What has caused the stagnation in children’s health innovation?

So why is that paediatrics is severely lagging behind? 

For one, there’s a simple obstacle of funding. Despite children representing 25% of the population, children’s healthcare receives less than 5% of the funding. To our knowledge, there are only two VCs globally that focus on children’s health.

There may be a number of explanations for this. Children, by and large, are very healthy: by which we mean chronic illnesses are pretty rare. Even those suffering from serious illnesses (e.g. cancers), about 80% will recover. That remaining 20% is the problem area, the target audience who need paediatric innovation the most: and yet, from an investor’s perspective, that’s a small niche. 

The other consideration for investors is the expectation of returns. The impact of children’s health is long term—decades, not years—making it a difficult investment for investors looking for returns and exits. That’s combined with the fact that, in the UK, the NHS operates on a 12-month budget, making this return on investment even harder to predict. 

When considering why children’s health is lagging, there’s an important distinction to make between adult health and children’s health—a distinction which is often forgotten. This has a knock-on effect when it comes to improving the quality and suitability of paediatric care. It’s not simply enough to take adult-based solutions and scale them down for children: paediatrics requires bespoke innovation with children at the centre of any trials or innovation process.

So why do we need to innovate now? 

For one, there really is no more time for delay. Studies underline the reality that, the earlier on you can tackle health challenges, the better individuals’ health will be going forward. A study in The Lancet showed that children who had a respiratory infection, such as bronchitis or pneumonia, before the age of 2 were twice as likely to die prematurely as adults. 

Innovation gets forgotten all too easily in a public context. When public purse strings are tightened, and NHS budgets are cut by incumbent governments, innovation often gets left on the floor as other short term challenges are prioritised. This underlines the huge need for private innovation, led by entrepreneurs and funded by private investors.  If the private sector is investing in the future of humanity then hopefully governments will also do the same.

We are currently facing an exciting turning point around health tech innovation. During COVID, the healthcare system saw decades of progress advance in a matter of weeks, underlining the capabilities of digital health, in particular telehealth and technologies that enabled remote care. This massively lowered the barriers to entry for healthtech startups, who suddenly saw far greater willingness for trialling and adoption by clinicians, insurers, and patients. Entrepreneurs operating today can seriously benefit from this shift. 

There are also wider learnings to take from paediatric innovation that could aid the healthcare system more broadly. The spectrum of childhood, from 0 to 18, has huge physiological changes and differences. If you can solve for this, there may be massive learning opportunities that can be scaled up for later in life. Consider the human lifecycle more broadly—in later life, you are a dependent, just as you are in early childhood. Again, a huge opportunity for learnings from paediatrics to be applied to geriatric care. 

What do children’s health entrepreneurs need?

Through the Children’s Health Impact Accelerator, we’re building a programme of support that aims to provide paediatric entrepreneurs with everything they need to set them up for success. So what does this include? 

First and foremost, you need to have children at the centre. Innovation is doomed to fail when it's built around adults and is scaled down for children. To succeed, ensure you tailor technology to the children for whom it is designed. There’s a positive here—children are natural innovators, and they know exactly what they want and what they don’t want (albeit in a blunter way than adults). 

Around these children, organisations need to ensure a culture of innovation. You need different stakeholders who are willing to drive innovation. This includes hospitals, who will provide the clinical validation for any potential technologies. We’re lucky to be working with Alder Hey Children’s Hospital, an organisation that has decades of experience of providing the best innovative care to children. Given the complexity of the highly regulated healthcare environment, working alongside healthcare institutions will give you a huge strategic advantage and help you get technologies implemented, monitored, and scaled. 

We want to work with entrepreneurs who are open-minded and willing to learn—these make the best founders. If you’re coming in pretending you know everything, then you probably don’t need an accelerator. 

Entrepreneurs also need to be able to measure the impact they are having. This might include financial savings, operational efficiencies, and lives saved. Maximising profit really shouldn’t be your focus: and if it is, you might be in this for the wrong reasons. You’ve got to be aware that children’s health isn’t a quick payoff: in 2023, these aren’t going to be billion dollar businesses. It could be in the future, but not now. 

As such, any potential founder needs to have the right reasons for being there, to endure the additional challenges of innovating in children’s healthcare, on top of global headwinds around tech at the present. Those with the right passion and commitment will know how big the possible reward could be on the other side.