The Medical Device Industry is Growing
Internationalization is No Longer an Option But a Necessity
One of the most promising young industries in the healthcare sector today is the medical device industry. This should come as no surprise, what with current technological and scientific advancements, as well as eager investors who have identified the demand for more options and newer devices to be introduced into the market. Advancements in healthcare have led to increased life expectancies over time, meaning there is a growing population composed of those in their older age who are in need of care. And of course, there is no shortage of modern day illnesses and diseases that require attention. Put all of these things together and you have a med device industry boom.
The Current State of Medical Devices in the United States
The U.S. is at the forefront of this industry boom. Cities such as Minneapolis, Boston, New York and Chicago are some of the most popular locations for medical device companies in the country. The U.S. is home to over 6,500 medical device companies (bizvibe.com), and most can be found in regions that are already home to other high-technology industries. California leads the way as far as the state breakdown goes. Between San Diego, Orange County, Los Angeles and Silicon Valley, the Golden State is home to more medical device hubs than any other state in the country.
Will this Industry growth in the U.S continue?
State to state breakdown aside, the U.S. medical device industry as a whole is on the rise. As BizVibe.com found that, “according to the latest figures from the U.S. Department of Commerce, the US medical device industry was valued at $147.7 billion in 2016, and is expected to achieve even greater growth over the next few years, reaching a projected $173 billion by 2019.” The growth of the U.S. industry has made the country a leader within the international community with consistent funding leading up to and during 2017 thus far.
The Current State of Medical Devices Worldwide
The medical device industry is on the rise all over the world and projections show no signs of it coming down. The global perspective is being adopted more and more by medical device companies. The International Trade Administration, a branch of the U.S. Department of Commerce describes this trend, saying “the industry has increasingly embraced globalization, and an ever-growing number of multinational firms is aggressively pursuing markets around the world. These firms are focusing greater attention on international sales, joint ventures, mergers, and acquisitions.”
Do Opportunities Exist for Medical Device Companies to go Global?
The U.S. is one of several nations with developed markets that both import and export medical devices. But the next big opportunities for the industry will be found in emerging markets around the world. These underdeveloped markets are promising targets for the medical device industries of different countries for many of the same reasons why universal medical device demand has increased, such as technological and scientific advances, but others as well: “Demand for health care is growing rapidly in emerging markets, a function of rising household incomes, increased discretionary spending, and aging populations. Governments are also investing heavily in health care to combat chronic and critical illnesses” (bcg.com). Additionally, KPMG noted in a 2015 report that “along with opportunities to reach new customers and increase sales, developing markets can be advantageous locations for conducting R&D, with fewer barriers to entry, lower input costs and fewer regulatory hurdles [than developed markets].”
And the growth of these emerging markets is expected to continue thanks to further innovations, increased spending, and continued development of health care infrastructure around the world. With such demand, it’s no surprise that American companies have started to expand their reach beyond U.S. borders. In fact, Americans have already begun to develop a strong presence in international markets. The U.S. Department of Commerce has stated that “U.S. medical device companies are highly regarded globally for their innovations and high-technology products… [and are] expected to remain highly competitive globally.” The international presence that the U.S. has established has allowed U.S. companies to find their place in international markets alongside local companies.
Why Medical Device Companies NEED to Start Thinking Globally
What does all of this mean? Internationalization of the U.S. medical device industry is happening; this is the direction the industry is going in. The companies that are going global now are going to have a leg up against those that stay local. Soon, internationalization will no longer be an option, but a necessity, in order to remain competitive. Ultimately, companies can only strengthen themselves by having an international presence.
All of that said, it is no longer a question of why go global; it is a question of how. Tune in next week for our blog on how to build a global digital strategy.