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Authors note: This is the first in a series of three articles where we share our ideas for boost­ing Norway’s health tech and life science exports.

The Norwe­gian govern­ment has set an ambitious goal to double health­care export revenues to NOK 50 billion by 2030. Despite its strengths, Norway’s life sciences sector is still relative­ly young and faces challenges, partic­u­lar­ly in terms of commer­cial­iza­tion, expan­sion, and access to risk capital.

Build­ing on our experi­ence in running health tech scale­ups, along with support from fellow CXOs and go-to-market experts, we creat­ed the Health Tech Export Engine.

The case for geographic expansion

Nordic health­care compa­nies boast signif­i­cant­ly higher share­hold­er returns and profit margins compared to global peers. Despite this, achiev­ing revenue growth and global scale remains a challenge. For Norway, which relies on oil and gas for 62% its exports, improv­ing the latter will be criti­cal for the future.

Nordic’s young health tech compa­nies will strug­gle to deliv­er on their valua­tion without geograph­ic growth. For many compa­nies that raised equity at high price tags during a period of low-cost capital, the transi­tion to a new normal is still in progress. In the major­i­ty of cases, even market leader­ship in the Nordics, may not be enough to fulfill their promis­es to investors.

Expand­ing into new markets is a daunt­ing task for CXOs, and Norway’s histor­i­cal­ly low health exports are not making it easier.

Team Norway assemble!

Team Norway, the collec­tive name for organi­za­tions such as Innova­tion Norway (the nation­al econom­ic devel­op­ment agency), cluster organi­za­tions, and the chamber of commerce, will be the driving force behind the growth of health tech exports. Togeth­er they are already running many high value initia­tives that are helping compa­nies to tackle challenges in innova­tion, go-to-market and geograph­ic expan­sion. Further align­ing these initia­tives around CXOs’ future needs, support­ed by local ground crews, will ensure endur­ing growth and geograph­ic expan­sion for the indus­try.

Health tech CXOs’ biggest headaches

We have identi­fied the six most criti­cal challenges that health tech growth compa­nies’ face in 2024. This list is based on our own research (includ­ing Maria’s PhD work) and inter­views with CXOs and inter­na­tion­al indus­try experts. Helping compa­nies to overcome these hurdles will require highly special­ized knowl­edge.

Market access related challenges

1. Regula­to­ry wall
   New MDR regula­tions are very challeng­ing to the indus­try, specif­i­cal­ly for small and medium sized compa­nies. Further­more, the current bottle­necks due to limit­ed capac­i­ties of notified bodies are making forward planning extreme­ly diffi­cult.
2. Reimburse­ment
   Systems are slow to embrace innova­tion and reimburse­ment plans are not aligned with digital health policies and new business models.
3. Pricing strat­e­gy
   Very complex to define and get buy-in for clini­cal benefits and trans­fer to pricing models. Almost none of the inter­viewed compa­nies had a strong under­stand­ing of pricing strat­e­gy.
   

Commercial challenges

4. Long sales cycle
   Lengthy and resource inten­sive procure­ment process­es, ranging from 6–12 months. The diffi­cult econom­ic environ­ment in Europe may further slow the sales process.
5. Secur­ing capital
   The next funding round will be harder then the last one – Especial­ly for hardware and biotech compa­nies. The relative­ly small number of health­care investors in Norway inten­si­fies compe­ti­tion for capital.
6. Geograph­ic expan­sion
   It is diffi­cult to scale inter­na­tion­al­ly due to very differ­ent health­care contexts, and risk of late mover disad­van­tage.

In addition to the six core challenges consid­ered preva­lent across Europe, we need to under­stand Norway-specif­ic reasons impact­ing expan­sion.

Reasons young companies postpone expansion

Further­more, we uncov­ered sever­al expan­sion-specif­ic challenges relat­ed to both strat­e­gy and opera­tions. These challenges can be catego­rized into two key areas: Incen­tives & market knowl­edge and running local opera­tions. We identi­fied four main reasons why compa­nies delay expan­sion efforts.

Local market focus and risk aversion

Nordic compa­nies often lag behind their global peers in revenue growth and scaling inter­na­tion­al­ly. A strong local support struc­ture and buying power contribute to this local market focus. Addition­al­ly, many compa­nies are risk-averse when it comes to enter­ing unfamil­iar markets, which delays their expan­sion plans. This is slowly shift­ing with a new gener­a­tion of Millen­ni­al and Gen Y CXOs who are more ambitious and risk taking.

Difficulty understanding the opportunity vs. costs

CEOs require real-world market knowl­edge to make informed decisions about expan­sion. Relying solely on reports is insuf­fi­cient. Prima­ry research and access to Key Opinion Leaders (KOLs) are crucial. Geograph­ic expan­sion also demands signif­i­cant invest­ments, and compa­nies must base their decisions on solid, valid data to under­stand the true cost-benefit ratio.

Lack of capacities to run expansion operations

Many compa­nies strug­gle to allocate the neces­sary opera­tional capac­i­ties for expan­sion efforts. This presents a major challenge for leader­ship teams, requir­ing their full atten­tion and resources. Without the proper infra­struc­ture and team in place, running opera­tions in new markets becomes a daunt­ing task.

