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I recently spent a day with a senior team of a multinational pharmaceutical company, who had requested some executive education on digital thinking. They were trying to make sense of the buzzwords – wearables, bots, financial technology (fintech), health technology (healthtech), government technology (govtech), and big tech.
There was a general sense of unease that something needed to change, but they found it hard to think clearly among all the noise. I was searching for a good way to get us started, when one of the most senior people in the room provided it.
“Here at [XYZ Pharma], we make drugs,” he said. “And the minute we take our eye off this simple fact, we’re dead.”
The assertion carried a simple moral authority, and its seeming self-evidence was comforting to the group. However, I was there to tell them the bad news, and informed them: “Unless you can move on from the idea that you simply make drugs, you’ll have lost market dominance within 10 years.”
I pointed them to figures showing that investment in digital health by technology companies was outstripping pharma companies by over 200%, as well as to the explosion in healthtech startups.
We had a discussion about how much more interested tomorrow’s customers – and investors – would be in a preventative, data-driven, genomic and personalised service that kept them fit and well in the first place, rather than selling them drugs once they were sick.
In turn, this talk about how businesses redefine their value in the digital economy – and for XYZ Pharma, this was about a shift to offering a far more valuable “wellness” offering, as well as treatment – quickly turned to a discussion about data.
As the stories about lives saved by the Apple Watch’s new ECG function demonstrate, we are likely to see the rapid growth of a health data economy where the potential costs to our wellness of not participating in these benefits – via wearables and, soon, implants – are likely to hugely outweigh most people’s more trivial data privacy concerns, driving widespread take-up.
Mark Thompson, Exeter Business School
By the end of the afternoon, it was clear to most of us that we are likely to see the emergence of a few large health platform plays at the centre of much of this data; that the primary offering of these platforms would be wellness and associated lifestyle; and, most alarmingly for XYZ Pharma, that these would probably control the pharma companies’ route to market for when people got sick.
Most importantly of all, we agreed that the platform winners – whoever these turn out to be – will have a huge market-making role in presiding over a complex ecosystem of specialists that includes funding, prevention, research and development (R&D), treatment, lifestyle and financial services, to name a few.
We agreed that an important strategic quality for such platform players would be the humility to understand that they could have little idea today of the possible health service needs that are likely to emerge from future interactions between different members of this ecosystem.
In short, it was clear that XYZ Pharma faced a stark choice in the emerging digital economy. Either it continued to deliver drugs as part of someone else’s ecosystem, or consider a platform play. In the case of a platform play, the strategy would never be pure delivery – it would be brokerage of a multi-sided market.
Government’s purpose in the emerging health data economy
Navigating the dilemma faced by XYZ Pharma requires clear-headed strategic thinking. There is a clear moral authority about the ethical manufacture of drugs, but this has little to do with platform strategy in a digital economy.
The UK government faces an arguably greater dilemma in the healthcare space, however. Put simply, what should be the “strategic play” of the Department of Health, and of the NHS, in the emerging digital health information economy?
Could the government be the one to unleash, broker and regulate an unprecedented ecosystem of data-fuelled innovation and investment by tech and health specialists for the benefit of the British public? Or will the huge informational power, and profit, that will accrue to whoever grabs the platform position be hoovered up by either big pharma or big tech (probably the latter) instead?
Sadly, looking at the £4.2bn IT strategy for the NHS, dubbed the “digital transformation programme”, it is clear this is predominantly a technology modernisation programme that has very little, if anything, to do with understanding and preparing for government’s place in the digital economy.
There have been some green shoots coming out of this strategy, such as engaging with major technology platforms, making NHS.UK application programming interfaces (APIs) and content available to more than 1,000 partners. But much more focus needs to be on fostering an ecosystem of data-driven analytics and personalisation, and ensuring this is opened up to the regions, which in turn are effectively empowered to use it for patients.
The misnaming of NHS Digital
NHS Digital’s activities to date have been primarily about delivering technology infrastructure. It would have been more accurate had it been named NHS Common Technology. While there’s nothing wrong with that, it’s not about rethinking government’s role as digital enabler to ensure citizens get a good deal.
That NHS Digital should have been so misnamed is unsurprising given that, with a few exceptions, UK government has offered its politicians and senior executives very little digital business education whatsoever – as distinct from technology training about agile, working in the open, considering user needs, and so on.
The result continues to be almost no discussion about, and development of, government’s understanding of its own strategic purpose in the digital economy, and an almost unchallenged acceptance of the belief “the strategy is delivery” among so-called digital (technology) teams across the UK, a belief where moral conviction comes from “meeting user needs”.
However, just as in the case of XYZ Pharma, moral conviction in the digital era is not so easily acquired. “The strategy is delivery” offers the short-term satisfaction of “meeting user needs” for drugs, whereas – if offered the choice – users would rather not have become sick in the first place. To meet this ultimate user need, XYZ and government has to “deliver” less, and co-ordinate more – especially around data.
How the next 10 years of digital will look
For government, addressing the need of tomorrow’s health user to stay well requires the humility not necessarily to try to deliver against user needs we cannot possibly imagine today. Instead, it is to build, inspire and regulate a much bigger, more inclusive, innovative and capable ecosystem of people who can, underpinned by an extraordinarily fast-expanding range of cloud utilities and services.
Whereas much of the UK’s digital narrative during the past 10 years may have been about supplanting legacy technology and commercial structures with in-house development capability in government, the idea of digital teams of public servants building systems to meet user needs is starting to look a little tired and irrelevant.
Instead, the narrative for the next 10 years will surely be about how government reacts to being the meat in the sandwich: between big tech utilities and services on one side, and govtech startups on the other.
If government is to redefine its purpose for the digital era to maximise the potential benefits to citizens, it will need to work much harder on interoperability to connect the market with the data, and regulate accordingly.
By this light, the recent announcement that government is creating NHSX, a joint organisation to “take forward digital transformation in the NHS, allowing patients and staff to benefit from the latest digital systems and technology” is a golden opportunity to make up for precious lost time (and money), and start planning government’s role in the fast-emerging digital economy.
Healthcare would be the ideal place to start, given the pace of innovation in this sector and the need for government to ensure patients get a good deal. I have no doubt that those setting up NHSX keep Tim O’ Reilly’s chapter on government as a platform by their bedsides. However, if you’re a busy minister, then read on for a condensed version.
How platform thinking changes the big government/small government debate
It should be obvious by now that platform thinking provides a real alternative to the endless argument between liberals and conservatives that has so dominated US political discourse in recent decades.
The idea that we have to choose between government providing services to citizens or leaving everything to the private sector is a false dichotomy. Tim Berners-Lee didn’t develop hundreds of millions of websites; Google didn’t develop thousands of Google Maps mashups; and Apple developed only a few of the tens of thousands of applications for the iPhone.
Being a platform provider means government stripped down to the essentials. A platform provider builds essential infrastructure, creates core applications that demonstrate the power of the platform and inspire outside developers to push the platform even further, and enforces “rules of the road” that ensure that applications work well together.
There are plenty of examples in UK government of genuinely pioneering attempts by senior leaders to completely re-imagine their purpose along these digital lines, such as the Financial Conduct Authority’s Open Banking initiative; the Department for Transport’s open data portal; Localgovdigital’s collaboration platform; Land Registry’s recent blockchain project; and NHS Jobs.
Most such initiatives are driven by senior leadership, not digital teams, and all aim to transform government’s value proposition to citizens – not just modernise its technology. All of these are real examples of government as a platform, and none are (technology) platforms for government (as usual).
NHSX, please help the government digital community get it right this time.