16 May Iceland: providing life-changing prosthetic solutions to the world’s most established healthcare markets
Sveinn Sölvason, CEO, Össur, discusses continuing demand and innovation in the prosthetics industry in Iceland.
What would you say is your management style and strategic vision now that you will be taking the company forward after Jon Sigurdsson decided to retire from his position as president and CEO in March 2021?
It is an honor to have the opportunity to lead such a fantastic organization. My role will be to continue to build a solid foundation. Personally, I’m a big believer in teams; and especially in teams that have ambitious goals. In our industry, significant opportunities still exist for providing amputees with better technology and more access to prosthetic solutions. In the more developed healthcare markets, there is still an opportunity to increase the utilization of high-quality prosthetic solutions, while in emerging markets it is more about providing access to prosthetic technology for the many amputees who don’t have proper access today.
Please could you talk about Össur’s growth, the impact of the pandemic over the past two years, and projected growth for the years to come.
The pandemic has had an impact on our business. For 2020, we had a 10% organic decline, which is the first time the company has not grown since it was listed in 1999. But we have bounced back well. In 2021, we grew 10% and our profitability is largely in line with pre-COVID levels.
On the bracing and supports side, we sell products that help people who have had some sort of injury related to their activity level. During COVID, the demand for these products went down as people were less mobile and doing fewer activities.
The prosthetic side of our business has held up reasonably well during COVID but more high-tech solutions have been impacted because they require more time and a closer relationship with the specialist and the patient.
Fundamentally though, there has been no permanent change to our industry. The demand is still there, and digital adoption has increased. Our customers are more willing to engage digitally. Our ways of working as a company have taken a step forward as well. There are definitely good things that have come out of COVID, even though it’s been a challenging period. Our business is coming out of these two years very strong. We’ve maintained both our investment in R&D and our investment made directly into new markets; we’re optimistic.
Össur has a strong presence in the U.S., with offices and operations worldwide. What is the breakdown of Össur’s operations across countries? Which geographical areas do you see developing the most?
As it stands today, we generate the vast majority of our sales in the more mature healthcare systems of the world, which are North America, Australia, the UK, France, Benelux, Scandinavia and Germany. These are well-funded, well-established healthcare markets where there is an established way of paying for prosthetic solutions. However, the majority of amputees are in other markets where the infrastructure and healthcare systems are less developed. This is where we will generate most growth over the next three to 10 years, even though there still remains a big opportunity in the more developed markets to raise the quality of prosthetic solutions that are being used.
The “volume” opportunity is to provide better access for amputees in other parts of the world, and that’s where we have both the technology and the willingness to innovate not just the product but also the overall approach to how we engage with amputees and how we provide them with good solutions that will change their lives.
Jon Sigurdsson often talked about Össur’s “tireless commitment to innovation”; it was a key factor in the company’s competitiveness and excellence. Can you tell us more about today’s new, innovative products, in particular the recent launch of the Power Knee and anything else that you have on the horizon?
Indeed, innovation has been a key driver for Össur. We have been instrumental in raising the bar with regards to quality of life for amputees through innovation, by investing in technology and solutions that increase the mobility of amputees. This goes to the core of our purpose as a company and it is where we continue to focus. We launched a groundbreaking product at the beginning of 2022: the next-generation Power Knee, which is the world’s first powered prosthesis. The majority of amputees are elderly people, and this Power Knee–with its motor or muscle power–has a very big functional impact on the lives of those individuals. You get more power and assistance in moving around, whereas with the traditional prosthesis you have to rely entirely on your own strength. For an elderly person this is a very big step in terms of increased functionality and better quality of life.
This is a key point, because our job is also to convince healthcare systems that paying for products like the Power Knee is a good investment. This product has benefits for any healthcare system that adopts it, because the cost will be less over the lifetime of the user who will be more mobile, healthier and less likely to fall.
Are the governments changing their vision on the potential benefits of incentivising these solutions?
Gradually, yes. There are more assisted payment programs and incentives available for these types of solutions, but I stress it’s been a gradual increase. But a key theme for us is to drive the adoption of these types of solutions, by convincing systems that they are a good investment, and that their money is well placed in good technology for amputees.
The next big step for the industry is the development of mind-controlled prosthetics. Össur has teamed up with the Alfred Mann Foundation. Can you tell us about the advancements reached and challenges to be overcome in this complex next-generation industry?
