Economics Research Seminar
Software Growth and Innovation: the Digital Transformation of Medical Technology
Sponsored by: Economics Department
Speaker(s): Ariel Dora Stern, Ph.D., Harvard University
Date & Time: Friday, Feb. 24 from 12:30 p.m. to 2 p.m.
There is a longstanding debate about whether technological innovation enables the rise of new entrants, or reinforces incumbent advantages. The ongoing digital transformation of medicine represents a unique opportunity to revisit this debate in the context of health care, an industry that represents nearly 18% of the U.S. economy. Medical technology has become increasingly digitized, as software and networking capability are embedded in new devices. In 2015, nearly 600 medical devices containing software were cleared for marketing by the FDA – almost double the number approved a decade earlier, in 2005. What patterns can be seen in the digital transformation of this industry? Has the digitization of medical devices enabled or deterred the entry of small firms? And has the geographic locus of medical innovation changed to favor areas with a stronger presence in digital business? We use novel data on the contents of new devices, recovered through automated text scraping, to study digital innovation in the medical device industry. Using supervised document classification and other natural language processing tools, we analyze the descriptions of over 30,000 medical devices in the eight most common specialty areas over the past fifteen years. We first document the growth of software and networking capabilities in medical technology and find significant heterogeneities across medical specialty areas, where representation of incumbent firms in new product innovation has historically varied due to different regulatory requirements. We then use detailed firm data to better understand the characteristics of the firms bringing digital technologies to market.
Please join the Economics Department for a research seminar. This event is open to all Case Western Reserve University faculty, Ph.D. students, economic majors and minors, and those interested in economics research.
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