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by EOS Intelligence EOS Intelligence No Comments

Driving Down Healthcare Costs with AR and VR Technology

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Augmented Reality (AR) delivers digital components atop an existing reality in order to make it more meaningful and interactive, while Virtual Reality (VR) enables immersive simulation of real-life setting or environment. AR and VR have wide-reaching applications in healthcare, from treatment and therapy to training and education. Though AR and VR have promising applications in healthcare, are these technologies prime for widespread adoption? This will largely depend on how effective these technologies are in relation to its cost of investment. Some of the AR and VR solutions standout to bring in significant cost savings.

In 2015, based on analysis of 80,000 surgical cases (retrieved from 2010 National Inpatient Sample, USA), Johns Hopkins University School of Medicine estimated that if all US hospitals increased the number of minimally-invasive procedures by 50%, nearly 3,600 complications could be avoided and hospital stays could be cut by 144,863 patient days, resulting in total cost savings of about US$288 million annually.

Augmented reality can offer higher accuracy

Despite such evident advantages, minimally-invasive surgeries are not as common as traditional approaches, because they require high precision and accuracy – and that is exactly where AR can be useful. For instance, Philips, a Dutch medical technology company, developed a real-time imaging solution which allows projection of high-resolution 3D image of the patient’s spine and a fully-automatic AR navigation system which guides the surgeon to plan the optimal device path, and subsequently place pedicle screws. The first pre-clinical study on the technology showed that the use of AR technology resulted in 85% accuracy as compared to 64% accuracy in case of conventional techniques. Using AR technology, doctors can perform minimally-invasive surgical procedures with high level of precision and efficiency, while minimizing mistakes and errors, thus reducing the preventable costs.

The first pre-clinical study on the technology showed that the use of AR technology resulted in 85% accuracy as compared to 64% accuracy in case of conventional techniques.

Remote mentoring and assistance delivered through augmented reality

Tele-mentoring is another practical application of AR which can bring considerable cost savings. In some complex cases, the locally available healthcare professionals are not skilled and experienced enough to carry out the procedure and experts from different cities or countries need to be called in to perform the treatment, and this involves a lot of time and costs. There are certain AR platforms that allow experts from remote locations to virtually join a surgical procedure. Using Google Glass or tablet, a real-time projection of the remotely located expert’s hands could be overlaid onto the local surgeon’s field of sight during the procedure.

In 2016, as a part of ongoing neurosurgical collaboration between Children’s of Alabama Hospital (USA) and Children’s Hospital in Ho Chi Minh City (Vietnam), Virtual Interactive Presence and Augmented Reality (VIPAR) telecommunication system was implemented at both hospitals to provide intraoperative assistance. The cost of setting up the hardware, software, and internet connection (for one year) was around US$2,500. This is far less in comparison to the cost of the American experts’ travel and stay in Vietnam. For instance, the expense of sending a team of three doctors from the USA to Vietnam for 14 days could total to around US$12,500.

Virtual reality could be an alternative to opioids

VR therapy is proving to be effective in providing relief from pain. Several studies have suggested that parts of the brain linked to pain-somatosensory cortex and the insula are less active when patients are distracted by an immersive experience created by VR technology, thereby reducing the pain. A clinical study by AppliedVR, a US-based company building VR platform for use in healthcare, suggested that VR therapy was effective in reducing pain by 52%.

This can prove to be a breakthrough in the field of pain management, and possibly reduce the opioid prescription. High-income countries such as the USA, Canada, UK, and Australia are struggling with the opioid crisis. Although, the cost of opioids is relatively low, the resulting addiction problems and drug overdose deaths lead to high societal and economic costs. For instance, the economic cost of the opioid crisis in the USA in 2015 was estimated at US$504 billion (85% of these costs were associated with fatalities resulting from overdose). This was equivalent to about 2.8% of GDP of the country that year. For countries such as the USA, where opioid epidemic is declared as a public health emergency, there is a high demand for non-addictive, less harmful alternative pain therapy such one delivered through as VR.

The economic cost of the opioid crisis in the USA in 2015 was estimated at US$504 billion, equivalent to 2.8% of GDP of the country. For such countries, there is a high demand for non-addictive, less harmful alternative pain therapy such as one delivered through VR.

Virtual visualization can reduce the cost of training

VR-based medical training through immersive visualizations is proven to be more effective than conventional teaching methods. In 2015, Miami Children’s Health System claimed that the medical professionals could retain as much as 80% of the information from a VR training session, compared to 20% retention level with traditional teaching methods.

VR can also help to significantly reduce medical training costs. For instance, elderly care facilities in the USA spend on average US$3,000 per employee to teach tracheal insertion through traditional methods; however, Next Galaxy, a US-based company, developed a VR software that will bring down the cost of training per employee to US$40. This VR software uses leap motion force feedback technology which enables the medical professionals to sense when the procedure is going wrong. As a result, this tool can create a realistic scenario, and medical professionals can have nearly hands-on experience of performing the procedure in a safe and controlled training environment, without risking the life of a patient, thus saving costs incurred in potential litigations.