The technology works and there are amputees who are using it. They have sensors, developed by the Alfred Mann Foundation, implanted into the remaining muscles of the residual limb. These sensors then communicate with our prosthetic solutions; we have developed the technology that makes that connection. The result is that these amputees are able to move by triggering a movement in their residual muscles. It’s another example of Össur’s commitment to being at the forefront of innovation in the prosthetics industry.
We strongly believe that this more intuitive control is part of the future of prosthetics, but it is still at a very early stage. We are going through a regulatory testing phase with these sensors. We are committed to furthering this technology and, today, our bionic products are already compatible with this sensor technology. It is an investment that we are making on a longer-term basis.
Not only do you give people a better quality of life, but your marketing campaigns also have an important role in changing people’s perceptions and ‘normalizing’ amputees’ lives, creating hope and acceptance. Can you explain how you’ve reached this point?
One of our strongest assets is our purpose: what our products and solutions can do for individual users. We’ve seen a great change in perception over the past decade–ever since we saw the first amputees participating in the Paralympics–and that has really raised awareness towards other amputees in terms of what can be achieved. We have some amazing ambassadors who have really influenced a lot of other amputees just by showing what can be done and how to use the technology that is available.
This is something that we have tried to do as much as we can: to sponsor individuals who have embraced this mindset, in such a way that they can also motivate and influence others to pursue their life to the fullest, despite having a mobility challenge that can be solved with good technology.
Last year, Össur celebrated its 50th anniversary and announced it would become carbon neutral. What steps are being taken to ensure this and what are Össur’s goals for the years to come?
We always had a very ambitious commitment to sustainability. Our biggest contribution is that we create products that help people live a better life. But on the environmental side, we are doing multiple things. When it comes to carbon emissions, the most important aspect is to run initiatives that minimize our footprint: everything from the transport freight to packaging, and initiatives such as using more carbon efficient ways to transport our products to traveling less, doing everything we can to source green energy and working with our vendors to minimize their carbon footprint.
In addition to that, we’ve decided to acquire offsets for the remainder of our footprint, and carefully select quality STEM initiatives, where we pay money to offset our net emissions. Lowering our emissions every year will continue to be our focus and we set ambitious goals in that regard.
Would you agree that it’s important to incentivize R&D in order to push Iceland’s innovative capabilities further? What more can be done to ensure growth and innovation?
There’s been a gradual mindset change in Iceland over the last 10 years. The country has always been very dependent on resource-heavy industries using limited natural resources for driving economic growth. Today there is much better understanding around the holistic environment needed for companies like Össur and others that rely on innovation and can sell products on the global stage.
The R&D incentives are important, but the most important thing is to think about it holistically: everything from educating the right talent to making sure there’s good access for foreign individuals to come and work with their families in Iceland and making foreign investment as easy as possible.
We just need to be competitive with all the incentives. The current government has done well and is doing the right things holistically for this part of the economy. They could still do more; they could have more ambitious plans in terms of how much they want this part of the economy to contribute and be more systematic and more ambitious in building this ecosystem that supports us, but they’re definitely moving in the right direction.
What values would you like to see attached to Iceland’s image on the international stage?
Our strengths are tied to our heritage in many ways. We live in a very remote part of the world here in Iceland, and in a very hostile environment to some extent. Our strengths center around being entrepreneurial, innovative, hard-working, competitive, and having a strong willingness to do well and make a mark in the bigger scheme of things. These are all valuable attributes and something that should attract interest from people looking to invest in Iceland; there is a fighting spirit.
We are eager to try new things and we’re not afraid to change: we are flexible. There are some strengths in being small, and our technological adoption is high. As the world is becoming more integrated, it matters less and less that we have a small domestic market because some of these digital solutions and digital business models are not necessarily dependent on a local market. These things are all changing.
On the sustainability side, by using our resources and knowledge in the energy sector, we have a huge opportunity to set a great example for tackling our biggest challenges as human beings today.
Do you have a final message for the readers of Newsweek?
Foreign investment is key to our growth and to driving the prosperity of the innovation sector in Iceland. There are plenty of opportunities to be harvested tied to our entrepreneurial spirit and innovative culture. There is an abundance of good talent here and a well-educated workforce, too. We at Össur are thankful for an environment that fosters our innovative spirit and purpose-driven culture. Our global business prospects are positive, and we foresee a bright future as we enable even more people to live a life without limitations.