By Kevin Davies
June 25, 2008 | “Change” is not merely a common refrain on the presidential election campaign trail. It’s also what dozens of life science CEOs are hankering for, according to preliminary findings from the latest IBM CEO survey.
Michael Svinte, IBM’s VP Global Innovation and Information-Based Medicine, shared some of those findings with Bio-IT World at a briefing during the Drug Industry Association conference (DIA) this week in Boston.
Every two years, IBM conducts a comprehensive CEO study, surveying hundreds of industry chief executives. For the 2008 survey, IBM spoke with 1,130 CEOs, including 40 in the life sciences and pharma arena. (Eight of the CEOs came from the Americas, 46 percent from Europe/Middle East/Africa and 34 percent from Asia-Pacific.) Svinte says the results, which will be published in a full white paper next month, are important in allowing IBM to allocate its resources into appropriate areas of need.
There were five principal takeaways from the life science CEO responses, according to Svinte. Chief among them was a hunger for change. 79 percent of the life science CEOs anticipated major change in the next few years. Talent concerns, regulatory issues, and market factors were the most commonly cited factors.
But 25 percent of the CEOs polled said they were struggling to manage change within their organizations. Once American big pharma CEO said, “We know we need to change faster, but are we adaptive enough? There is a lot of skepticism internally with regard to our change capabilities.”
The other key lessons Svinte and colleagues extracted from the survey include:
- Innovation beyond customer imagination: CEOs were “bullish” about the increase in consumer purchasing power. “Patients will be more involved because they’re better informed,” said one European pharma CEO. The survey showed investment in this area projected to grow by 43 percent in the coming years, but less for more sophisticated consumers. Svinte says life science companies face a huge challenge “engaging the broader ecosystem,” (similar to IBM’s evolution in recent years), as they pursue new markets, new business operations, and new operations.
- Global integration: 90 percent of life science CEOs questions are entering new markets, but they are wary of legislative regulation and intellectual property concerns. As with the larger study, insufficient talent is a serious obstacle, they said.
- Business model innovation: Three quarters of the life science CEOs are pursuing “extensive business model innovation over the next three years.” Here, the emphasis among the CEOs is on enterprise model innovation. “Our future is in convergent technologies, where we combine different aspects of our business with technology, for example, combining a technological component with medication,” said one European pharma CEO. Surprisingly perhaps, fewer than 20 percent of the CEOs are entertaining industry model innovation. IBM expects to see merging capabilities among pharma, healthcare and diagnostic companies as new industry models emerge.
- Social responsibility: 62 percent of life science CEOs reacted favorably to exhibiting social responsibility. This primarily impacts the manufacturing space and medical by-products, yet one quarter of CEOs doubted that improved social responsibility would enhance their business.