EOS Perspective

AR and VR are among the next-generation technologies with the potential to transform healthcare. There is a consensus amongst analysts that a healthy growth of the global AR and VR in healthcare market can be expected over the coming years. For instance, a research company MarketsandMarkets estimated the market size at US$769.2 million in 2017, with forecast growth at a CAGR of 36.6% to reach US$4,997.9 million by 2023. Similarly, another research firm, Key Market Insights, expects the market to reach to US$5.6 billion by 2022. Several clinical studies indicate that innovative techniques powered by AR and VR are more efficient and effective over conventional methods, thus spurring the interest of private companies and in turn, expanding the market space.

Though AR and VR technologies offer significant opportunities for cost savings, the cost of investment in such new and emerging technologies is also an essential point of consideration.

There is high uptake of VR applications that are compatible with consumer-grade VR headsets such as Google Cardboard, Oculus Rift, HTC Vive, etc. These devices have already reached mainstream use. Moreover, as the technology matures, the competition is increasing, further driving down the price of the devices; for instance, in 2017, Oculus Rift (headset with motion sensor controller) was priced at US$399, half of its launch price in 2016. Increasing use of more affordable consumer-grade VR devices for healthcare applications will further bring down the cost of investment, thereby driving adoption of the VR technology in the sector.

Increasing use of more affordable consumer-grade VR devices for healthcare applications will further bring down the cost of investment, thereby driving adoption of the VR technology in the sector.

While AR headsets and smart glasses such as Microsoft HoloLens and Google Glass are still in trial version, some of the AR applications can be experienced on any smartphone/tablet without the need of headset or controllers, thus making it more accessible and affordable; for instance, EyeDecide, developed by OrcaMD, is an AR-based mobile app that simulates patient’s vision to demonstrate their actual medical condition. Such applications, which are priced as low as US$1.99 to US$4.99, can be widely used to enhance patient experience.

Healthcare organizations could leverage AR and VR technology to improve efficiency and quality of service and enhance patient care while cutting costs. Moreover, as these technologies are reaching mainstream, the cost of investment is expected to go down. Thus, AR and VR technologies are proving to deliver more value while reducing overall costs.

by EOS Intelligence EOS Intelligence No Comments

Is Technology the Solution to the Next Food Crisis?

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The UN estimates rapid population growth with additional 2-3 billion people globally by 2050. To feed this swelling population, food production needs to scale up by 70%, otherwise we are likely to be at risk of a global food crisis. With resources becoming scarce and climate change diminishing crop production by 2% per decade, food production methods need radical transformation and technology could be the possible solution to it. Using technology in farms and fields holds extraordinary promise of helping the agriculture sector become more efficient, productive, and sustainable.

Population increase, resource limitations, and climate change are putting pressure on farmers to produce more with less. To boost production it is essential to efficiently manage farm inputs such as seeds, fertilizers, and pesticides, optimize sowing and harvesting cycles, monitor field data (soil condition, plant stress, etc.) for improved crop yield, among others. However, managing these inputs is cumbersome and laborious without consistent and precise monitoring. Unfortunately, many farmers still rely on guess work and traditional processes instead of actual data to make all farming decisions. Technology could prove useful by helping farmers to closely monitor all farm activities and take informed data-driven decisions to improve production levels.

Technology can offer relief to pressures in agriculture

Emerging technologies such as weather tracking, robotics, and Internet of Things (IoT) can consistently monitor every aspect of agriculture such as soil fertility, health of farm animals, temperature and humidity conditions, optimal time to sow and harvest, schedule chemical application on fields, analyze irrigation requirements, among several other functions.

Weather forecast-based predictive modelling

Weather is a crucial determinant to ascertain the best time to sow, fertilize, spray, irrigate, and harvest crops. About 90% of crops losses are due to weather events and 25% of those losses could be avoided by using weather forecast-based predictive modelling on farms. Integrating weather forecast models with farming practices could enable better decision-making and improve crop yield. Companies such as John Deere, Ignitia, etc., already offer comprehensive weather-based farming solutions.

Robotics

Robotics is another emerging technology gaining traction in the agriculture sector. With robots capable of executing all functions from sowing to harvesting, they could easily replace human labor in the foreseeable future, particularly, at a time when some countries are facing labor shortage. For instance, in 2017, the UK suffered from 20% shortfall in migrant labors, which was mostly blamed on the Brexit vote that has made the UK unattractive for overseas workers to seek employment. The labor shortage is likely to get worse in 2018, making harvesting at labor-intensive vegetable and fruit fields difficult. Hence, some farms across the UK are considering to employ farm robots for vegetable and fruit picking.

Robots are also far more efficient than human labor, which is the key requirement to boost food production – each Harvest CROO Robotics’ robot (made by a US-based company that develops robots for the agriculture sector) is capable of harvesting eight acres in a day, which is equivalent to the work of 30 human pickers.

