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Australia's digital health sector yields record-breaking economic returns
Wed, 14th Feb 2024

In an Australian first, Assistant Minister for Health and Aged Care Ged Kearney launched an economic impact assessment of the country's investment into digital health at Parliament House today.

Produced independently by global firm L.E.K. Consulting, the report analysed the impact of the MRFF-funded ANDHealth+ program and Masterclass: ACCELERATE series on Australia's MedTech sector. It revealed that for every $1 million invested by the Government and industry into the digital health sector, $19.7 million in capital is raised, 56 new jobs are created, and $4.2 million in gross economic value is delivered.

This impressive return significantly outperforms other commercialisation programs in both the general technology and deep tech sectors. The report also suggested that Australia may have finally found a successful model for commercialising its MedTech industry, which has yet to become a principal driver of economic growth, despite government investment into initiatives like the $15bn National Reconstruction Fund and the Medical Research Future Fund (MRFF).

In particular, SMALL to Medium Enterprises (SMEs) participating in the ANDHealth+ scheme raised an average of $1.1 million in capital in just six months — almost double the $600,000 raised by other SMEs. They also consistently achieved 4.1 international market launches for every $1 invested, positively impacted 87 patients for every $1k invested, and pursued 9 clinical trials for every $1 million invested — a dramatic increase of clinical trials per $1 million invested by other digital health SMEs.

L.E.K. Consulting Australia's managing partner, Stephanie Newey, stated, "Digital health is an increasingly important contributor to health and economic outcomes in Australia, but historically, the sector has faced commercialisation hurdles due to limited access to specialised knowledge and capital."

Solving these commercialisation challenges, the ANDHealth model has resulted in a cumulative total of $161.8 million in capital being raised, 512 new jobs being created, 1 million patients reached, and 30 product launches internationally by Australian companies. It is noted that the onshore capacity to successfully export ideas and innovations is a fundamental issue for Australia, with the International Institute for Management Developments (IMD) ranking Australia as the third worst of 64 countries for entrepreneurship.

Bronwyn Le Grice, ANDHealth CEO and Managing Director, said, "A distinctive capability of digital health SMEs is their ability to grow locally and scale globally, servicing global patient populations while remaining headquartered here in Australia. This creates local, highly skilled, deep technology jobs, has the potential to deliver significant economic growth and export impact and improve health outcomes for all Australians."

Ms Le Grice adds, "MRFF investment into digital health has delivered returns of millions in capital and hundreds of jobs created. With the right investment and regulatory incentives supporting onshore digital health innovations, there is potential for Australia to realise even greater health and economic gains."

Highlighting that the success of their cooperative commercialisation model underlines how a similar approach could be deployed in other sectors, Ms Le Grice concluded, "Most importantly, we have demonstrated that our cooperative commercialisation model, led by the industry for industry, can deliver transformative commercialisation outcomes. This model could easily be deployed in other sectors, which would have immeasurable impact on our future prosperity at a time in which we are struggling with overall declines in productivity across the economy."