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In 2025, multiple national strategies linked the NHS, the life sciences sector and economic growth more explicitly than before. A core aspect to the strategies is the use of novel innovation to transform the NHS. This means that the NHS will need to work differently with industry, particularly life sciences and medtech, both as a partner in developing solutions and as a reliable customer. The intended prize is threefold: innovations reach patients faster, care improves and successful companies generate jobs and economic growth. Yet there is a long-standing gap between ambition and delivery especially as the NHS has long been seen as slow to innovate. 

This thought piece explores how the NHS, life sciences and medtech sectors can better translate national innovation into real-world delivery, patient benefit and economic growth. It synthesises insights from a roundtable with patient representatives, NHS and industry experts, and conversations with other NHS and medtech representatives, alongside recent national strategies. 

Barriers to scaling innovation in the NHS

System complexity and fragmentation 

The NHS, often spoken of as one entity, is in reality a complex and fragmented system that is difficult for innovators to navigate. This is counter intuitive given the NHS is treated as a single entity and the UK has a relatively small geographic footprint. It often requires suppliers to take a ‘door-to-door’ approach across individual providers. The combined effect is slow spread and limited scale. 

Competing priorities and financial constraints

The NHS has a wide set of digital priorities – from core infrastructure to AI – for providers to tackle while also meeting productivity requirements and working within financial constraints. Innovation budgets are therefore spread thinly and inconsistently defined (see below).

Ring-fenced innovation budget challenges

Providers are required to reserve 3% of their budgets for transformation. This is not new money but is expected to come from savings made elsewhere. Interpretation of what constitutes innovation varies with some looking at novel technologies while others plan to use this to contribute to electronic health records (EHR) budgets. In addition, the 3% per provider basis creates small, fragmented pots, with smaller providers holding the smallest pots. These smaller budgets are often not sufficient for meaningful innovation, despite smaller providers often being more agile and able to move quickly with the right infrastructure.

Too many pilots and lack of adoption pathways

Numerous pilots that lack clear plans for scaling create ‘cliff edges’ for innovators and frustration for staff who rarely see promising pilots leading to actual deployment. Instead, they are seen as wasting time. The poorly defined success measures and planning of next steps mean successful pilots often fail to embed, sustain or spread, perpetuating scepticism of the potential for innovation.

Cultural and capacity barriers to change

Clinicians, even within the same department, hold different opinions on particular innovations, creating variability of clinical buy-in and making the selection of innovation a challenge. Clinical leaders are under-represented in national and regional decision-making, which leads to insufficient peer support to generate buy-in at a local level. National incentives, such as league tables, discourage collaboration, sustaining silos and barriers to scaling solutions. These factors in combination create a cultural slowness in innovation adoption and resistance to scaling.

Layering technology on existing processes

Transformation requires a deliberate strategic shift in how an organisation or system works. Innovations are often added to established and stretched pathways rather than being a design-led service change that consolidates tools and removes low-value technology. This leads to inefficiencies and missed opportunities for real transformation.

Data access and evaluation challenges

The NHS’s data should be a major strength and a route to better evaluation and improved care. But in reality, the complexity, uncertainty and difficulty accessing data means these advantages and the potential for real-world evaluation and evidence building are squandered. Access is slow, uncertain and costly; the Health Data Research Service should solve this in future, though at the moment it currently adds more confusion in the current fragmented landscape which includes Secure Data Environments.

Regulatory uncertainty and burden

• Although the EU Medical Devices Regulation (MDR) legislation continues to define UK regulatory processes, innovators describe the regulatory environment as uncertain for novel technologies. Companies are reluctant to commit to research into promising and deployable innovations without clearly defined and predictable regulatory processes – absence of regulation is as much a hindrance as too onerous regulation. 

  “The quantity of data and validation in the UK is out of step with many other countries, resulting in the NHS having high barriers to developing and implementing innovation.”

  Author:

• We heard how the quantity of data and validation in the UK is out of step with many other countries, resulting in the NHS having high barriers to developing and implementing innovation. This leads innovators to prioritise other markets. No technology or tool is absent of risk – striking an acceptable balance between risk and missed opportunities for improving care is important. 

• The Industrial Strategy sets out the intention to address regulatory burden – the AI Airlock and National Commission into the Regulation of AI in Healthcare are positive steps in this direction. However the lack of reciprocity of regulation standards and approaches across different countries means this pioneering regulation work in health care is not positioned to aid innovation into the NHS or support growth of life sciences companies. These different regulatory requirements and system complexity incentivise companies to avoid the NHS and make it harder for UK life sciences companies to grow.

But it’s not all problems and challenges. There are some developments in progress that show promise. 

