Globally, the medical technology industry is estimated at €280bn – €300bn. Some forecasters have indicated that the sector will grow 10% over the next 5-6 years. This growth will be driven by an aging population in need of treatment for chronic diseases and the increase in the income level in developed and developing economies. MedTech accounts for 4.2% of total healthcare expenditure in Europe.

MedTech products are non-metabolic products, instruments, devices or diagnostic equipment which helps to prevent diseases and/or improve quality of life.

Ireland is already a recognised cluster in the global MedTech Industry and has the opportunity to become a more significant cluster or indeed a GoTo destination for the industry. Despite significant advances in recent years it has work to do to exploit this opportunity.

Europe is a significant player in the world MedTech Industry with over €95 billion sales in 2009 which is about 30% of global sales. It also invests about €7.5 billion annually in R&D (8% of sales). It employs over 500,000 people in 22,500 MedTech companies of which 80% are SMEs.

Germany is the third largest medical technology products producer and medical services provider in the world.

In terms of new patent registrations, German manufacturers currently lie second behind the USA, making Germany Europe’s strongest location for innovation in this industry. German medical technology producers achieve roughly a third of their turnover with products that are less than three years old.

The German medical technology industry is a high-tech sector with high levels of innovation and a strong export orientation that is characterised by small and medium sized companies. Its success has been built on its long tradition of precision engineering skills and research capability.

A unique characteristic of German medical technology is the “Mittelstand” (medium-sized) company oriented structure which makes it possible to react in a flexible way, cover a multitude of themes and provide niche products for specialist application.

Close cooperation between Germany’s R&D institutes and equipment manufacturers, not to mention a plethora of in-house R&D facilities, helps maintain an internationally unparalleled competitive edge which is reflected in its product development and patent output.

Germany has over 1,200 companies (each with more than 20 employees) active in the MedTech sector which invest around 9% of their turnover in R&D. Around 15% of all employees in this industry work in R&D.

The German medical technology sector is largely made up of small and medium-sized enterprises (SMEs). Ninety-seven percent of all medical technology firms in Germany employ less than 500 employees and 15% of all employees work in businesses with less than 50 employees.

With an average of 78 employees per company, the medical technology industry is typically more small and medium-scaled than German industry by and large – with an average employee number of around 130.

Berne in Switzerland is another recognised MedTech cluster in Europe.

Its success is based on the long tradition of the watch and clock making in the canton of Berne which has advanced the know-how in precision manufacturing and is an important advantage for the medical technology sector.

It has 320 medical technology companies employing approximately 7,000 people of which 190 of which are manufacturers and suppliers. It has sales of €3.3bn of which 70% is exported.

The success of this cluster, although smaller than Ireland in terms of sales is also assisted by the support of the University of Berne with Masters and PhD in Biomedical Sciences and in Biomedical Engineering. Berne University of Applied Sciences encompasses both the Bachelor and Master degree levels as well as on the job further training and provides: Bachelor of Microtechnology, specialising in medical technology: Diploma of Advanced Studies Medical Technology Management and a Masters of Advanced Studies in Medical Technology Management.

The Irish Medtech Sector Is In Good Health

There are currently over 250 medical technology companies in Ireland, exporting €7.2bn worth of product annually and employing 25,000 people – the highest number of people working in the industry in any country in Europe, per head of population. 50% of the MedTech firms are indigenous which provides some shelter against potential relocations by the MNCs.

With 2.8%, Ireland has one of the lowest expenditures per capita on Medical Technology as a percentage of GDP, compared to a European average of 4.6% which presents a great opportunity for MedTech firms to sell more into the Irish Healthcare system.

According to IMSTA (Irish Medial & Surgical Trade Association), improved market access will be needed to realise this potential and could simplify the pathway by which new technologies pass from development into wider use. Benchmarking and developing ways to monitor uptake will also be important.

The Irish MedTech sector is in good health indicated by the fact that exports of medical devices and pharmaceutical products have grown by 7.26% and 14.43% over the period 2009 – 20101 (which date? 2010 or 2011) respectively according to the CSO. Exports of medical devices and diagnostics products now represent close to 10% of Ireland’s total exports and growth prospects for the industry globally are good.

Over the course of 2011, Irish-based medical technology companies announced investments of a combined €170m, leading to the creation of 875 jobs, which will come on stream in the coming years.

Many of the world’s top medical technology companies have invested significantly in Ireland and a number of exciting, research-based, indigenous companies are emerging and competing internationally.

The medical technology industry in Ireland is changing from being prominently manufacturing to being more complex and driven by R&D. It now involves intensive collaboration between a broad range of partners, including research institutions, clinicians, manufacturing and marketing/distribution companies and government agencies.

The MedTech industry is the home of technological disruptive innovations or “enablers”–much needed solutions for healthcare challenges.

Key Challenges In Making Ireland A Major Global Medtech Hub

While Ireland has many advantages to support the growth of the MedTech sector such as a favourable regulatory environment, a sector that operates to the highest international quality standards e.g. European, US and Japanese and a competitive corporation tax rate of 12.5%, it has some challenges to address in its ability to develop and grow further. These include:

Skills shortages – the Irish medical device industry recently carried out a survey of its member companies to identify current skills shortages. These skills shortages include

    • Engineering including design, process, control, mechanical, quality, automation, chemical processing and manufacturing.
    • Applied statisticians and toolmakers
    • Quality and regulatory professionals, including Analysts and Quality technicians
    • Sales and marketing is also vital to the sector and companies are currently facing shortages in this area

Greater research collaboration required – there is a relatively low overall level of engagement by clinicians in research. In addition the level of collaboration between the industry and the research community is low but improving. This stands as a challenge for the future of medical devices research in Ireland as significant medical device innovations frequently emerge informally from the application of engineering principles to clinician insights.

Commercialisation – Ireland’s record in this area falls far behind competing clusters due to a lack of experience in universities and hospitals. Clinical trialling and medical device evaluation are in early stage development in Ireland and national co-ordination could be facilitated by the creation of centres of excellence and/or competence for MedTech which would facilitate commercialisation and strengthen the bonds between academia, clinicians, government and industry.

Rising Costs – The MedTech sector owes much of its growth to overseas investment. However, this record of growth is now being challenged by rising costs, unfavourable exchange rates, and the improving manufacturing capabilities of competing low cost economies.

Education – while good progress has been made on this front the educational sector needs to do more to support in the provision of relevant undergraduate and post graduate programmes.

Ireland can become a significant player in the MedTech sector if it can address the challenges above.