Wearable Technology - The Future of Human Health

Kratzman, Le Dain, MureFinpro London and Stamford 24.6.2015

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Executive Summary• Wearable technology estimated to be worth $42 billion within five years, promises to revolutionize marketing, retail, fitness, and

medicine as it grows at 35% compounded annually.

• Finland can capitalize upon its integrated digital and mobile heritage. Finland’s infrastructure is ahead of the rest of the world - now is the time to exploit Finnish brainpower and its innovation warehouse for wearable technology.

• Global leaders – Apple, Samsung, Microsoft, Google, Sony, GE, Pfizer, Astra Zeneca, Abbott, Michael Kors, Ralph Lauren, Ford, BMW, Volvo and others are integrating wearables and health sensors into their business models.

• Medicine is in transition and care delivery will happen at home by consumers connected to their doctors through wearable computing.

• This new balance between work, life, and health is an irreversible process, and wearables will impact the mobile and healthcare industries as it continues to reach into everyday life - wellness, fitness, health and hospital at home, the military, and infotainment.

• Current major applications of wearable devices in healthcare include BP monitors, CGM devices, Smart Glasses, PERS, insulin pumps, ECG monitors, hospital and home bed and floor monitors, baby monitors, and the list goes on. But as healthcare moves into homes, workplaces, schools, etc., these and other devices need to be less institutional and more lifestyle designed and operational.

• Smart devices are the fastest-growing element of the “internet of things”, the linking of everyday objects to the internet so they can collect and receive information from other connected devices and web-based services. This is Finland’s “sweet spot”

• Data privacy and data traffic management is a challenge for the market, so a new layer of complexity and need exist.

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Key Wearable Themes

1. Bio-Tech Fusion2. Synced Lifestyle3. Organic Computing4. Human Enhancement5. Health Empowerment6. Personalized Context

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Demand and Drivers• Wearable technology devices currently encompass the following categories: fitness, wellbeing and lifestyle

activity monitors, wearable patches, implantable devices for drug delivery, sleep sensors.• Wearable technology presents an opportunity to find exciting ways to integrate technologies with our entire

bodies thus personalising our relationship with technology.• Every fifth adult in the US and Europe is involved in regular fitness activities. The fitness and wellbeing market

grows 15% annually. 11% use a wearable device; 14% use a smart phone app. 10% of American adults own an activity tracker. The fitness mobile applications market grows 60% annually.

• 90m wearable Computing devices will be shipped in 2014 driven by sports, health and fitness (ABI Research)• Gartner predicts that 52% are currently considering purchasing wearable technologies.• A report from Juniper Research indicates that global retail revenue from smart wearable technology is

estimated to be worth $8.4 billion in 2014. This will treble by 2016, before reaching $53.2 billion by 2020. • The market will be driven by an increase in

smart technology in the following key areas:• Health & Wellbeing• Sports and Fitness• Biotech Medical Fusion• Smart Fabrics and Textiles• Augmented Reality• Smart watches• Smart glasses

Euromonitor International Analyst Survey (January 2014).

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Demand and Drivers

• Global giants cannot innovate fast enough or by themselves. New ideas and technologies have to come from outside their companies. Finland has a wealth of talent in this area related to Big Data, Biotech, remote monitoring, cyber security, robust portable devices.

• Increasing life expectancy rates and significant shifts in societal needs and evolution. Growing demand for preventive, personalized medicine, long-term care solutions, healthful lifestyle for all ages, and care anywhere are the major drivers for the growth of wearable technologies

• The growing need and demand for portable devices, for real time data analytics, patient satisfaction, and reductions of the cost of care are further driving the growth of wearable technologies. Most of the devices to date have evolved from the fitness, healthcare, and mobile industries

• The global medical community is seeking wearable and mobile technologies to maintain and grow its patient base. Over 5,000 hospitals in the the US and over 100 health insurance companies need wearables to maintain and grow profits, while maintaining the health of their patients and subscribers.

