In today’s dynamic orthopedic landscape, innovation is not just a competitive advantage—it’s a necessity. Companies across the industry are increasingly faced with a strategic decision: Should innovation be driven internally, where control and expertise are centralized, or externally, where speed and cost-efficiency often take the lead? This is the classic build vs. buy conundrum (Figure 1). The current trends reveal a mixed approach, with organizations balancing in-house initiatives with outsourced innovation to meet evolving market demands.

For many companies, internal innovation remains the backbone of their growth strategy. By keeping R&D, regulatory, and manufacturing functions in-house, organizations maintain tight control over processes, procedures, and communication. This ensures consistency, protects intellectual property (IP), and enables seamless cross-functional collaboration from concept through commercialization.

Andrea Light, an innovation leader with experience at industry-leading orthopedics companies, emphasizes the value of institutional knowledge. “In-house teams bring together deep expertise across engineering, regulatory, and quality. This integration allows companies to iterate quickly, align with core competencies, and respond to customer needs in a way that’s difficult to replicate externally.”

Internal innovation also strengthens IP portfolios, allowing companies to leverage proprietary technologies in new applications and future developments. This self-sufficiency can be particularly advantageous for complex projects requiring high levels of customization, compliance, and traceability.

On the other side of the spectrum, external innovation offers compelling advantages, particularly in terms of cost, speed, and access to specialized technology (Figure 2). With experience on both sides of the business development table, there are strategic benefits of working with nimble startups and external inventors.

“Often, externally developed innovations are already FDA-cleared or in limited clinical use,” Light notes. “This gives manufacturers a high degree of confidence in the technology’s efficacy and accelerates time to market.”

By collaborating with smaller, focused organizations, manufacturers can tap into niche expertise without diverting internal resources. External partnerships also enable scalability, allowing companies to test concepts before fully integrating them into their portfolio. Distribution agreements, sales models, or outright acquisitions provide flexibility to match strategic goals and resource availability based on the lead companies’ needs.

Ultimately, the decision to pursue internal versus external innovation is influenced by several key considerations: the nature and complexity of the project, budget constraints, the level of expertise required, and scalability needs. 

A case study published by the University of Pennsylvania highlights that while 90% of the tech used in the Penn Medicine system is acquired through external sources, there are situations when the time and effort needed suggest an internal development path.¹ They consider time and cost, need for agility and integration with existing systems, alignment with organizational goals and long-term investment, and sustainability considerations. A “me too” product may benefit from the speed and cost-efficiency of an external solution, while a novel, complex device might demand in-house development to ensure precision and control, which is why it is important to take a strategic decision-making approach.

MedTech Strategies Perspective

There is no one-size-fits-all answer. In fact, the most successful orthopedic manufacturers often adopt a hybrid model—investing in internal innovation to retain strategic control while partnering externally to expand capabilities and accelerate market access. By carefully evaluating the right mix for each project, companies can navigate the innovation landscape with agility, confidence, and sustained competitiveness.

References

¹ tinyurl.com/odt250501
² tinyurl.com/odt250502

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Ilsa Webeck has more than 30 years of work experience assessing commercial and market viability in the medtech space. After founding MedTech Strategies in 2014, she has worked with a wide range of organizations focused on assessing commercial fit and identifying product and service value propositions, as well as uncovering customer/user needs to understand a path to commercial success. Her past experiences include group product director at J&J’s DePuy Spine, leading the strategic marketing and upstream marketing team, associate director for global commercial strategy in the MS Franchise at Biogen Idec, and current vice president of commercialization services at Simbex. For more information, visit www.medtechstrategiesllc.com.