In an era when medical devices are starting to become commoditized and the industry faces new taxes in the large U.S. market, competitive pressures are making clear the importance of collaborating just to stay ahead. Faced with the demand to be more creative and aggressive when it comes to innovating, this could turn out to be a new era of opportunity in many ways as the medical device industry moves from a siloed approach to a new reality, and where competition thrives and gives birth to new and better ideas.

At IBM, we concluded many years ago that we couldn’t invent everything we needed by ourselves and we wouldn’t always be the first with the latest technological breakthrough. That conclusion became even more important as we transformed from largely a hardware company to a software and services company. This perspective has helped create some guiding principles around collaboration that many companies could take to heart if they truly want to innovate and transform their businesses. And as the medical device industry begins to transform itself to look more like a software differentiated services industry, medical-device companies will benefit from many of the strategies learned in the IT industry.

Historically it was fine, if not ideal, for companies in many industries to operate monolithically, amassing patents and intellectual property to inhibit competition from entering the market and vying for the best talent. But as new market forces take hold, every industry is faced with a rapidly changing landscape. Driven by the reality of a global economy, the emergence of a new digital age where interconnected systems can sense and respond to change, as well as stringent compliance demands, these forces have created a new playing field.

So how can collaboration be the catalyst that can help a medical-device company innovate and transform? Based on our own experience we offer the following guidelines:

• Collaborate with clients and competitors for new insight. Opening the doors to collaboration must be done intentionally. Choose collaborations that provide specific technical or industry expertise. When a technology becomes commoditized and when highly profitable technologies aren’t highly profitable anymore, finding the right organizations with which to partner, identifying new ways of working, and driving a continued stream of innovation is key. For example, when IBM collaborates with healthcare and life sciences organizations on research projects, each brings something to the table that the other one needs.

• Combine talents. As an IT company, we don’t have access to the insights and data a clinical organization or device manufacturer does and they may not have access to the insights and methodologies that an enterprise IT company has. By combining our respective talents we can frequently find innovative solutions to industry challenges. This concept also can apply to collaboration with traditional competitors. If the entire market can expand through a collaboration then all participants win. An example of this can be found in the collaboration of medical imaging vendors to agree on the DICOM (Digital Imaging and Communications in Medicine) standard for digital images.

• Consider the IP portfolio and how to leverage it. Think hard about what an intellectual property portfolio means and how to leverage it in new ways. Typically protecting IP is all about preventing others from using it. The IT industry is somewhat unique in this perspective because most of the major players are fully cross–licensed. The IP itself can be a significant new revenue source. In some cases providing open access to a patent commons can help the entire industry to grow and the owners of the IP to generate more revenue than they could by keeping the IP locked up.

• Collaborate in global and emerging markets. Healthcare is one of the top growth industries in Central Europe, Latin America and parts of Asia. While the market opportunity swells, strategic investments are underway with both government-funded and privately funded projects, driving innovation in places like South America, Eastern Europe, and Asia. By collaborating with partners in new markets, an expanded presence brings early entry to the market and expanded presence as the market grows.

IBM recently announced a new research collaboratory in Taipei, Taiwan. The IBM collaboratory — where IBM Researchers co-locate with a university, government, or commercial partners and share skills, assets, and resources to achieve a common research goal — brings together expertise in the areas of services, privacy, data management, analytics, and healthcare device management. IBM is partnering with the Ministry of Economic Affairs Taiwan as well as the Industrial Technology Research Institute and the Institute for Information Industry Collaborate with academia. Many of the best breakthrough ideas start in academia. Creating a broad set of collaborations with academic institutions can open the door to early access to their innovation so they can be used for your business interests as quickly as possible. Working out collaboration agreements around precompetitive research can allow a company to quickly bring new innovation to products and services.

In the midst of a competitive and challenge market for this industry, collaboration just may be the key to some remarkable new breakthroughs.