There are also perceptions of misalignment in terms of outcomes and knowledge. Despite 74 per cent of respondents agreeing that greater collaboration across the healthcare ecosystem would significantly accelerate progress, 78 per cent of healthcare and life sciences companies reported concerns that technology organisations push a more commercial agenda over healthcare excellence, while 71 per cent of technology players indicated that healthcare companies often lack the tech know-how to operationalise new solutions.

As a result, 72 per cent of those surveyed across all groups believe a radical rethink of how innovation is organised, funded and scaled is required to meet demand for new solutions. The complex, highly regulated nature of the healthcare ecosystem by governments and misalignment between organisations’ business interests are also barriers to accelerating innovation.

Sydney-based head of healthcare and life sciences, Asia Pacific, at Baker McKenzie, Elisabeth White, said that underpinning both the challenges and opportunities in the sector was user/patient data.

“Data is the new gold. From healthcare records to wearable tracking data to payment information, it is the currency which drives digital health innovation and is shaping the next generation of digital health solutions and systems,” Ms White said.

“It is critical to establish what relevant data collaborators bring into the partnership and, where a new and valuable dataset will be created, who is responsible for, has access to and is able to monetise this information and for what purpose.

“These challenges are not deterring new funds and players from entering the market currently, as the opportunity for growth and development of the digital health sector remains vast. In fact, investors surveyed for this report alone intend to direct US$22 billion of new global funding into digital health innovation.”

The study also found that across the Asia-Pacific region, a rapidly expanding population, an empowered and tech-savvy middle class and a physician shortage has created the perfect conditions for digital health innovation, and COVID-19 has created an even greater imperative to develop future-proof digital health solutions and systems.

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The research found that some of the key drivers of digital health acceleration in the Asia-Pacific region today were disruption to traditional healthcare delivery and management arising from COVID-19, advances in digital health technology along with the cost pressure in healthcare systems.

Asia-Pacific digital health hotspots

While deal flow data shows digital health VC deals in the Asia-Pacific region largely centred on the major population centres of China, South Korea, India and Japan, 62 per cent of survey respondents cited Singapore as their top destination in the region for intended new investment and development in digital health, followed by Australia (56 per cent).

This suggests Singapore is emerging as a key hub for digital health innovation and cross-jurisdictional deal making in the Asia-Pacific, which is in part attributed to the aggressive incentives the Singapore government has introduced to attract digital health investment.

Ren Jun Lim, Baker McKenzie principal in Singapore, said that governments could also play a major role in supporting the sector through working towards regulatory harmonisation across jurisdictions.

“While digital health is accelerating in spite of regulatory complexity, harmonisation can provide a confident basis for greater investment and innovation. If regulation was designed to support cross-jurisdictional, cross-industry collaboration, we would expect to see digital health innovation accelerate by a huge order of magnitude,” Mr Lim said.

“Therefore, the report found while 72 per cent of digital health players believe that at present government intervention can in fact be counterproductive to their efforts to innovate — referencing regulatory enforcement and cross-jurisdictional fragmentation — the fast-growing interest in Singapore does suggest that grants, incubators and incentives are shifting the dial on digital health innovation. This approach also has the potential for developing economies to leapfrog some of the more traditional healthcare hubs through digitalisation.”