Internet of Things

Further, IoT has gained significance across several industries and has now entered the farms. IoT is turning farms into a mesh of smart sensors connected in a network, with the help of which every granular detail of crop, soil, livestock, or farm can be analyzed, thus, enabling farmers to devise smart cropping techniques and farming methods. IoT can streamline farming processes, reduce water consumption, and improve production and bottom lines.

EOS Perspective

Eventually, the growing population will put pressure on food supply. In such a scenario, digital farming is the best possible solution to escape the looming food crisis. Technology promises improved communication systems, precise monitoring devices, recommendations that could improve all processes between sowing and harvesting, and efficient livestock monitoring, among others, that could boost agricultural yields, reduce food wastage, decrease the inputs or resources needed per unit of output, and ensure sustainable farming practices.

However, most farmers have not adopted digital farming solutions and the use of technology is far from being a mass phenomenon yet. Cost is the most significant barrier to adoption, with most farms unable to bear the high upfront costs. Another common challenge is the lack of robust communication and internet network in rural areas as well as the absence of awareness and skills among farmers to apply technologies in farms.

Most farmers have not adopted digital farming solutions and the use of technology is far from being a mass phenomenon yet. Cost is the most significant barrier to adoption.

Consequently, the development of digital farming will require commitment and intervention by governments across the world, to offer incentives and cover the substantial start-up costs. Fortunately, few organizations have already started undertaking initiatives to tackle challenges. For instance, Mimosa Technology (a Vietnam-based IoT solution provider for agriculture sector) leases IoT-based hardware devices to farmers’ cooperatives in Vietnam to lessen the cost burden for smallholder farmers.

Initiatives are also being taken to ensure network connectivity and improve digital literacy in remote/rural areas – for example, governments of Thailand, India, or the UK, to name a few, are planning to boost digital connectivity in rural areas.

Eventually, technological innovations can be expected to make farming practices precise and to improve output. The use of digital farming solutions is an answer to the probable food crisis but for it to succeed, a mass adoption of technology across farms is a necessity. With growing awareness of benefits of automation in fields and efforts made by various organizations and governments to overcome challenges, digital farming would sooner than later transform the agriculture sector.


Brief description of companies and projects:

  • CropX: A USA-based agriculture-analytics company
  • CLAAS: A Germany-based agricultural machinery manufacturer
  • SmaXtec: An Austria-based provider of solutions to monitor livestock
  • Farmers Edge: A Canada-based company offering digital solutions for agriculture
  • The Weather Company: A USA-based weather forecasting and information technology company, a part of IBM
  • John Deere: A USA-based manufacturer of machinery for agriculture, construction, and forestry
  • Ignitia: A Sweden-based weather forecasting company
  • Robot Thorvald (to be launched): A robot developed by Saga Robotics, a Norway-based manufacturer of robots
  • Deepfield robotics: Robots developed by Bosch, a Germany-based engineering and electronics company
  • Hands Free Hectare: A project developed by Harper Adams University and Precision Decisions
  • Robot Agbot: A robot designed and built by QUT (an Australian university) with support from the Queensland Government
by EOS Intelligence EOS Intelligence No Comments

Infographic: China Going Cashless – What Does It Mean for Consumers, Trade, and Economy?

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China is heading fast towards a cashless society. The immense adoption and use of smartphone apps that provide mobile-payment services for buying goods and services have transformed how payments are made, eliminating the need to carry cash and reducing the dependence on credit and debit cards, which are already close to scarce in China. Easy access to smartphones and lack of alternative non-cash payment options, low penetration of credit cards and tedious debit card payment process that includes authentication via messages and codes, have led to the growth of online payments in the country.

This cashless payment revolution is expected to continue and grow, thus impacting the way businesses function, consumers shop, and China’s economy rolls.

by EOS Intelligence EOS Intelligence No Comments

Big Data Analytics: A Revolution for the Healthcare Sector

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Big data analytics is beginning to transform the healthcare sector by forging new pathways that lead to data transparency, reduction in healthcare costs, and improved patient outcome through better quality of healthcare services. Traditionally, physicians used their clinical judgment to make treatment-related decisions but over the last few years, the trend has shifted towards evidence-based decision-making by leveraging big data analytics, which correlates massive amount of data to provide quick analysis. Big data analytics is slowly changing the way data is managed, analyzed, and leveraged. Although the big data revolution is at an initial stage of its implementation in this sector and most of its potential for innovation and value creation is yet to be realized, it has already directed the healthcare industry on a path of rapid change and improvement.

In an era where healthcare data exists across different sources and formats – such as images, videos, texts, numerical data, etc. – such an enormous amount of data is incredibly complex and difficult to sort, organize, decipher, and manage. This is where big data analytics steps in. It aids in analyzing structured and unstructured data across multiple data sources, which helps to improve accuracy of diagnosing patient conditions and matching treatments with outcomes. Applying analytics in healthcare could reduce treatment costs, forecast outbreaks of epidemics, avoid preventable diseases, and most importantly, improve quality of life through better medical services.

