Technology Emerging Markets : Changing Outsourcing Drivers
The changing paradigms in the
developed nations have created pressures for the Global Medical Technology
Industry. Moreover, as predicted by World economic Forum, the global cost of
treating common chronic conditions would need trillions of US $ s in the next
The conditions such as heart
disease and diabetes, thought of as Western diseases, are becoming more common
internationally. China’s Ministry of Health recently found that 85% of deaths in
the nation are the result of chronic diseases. By contrast, the WHO estimates
that chronic conditions are responsible for 60% of mortalities globally.
This has resulted in intensifying
the pressures to cut the costs of healthcare technology across the globe. For
Medical Device manufacturers, outsourcing continues to be a common strategy to
minimize costs related to manufacturing. However, The costs benefits of off
shoring manufacturing, however, are gradually eroding in many emerging markets.
It is estimated that the labor cost is going to increase in emerging economies
which may shift the lure of emerging markets like China.
Meanwhile, the lure of emerging
markets like China are shifting. These countries become increasingly important
markets themselves as their appetite for medical devices grows, Matlis explains:
“Some of the executives in our research told us is that they are looking to
globalization more as a means to supply the local market with locally
manufactured products. ”Regulatory advantages and tax or tariff savings are the
other considerations However, the potential of emerging economies remains
strong. It is also estimated that the potential for shifting manufacturing to
emerging markets is strong.
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