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Life science CEOs see future in technology, disruption

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Dive Brief:

  • Life sciences CEOs are actively pursuing disruption in their industries, and digital technologies are seen as the key to transformation, a new KPMG survey finds.
  • A sweeping 86% of CEOs see their organizations as active disrupters, up from 72% last year, with 78% calling technology investment a strategic rather than tactical maneuver. Also, 43% plan to increase investment in disruption over the next three years to meet corporate growth goals.
  • Leaders also are optimistic about realizing return on investment on technologies. Asked about investment in digital transformation, artificial intelligence and robotic process automation systems, 30% expect to see ROI within 12 months and 25% in one to three years.

Dive Insight:

The survey reflects a growing embrace of IT tools across the healthcare spectrum. Large health systems like UPMC and the University of Pennsylvania are using entrepreneurial arms to develop and test new technologies for use in-house and as potential new revenue streams.

Digital health funding in the first half of 2018 totaled $3.4 billion across 193 deals, according to a recent Rock Health report. On-demand healthcare services was the top-funded category, followed by disease monitoring and consumer health information. The internet of connected medical things market alone could hit $158 billion by 2022, up from $41 billion in 2017, Deloitte predicts. More than half of medtech leaders are implementing new business models to drive innovation and sales.

The new report shows U.S. business leaders are also growing more confident in the digital tools they use, with 73% saying they trust the accuracy of predictive analytics over historic data.

When it comes to AI, 30% said they have already implemented machine learning in their organization. Another 48% said they have begun a limited implementation of AI, while 23% said they are piloting an AI project. CEOs see AI’s top three benefits as reducing operating costs (45%), improving risk management (45%) and improving data governance (40%).

Meanwhile, cybersecurity remains high on CEO’s radar, with 33% calling it the top risk for their organization’s growth. In the U.S., 68% of CEOs said a cyberattack on their business is inevitable. Yet while more than nine in 10 leaders feel prepared to identify new cyber threats, just 41% believe they are very well prepared to prevent attacks or limit the fallout when they occur.

Healthcare companies are certainly no stranger to cybersecurity risks, particularly data breaches and malware. Many organizations have failed to integrate security protocols into day-to-day practices or train employees how to thwart viruses and other risks. These problems can be costly in terms of litigation and cleaning up the virtual mess.

The KPMG report finds that CEOs are rethinking their cybersecurity programs and shifting from point security projects to longer-term sustainability of cyber risk mitigation.

Overall, leaders are upbeat about growth and the economy, with 93% of U.S. CEOs expressing confidence in their organization’s future. Asked about their outlook for top-line revenue growth over the next three years, 60% predicted an increase of greater than 2%, according to the survey.