defined this way, there are very few health care start-ups in New Brunswick. Sackville-based Soricimed a firm that is developing tools to diagnose cancer, is an exception. At the technology and services end of the market there are very few firms based here that are exporting to national or international markets.
There are virtually no health care start-ups in New Brunswick because there are few pathways for new health care entrepreneurs to emerge.
University-based research is one of the top pathways for new health care start-ups.
As an example, the University of New Brunswick’s Institute of Biomedical Engineering is well-known for its pioneering work in the area of artificial limbs and the Stan Cassidy Centre For Rehabilitation is working with its engineers on related research. How come there aren’t four or five new start-ups churning out of that activity every year?
The Economist article discusses one of the most interesting health care start-up incubators set up by athenahealth. The company hosts an annual “More Disruption Please” conference where start-ups gather to pitch their ideas and the winning entrepreneurs get to offer their products to the 35,000 doctors in athena’s network.
Horizon Health Network is made up of 12 hospitals and serves communities across New Brunswick, northern Nova Scotia and Prince Edward Island. Horizon employs over a thousand physicians and 13,000 total staff. Sounds like an ideal breeding ground for potential health care start-ups. How do we make it happen?
New Brunswick is also blessed to have some of the biggest players in the health insurance sector (i.e. Medavie Blue Cross) and the pharmaceuticals distribution business (McKesson). How do we convince these firms to follow the lead of athenahealth and support the incubation of new health care start-ups that align with their business models?
One weakness is the size of the New Brunswick market. The way to solve this is simple. Whatever incubation approach we take should be opened up to entrepreneurs nationally and even internationally. If you have a good idea in the health care space, pitch it to the international New Brunswick health care incubator.
Last year I completed a study that looked at the most successful export-intensive health care clusters across North America. It became crystal clear to me that health care clusters grow through entrepreneurial activity. New start-ups emerge and access early stage financing. They then grow to a size that makes them interesting to the larger global players and get gobbled up. The new capital from the acquisitions is then re-invested in even more entrepreneurial activity and the cycle continues.
If we want our share of this rapidly growing opportunity, we need to find out how to get the entrepreneurial juices flowing.