Big data analytics has tremendous potential to cut down the spiraling healthcare costs. Analytics could be used to reduce preventable emergency room visits and hospitalizations, eliminate unnecessary lab tests, reduce inefficiencies, and avert security breaches and frauds, among others. Some key applications of analytics in healthcare include electronic health records (EHR), predictive analysis, real-time alerting system.

The EHR marketplace, part of big data analytics for healthcare market, in the USA is dominated by suppliers such as Epic Systems (a USA-based organization that develops software for healthcare sector) which held a market share of 22% in 2015. The EHR supplier landscape is consolidated at the top end, with three leaders (Epic Systems, Cerner, and Meditech) occupying majority share of 55% in the market in 2015.

Another segment of the big data analytics for healthcare, i.e. business intelligence market dealing with business intelligence tools support several major big data functions within hospital such as predictive analysis, clinical decision support, clinical workflow optimization, population health management, and financial performance modeling, is fragmented, unlike EHR. While Epic Systems occupies a sizeable portion of the business intelligence market (25% market share), over ninety vendors accounted for further 25% combined share of suppliers operating in the market in 2015.

EOS Perspective

For the longest time, healthcare has lagged behind other industries, such as banking and retail, in the use of big data. However, healthcare sector is now ripe for big data initiatives, which have the potential to completely transform the quality of healthcare services by offering a wide array of applications for predictive analytics, evidence-based accurate treatment decision-making, potential cure for complex diseases, improving clinical documentation, among many others.

For big data analytics to fully succeed, the healthcare industry must undergo few fundamental changes, so that the stakeholders can take advantage of big data. Some issues in the industry arise from resistance to change, as healthcare providers are accustomed to making treatment decisions independently, rather than relying on automation and analytics. Healthcare professionals need to shift from standard regression-based methods to more future-oriented techniques such as predictive analytics, machine learning, and graph analytics that can improve and quicken decision-making and treatment-related judgement.

Other obstacles are structural in nature – several healthcare professionals have chosen to underinvest in information technology because of unsure returns. Additionally, some hindrances stem from the nature of the healthcare sector itself. With presence of several players in the industry, it is not easy to share data with different providers or facilities due to privacy concerns, which hinders the use of analytics on data sets.

Currently, implementation of big data technology in healthcare is limited and mostly concentrated in the USA, largely due to the high infrastructure costs and hefty initial investment. Furthermore, the human expertise required to leverage healthcare analytics lags behind. Nonetheless, healthcare professionals are beginning to understand the value of leveraging volumes of patient data and efforts are being made to overcome all barriers.

Healthcare professionals are beginning to understand the value of leveraging volumes of patient data and efforts are being made to overcome all barriers.

Big data has the potential to completely revamp the healthcare sector, in the same way it has transformed several other industries. Besides reducing costs, big data initiatives could save many lives and improve patient outcomes. Pharmaceutical industry experts, payers, and providers are slowly starting to analyze big data to obtain insights. Although such efforts are in the preliminary stages, collectively they could help the industry to tackle issues such as variability in quality of healthcare and growing healthcare spend. Healthcare stakeholders who decide to invest in data capabilities and promote data transparency will not only achieve a competitive edge but will also lead the healthcare industry into a new era.


*Brief description of healthcare organizations – refer to the infographic

  1. USA-based healthcare organizations – MemorialCare Hospital, Parkland Hospital, Beaufort Memorial Hospital, Kaiser Permanente, Emory University Hospital, and UnitedHealthcare
  2. Israel-based organization providing technology/analytical solutions for the healthcare sector –Zebra Medical Vision
  3. USA-based companies providing software, hardware, and technology solutions and services for the healthcare sector – Epic Systems, Cerner, and Meditech
  4. USA-based provider of information technology solution, owned by Xerox – Affiliated Computer Services
by EOS Intelligence EOS Intelligence No Comments

Fitness Apps Thrive in Spite of Issues, But for How Long?

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Global fitness app market was worth US$930 million in 2016, expected to grow at a CAGR of 23.6% during 2016-2021 to reach US$2.7 billion. This growth can be attributed to drivers such as steady increase in smartphone adoption, affordable costs of mobile apps, as well as growing health awareness among consumers, including smartphone users. Regardless of how steady growth the market is registering, its expansion may hit a roadblock due to low product differentiation in a fiercely competitive market and unclear privacy policies that may cause wariness among consumers.

Fitness apps are becoming a new way to stay fit for smartphone and tablet users. During 2014-2016, fitness apps users have greatly increased in number, which led to fitness apps usage increase of over 330% in that period. A major driver of this growth is the fact that many fitness apps are highly engaging, according to a 2016 research conducted by Apptentive, a mobile customer experience and engagement software measuring the percentage of customers who retained an app for a certain period of time. In the health and fitness category, an average of 75% of users retained an app for at least 28 days, positioning the category as one of the top performers among news, finance, music, and shopping apps.

The high engagement of fitness apps is partially due to these apps providing users with a constantly-updated overview of their performance details and general wellness, which offers continuous motivation. This certainly benefits fitness apps growth and expansion in the market by not only attracting new users but also keeping existing users as loyal customers (at least to a certain extent).

