The Campbell Report: a roadmap to investment for health innovation life sciences and healthtech

The opportunity

Capital investment into health innovation globally has remained strong and grew over 2020, continuing that trend into 2021. Scotland is well placed to lead this growth and harness the economic and health benefits. Life sciences as a whole is still a relatively small sector in Scotland in terms of overall employment, yet makes significant contributions to productivity, innovation and wages. Gross Value Added for the Life Sciences growth sector was estimated at £1,577.2 million in 2019, an increase of 3.7% from the previous year. GVA per head for the Life Sciences sector was £87,797 in 2019, compared with the Scottish average of £53,524^[3]. Success is further demonstrated by consistently high levels of growth in recent years.

Source: Scottish Government Growth Sector Statistics

At a UK level, Scotland performs relatively well in attracting global capital investment in life sciences. Scotland is fourth in terms of deal numbers in the UK, sitting just behind the 'Golden Triangle' regions (London, East and South-East England). Coming fourth behind the component parts of one of the main life science clusters in Europe demonstrates the competitiveness of health innovation sectors in Scotland already. However, despite high levels of deals, our lower average deal size reflects a relatively immature investment ecosystem. There is scope to enhance the enabling conditions to build demand for capital, and to support companies in attracting investment. There is also significant economic opportunity from strengthening connections with local investors, and encouraging international investors to look to Scotland for the first time or increase their activity here. We already have all the component parts of a successful health innovation and health tech cluster. But there are parts of our innovation and commercialisation landscape that can be refined through building better connections across our ecosystem so that it can realise its full potential on the international stage.

Health innovation is primed to play an important role in our future economy. At the same time as the health innovation life science cluster is developing, there are also other clusters emerging: across life sciences more broadly, in the digital economy, and in the technology and infrastructure needed to decarbonise. Scotland has a small but highly diverse economy with world-leading innovation and a skilled workforce. Mature clusters across a range of technologies, and cutting across sectors, allow for cross-fertilisation of ideas. And a system-wide lens allows us to present to capital markets a series of investment propositions with aligned infrastructure, business growth and real estate opportunities, representing the best of Scottish innovation across sectors, supply chains and technologies.

Health innovation supply chains pivoted at pace to tackle the Covid-19 pandemic. Work is already underway to build on the success of the new PPE supply chain created in Scotland in response to unprecedented demands from Covid-19, and to continue to develop Scottish supply chains through improved capacity and capability.

It's not only our economy that stands to benefit. Much of the innovation in this sector directly responds to our population's health and care needs, enabling adoption to improve outcomes. This means better disease prevention, greater personalisation of service delivery, enhanced productivity, and a more resilient and higher skilled workforce. Health innovation life sciences could also play a crucial role in responding to demographic challenges with an ageing population living with increasing co-morbidities. Innovation in diagnostics, therapeutics and integrated healthcare approaches in particular will be pivotal to help manage future demand for health and social care services.

Opportunity for health and industry partnership: Lenus Health

Edinburgh-based Lenus Health partnered with one of Europe's largest healthcare providers, NHS Greater Glasgow and Clyde (NHS GGC), and the Digital Health and Care Institute (DHI) with funding from Innovate UK to deliver a digital COPD Support Service underpinned by the company's health data-exchange platform. The service aggregates data from wearables, respiratory devices and patient reported outcomes with clinical history data from EHR to provide clinical care teams and patients with a more robust view of their COPD condition. The service has been proven to reduce COPD emergency admissions by 28%, and hospital bed days by 38%. The company is also working in partnership with NHS GGC to operationalise AI risk stratification scores for exacerbation, re-admission and mortality within point of care clinical workflows.

In November 2021, global health leader ResMed, announced a minority equity investment in Lenus Health to support the international scale out of the company's technology through a joint go to market strategy.