Medtech companies eschewing the NHS and addressing other countries because of these challenges is not inevitable: the NHS and the UK as a whole do have real strengths. UK regulators and institutions carry strong credibility internationally, and the NHS has the potential to demonstrate what can be achieved at scale even though it is a small market globally. It can move quickly when priorities are clear and routes are simple. And the diverse patient population and subsequent datasets should enable better research and evaluation.

What seems to be moving in the right direction?

Across stakeholders from the NHS, patient representative groups and industry, there is broad agreement the direction of travel in the national strategies is positive. Existing structures such as the Office for Life Sciences and the Department of Health and Social Care medtech team are recognised as being helpful in driving progress. Initiatives like the Medium Term Planning Framework, with its three-year financial timeframes, establish a longer-term view that supports innovation. And value-based commissioning through the new model for integrated care boards has the potential to shift the focus to outcomes rather than transactional purchasing. There is also hope that the Innovator Passport helps make scaling quicker.

Recent national strategies propose new structures and approaches, including integrated health organisations and regional health innovation zones. Integrated health organisations are a new potential contractual form for health care providers in England with new responsibilities and capabilities to integrate services, hold population-level budget and take on increased autonomy. There were suggestions at the roundtable that these structures are potential mechanisms for bringing partners together and scaling at regional level. This raises the question: what do these new initiatives need to change to make novel innovation, adoption and scale more likely? 

The missing ‘how’

The strategic aspiration is clearly articulated in the 10 Year Health Plan, Life Sciences Sector Plan and Medium Term Planning Framework. But the biggest unknown is understanding how to implement and scale innovations. The most consistent message from NHS, industry and patient representative groups is the need for action. 

There are several factors that encourage action towards innovation and change. Staff and patients are increasingly frustrated, building energy and expectation towards change. During the roundtable we heard participants describe a system that has, in effect, normalised existing harms. This creates an environment where the current level of risk and avoidable harm becomes ‘business as usual’ and change is perceived as the risk. Change, when done well, is not simply an additional risk; it can be a way to work differently and reduce risk and harm over time. 

Financial pressure, rising demand, workforce challenge and public expectations are all pushing the system towards innovation. So, what needs to be done? 

What needs to change to support innovation?

1. Design pilots for adoption

The NHS is not short of pilots; it is short of intentional pilot strategies that are designed with clear success measures and routes to implementation with defined decision points. Pilots need to show how an innovation solves a priority problem and the conditions required for successful integration. To address this, some providers are integrating transformation and innovation staff into one team that acts like an in-house consultancy. They have stopped doing pilots for curiosity and instead this team takes an end-to-end approach: identifying problems, sourcing solutions, conducting the pilot with planned evaluation and developing implementation knowledge. Crucially, the implementation is activated automatically when agreed success thresholds are reached – so a pilot creates evidence with defined success criteria that leads directly to roll-out rather than uncertainty and yet another cycle of pilot activity.

In the roundtable, providers taking this approach shared that they have better uptake from pilots and reduced spend on external consultancies. Key to making this a success is separating the budgets for testing and deployment. Testing needs to happen quickly to inform procurement decisions. Deployment requires investment, training and service redesign. Separation of budgets increases speed of innovation and supports NHS providers to make informed decisions on procurement to select innovations that address identified problems.

2. Pool innovation budgets to address shared problems

The 3% ring-fenced innovation budget can be useful, but as we stated earlier, it’s spread too thin for cutting-edge innovation development and implementation. A more effective approach is to collaborate across multiple providers to pool budgets for novel innovations that address shared problems. Larger pooled budgets delegated to a single innovative provider can support robust development, evaluation, implementation support and scale for joint benefit across providers and patients. The NHS has long tried to make innovation a core expectation for all providers. However, we believe this has resulted in innovation capacity, innovator enthusiasm and funding being too thinly spread. Innovators in most NHS organisations are in similar environments where they struggle to have the support and engagement to make change. Instead, we need a different model where innovators are clustered in the specific providers that have an enabling environment with increased risk appetite and innovation infrastructure. This then needs to be coupled with regional peer networks, shadowing, placements and mentoring to support staff from other providers to be fast followers to avoid repetitive pilots and go straight to scale and uptake.

3. Reward innovation capability, not just aspiration

If innovation is to be taken seriously then it should be non-negotiable for integrated health organisation contenders to demonstrate their capability to develop and implement novel innovations successfully, and work effectively with other providers and suppliers to qualify as an integrated health organisation. Over time, this could help create a visible group of organisations that are set up to create groundbreaking innovations with industry, adopt them and support regional scaling of what works. Integrated health organisations should act as convenors for regional health innovation zones, embedding collaboration and creating clearer routes from conception to adoption.