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Demand and Drivers• Activity trackers will continue to be the most popular wearable device as people carefully monitor their activity levels and

energy output. Concerns around weight management and even obesity are the prime drivers behind this wearable device type (source ABI Research)

• The main technological challenges to overcome are related to battery (30%), user interface (16%), applications (14%) and display technologies (12%). 90% think that it is very important to have touch user interface in the wearable device (source “Future of Wearable Touch Devices”, Canatu). This is a key driver for Finnish development expertise.

• Many of the recent technology developments in the sector have come from start-ups and smaller companies. Key players have begun focusing on supporting platforms such as Google’s Android Wear, Samsung’s SAMI data architecture or Intel’s Edison design platform. This has enabled the key players to respond easily to new device developments, rather than developing the devices themselves. This will be a key driver for partnering with Finnish technology talent.

• The global medical community is exploring ways to use wearables to improve care delivery. A key deliverable is the empowerment, education and involvement of the patient and will enable vastly improved and coordinated medical care delivery. For medical purposes, wearable will expanded to implantable and digestible (biosensors) to facilitate:

• Increased patient engagement• Closer communication between patients and medical service providers• Tailored patient services• Reduced cost of care / improved efficiencies• Improved decision-making

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Demand and Drivers

• The worldwide wearable computing market has expanded beyond early adopter status to more functional and stylish lifestyle accessories.

• The medical community is now exploring ways to use wearables to improve care delivery. It is not so much about the data and tools but rather the empowerment of the patient, the education of the patient, the involvement of the patient, and integrating the patient and doctor through coordinated care delivery. Care delivery is the key and wearables are catalysts.

• Wearable have expanded to wearable, implantable, and digestible. It is about biosensors and health integration - key areas of Finnish expertise.

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Demand and Drivers

• Venture funding of biosensors and wearable technology increased 5X from 2011-2013—more than double the growth of digital health overall during the same period. The merging of these two spaces into a singular category — biosensing wearables — is where we see the most potential to impact healthcare.

• Every fifth adult in US and Europe is involved in regular fitness activities, number of people practicing active and healthy lifestyle constantly grows. Thus fitness and wellbeing market keeps growing 10-15% yearly, with value of USD 55 billion reached in 2012.

• At the close of 2014, the US accounted for roughly 80% of the global wearables market; but use data trends predicts that wearables will follow global fitness trend with the UK becoming the most important European market

• Booming mobile apps market responds to growing healthy lifestyle popularity with spectacular 60% growth of fitness mobile apps market segment (with estimated value of USD 250 million in 2012). ON World called 2013 “a remarkable” year for mobile apps for sport and fitness, as this market segment gained USD 800 billion in venture investments in 2013. That enormous interest to the segment makes value forecasts quite difficult, experts estimations vary from UDS 1 to 26 billion by 2017.

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What is the Opportunity?

• Multiple ways to engage the market:• Health & wellbeing• Sports & fitness• Biotech medical fusion• Smart fabric & textiles• Smart home, cars, institutions• Smart watches & jewelry• Smart glasses

• The medical community is exploring ways to use wearables to improve care delivery:• Increased patient engagement• Closer communications between patients and medical service provider• Tailored patient services• Reduced cost of care /improved efficiencies• Improved decision making

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Why is this Good for Finland?• Wearables represent a natural market for Finland, Finnish expertise & talent. The main

technological challenges to overcome are:• Battery relate (30%)• User interface (16%)• Applications (14%)• Display technologies (12%) (Future of Wearable Touch Devices, Canatu)

• Many of the recent technology developments come from startups and SMEs. Many of the multinational players are watching startups and SMEs, thereby creating potential partner, business, and financial opportunities for Finnish companies & talent

• The US is coming to Finland. Startup Health will open its first overseas office in partnership with GE Healthcare and Team Finland

• In essence, wearables is a market created by and for Finland. Now is the time for Finland to re-assume its leadership role

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