APPLICATIONS OF DIGITAL HEALTH: AN ASSESSMENT OF THE U.S AND SOUTH AFRICAN MARKETS Öffentlichkeit
Paffhausen, Emily (Spring 2020)
Published
Abstract
Digital health is the use of innovative technologies to create health-related solutions. The term has expanded over the last decade and today includes products such as wearables, telemedicine, artificial intelligence, mobile applications, genomics, and digital medical devices. These products have been shown to provide several benefits, such as, improving access to healthcare services and knowledge, cost savings, and health services delivery. Furthermore, the field of digital health has seen continuous market growth and venture capital interest in the U.S. since 2011.
The proliferation of mobile phone access across sub-Saharan Africa gave rise to the use of mobile phones for health-related purposes. Due to its lower infrastructure requirements and cost, digital health has been hailed as a potential solution to aid in sub-Saharan Africa’s achievement of universal health coverage. The purpose of this study is, therefore, to examine the growth of digital health in the U.S. market and how this may affect the application of digital health in sub-Saharan Africa through both entrepreneurial and investor lenses.
Ultimately this analysis finds that South Africa, and broadly sub-Saharan Africa, offer both entrepreneurs and investors numerous positive opportunities for growth in digital health products. However, their investment markets and entrepreneurial mindset are still developing. Interviewees report there are two gaps in funding size requests. These gaps cause barriers for entrepreneurs to grow and scale their companies. Without enough successful entrepreneurial ventures, it becomes more difficult to convince investors to enter the market. This creates a cyclical paradox for the overall innovation landscape. South Africa’s early phase of entrepreneurial investment makes it difficult to strongly conclude that digital health will be a worthwhile investment for health systems in the region long-term. It will be critical for international investors interested in the region to seek healthcare specific venture capital funds to facilitate the growth of the broader entrepreneurial ecosystem on a local level.
Table of Contents
Chapter 1: Introduction ………………………………………………………………………….. 1
Chapter 2: Literature Review ……………………………………………………………………. 4
2.1 Timeline of Digital Health ………………………………………………………………... 4
2.2 Digital Health Investments ……………………………………………………………….. 6
2.3 Trends in Digital Health ……………………………………………………………….... 10
2.4 Success in Digital Health ………………………………………………………………... 12
2.5 Digital Health & Universal Health Coverage …………………………………………... 14
2.6 Mobile Health & Sub-Saharan Africa ……………………………………………...…… 16
2.7 Venture Capital Investments in Africa …………………………………………………... 20
2.8 Challenges to International Investments …………………………………...…………… 22
2.9 Digital Health’s Future ………………………………………………………………….. 24
Chapter 3: Methods …………………………………………………………………………….. 25
3.1 Peer Reviewed Articles ………………………………………………………………….. 25
3.2 Non-Peer Reviewed Articles …………………………………………………………….. 26
3.3 In-Depth Interview ………………………………………………………………………. 27
Chapter 4: South Africa Case Analysis ………………………………………………………... 28
4.1 South African Demographics & Economy……………………………………………….. 28
4.2 Venture Capital Funding in South Africa ………………………………………..……… 29
4.3 Investment Opportunities ………………………………………………………..………. 30
4.4 Investor Risks & Challenges …………………………………………………………..… 32
4.5 Entrepreneurial Risks & Opportunities ………………………………...…………..…… 34
Chapter 5: Conclusion & Discussion …………………………………….…………………….. 38
5.1 Key Takeaways from U.S. Digital Health Market Analysis ………………………….…. 38
5.2 Key Takeaways from Global Digital Health Applications Analysis …………………...... 40
5.3 Key Takeaways from South African Case Analysis ………………………………..……. 42
5.4 Conclusions & Recommendations …………………………………………………..…... 46
References ……………………………………………………………………………………… 50
Appendix ……………………………………………………………………………………….. 54
List of Figures & Tables
Figures and Tables are listed in their order of appearance. Figures and Tables included in the Appendix are denoted by an “A” and are listed separately.
Figure 1: Total venture capital finding in U.S. based digital health companies ………………... 6
Table 1: The most active digital health investors in 2016 ……………………………………..... 7
Table 2: Top 10 most active venture capital investors within CB Insights 2019 ……………….. 8
Figure 2: Digital health public companies index at Q3 2019 …………………………………. 10
Figure 3: Visualization of various DARQ technologies ……………………………………….. 12
Figure 4: Status of mobile health initiatives by category for each WHO region ……………… 18
Figure 5: Barriers to implementing mobile health initiatives in WHO African region compared to global reported barriers …………………………………………………………………….. 19
Figure 6: Venture capital investments per continent in 2016 …………………………………. 22
Figure 7: Percent of international funding applicants from July to December 2016 …………. 23
Figure 8: Methodology tree demonstrating the selection process for peer review cited works in this analysis ……………………………………………………………………………………. 26
Table 3: Key informants for in-depth interviews ………………………………………………. 27
Figure 9: South Africa GDP annual growth rate from 2017 to 2020 …………………………. 31
Figures & Tables in Appendix:
Figure 1A: Map of South Africa ……………………………………………………………….. 54
Figure 2A: Average annual forecast growth per region (2011-2015) ………………………… 54
Figure 3A: Top countries of birth for sub-Saharan African migrants living in the U.S. and the European Union in thousands in 2017 ………………………………………………………… 55
Figure 4A: List of the 10 fastest growing high net-worth individuals in 2019 ………………… 55
Figure 5A: Top four African countries that received venture capital funding in 2019 ………... 56
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