4. More innovation zones from concept to delivery

The 10 Year Health Plan proposed health innovation zones, but to date there has been no visible progress on establishing them at a local level. Innovation zones should become the essential enablers for innovation and regional economic growth. The priority must be rapid development of the concept and transparent selection of regions. This is not about more funding; it is about defining the freedoms, designations and operating model that will make zones meaningful and impactful. To be meaningful, innovation zones should build a ‘coalition of the willing’, a collaborative group of providers across a geography that agree priorities, pool budgets and resources, and share implementation support. The innovation zones should use existing mechanisms like corporate social responsibility contributions from tenders to cluster innovation and research capability and compound gains over time

Leadership is central to the success of the innovation zones and they should draw on and develop collaborative leaders. Both clinical and operational leadership will be needed to win hearts and minds among peers and support practical delivery. The leaders should be people with demonstrable knowledge, skills and confidence to understand innovation adoption approaches, protect and build capacity, embrace higher risk tolerance, build and lead cross sector teams, and create environments with governance that enables innovation. These leaders need to also be able to work collaboratively with providers in the region to agree shared priorities and support scaling of innovation, making use of the knowledge and skills developed during innovation development and testing. 

The innovation zones should cluster resources, but the permissions are the most important change. Specifically, the permission to become forerunners in developing and testing necessary changes to regulation needed for novel innovation. This could progress the goal of demonstrating the robustness of UK-based regulation to support innovation. Many countries are trying to navigate the same challenges of regulation and innovation. UK-based regulatory institutions have strong reputations and have initiatives to enable innovation through regulatory change. There’s an opportunity to build international recognition in growth countries which would support UK innovators to accelerate economic growth by making exporting easier.

5. Fund clinical, organisational and patient leadership to create demand for change

Strategic prioritisation needs to be matched with funded clinical and organisational leadership and peer networks nationally, regionally and locally – fast-tracking leaders with demonstrable innovation experience and leaders able to engage peers for change and give them budgets to make change happen. Leaders need time and support to engage teams, build capability and help colleagues adapt pathways and practice. This means those leading change should have protected time as part of their contracts to focus on innovation activities. Time is essential but this needs to be combined with access to funding for technology tools, support from IT teams and opportunities to gain knowledge and experience, so should be combined with shadowing, placements and access to peer networks. 

Patient and community leaders should also be supported to help shape innovation development, champion adoption and build confidence with communities. Together, clinical and patient leadership can create ‘pull’ for innovation rather than adoption being driven only by top-down instruction.

6. Use value-based procurement to enable responsible risk-sharing

Value-based procurement can transform NHS innovation adoption by enabling fair risk sharing with suppliers. In practice, this could mean buying emerging innovations where payment is based on a promising evidence base and meeting agreed value metrics. It could include an agreement for supplier contributions encompassing resources, support, education etc that helps the NHS adopt innovations and transform services. Those value metrics should be meaningful, ie, aligned with population health priorities and areas of unmet need. Contracts might include additional capacity, training and specialist skills to support implementation. This does not have to be only for emerging innovations but could apply to established innovations where multi-year contracts could unlock supplier contributions into the NHS that aid transformation where there may be a gap in the necessary skills or capacity.

7. Innovate in finance to enable service redesign

Innovation is not one dimensional. Technological and scientific breakthroughs will not deliver impact without implementation capacity. Financial mechanisms can help create that capacity. 

One example is social impact investment that enables double running: maintaining existing services while new models of care are built around innovations . More broadly, a mix of ‘carrots and sticks’ could be designed to be financially neutral overall, rewarding delivery and reducing budgets where organisations consistently do not engage in implementation of innovation. The intention of budget reallocation would be to make inaction less viable without increasing overall cost to the NHS. 

Changing how innovation initiatives are funded can improve incentives. Providing baseline funding, while making additional funding available for demonstrably successful NHS innovation deployment and impact (see below), creates clearer incentives for measurable outcomes. 

8. Prioritise a small number of innovations for rapid national scale (and be explicit about trade-offs) 

The NHS should be more deliberate and more selective by choosing four or five novel evidence-based innovations, or groups of innovations, with clinical prioritisation to scale nationally. This would mean concentrating implementation funding and attention within a small number of organisations to create scale and evidence and supporting global growth as well as patient benefit. It would also mean being transparent about trade-offs and about the criteria used for prioritisation, including the potential to prioritise and privilege UK-based companies. 

Building on Innovative Devices Access Pathway (IDAP), a rough set of criteria might include innovations that: 

• address an unmet medical need where options are limited 

• improve diagnosis or treatment for life-threatening, irreversibly debilitating or highly prevalent conditions 

• offer clear advantages where existing alternatives are lacking or significantly less effective 

• tackle major public health challenges and substantially reduce burden on the NHS. 

This approach raises challenges for fair and open public procurement. It would therefore require a transparent selection process and careful design to ensure decisions are defensible and trusted and it would require robust evidence. The recent Ambient Voice Technology evaluations have been one of a small number of evaluations that consider the benefits of scale in the impact of the technology and conduct evaluation over multiple settings.

9. Create and expand NHS Venture Funds

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