The medical devices sector in India has the potential to deliver tremendous growth to the country’s economy. As per estimates by the Government of India, the sector is pegged to grow at 28% p.a. to reach a size of USD 50 bn by 2030. These are extremely bullish projections for an industry whose share in the global medical devices market is currently 1.5%.
The medical devices sector in India has the potential to deliver tremendous growth to the country’s economy. As per estimates by the Government of India, the sector is pegged to grow at 28% p.a. to reach a size of USD 50 bn by 2030. These are extremely bullish projections for an industry whose share in the global medical devices market is currently 1.5%.
While boosting exports of manufactured products is one way of driving growth, moving up the value chain and delivering innovation is another important opportunity India can’t afford to miss. Given the presence of certain favorable conditions, many industries in India are beginning to focus on end-to-end product development. The medical devices sector is one of them.
1991
With the economic liberalization in 1991, the IT services sector took off in a big way and many multi-national companies (MNCs) set up their global technology center (GTC) hubs in India. Indian talent gained global recognition, initially fueled by the Y2K problem as the country became an outsourcing hub for these MNCs’ R&D jobs. Eventually, the sector gained maturity and progressed from performing merely repetitive engineering tasks to project definition, and then to project ownership.
More recently, many overseas companies are leveraging India’s Engineering Research and Development (ER&D) capabilities by making India the global product ownership hub. Not only are the products being defined, designed, and developed in India, but also, global products are being launched from India. The medical devices industry is gradually tracing the same path with the increasing convergence of Information Technology (IT) and mechatronics.
On the End-to-End product development highway
Today, India has emerged as one of the largest automobile exporters in the world – this is in addition to the presence of a large domestic market. The flourishing automobile and heavy engineering sectors in India have spawned a wide supply base for components and sub-assembly parts. This augurs well for the country’s manufacturing future. Driven by Make in India, many global automotive companies have made India their export hub and are expanding their R&D capabilities here.
The same is true for the medtech sector too. Though its volumes are lower than some industries, many global organizations in this space are making India the hub for manufacturing, as well as innovation, for products that cater to, and are designed for, both local and global markets. Additionally, some organizations have now started focusing on India as a component manufacturing hub for assembly plants located across the globe.
These are early trends but are also firm strides that India is taking in both manufacturing and innovation to pave the way for in-country end-to-end product development. Home grown entrepreneurs and the rise of the start-up ecosystem in the country, the third largest globally, are also boosting this trend.
While initial trends are encouraging, the transition to an end-to-end product development hub will depend on how certain key aspects play out in the future.
Growth triggers for innovation and manufacturing in India
Talent: The availability of skilled workforce is undoubtedly one of the key factors in driving tremendous growth in many sectors. However, when it comes to stepping up and delivering on innovation, the talent pipeline needs to be mature enough to meet that kind of need. One of the challenges that organizations face is the tendency for frequent job hopping amongst the talent pool. Without completing a full cycle of learning, when people move on to the next job, they miss out on gaining exposure to the complete product development process. This is not only a challenge for organizations in delivering projects on time, but also, the individual talent is not able to develop a solid foundation for the future. On the other hand, top talents look for challenging opportunities. It is imperative for organizations to rise to this demand and provide quality work opportunities, as well as certain benefits like flexibility on the job to explore different opportunities. Closer industry-academia relationships also play a critical role in ensuring the availability of talent that are job ready from day one. Additionally, India needs to focus on developing new competencies/capabilities like global product managers, end to end (E2E) program managers, specific sector skills like clinical competencies for healthcare and so on. One way to do that would be to entice global Indian talent, working in developed countries, to come back home.
Government Incentives: There have been many successful programs by the government like STPI and SEZ that have played an important role in sectorial growth in the last three decades. However, more is needed to accelerate the transition for India to a global innovation hub. Recently, new programs like PLI (Production Linked Incentives) were well appreciated by organizations and have significantly incentivized production in India. We need more such programs both for manufacturing, as well as R&D. For example, we will have to look at our policies around component manufacturing incentives, , incentives for R&D and so on.
There was some heartening news recently during the Union Budget where the Government of India announced some proposed fiscal and non-fiscal interventions to promote R&D in Medtech sector. Given that the right policies are in place and with a strong focus on strengthening the R&D sector, India has all the right ingredients to be at the forefront of innovation and manufacturing globally.
Peeyush Kaushik, VP and Head of Healthcare Innovation Centre (HIC) – Pune, Philips
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