The Urgent Case for Radical Collaboration in MedTech

Why is MedTech Innovation Delivering so Little Return on Massive R&D Spend?

In 2024 alone, the global MedTech industry spent an estimated £30 billion on R&D. And yet, the true return on that investment for patients, caregivers and even shareholders are stubbornly low. As developing and launching a novel medical technology often costs millions and takes the better part of a decade, many of the industry’s bigger players are being forced to think small. The pressure on R&D leaders to deliver near-term launches means safer, incremental updates often win out over riskier, step-change innovations. The rest of the R&D budget is quickly consumed in keeping current products on the market.

What’s Holding Back Breakthrough Innovation in Medical Technology?

Often, more ambitious breakthroughs that have the potential to redefine standards of care for patients and caregivers, are born in startups. Funding for these ventures has always been tough but has rarely been tougher than it is today. This means that demand for novel technologies risks continuing to outstrip supply for years ahead. This will have significant consequences for the market, and those that it serves, if the current status quo is maintained.

When the limited number of solutions reach or near fruition, bidding wars can result that drives higher and higher multiples being paid by the established industry players that didn’t lack the vision, but couldn’t absorb the upfront risk of development in their P&L. When there aren’t enough high-quality solutions, it is almost inevitable that some acquisitions will not pay back or will be made too eagerly and early and lead to further delays and costs in projects as technologies are absorbed, reformulated and re-packaged within larger ecosystems.

The analogous approach may work well in the pharma world where investors can stomach the risk of project failures as revenues and long-term profitability for those winners are high. In the cluttered medical technology space however, risk of failure is also high, but profitability rates are significantly lower. This is partly driven by increasingly complex regulatory and reimbursement systems.

Does MedTech Have an Innovation Gap or a Collaboration Gap?

If the industry is to meaningfully accelerate progress, it needs more than capital and vision. It needs a new operating model. One that embraces radical collaboration, not just between functions, but across companies, regulators, clinicians and innovators of all sizes. The large and risk-averse must learn to ally with the small and daring. And within the giants themselves, internal collaboration must evolve. As companies grow, acquire, and reorganise, often under the weight of matrix management, they must find ways to regain the speed, clarity and boldness of their startup days, without falling prey to the same naive mistakes.

If you’re reading this, you’ve probably funded, supported or been part of a project where progress felt glacial. You’ve sat in meetings where brilliant minds from engineering, clinical, QA/RA and marketing all spoke the same language but with different accents and sometimes not to each other at all. And it’s not because people aren’t working hard. They are. It’s just that modern MedTech development is an exercise in managing complexity at scale. Regulatory pathways are shifting. Requirements are deepening. Ethics, reimbursement, clinical validity, usability, cybersecurity are vital inputs, and also headwinds that complicate project requirements and teams. And the more ambitious the device, the more turbulent the storm.

Why Must Collaboration Be Designed, Not Left to Chance, in MedTech?

At the centre of all this is a simple but stubborn truth. Developing novel medical technologies isn’t simply hard, it’s too hard to do alone. That’s why collaboration is no longer a “nice to have”, it’s the only rational response to an environment this complex. Cross-functional collaboration inside companies is hard enough, but cross-company, pre-competitive collaboration? It takes real intent. It takes new norms. It takes trust, something in short supply in industries built around IP, competition and risk mitigation. And yet, when it works, it changes the game.

If we accept that the current system is underperforming, then the next question is: How do we fix it? There’s no single answer, but the first step is reframing the problem. MedTech doesn’t have an innovation gap. It has a collaboration gap and that gap shows up everywhere. Between functions, between companies, between regulators and industry, between bold ideas and viable execution. Bridging it requires more than better tools or new org charts. It requires structural shifts in how we think about risk, ownership, and shared value.

How Can Large MedTech Companies Build Collaboration into Development Teams?

If large organisations want to reclaim the speed and boldness of their earlier days, they need to stop simply acquiring agility and start embedding it. That means protecting innovation groups from bureaucracy, encouraging calculated risk-taking and ensuring leadership is not just measuring inputs like headcount and budget but outcomes like learning velocity and clinical impact. It also means being honest about what scale breaks and building cultures and structures that counteract that drag.

One of the most common impediments on momentum in large organisations is the disbanding and reshuffling of teams between project phases. True innovation doesn’t happen in isolated silos,  it comes from stable, multidisciplinary teams that stay with a product from concept through to launch or are managed accepting that change is inevitable. These R&D teams need more than token representation from clinical, regulatory, commercial and technical functions, they need shared accountability and decision-making power. That means rethinking how teams are formed and managed and how success is measured and rewarded.

Matrixed organisations often suffer from a well-intentioned but deadly inefficiency. Too many people at the table, too many gates to pass through and not enough clarity on who can say “yes”. Companies need to clarify authority, reduce unnecessary escalation layers and empower teams to act decisively. If internal processes are harder to navigate than external regulation, that’s not a complexity problem, that’s a leadership one.

What Would True Industry-Wide Collaboration Look Like in MedTech?

The industry has seen success with trade associations and initiatives in the US like the Medical Device Innovation Consortium (MDIC) that bring together regulators, industry and academia. But we need more. Especially in complex and emerging areas such as neurotech, AI-enabled diagnostics and connected devices where regulatory uncertainty can kill innovation before it starts. Pre-competitive collaboration can be used to develop shared protocols, streamline evidence generation and define common data standards. They can also be used to reduce the interpretation gap that slows reviews and approvals.

Also, instead of treating startups as acquisition targets to be harvested once de-risked, large MedTech companies could benefit greatly by taking a more proactive, partnership-based approach earlier in development lifecycles. That doesn’t mean charity, it means strategic alignment,  co-development agreements, shared access to regulatory expertise, infrastructure support and sandboxed clinical validation programs could all allow promising technologies to mature without being crushed by the process.

Why Does Radical Collaboration in MedTech Ultimately Save Lives?

Delayed innovations don’t just hurt quarterly growth targets. They impact real patients, real caregivers and real clinical outcomes. Every month shaved off development time, every barrier removed between a good idea and real-world deployment, is a win for business and for health. Radical collaboration isn’t about soft ideals. It’s about hard results. The companies and ecosystems that figure this out first will win in market share and in relevance.

Disclaimer. The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the official policy or position of Test Labs Limited. The content provided is for informational purposes only and is not intended to constitute legal or professional advice. Test Labs assumes no responsibility for any errors or omissions in the content of this article, nor for any actions taken in reliance thereon.