Another driver for the fitness apps market growth is the cost-effectiveness of these apps, especially in comparison with typical gym membership fees. While a local gym in a city such as New York may charge around US$130 a month (plus a sign-up fee in some cases), fitness apps offer basic training routines, tracking location, and a calorie counter free of charge. Most fitness and health apps also offer an upgraded version with extra features, such as personal trainer, at prices ranging between US$2.99 a month and US$49.99 for an annual subscription.

These drivers bring about a favorable market environment for fitness apps to thrive, further underpinned by an estimated 2.1 billion smartphone users globally in 2016, a strong internet penetration – 87.4% in the USA, 73.1% in Europe, 54.3% in Latin America, and 52.3% in Asia, and a growing health awareness among an increasing number of people.

What may seem as a challenge is the fact that many fitness apps do not manage to stand out in the vast pool of apps, resulting in lack of product differentiation in the market. Most fitness apps offer very similar features – workout routines adjusted to the user’s level of fitness, sharing workout results online, etc., with focus on increasing user’s engagement with the app. Although this last point seems to have been achieved as fitness app users seem to be generally loyal to one app, a low product differentiation means low switching barriers for the users over long term, while limited innovation in introduction of new features can potentially hinder fitness app market growth.

Another challenge for fitness app developers is to improve the apps’ privacy policies. Fitness apps collect a gamut of sensitive, personal information about the users and require the geo-location feature to be enabled during workouts, meaning user’s location can be pinpointed at any time while using the app. Fitness apps mostly fail to clearly specify how this information will be handled. According to a report published by the Future of Privacy Forum (FPF), USA-based think tank and advocacy group, 30% out of the top paid and free health and fitness apps found in the App Store and Google Play in 2016 lagged behind in providing basic transparency about the app’s privacy terms. In other words, there is a probability that personal user information logged on the apps could be misused, weakening consumer’s trust, which could translate into users choosing not to use fitness apps to exercise, as their awareness of privacy issues increases.

Such lack of transparency from fitness app providers may cause users to grow wary of using the apps to track their workouts and to introduce personal information regarding their health. This can turn out to be a considerable problem for the app companies, as the key advantage and the selling point of their products is personalized data analysis, training plans, performance charts, etc., for which it is essential that the user allows the app to gather their personal health and workout input data. Without this, the use of these apps is virtually pointless.

EOS Perspective

Fitness apps have proven to be highly engaging causing consumers to rapidly adopt the ’anytime, anywhere’ way of exercising and to continue using these apps through extended periods of time. While convincing potential users to start using any fitness app does not seem to be a problem and customer acquisition does not pose a major challenge in general for the industry as a whole, it appears that low product differentiation is the key obstacle for individual developers to get their products to stand out in the jumble of similar apps, and this lack of differentiation might be the factor to hamper fitness app market growth.

Some app providers seem to be noticing this, however they are trying to tackle this issue by doing everything but truly differentiating their products, and instead attempt to outdo their competitors by trying to shout loud about their own apps. As many apps lack differentiation and tend to melt into one vast pool of similar apps, fitness app developers are trying to make their products be more heard and visible using social medial to gain a competitive advantage.

One such case is the Sweat app, belonging to the Australian international fitness figure Kayla Itsines, who has been using social media extensively – mainly Instagram and Facebook – as a means of promotion for her app. By implementing a well-designed and aggressive social media marketing strategy, the Sweat app spread around 195 countries engaging 11 million users in 2017 alone. In that same year, the app registered US$100 million in revenue. The use of social media (hashtags, motivational photos, short videos, reposting before and after pictures of app users who had made remarkable progress) granted major visibility in the market and an increase in new subscriptions, without the need for actual innovation and truly unique selling proposition.

A lot of fitness apps offer user workouts based on generic information introduced by the user (e.g. weight, height, age) and data measured by GPS, accelerometer, or gyroscope, however lack the ability to register the body’s real-time performance, which has an impact on the accuracy of the gathered data and recommendations. This gap offers a good opportunity to differentiate and the app developers should try to align their applications with current trends such as the increasing popularity of wearable devices and smart garment.

Fitness apps companies might want to continue to seek to collaborate with garment industry players to develop smart garment – a piece of clothing such as a sport bra with conductive threads woven into the fabrics to work wirelessly with a smartphone. Smart threads in the fabric are capable of reading user’s biometrics, for instance heart rate, body temperature, and dehydration, among others that otherwise a smartphone would be incapable of registering on its own. By integrating the smart garment with a fitness app, the latter can use the real-time data collected on the body’s actual performance to accurately monitor workout sessions, giving a range of possibilities to use this data to differentiate the service offered by the app. As a result, the end product could stand out in the vast pool of apps while facilitating the user to efficiently reach their personal goals. It is a path for app developers to consider, as the growth of standard, smartphone-based apps is surely going to be limited.

by EOS Intelligence EOS Intelligence No Comments

Infographic: Understanding the Cost Dynamics of 3D Printed Drugs

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Medical industry needs no introduction to 3D printing technology, which has found usage in applications varying from custom prosthetics to surgical procedures. And with the US Food and Drug Administration (FDA) approving the sale of Spritam (in 2016 across USA), a drug used in preventing seizures, produced by Aprecia Pharmaceuticals using 3D printing, this commercial use of 3D printing technology embodies a momentous development in the field of printing drugs. The deployment of this technology offers certain benefits, but also comes at a cost, and affects the cost dynamics of producing a drug.

