In his prophetic 1992 novel Snow Crash, Neal Stephenson envisioned a fictional world with wearable computing used by those on the fringes of society to trade data and interact with each other in a virtual reality. In our actual reality, however, roughly 10% of people in the U.S. already own a dedicated wearable fitness device, and that number is growing. Wearable device shipments for the first quarter were up 57% year-over-year, and their competitive landscape is growing cluttered.
So-called “basic wearables” — those that can’t run third-party apps — are frequently thought of as consumer-grade fitness-and-wellness devices that encourage users to live generally happier and healthier lives. However, these devices have been ‘leaking’ into use in very specific health, medical, and clinical settings, in turn opening a regulatory can of worms. According to Fitbit, to use just one prominent company as an example,their devices have already been used in over 100 academic research studies. This “BYOD” (bring your own device) approach to measuring human health, however innovative, raises serious questions about the lack of guidance and/or regulation of standards for data capture, data security and privacy, data standards and quality, data integration across different types of devices, and data analysis in professional health, medical, and clinical settings.
Such researchers are in fact asking for exactly this type of guidance and permission, the control of which largely lies with the government and not the original device makers. In April, John J. Lewis, Senior Vice President of Policy and Public Affairs for the Association of Clinical Research Organizations, published a 20-page memo written to the Food and Drug Administration that, among other things, specifically requested that “the FDA focus its resources on providing guidance on those technologies that are most beneficial and most likely to be widely adopted” in clinical research. Of the specific technologies called out, wearables were determined to be one of the most valuable.
Fitbit CEO James Park recently described sharing fitness data with insurance companies as the “Holy Grail.” But just like the dangerous fictional searches for the Grail, every byte of data collected from every newly connected wearable device represents a potential danger that must be mitigated. That’s because sharing data with doctors, medical scientists, and insurance companies — and marketing it as a feature — puts device makers in a gray area: At which point does a consumer gadget become a medical device? And who is responsible when something goes wrong downstream and a patient or research subject gets the wrong treatment . . . or dies?
At least four U.S. federal agencies, five congressional committees, and eight EU entities have hosted hearings, started working groups, levied suits, or are otherwise meaningfully engaged in this topic matter. Such a regulatory environment is complex enough for the likes of fitness-and-wellness tech makers Apple, Samsung, and Nokia, but it is expected to be particularly challenging for small startup companies (GOQii, Whoop, Embrace, and many others), and companies whose origins are in the sport and apparel industry (Nike, Adidas, Under Armour). They are not accustomed to dealing with organizations such as the Department of Health and Human Services Office for the National Coordinator for Health Information Technology or the European Commission’s Working Group on mHealth assessment guidelines.
Despite this labyrinth of regulatory bodies interested in fitness-and-wellness technology, the good news for companies working in the space is that the broad majority of the legislation, rules, and regulations governing these topics have not yet been written, presenting a huge opportunity for such companies to be proactive in their approaches to government affairs, public policy, and thought leadership.
In that vein, there are two critical questions fitness-and-wellness technology companies need to answer:
Is our company staffed and prepared to navigate the current regulatory environment?
Makers of such technology should have experienced staff and consultants who can build out a “regulatory roadmap” for proactively engaging regulators and influencers on issues related to emerging technology. In addition, companies might consider developing company- or industry-wide certification for their software developers working on such products. In a world where your hardware might be used anywhere, companies can still maintain control over their devices’ back-end software and services, doing everything they can to make sure they are compliant and secure.
Will our company be able to compete for software developer talent next year, and five years from now?
In a competitive landscape that includes companies such as Apple, Samsung, Nokia, Fitbit, Xiaomi, Garmin, Adidas, Under Armour and many more large and small organizations, the competition for developer talent will be intense. Recruiting, retaining, and growing a high-quality developer workforce is the new “table stakes” in every industry undergoing a digital transformation. Future success will necessitate understanding and engaging this intelligent and complex workforce, which has a tendency to flow to the most exciting employers and projects.
The journalist Patrick Tucker describes a world which can predict your every move as our “Naked Future.” He writes in his book of the same name, “We want our apps to know us, to present customized answers to our problems and questions, but we don't care how they arrive at those solutions until there's a problem.” Warding off abuse of fitness-and-wellness data collected by wearables and apparel, while also protecting the ability to make products and services that help people live healthier and happier lives, will be the grand challenge for companies in this space for the next few years to come.
Sr. Director of Membership, North America