Looking back over the past quarter-century, the local economy has survived and thrived by adapting to the future.
The Globe asked three executives to talk about the years ahead and how key industries will change. Deborah Dunsire, former chief executive of Millennium Pharmaceuticals Inc.; Staples Inc. founder Tom Stemberg, now managing general partner of the Highland Consumer Fund; and Dave Barrett, managing general partner at Polaris Partners, looked into the future with Globe 100 editor Steven Syre.
Globe Tom, what’s going to work best in retail in the years ahead?
Stemberg The most successful business models will be those that integrate the very best elements of Web shopping with the best elements of physical shopping. A concept that’s very hot in Europe right now — and I suspect it will come to the States — is a new kind of drive-in shopping. You enter your order on a website and then pick up the merchandise not in a supermarket but in a drive-through like a bank. This concept has taken over close to 5 percent of the retail food business in France. It’s primarily food, but I can see it growing into other categories as well.
Globe Globalization has had a profound impact over the last 25 years. How will it influence business in years ahead?
Stemberg You’ll need to begin to think globally much earlier in a company’s life. I see it today even in the earlier-stage companies we get involved with. Indochino [which sells custom menswear online] launched in Canada, manufactures in China, and sells in the US as well as Europe. These guys are a small, couple-year-old company. You look at the retail strip and who’s coming in — Uniqlo from Japan, H&M from the Scandinavian world, Topshop from the UK. Those are the hot new stores in New York, and not a single one of them is American. The Internet has profoundly affected how fast word spreads. Trends explode incredibly quickly.
Globe Turning to health care, how will personalization affect treatment in the future?
Dunsire Definitely, personalization is coming, but there’s a limit to that. In the cancer field, one cancer can have 40,000 mutations. You’re not going to get 40,000 different therapies. I think there will be a better understanding of the biology of an individual patient, not only in the cancer field but across cardiovascular disease, neurological disease — what are people going to be predisposed to in their life, based on their genetic background? Counseling will happen — what can you do to delay, prevent, or prepare for? Then I think patients will want to own their data and be able to access it.
Globe How will America’s aging population impact the health care market?
Dunsire We need to manage increasingly aging people — the number of people and the length of the lives — and ensure we can do it without spending 25 or 30 percent of every government dollar on health care. The US is spending about 14.5 percent of our GDP on health right now, the highest in the world. But at current rates of growth it’s projected to grow to 25 percent by 2040. So this becomes unsustainable. The ability to create medicines to manage a rapidly growing, older population who are going to manifest more disease is going to be critical.
Globe How will health insurers influence that?
Dunsire When I talk to health care payers, their mantra is we don’t necessarily have more to spend so how do we spend what we’ve got efficiently? Show us your products to keep people out of hospitals, shorten the stay, reduce the readmission. For us delivering medical products and therapies, those are some of the things we’ll need to demonstrate. The way we’ll think about clinical trials won’t only be about scientific efficacy and safety, but demonstrating these other benefits.
Globe Health care is just one field dealing with information explosion. How is big data going to evolve?
Barrett One of the interesting things is where big data’s coming from. It’s no longer just inside the enterprise walls, but big data is coming from every one of those mobile devices — from consumers as well as patrons as well as business owners. It’s almost like the oil of this century. There’s this incredible resource that needs to be mined and analyzed so there’s a whole other level of sub industries that we think will be emerging around analysis — analysis platforms, analysis tools, and having predictive capabilities in almost any application whether a consumer uses it, a business uses it, or the health care industry uses it.
Globe So is health care the biggest opportunity?
Barrett I wouldn’t say it’s the biggest, but I think it’s one of them, and I think it’s the one that has the most powerful forces behind it right now. There’s a clear need and a very, very big market that’s been broken for some time. The triangle of payers, providers, and patients are all highly motivated to help change that. It’s ripe for change.
Globe Let’s talk about things that may disappear in the future. What won’t survive in retail and consumer products?
Stemberg Start with Sears, Roebuck. I think there will be far fewer department stores in 25 years than there are today. There are fewer and fewer each year, that trend will continue. I think there will still be big boxes in categories where you need the big box to satisfy the customer. Home improvement is a great example. Lumber takes up a lot of space, tractors take up a lot of space. I also think the shopping mall — with exceptions — is gradually going to fade away and be replaced with lifestyle centers and, I think, a revitalization — this is going to be the past coming back to the future — of the main street.
Globe What will go away in health care?
Dunsire We’re going to see more care migrating out of tertiary centers. I’m not saying hospitals are dead — they’re definitely not — but some of the more routine care they do will migrate out. We’re going to be making use of centers of excellence that disperse their excellence via robotics, where you can communicate by computer to robots in another location.
Globe Be specific about life-science industries.
Dunsire Creating the fourth and fifth product in a class is diminishing. Lipitor was the eighth entry into the lipid-lowering category and became the world’s biggest drug with $13 billion [in annual sales] at its peak. I don’t think that’s going to work in the future. I don’t think payers will stand for it. We’re going to be obligated to really demonstrate the forward benefit of any therapy we bring forward.
Globe What will disappear in IT?
Barrett Let’s talk about the things that through tremendous technology advances are just becoming more and more commoditized. Just the act of storing data is commoditized. It’s a race to the bottom as a business entity. So it’s going to be tougher and tougher to be able to make a company just in storing data.
Globe What do you think about our future as a center for information technology?
Barrett We’re tremendously enthused about what the Boston-Cambridge marketplace will look like in the next 10 years, and we’re betting on it to a certain extent with our pocketbook. As a firm, Polaris invests in the West Coast, New York, Boston, and in Europe. We really think Cambridge has the most upside over the next 10 years. It’s because there’s a ready, willing workforce, there are those great assets of academia in the community, and there are relationships that exist and can be extended.
Globe Will Massachusetts still be a life sciences mecca in 10 or 20 years?
Dunsire I think we can, but policy has to be smart. There has to be real encouragement for immigration of high-skilled workers. We have to make it more attractive and easier to stay here once you’re trained, rather that go elsewhere. We have to not rest on our laurels. I believe Massachusetts has the wherewithal, it’s got the ingredients. We need good policy, and we need people to say it’s not OK to stay where we are and be comfortable. Being arrogant is a short path to the cluster disappearing.