Medical device market overview

medical-Device-Overview.jpgThe medical device industry represents a tremendous business opportunity for innovative firms. Part of the reason is demographics. In 2016, the National Institutes of Health reported that the world’s older population was growing at an “unprecedented” rate.

Based on NIH-sponsored research, about 8.5% of people around the world are aged 65 or older.

People are “living longer, but that does not necessarily mean they are living healthier,” said Dr. Richard J. Hodes, the director of the NIA. Countries around the world confront significant health challenges, from the lifestyle diseases faced by sedentary workers to malnutrition and other issues in developing nations.

It should come as no surprise, then, that the medical device industry is growing quickly. It was estimated at a total global figure of $336 billion in 2016.

The International Trade Administration estimates that the medical device industry in the Americas will grow to some $208.6 billion by 2020, with Western Europe coming in #2 at $106.2 billion. The Asia Pacific region is expected to achieve growth to about $88.6 billion within that time.

The United States will remain the single leading medical device market.

The United States Stands Alone as the World Leader in Medical Device Manufacturing

Recent public policy debates have driven a renewed focus on healthcare in the United States. More people are actively reappraising how healthcare should relate to broader goals in politics and society. Combined with demographic trends as Baby Boomers leave the workforce, the U.S. has a strong incentive to invest time, talent, and capital into medical device development.

With a $140 billion medical device market, the U.S. represented about 40% of the global total market in 2015. Exports of medical devices in key product categories specified by the Department of Commerce exceeded $44 billion during that year. U.S. products are uniquely visible within the global market, and the brands driving medical device innovation are highly regarded.

Medical device manufacture has had a powerful effect on the U.S. job market:

  • The sector employed about 365,000 people over 5,800 enterprises in 2012;
  • Employees had median salaries 15% higher than the manufacturing average;
  • More than 80% of medical device firms have fewer than 50 total employees.

Medical device development also stands apart for its remarkable degree of innovation. R&D spending averaged 6.7% of revenue in the period 2011-2016. This eclipses the innovation investments of other industries, including automotive, defense, and telecommunications.

Elsewhere in North America, interest in medical devices continues to run high.

Mexico has begun to leverage its existing expertise in automotive and aerospace manufacturing to meet the increased need for medical devices. Throughout the Baja California region, as many as 70 medical device manufacturers are in active operation. In Canada, a $6.7 billion medical device industry benefits from significant government investment.

Opportunities Continue to Emerge Worldwide

Asia Pacific is projected to see the greatest near-term growth in its medical device market, with Japan leading the way as the biggest medical device market outside the U.S. and Europe. Industry insiders will, of course, watch China closely for future development as well.

In the midst of all this, it is vital not to overlook established European markets. MedTech Europe estimates the European medical technology industry at €100 billion (about $118.7 billion.)

Within the European Union, there are a number of fast-growing medical device markets. Germany alone represents the third-largest medical device market in the world, valued at $26 billion in 2014. It remains attractive despite broad challenges in the European economy.

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