If you are taken into hospital in England, you rely on the National Health Service (NHS) to provide the best care available. As a publicly-funded organisation, the NHS is responsible for hospitals, general practitioners, and many other forms of healthcare across the country. In 2021/22 alone, there were an estimated 570 million patient contacts with doctors, hospitals, mental health services, ambulances and other NHS outlets. For these millions of contacts to be as successful as possible, the NHS must continue to innovate. Surgeons and nurses need the most up-to-date technologies, products with the greatest chance of ensuring a heart operation is successful, that a transplant goes well, that diagnoses are accurate. The NHS spends more than £1bn annually on research and development, and healthcare is the largest area of government procurement spending in the UK. In 2018/19, the UK Department of Health and Social Care (DHSC) spent just under £70bn, most on behalf of the NHS in England. This money is spent, among other things, on purchasing innovations that fulfil as-yet-unmet healthcare needs – they are looking for innovators to create something that can be applied across their organisation. But if this all sounds nothing but wonderful and straightforward, it is far from it. THE SMALL BUSINESS PROBLEM The slow uptake of innovations within the NHS has long been an issue, related to multiple institutional failures. A culture among medical professionals of organised scepticism leads them to require substantial clinical evidence of efficacy before adopting a technology or innovation. Coupled with labyrinth bureaucracy, this slows down adoption. Many of the firms who can address the innovation needs of the NHS are technology-based SMEs. Their presence is key to stimulating change and development, to introducing the types of technology that keep the NHS at the cutting edge. The NHS – and other large public organisations – will know they have a need, but they are not always sure what the solution is, or what shape it will take. But SMEs do not find it easy to access the NHS. These firms may have the most effective products, solutions to problems that the larger organisation has yet to begin to tackle, but the essential connections between the SMEs and the NHS can be hard to establish and maintain. This is where intermediary organisations can come in. In the NHS, our research involved analysing the work of the Health Innovation North West Coast. Health Innovation Networks (formerly known as Academic Health Science Networks) are regional bodies established by the NHS in 2013 to support the identification and spread of innovations with the English NHS at pace and scale. Health Innovation Networks (HINs) bring together various NHS organisations – such as hospitals and commissioning bodies – with industry and academia, with the aim of improving patient outcomes while generating economic growth. They create a key point of reference for health innovation. They work with industry to scope problems and jointly develop solutions to key health challenges. They raise awareness of innovative firms and their technologies and coordinate NHS organisations on the demand side to accelerate the adoption of solutions that are new to the NHS. Essentially, they bridge the gap between supply and demand. IT TAKES THREE TO TANGO Our expertise is in supply chains. We know how innovation can flow through them, and if this is improved – if processes and structures are optimised, and obstacles are removed – then there 12 | As well as our work within the NHS, we analysed similar structures within the UK Ministry of Defence (MoD). Our research attracted the MoD’s attention, and we gave an invited lecture to an audience of Ministry officials and other civil servants. The MoD spent more than £20bn on procurement in 2019/20, and is expected to spend more than £85bn over the next four years. Like the NHS, the MoD recognises the importance of new and emerging technologies. But procurement practices can impede innovation. Niteworks, a for-profit organisation, was set up in 2003 to provide an impartial environment where defence supplier employees, MoD staff, scientists and academics could collaborate to address important defence challenges. The mediating organisation enabled early and close interactions between suppliers, military endusers and relevant MoD units to investigate key requirements of new technologies. This led to refined needs and significant cost savings. Niteworks senior managers lobbied MoD officials to adopt more agile contracting, allowing faster integration of technological advances. They convinced stakeholders to test alternative procurement processes, and built a system where the MoD was more willing and able to engage early and closely with suppliers to define requirements. Their actions improved the way the MoD asks for and procures innovation. This is innovation-oriented public procurement, but it could just as easily apply to the private sector, where you have large corporations looking to innovate, and SMEs who might have the products and the knowhow to help. It could be applied, for instance, to the aerospace or automotive industry, bridging the gap from early-stage innovation to commercial application. The case for the Defence
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