Cost savings offered by 3D printing technology are massive. Making drugs using printers will gradually reduce the processing equipment required, allowing the final product to be printed on one versatile machine, saving thousands of dollars. Going a step ahead, pharma companies will provide the base products for printing of the medicines at clinics and pharmacies, which means that the investment in production and storage facilities at the pharma company’s end will decline as the physical making of the drug will be shifted closer to the end-user. The technology will also help save on packaging and labelling costs along with bringing down logistics expenses.

However, as 3D printing capabilities develop further and as the cost of printing drugs falls, increasing easy accessibility to these drugs, it will become imperative to address safety and regulatory concerns associated with this technology.

While making drugs with 3D printing technology could be a game changer for the medical industry, it also comes with a potential threat of counterfeit and illegal drugs. As drugs production will be shifted from centralized location of pharma companies, which are able to ensure more controlled and supervised production processes, drugs will be printed at numerous clinics and pharmacies, and hence strict regulations need to be adopted and methods of production need to be appropriately controlled. Unified safety procedures and quality control measures need to be developed so that patients can be assured of the quality of the products.

The immense potential offered by this technology is increasingly materializing through commercialization in developed markets. However, as massive financial inputs from pharma companies paired with research grants and support by governments are still required, it is fair to believe that this technology is still far out from the reach of the less developed parts of the world, at least in the foreseeable future.

3D printed drugs

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Commentary: OLA Finds Its Way on Aussie Roads

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With plans to expand globally, Ola Cabs, India’s leading ride-sharing service provider, marked its entry into the international market by announcing in January 2018 the launch of its services in the Australian territory. While the exact date of the service launch in Australia is not yet decided, as it is subject to regulatory approvals, the service provider has already started the ground work by inviting private hire vehicles to join them. The company is starting to collaborate with private hire vehicle owners in Sydney, Melbourne, and Perth, the three cities where Ola cabs will initially be available for rides, to be ready to roll out once the commercial operations commence.

Presently, the market for ride-sharing service providers in Australia includes players such as Uber, Taxify, and GoCatch, among others. With Uber, which has emerged as the leading player in Australia, already present in the market, Ola needs to have its strategy, policies, and priorities set just right to smoothly launch and successfully run its operations. However, the presence of Uber has worked, to some extent, in favor of Ola, as it paved the way for ride-sharing services in the country resulting in regulatory policies being already in place. This makes the market entry a bit easier for Ola as the company will not need to deal with several challenges that the early market entrants in such novelty markets as ride-sharing typically have to tackle.

However, competing against its largest rival, Uber, is not the only concern for Ola. To be successful in the Australian market, Ola also has to focus on smaller and newer competitors, and set its operational and pricing policies keeping in mind their strategies in the market. Taxify, an Estonia-based company that launched its operations in Australia in December 2017, is expected to closely compete with Ola, especially with its ride services being operational only in Sydney and Melbourne, two of the locations where Ola is launching its services as well. With two ride-sharing service providers launching its operations in similar locations within a span of few months, a price war between the two is expected to happen. Currently, Taxify offers rides to its commuters without any surge pricing, making the ride cheaper than Uber. If Ola plans a similar pricing structure, among other strategies to drive the business, the competition between the two operators will, most likely, heat up very soon.

With two ride-sharing service providers launching its operations in similar locations within a span of few months, a price war between the two is expected to happen.

In the Australian market, the ride-sharing services segment is still in its infancy stage of development and with only one player (in this case, Uber) currently dominating the scene, it makes sense for Ola to launch its operations here now, offering a new option for consumers to choose from. Entry of Ola, along with new players such as Taxify, may indicate a transitioning phase in the Australian ride-sharing market as the entry of new players has the potential to end Uber’s monopoly. Currently, with very little known about the operating dynamics, not much can be commented about the success of Ola in the Australian market. However, the unsaturated state of the local market clearly indicates that Ola has a good chance to thrive in Australia, as long as they get the pricing right and set their eyes on the long-term business growth rather than short-term gain through higher prices.

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Can Cryptocurrencies Dent the Trillion-Dollar Banking Industry?

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Cryptocurrencies (such as bitcoin, ethereum, and litecoin) have definitely been the talk of the town this year. With their prices rising beyond bounds, everyone is sharing their two cents on the future of this fairly new concept of digital currency. Among these, are also players of the established financial system, which up till now have largely ignored cryptocurrencies terming them as a short-lived phenomenon. However, this has changed as bitcoin prices continue to soar and banks and other financial institutions evaluate not only the merits of the new currency and the technology behind it, but also the perils of not acting swiftly enough to adapt to the changing financial market scenario.

