Where Industry and Security Intersect
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Each year, thousands of people around the world discover that they have developed some form of disability as a consequence of an accident, aging, disease, or other causes–and they wonder how they will cope. For others, it may be just another day of living with a disability, which they have had since their youth. Regardless of when people develop disabilities they have a common cause–to identify and use whenever possible devices that enable them to lead a full life and to be more productive.
U.S. manufacturers of "assistive technologies" are doing much to meet the needs of people with disabilities, producing thousands of products to address many conditions. "Assistive technology" is defined broadly as encompassing any kind of process, system, or equipment that maintains or improves the capabilities of people affected by disabilities of any kind — physical or cognitive.
The AT industry serves several groups of customers: those with temporary needs for assistive devices, and those with chronic medical problems or permanent disabilities that require assistive aids over their lifetimes. The majority of the AT industry’s sales is concentrated in serving people with long-term or permanent disabilities.
The 359 companies responding to the BIS survey reported sales in 1999 of $2.87 billion, with sales growing 21.8 percent from 1997 to 1999. The industry manufactures more than 17,000 products, and, according to the survey data, employed just over 20,000 workers in 1999 in a mix of small, medium, and large businesses. Sixty percent of respondent firms have 10 employees or less. Eleven percent of these firms accounted for 69 percent of the revenue.
There are questions, however, about the future of U.S. assistive technology (AT) companies — specifically, their ability to continue to grow and to innovate. To varying degrees, the industry is constrained by the scale and size of specific product markets, which can be extremely small, making it difficult for companies to generate large revenues and discouraging them from making large investments in research and development (R&D) and manufacturing capacity.
Further complicating life for AT manufacturers are insurance industry rules, which can hinder product introduction and distribution. Similarly, there are regulations within state and federal health agencies that can retard product sales and stifle innovation in AT product development. Demand for AT products is highly dependent on reimbursement from public and private insurers; there are limited alternative markets for most of these products.
At the same time, the economic status of many people with disabilities prevents them from acquiring the AT products they need. Disabled persons often do not have adequate insurance, or are dependent on budget-constrained state and federal health agencies to provide partial or full funding of assistive devices.
Because AT manufacturers are at times uncertain of the dynamics of the target market–or when theywill obtain acceptance of products from regulatory agencies–many product ideas may remain on the shelf, according to survey data collected by the Bureau of Industry and Security (BIS) from 359 companies. The data and discussions with company executives suggest that some processes within federal and state agencies may be in need of revision. The goals of such reform should be to: 1) encourage more innovation and risk taking by companies; and 2) ensure that people with disabilities are not denied access to products that can make their lives better.
To better serve the American public, maintain marketshare in the domestic market, and to expand sales of U.S.-made AT products in overseas markets, both industry and government
must change the way they do business. U.S. AT companies have to examine their current business practices with an eye to the future. Despite demographic trends that will increase the market size, those manufacturers that fail to plan for the future may not survive.
The challenge before AT manufacturers is to find ways to produce AT devices more efficiently, at lower cost, and with improved utility to meet rising market demand, increased competition (domestic and foreign), and shifting economics. U.S. companies also must improve their capabilities in many instances in order to create new products as well as to refine and enhance products required in world AT markets.
Approximately 50 million Americans have some kind of disability–17.5 percent of the 285 million people who reside in the United States. Almost half of this group6 is coping with a severe disability. The population of people with disabilities in the United States, many of them elderly, is certain to grow dramatically in the years ahead. As of 2001, the U.S. Census estimated there are 59.6 million people living in the United States who are 55 years of age or older–a figure that is expected to skyrocket to 102.7 million by 2025.7
A key challenge for the U.S. assistive technology industry is to increase the quality and quantity of products available at lower prices. This will assist federal and state policymakers and the insurance providers in meeting the needs of this aging population. This will also allow the industry to reach more effectively the underserved and un-served portion of Americans who have disabilities. Achieving this goal requires multiple actions on the part of the industry:
Finally, the industry and interest groups representing people with disabilities should work closely with state legislators and the Congress to set priorities and to identify the types of disabilities and those groups that may most benefit from the allocation of additional funding support for the acquisition of AT products and the development of new AT devices. At the same time, the budgetary limitations on the private and government resources that will be available in the future will almost certainly require greater thought in setting funding priorities for meeting the needs of people with disabilities
7 See: www.census.gov/ftp/pub/population/projections/nation/summary/np-t3-f.txt