Cross-industry innovation in health care sector

Over the past decade, collaborations across industry boundaries have become increasingly popular in the corporate world. Cross-industry innovation (CII) describes the systematic incorporation of knowledge, concepts or technologies from more or less distant industries into a company’s innovation process. Through CII, firms are able to foster product, service or even business model innovation.

CII assists firms in cutting down uncertainty and risk in their innovation processes, because the solutions and technologies it introduces have already worked successfully in a different market.

Used primarily in the development of new products, CII is an attractive method for generating both radical and incremental innovations.

The CII process can be defined as:

  1. Abstracting a problem uncoupled from the company’s own industry
  2. Finding solutions to this problem through analogies in foreign industries
  3. Transferring these analogies in a way that is applicable in the company’s own industry

Prior research suggests that firms are able either to enhance a product’s novelty value (e.g., create more radical innovations) or increase effectiveness via CII initiatives. Since a specific solution or technology has already worked successfully in a different market, firms are able to cut down uncertainty and risk in their innovation processes.

Strict laws and regulations in the health care sector can lead to various challenges. Firms in this sector are often forced to achieve two simultaneous objectives: an increase in innovation novelty as well as an increase in efficiency. CII is a logical step in achieving these goals, because differences in the mindsets of cross-industry partners might expand views beyond a firm’s horizon. In order to analyze CII in the health care sector, we interviewed seven companies and conducted a multiple case study analysis.

We found that firms within the health care sector require unique organizational capabilities to create cross-industry products, services or even conduct business model imitation across industry boundaries. Several health care firms that we studied identified automotive and aviation as lead industries for the regular transfer of technologies, processes and even business models. Furthermore, scouting and screening initiatives need to be promoted beyond the health care sector, because otherwise an increase in the products’ novelty value and the introduction of new trends in the health care sector are quite unlikely.

The complete article was written by:

  • Karoline Bader
    MA, PhD candidate at the Chair for Innovation Management, Zeppelin Universitaet gGmbH, Germany
  • Ellen Enkel
    Prof. Dr. Phil., Head of the Chair for Innovation Management, Zeppelin Universitaet gGmbH, Germany
  • Charlott Buchholz
    Bachelor student, Corporate Management and Economics, Zeppelin Universitaet gGmbH, Germany
  • Lorenz Bohn
    Bachelor student, Corporate Management and Economics, Zeppelin Universitaet gGmbH, Germany

Read the full case studypdf407.94 kB

EY refers to one or more of the member firms of Ernst & Young Global Limited (EYG), a UK private company limited by guarantee. EYG is the principal governance entity of the global EY organization and does not provide any service to clients. Services are provided by EYG member firms. Each of EYG and its member firms is a separate legal entity and has no liability for another such entity's acts or omissions. Certain content on this site may have been prepared by one or more EYG member firms