Cryptocurrencies and blockchain – what are we talking about?

Owing to an unparalleled rise in its prices, cryptocurrencies, especially bitcoin, have garnered massive interest from the public at large, however, very few understand how they and the technology that underpins them actually work.

Cryptocurrency is a digital form of money that is secure and largely anonymous. It uses encryption techniques to regulate the creation of the currency units and verify the transactions, thereby eliminating the need of a third-party verification (that is conducted by banks in case of traditional currency). However, to better comprehend the concept of cryptocurrencies it is vital to understand the core technology that enables its existence – blockchain technology.

Blockchain is a global distributed ledger or database of transactions running on an expansive peer to peer network, where transactions are securely stored and confirmed without the need of a central certifying body. Each and every transaction ever made historically is noted transparently and any new transaction is accepted/verified on the basis of all previous transactions undertaken (i.e. to ensure that the person undertaking the transaction has the credit to carry out the transaction).

Blockchain is increasingly finding application across industries – we wrote about its entry into the healthcare sector in our publication Blockchain Technology – Next Frontier in Healthcare? in March 2017.

The next aspect is to understand how cryptocurrencies are created/transacted. A new unit of currency is created when a “cryptocurrency miner” solves a complex computational algorithm to confirm a transaction and add it to the blockchain. For their service (i.e. to confirm and conduct the transaction), the miner generates a certain amount of the cryptocurrency for himself, thereby creating additional units of the cryptocurrency. Having said that, cryptocurrencies are limited in number (for example, there can only be 21 million Bitcoins and 84 million litecoins).

Cryptocurrencies are stored in a digital wallet, using which the user can spend the currency as well as check his balance.

Leading companies increasingly accept cryptocurrencies

While the reach of cryptocurrencies still remains largely limited when compared with conventional money, their acceptability and transaction value have been steadily rising. Several leading companies now accept bitcoins (the leading cryptocurrency) as a form of payment. These include Subway, Microsoft, Reddit, Expedia.com, WordPress.com, Virgin Galactic, Tesla, etc.

McDonalds announced that it will start accepting bitcoins in 2018, while Argos (a retailer) as well as British Airways have also expressed their intent to start accepting bitcoins as a mean of payments by 2018. In addition, the daily total value of bitcoins being transacted has also seen a substantial rise from about US$200 million worth of bitcoins being transacted daily in January 2017 to US$2 billion by November 2017. However, the per-day volume of transactions has witnessed a comparatively moderate rise as they ranged around 200,000-300,000 transactions per day at the beginning of the year and increased to about 350,000-450,000 number of daily transactions by December 2017.

Central banks evaluate risks to the banking system

This momentous rise in their popularity and acceptability over the past years has made central banks across the world realize and evaluate the risk posed by this revolutionary technology.

Cryptocurrencies bite into banks’ space

The traditional money used across the globe gains its credibility by being backed by a centralized authority (mainly a central bank of a country). However, cryptocurrencies remove the need of a third-party guarantor and depend on un-hackable peer-to-peer (blockchain) technology to guarantee value (i.e. when a transaction is made using cryptocurrency, the miners validate the transaction and unlock a small amount of cryptocurrency from the network as a compensation for their service.) Thus, in simple terms, they make the job of banks (who act as a third-party in terms of all money transactions) redundant.

Therefore, when using cryptocurrencies, consumers save on commissions that they have been paying to banks for processing financial transactions. These include credit and debit card transaction fee, international money transfer fee, clearing and settlement fee, among several others. This not only saves customers money but also time.

Moreover, the use of cryptocurrencies makes financing easier as it opens another avenue for financing for people who have been turned down by banks or other traditional channels. In case better terms and rates are offered in this form of peer-to-peer financing, customers eligible for bank loans may also steer towards digital money for financing.


Explore our other Perspectives on blockchain


Decentralized nature of cryptocurrencies protects the client identity

Another advantage of cryptocurrencies over conventional currency is security and privacy. Blockchain technology is known to protect client information and identity better than banks. Since it is a peer-to-peer network that is distributed across a host of computers across the world, it is less susceptible to cyberattacks when compared with bank servers that are usually located at one place (thereby making attacks comparatively simpler). Thus, the decentralized nature of blockchain and in turn cryptocurrencies makes it more secure than traditional banking. The anonymous nature of the transactions also makes it attractive to a certain type of customers who value privacy.

These factors pose a significant risk to the traditional banking system, which must act swiftly if it does not wish to cede further ground to cryptocurrencies. In order to compete with digital money, banks need to improve services, especially by offering digital services at a lower fee, and offer similar real-time services that cryptocurrencies offer. Moreover, they must realize the end of their monopoly on financial transactions and get rid of standard manipulations such as charging hidden fees on several financial services, such as credit and debit cards.

