Health Policy and High-Tech Industrial Development

Health Policy and High-Tech Industrial Development

Learning from Innovation in the Health Industry

Edited by Marco R. Di Tommaso and Stuart O. Schweitzer

By weaving together the fields of health economics, industrial organisation and industrial development, this book describes the benefits of promoting a country’s health industry as a way of stimulating its high-technology industrial capacity. The authors illustrate that the development of a country’s health industry not only improves the country’s health status, but also promotes an industry with relatively stable, high-wage employment, creates the potential for exporting goods and services, and produces scientific spillovers that will favourably impact other high-technology industries.

Chapter 1: The Health Industry Model: New Roles for the Health Industry

Stuart O. Schweitzer and Marco R. Di Tommaso

Subjects: economics and finance, health policy and economics, industrial economics, social policy and sociology, health policy and economics


Stuart O. Schweitzer and Marco R. Di Tommaso INTRODUCTION There is wide variation in technological development and innovative capabilities of industrialized countries. What explains these differences in the pace of innovation and dissemination of new scientific knowledge? What are the policy actions that might be undertaken if governments wanted to stimulate technological innovation? To what extent are these actions consistent with traditional health policy approaches? Can the health industry be used as a leading sector, stimulating other high-tech industries? In this chapter we suggest that answers to these complex questions can be suggested by seeing the health care sector from a new perspective. The health industry is one of the largest industries in any wealthy and industrialized economy, measured in terms of expenditures and employment. The industry’s size is not its only characteristic, however. Technologically the health industry is central to other high-tech or ‘new’ industries. Therefore government policies affecting the health industry will have widespread effects in other technologically sophisticated areas. This new perspective suggests a rethinking of the definition of the public policy tools and objectives to be applied in a sector which, over the past few decades, has been strongly influenced by two factors: budget constraints and technological progress. In these countries most health care demand is financed by public resources. This characteristic has pushed policy makers to focus their attention on the opportunity costs of health spending and in this context health expenditures have been strongly limited by more general...

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