Lack of trusted service providers and interim management

The scarci­ty of reliable profes­sion­al service providers for young growth compa­nies is a signif­i­cant hurdle, especial­ly when price is a concern. It is often challeng­ing to identi­fy high-value and trust­wor­thy service providers in foreign markets, which further hinders compa­nies’ willing­ness to expand.

A system for support­ing compa­nies to pursue growth needs to be struc­tured around these criti­cal obsta­cles.

Building a Health Export
Growth Engine

Creating a system that empowers CXOs to pursue global growth

In order to drive success­ful growth and inter­na­tion­al expan­sion, compa­nies need to devel­op key capabil­i­ties. Team Norway can aid this effort by focus­ing on four main areas: Market access, ecosys­tems, local ground crews, and growth tools. These can be divid­ed into two main categories: Partner­ships and Enablers.

Partnerships

Guide compa­nies through a complex maze.

1. Market Access
   Break­ing into new markets requires overcom­ing complex regula­to­ry and reimburse­ment hurdles. It’s essen­tial to have a clear path to market access, includ­ing a strong support system for clini­cal strat­e­gy verifi­ca­tion. Address­ing these access hurdles will stream­line entry and ensure compli­ance with local regula­tions.

• Clini­cal Affairs: Estab­lish formal service packages with select­ed Contract Research Organi­za­tions (CROs) to ensure excel­lence in planning and conduct­ing clini­cal studies. This formal­iza­tion is key to maintain­ing high standards and regula­to­ry compli­ance.
• Regula­to­ry Affairs: Partner­ing with regula­to­ry advisors is essen­tial for an efficient pathway to regula­to­ry clear­ance. Stream­lin­ing these process­es through formal­ized packages can expedite market entry.
• Reimburse­ment: Formal­ize service packages with reimburse­ment special­ists. Under­stand­ing the payer landscape, includ­ing proba­bil­i­ty and effort, is vital for success in new markets.

2. Ecosys­tem
   These are the second type of partner­ships, and vital for accel­er­at­ing commer­cial activ­i­ties and growth. Compa­nies need access to a network of hospi­tals, insur­ers, regula­tors, indus­try partners, and distri­b­u­tion channels. By tapping into these ecosys­tems, business­es can lever­age exist­ing infra­struc­ture and relation­ships to fuel expan­sion efforts.

• Clini­cal Affairs: Estab­lish formal service packages with select­ed Contract Research Organi­za­tions (CROs) to ensure excel­lence in planning and conduct­ing clini­cal studies. This formal­iza­tion is key to maintain­ing high standards and regula­to­ry compli­ance.
• Regula­to­ry Affairs: Partner­ing with regula­to­ry advisors is essen­tial for an efficient pathway to regula­to­ry clear­ance. Stream­lin­ing these process­es through formal­ized packages can expedite market entry.
• Reimburse­ment: Formal­ize service packages with reimburse­ment special­ists. Under­stand­ing the payer landscape, includ­ing proba­bil­i­ty and effort, is vital for success in new markets.

Enablers

Equip compa­nies with go-to-market power.

3. Ground Crew
   Local presence is key, and having a dedicat­ed ground crew consist­ing of local profes­sion­als and a more cost-effec­tive junior team can provide criti­cal support. This team assists in identi­fy­ing and recruit­ing local opinion leaders and clini­cal experts. Addition­al­ly, they can help with talent identi­fi­ca­tion, ensur­ing that compa­nies have the right resources and person­nel to succeed in new markets.

• KOL & Partner Scout­ing: Utilize local junior teams to identi­fy, inter­view, and onboard experts. These teams, composed of students and junior employ­ees, play a central role in estab­lish­ing market connec­tions.
• Business Devel­op­ment: Early business devel­op­ment activ­i­ties are best carried out by local teams with support from indus­try experts. This ensures that compa­nies have a ground-level approach to market entry.
• Talent Attrac­tion: Identi­fy­ing the best local talent is key to build­ing a strong presence. The ground crew can support talent attrac­tion, utiliz­ing county specif­ic channels and tailor inter­view process­es.

4. Growth Tools
   Upgrad­ing sales and market­ing capabil­i­ties is neces­sary to maximize reach and impact. Provid­ing AI tools, workshops, and knowl­edge databas­es can empow­er compa­nies to scale their opera­tions. Combined, the growth tools ensure just in time knowl­edge, train­ings and inspi­ra­tion.

• Tools Library: Compile all tools, insights, and reports, into a struc­tured knowl­edge base. Estab­lish a commu­ni­ty approach of infor­ma­tion sharing and enable an efficient search function.
• Workshops: Conduct workshops focused on defined market segments. These workshops provide criti­cal market insights and function­al skills build­ing, that are criti­cal for success­ful market entry.
• AI Tools: Collab­o­rate with AI company,(e.g. Oslo-based Brua.IO) to devel­op Large Language Model (LLM) tools. Use content from the tools library and workshop outcomes as a database to enhance decision-making.

Outlook

The journey to build­ing a Health Export Growth Engine is just begin­ning. By build­ing lasting capabil­i­ties and an inter­na­tion­al infra­struc­ture, Team Norway will drive the health tech sector toward sustained global expan­sion.

In our next article, we will outline a staged imple­men­ta­tion approach, provid­ing action­able steps to start the growth engine.

In the meanwhile, please reach out and share your feedback or start a dialog on how to further improve our ideas.