On the surface, the medtech sector seems a fairly safe bet for cleanroom or sterilisation service providers. Medical device use is predicted to grow in all economic regions, albeit less rapidly in markets such as Europe, where austerity measures have meant spending cuts. But the US, Asia and emerging markets such as Brazil promise better forecasts.
But for companies debating where to locate medical device production the story is more complex. Increasingly, US companies are finding that an early launch in Europe is a good strategy for building their businesses. And countries such as Ireland are not only strong in medtech design and manufacturing, but they also offer low tax rates which some US companies are making use of.
Other countries are trying to entice medtech start-ups by building incubation facilities within medical clusters to nurture young businesses through the minefield of getting new devices to market.
It is a tough process – the technology develops rapidly, competition is fierce and the failure rate is high. Regulators and end users are conservative – getting it wrong can cost lives. So it can take 10 years to get a device to market – and it could then be superseded by new technology in an instant.
Companies looking to offer specialist services to the sector – plastics compounding, moulding, adhesives, packaging or sterilisation – need to be prepared to invest considerable sums in facilities and equipment, but the questions remains as to whether the customer will still be there in a few years’ time. What seems to be a lucrative area to enter can prove a difficult one to master.