Banks start to embrace the revolution

Banks can also seize certain opportunities presented by the growing popularity of cryptocurrencies. These include providing escrow services, helping customers exchange their money for bitcoins, etc. For instance, in May 2017, Norway’s largest online-only bank, Skandiabanken announced its plans to offer clients the ability to link bank accounts to their cryptocurrency holdings.

At the same time, several banks (both central and private) are also looking at creating their own digital currency and are showing keen interest in understanding and adapting blockchain technology for interbank transfers.

People’s Bank of China (China’s central bank) is developing its own digital currency in an effort to reduce transaction costs, expand the outreach of financial services to rural areas and increase the efficiency of its monetary policy. On similar lines, Russia’s Communications Minister has announced in October 2017 the country’s plans to create and launch state-controlled digital currency, which would use blockchain to decentralize control and improve trust but would be issued and tracked like conventional currency. The Dutch Central Bank has also created its own cryptocurrency for internal circulation only to get an understanding of its working. On the other hand, the Bank of Japan and the European Central Bank have launched a joint research project on the adoption of blockchain technology.

The 2017 Global Blockchain Benchmarking Study, published in September, analyzed 200 central banks and stated that about 20% of central banks plan to deploy blockchain within the next two years, while about 40% plan to apply it within the decade. Moreover, about 80% claim to be researching blockchain technology with the aim of issuing their own cryptocurrencies.

On the private side, in July 2017, the Digital Trade Chain Consortium, which consists of seven European banks, namely Deutsche Bank, HSBC, KBC, Natixis, Rabobank, Societe Generale, and Unicredit awarded a contract to IBM to build a digital trade platform that will run on IBM’s cloud.

In another deal, IBM is working along with Japan’s, Aeon Financial Service, to develop a blockchain-based financial platform to provide settlement and transactions for both corporate as well as retail financial services, which will include virtual currency payments between individuals and businesses, loyalty points allocation and redemption, and transaction data management.

In September 2017, six major banking corporations (Barclays, Credit Suisse, Canadian Imperial Bank of Commerce, HSBC, MUFG, and State Street) announced that they are partnering up to create a cryptocurrency of their own. The digital coin that is being called “utility settlement coin” would be used for clearing and settling transactions for these banks globally over a blockchain. Currently, the banks are in talks with central bank regulators regarding the same and are expected to launch their commercial-grade blockchain by 2018.

While banks may be wary of the credibility of the currently regulated cryptocurrencies, most of them agree on and see blockchain technology as the difference-maker and are open to adopting blockchain to upgrade their services, such as improving payment systems. As per experts, blockchain technology can save the financial industry US$20 billion per year by 2020.

Cryptocurrencies’ drawbacks go beyond threats just to the banking system

However, not everything about cryptocurrencies works well, as the current set of cryptocurrencies being traded also has some shortcomings when compared with the traditional financial system.

While the anonymity of transactions may be seen as a positive to a certain group of users, it does pose a threat to the society in general. The anonymity makes cryptocurrencies a convenient choice for illegal activities, such as money laundering. Moreover, it also provides a window to terrorist financing as money can switch hands without being traced.

Cryptocurrencies, such as bitcoin, also have a drawback of being limited in number (the number of bitcoin is limited to 21 million). This limitation makes cryptocurrencies somewhat similar to the gold standard currency, wherein a country’s currency has a value directly linked to gold. This monetary approach has been deserted by most economists as this money supply policy that does not factor in the fact that changes in demand generate large fluctuations in prices (as being witnessed in bitcoins presently) and these fluctuations are not practical in the day-to-day workings of the society, especially wage payments. Therefore, while demand for bitcoin may be increasing, it cannot largely replace traditional currency due to such intrinsic characteristics.

Moreover, the current increase in bitcoin demand is speculated to be a bubble by several analysts who claim that the exponential rise in prices has more to do with an ongoing investment frenzy to make quick profits and exit, rather than actual established increase in usage.

cryptocurrencies

EOS Perspective

Whether it is a long-term replacement to traditional currency or not, cryptocurrencies cannot be ignored. The unimaginable rise in the prices of bitcoin (from close to US$1,000 in January 2017 to about US$17,000 in December 2017) has compelled banks to pay close attention to this upcoming competitor. While cryptocurrencies do offer several benefits (such as elimination of third-party, easier financing, and greater security) that are enticing consumers to move beyond traditional currencies and banking, they are no position to uproot the gigantic money market. However, that does not mean that banks can just ignore them.

While cryptocurrencies do offer several benefits, they are in no position to uproot the gigantic money market. However, that does not mean that banks can just ignore them

Banks must work towards innovating digital services and making them cheaper and faster. Cryptocurrencies also open doors for banks to launch few supplementary services, such as providing escrow services and syncing their bank accounts with their cryptocurrency digital wallets. While these may be short term goals, banks are most interested in testing and adopting blockchain technology especially for clearing and settling of inter-bank transactions.

While cryptocurrencies are unlikely to uproot the banking system any time soon, we believe it should be considered that blockchain has the capability to impact the financial sector the same way Internet impacted many industries back in the 1990’s.

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