‘Latvia’s health technology innovation environment is infertile’ / Article

In Latvia, international cooperation opportunities are offered by Rīga Stradiņš University (RSU), which hosts the European Institute of Innovation and Technology’s Health Knowledge and the Innovation Community (EIT Health) Centre in Latvia.

However, despite this impressive potential, the path of innovation in the field of health technologies in Latvia often runs into a dead end, more often than not related to attracting funding or trying to navigate the sector’s complex regulation, notes Līga Žūka, Director of the RSU Innovation Centre.

Latvia has long been stagnating in the Innovation Index. Although we are not losing our position, we are not growing either, and that is not good. Ostensibly, everything is in place – ideas, people, and international contacts. So where is the problem?

In my opinion, what is missing is a clear, understandable, and practical system that would help to transform these ideas into real, competitive products. In the EIT Health discussion “Morning Talks on Healthcare,” even start-ups and hospital representatives acknowledged that they often have to knock on unfamiliar doors in the hope that they are the right ones.

As far as health technologies are concerned, the situation is even more complicated, because this is not a field where a good idea or a prototype alone is enough. Certainty is required that the solution under development will meet clinical requirements and comply with European Union (EU) and national regulations, which often entails a lengthy and complex process. In Latvia’s case, there is still nobody available to explain or help candidates to navigate the process.

RSU plays an important role in all of this – not as a financier, but as a bridge between different stakeholders. Hackathons, discussions, and networking events facilitate cooperation and thinking about the future of healthcare. Platforms like this allow entrepreneurs to talk to doctors and regulators, which may well be the only time when the different parties actually hear each other.

However, that alone is insufficient, because the system as a whole is not open to new solutions – both literally and formally. Oftentimes hospitals cannot cooperate with start-ups simply because the regulations are not adapted to today’s reality. For instance, rules for the exchange of medical data are still not fully clear.

One of the biggest obstacles – funding

Not surprisingly one of the biggest obstacles is funding. Although venture capital funds operate in Latvia, and some are even managed by Latvians, oftentimes these funds choose not to invest in Latvian start-ups. Why? That is a question that requires deeper examination. Are the ideas too weak? Is there a lack of communication skills? Or do local investors simply trust foreign solutions to a greater extent?

One thing is clear – the health technology sector is specific. A nicely designed presentation is not enough.

You must understand medicine, be able to verify the safety of the product, and be prepared for a long development and registration phase. All this requires money, time, and expertise, which start-up founders often lack. This is also why only a few entrepreneurs decide to participate in international programmes, such as those offered by EIT Health, where the most successful participants can receive tens of thousands of euros in funding with which to develop their technology.

In this regard, Estonia has done its homework excellently. For over a decade now, our northern neighbours have been creating an environment in which it is easy for start-ups to grow and develop – with little bureaucracy, documentation available in English, and targeted state investment to ensure that scientists and entrepreneurs can work together.

Lithuania is not far behind. Having adopted a strategic approach, Lithuania is building a system where innovations are seen not as something disruptive or risky, but as an opportunity and a value. In Latvia, we still often look at innovation with caution because we are afraid to take risks.

Calling things by their real names

Instead of simply stating that we lack money or that bureaucracy is too onerous, it is worth calling things by their real names, and defining the main problems that could be addressed today.

I believe that problem number one is that Latvia lacks specialised support instruments for health technology start-ups. Unfortunately, at present there are no incubators or accelerators ready to work with these teams in the long term.

Secondly, there are not enough professional consultants who understand technology and medical regulations – the reality is that no start-up founder can become an expert in every area.

And thirdly, cooperation with healthcare institutions is far too complicated. Bureaucracy and gaps in regulation preclude new solutions from being introduced in hospitals or clinics, even when the interest is there.

A clear strategy must be developed

In order for us to finally move forward and see real positive change, Latvia must develop a clear, coordinated, and sustainable strategy focused on specific actions and an action plan.

Special support mechanisms for the health technology sector need to be introduced with the involvement of both the state and the private sector. Support in the form of actions, not just words, must be provided for data accessibility and cooperation with medical institutions.

And competence centres must be created where start-ups can receive practical assistance, both in relation to regulations and on how to better structure a project to attract investor interest. The EIT Health Centre in Latvia is ready to take a leading role in creating such a roadmap.

Latvia has everything it needs to become a strong innovation hub in health technologies. However, we lack one essential thing – a clear system that enables an idea to reach the market. Innovation cannot flourish in infertile soil. It grows in a supportive environment.

This opinion piece was first published by Labs of Latvia and is reproduced by kind permission.