FOR most of recent history, research and development (R&D) in the field of medical technology, also known as medtech, happened mainly in the US and Europe.
But as Asia develops, the region will contribute a growing share of medtech innovation in the coming years. Several Asian countries already have robust innovation ecosystems that are producing new intellectual property, products and business models every year. This will drive business opportunities for medtech companies in Asia and expand access to much-needed treatments across the region; it may also lead to insights and products that have value in other regions, including the US and Europe.
Medtech innovation comes in a variety of forms. It includes high-tech innovations that use the most cutting-edge advances in science and technology, such as nanotechnology and artificial intelligence. It also includes clever methods and business models for reducing costs and providing greater coverage with existing technologies.
Since high-tech innovation typically requires significant investment and world-class talent, it usually happens in more developed countries. Emerging economies, by contrast, cannot afford to invest in high-tech R&D, but this often inspires innovative methods for doing more with less.
Among the region's advanced markets, Japan has a particularly long history of high-tech innovation. As far back as the 1970s, important medical technologies like pulse oximetry were being invented there. The country's strong capabilities in engineering and advanced manufacturing have made it a pioneer of many novel technologies in the years since.
One area of opportunity today is senior care; with a median age of 46, Japan has one of the oldest populations in the world. Many firms there are already working on innovative senior-care solutions, such as robots that provide companionship and medical support for the elderly.
Singapore is another leading hub of high-tech innovation. Although relatively small in terms of both population and market size, it has an impressively high density of research institutes, corporate R&D centres, startups and public-sector initiatives supporting medtech innovation. The Singapore government works hard to make its city-state accommodating for the medtech sector. It has a fantastic business environment, deep pools of high-tech talent and other qualities that make an obvious choice for medtech and healthcare R&D.
Taiwan can also be singled out as a hotbed for medtech innovation. Given its long history as a global manufacturing hub for electronics as well as medical devices such as glucometers, it has the right infrastructure in place to support prototyping and manufacturing of progressively more advanced equipment.
The Taiwanese government and other stakeholders recognise that the next wave of medtech innovation will require integration of both manufacturing and advanced IT capabilities, and some are tailoring R&D efforts to support this.
South Korea has great potential for medtech innovation as well. The country took the top spot on Bloomberg's Innovation Index last year, reflecting its significant R&D expenditures and strong base of science, technology and engineering talent. Recent measures by the Korean government to promote entrepreneurship will also help, and we are beginning to see some promising medical-device innovations coming out of the country.
The Chinese government recently launched a series of policies and programmes to support medtech innovation. The country's 13th Five-Year Plan for Development of the Medical Industry, for example, includes a requirement for large pharmaceutical and medical-device companies to invest at least 2 per cent of their revenue in R&D. China is also working to improve its regulatory environment and making heavy investments in a few key areas, such as precision medicine, which could spur a new wave of healthcare innovation.
Many of China's efforts to promote high-tech innovation are still aspirational, but Chinese medtech firms already have a strong track record in business-model innovation. Over the past decade, Chinese firms developed innovative methods for reducing costs, localising their products and managing their sales channels. As a result, many posted high growth and seized market share from multinationals, which are responding by increasing their R&D spend and re-examining their go-to-market strategies.
South Asia is yet another epicentre of business-model innovation. Indian provider networks are particularly famous for building highly efficient systems of care. Bangladesh has some great case studies too.
At APACMed's annual Asia-Pacific MedTech Forum in Singapore last November, we were fortunate to host healthcare leaders from both countries. A key takeaway was that most case studies were collaborative efforts that required participation from across the healthcare ecosystem, including providers, governments, non-government organisations and medtech firms.
All this innovation will help address the rapidly growing disease burden and widespread demand for better care in Asia. Both multinationals and local companies are playing an active role in upgrading healthcare systems around the region, but patient needs remain unaddressed in many countries.
In a 2015 survey by McKinsey, 55 per cent of medtech executives expressed concern that existing product portfolios do not adequately address local needs.
Medtech companies are turning up their R&D efforts to fill the gaps, and these efforts are beginning to yield results. Around the region, medtech innovators are building products and business models that meet local needs. Some are even developing cutting-edge technologies.
At this year's Asia Pacific MedTech Forum, which will be held in Singapore from Nov 7 to 9, we will once again welcome speakers from across Asia to explore medtech innovation across the region. Much work remains to be done, but all signs suggest that Asia will become one of the world's most important hotspots for medtech R&D in the coming years.
- The writer is chief executive officer of Asia-Pacific Medical Technology Association (APACMed)