Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • 2019
  • Working Paper
  • HBS Working Paper Series

Who Drives Digital Innovation? Evidence from the U.S. Medical Device Industry

By: Cirrus Foroughi and Ariel Dora Stern
  • Format:Print
  • | Language:English
  • | Pages:65
ShareBar

Abstract

Does the large-scale technological change that is characteristic of an industry-wide digital transformation entrench industry leaders or enable the rise of new entrants? We offer a novel approach to this question by studying the medical device industry, a unique setting in which we observe all new product commercialization over several years and in which the introduction of software has created fresh opportunities for new product development. Pioneering a new application of text analysis, we consider over 35,000 new medical devices that came to market in the United States from 2002 to 2016 in order to identify digital products. We examine the relative importance of within-firm know-how, geography, and financial resources in predicting digital new product development. We find that prior product-area commercialization experience and location in a region of concentrated expertise reinforce one another as predictors of digital innovation. Access to financing through public capital markets and venture capital are also positive predictors, but the magnitudes of these effects are smaller and do not appear to compensate for past product experience or geography. We conclude that the digital transformation of the medical device industry is disproportionately driven by product area and geographic incumbents.

Keywords

Innovation; Medical Devices; Digitization; Medical Technology; Technological Innovation; Applications and Software; Market Entry and Exit; Industry Growth; Medical Devices and Supplies Industry; United States

Citation

Foroughi, Cirrus, and Ariel Dora Stern. "Who Drives Digital Innovation? Evidence from the U.S. Medical Device Industry." Harvard Business School Working Paper, No. 19-120, June 2019.
  • Read Now

About The Author

Ariel D. Stern

Technology and Operations Management
→More Publications

More from the Authors

    • April 18, 2022
    • Harvard Business Review (website)

    Will mRNA Technology Companies Spawn Innovation Ecosystems?

    By: Christoph Grimpe, Timo Minssen, W. Nicholson Price, II and Ariel Dora Stern
    • April 2022
    • NEJM Catalyst Innovations in Care Delivery

    AI Insurance: How Liability Insurance Can Drive the Responsible Adoption of Artificial Intelligence in Health Care

    By: Ariel Dora Stern, Avi Goldfarb and Timo Minssen
    • March 2022
    • Faculty Research

    Proximie: Using XR Technology to Create Borderless Operating Rooms

    By: Ariel D. Stern and Alpana Thapar
More from the Authors
  • Will mRNA Technology Companies Spawn Innovation Ecosystems? By: Christoph Grimpe, Timo Minssen, W. Nicholson Price, II and Ariel Dora Stern
  • AI Insurance: How Liability Insurance Can Drive the Responsible Adoption of Artificial Intelligence in Health Care By: Ariel Dora Stern, Avi Goldfarb and Timo Minssen
  • Proximie: Using XR Technology to Create Borderless Operating Rooms By: Ariel D. Stern and Alpana Thapar
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Digital Accessibility
Copyright © President & Fellows of Harvard College