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  • From Science to Finance - and Back: MedTech’s journey from invention to consolidation, and the limits of a finance-first model
  • The Seismic Shift: AI, regenerative medicine, new materials, and emerging-market demand are redefining the field
  • Leadership at a Crossroads: Balance sheets are not enough - scientific fluency is now strategic
  • The “Bilingual” Strategist: The next-generation leader must be fluent in both frontier science and capital discipline
  • Key Shifts for a New Era: A practical framework to reset governance and culture for 21st-century innovation

The MedTech Empire Science Will Rebuild

In the 1970s and 80s, MedTech was propelled by a spirit of scientific audacity. Scientists, engineers, and clinicians collaborated to turn improbable ideas into transformative devices - from the first implantable defibrillators to the dawn of surgical robotics. Breakthroughs did not emerge from corporate strategy decks, but from hospital basements, university research labs, and, in some cases, improvised garage workshops. The sector’s DNA was shaped by curiosity, technical mastery, and an unflinching focus on solving clinical problems.

By the late 1990s, a different force assumed command: finance. Private equity firms and public markets brought professional management, access to capital, and a focus on operational efficiency. Leveraged roll-up strategies consolidated hundreds of smaller innovators into multinational powerhouses. Standardised compliance frameworks improved regulatory resilience. Streamlined supply chains reduced cost and increased speed. Harmonised systems allowed these new giants to operate at a scale that was previously unthinkable.

The results were tangible: global reach, higher margins, and more predictable performance. MedTech became one of the most profitable sectors in healthcare - admired by investors and emulated by adjacent industries.

 
In this Commentary

This Commentary charts the industry's journey from its science-driven origins through the finance-dominated era and argues that the next wave of leadership must be “bilingual” - fluent in both frontier science and capital discipline. It explores the movement back to science, the market dynamics and technological forces shaping healthcare, and five key shifts needed to ensure medical technology leads - rather than follows - the future of innovation.
 
The Limits of the Finance Era

The strengths that defined the financial era in MedTech are now revealing themselves as constraints. For decades, a model optimised for scaling proven devices, consolidating markets, and reliably delivering returns to investors brought order and professionalism to what had once been a fragmented industry. Yet, the same architecture that enabled discipline and predictability has, in many instances, dulled the sector’s adaptive edge. A system designed to favour efficiency, incremental improvement, and risk management struggles when confronted with scientific and technological discontinuities.

This is not just a question of pace but of orientation. The financial era prioritised business models that could be forecast, replicated, and leveraged across geographies. Today, however, medicine and healthcare are being reshaped by forces that resist such linear replication: the convergence of digital tools with biology, the rise of personalised and regenerative therapies, the blurring of boundaries between devices, diagnostics, and drugs, and the entry of new players from technology and data science. These shifts demand exploration, experimentation, and tolerance for uncertainty - the capacities a finance-driven paradigm has deprioritised.

The playbook that worked for three decades - built on consolidation, cost control, and incrementalism - now threatens to become a liability. Efficiency can calcify into rigidity; scale can suppress originality; risk aversion can translate into missed opportunities. Where science is once again becoming the primary engine of change, the industry’s reliance on financial engineering is proving insufficient, if not counterproductive. The MedTech sector now finds itself in a paradox: the strategies that once secured its dominance may impede its ability to navigate an era where breakthroughs are less about balance sheets and more about science, technology, and vision.
Africa is the world’s next healthcare frontier - young, bold, unstoppable.
Listen to the new episode of HealthPadTalks, Africa’s Health Opportunity, to discover why healthcare is the cornerstone of the continent’s prosperity.
The Shift Back to Science

The transformation now underway in MedTech is not incremental - it is seismic. The industry is being pulled back to its scientific roots, yet the scale, speed, and context of this shift are unprecedented. Changes that once took decades are now happening in years - or even months - as breakthroughs in biology, computation, and engineering fuel one another in a self-reinforcing cycle. Governance frameworks, regulatory pathways, and commercial models struggle to keep up with the pace of change.

The definition of “medical technology” is being redrawn. Once bounded by devices and diagnostics, the field is expanding into dynamic systems that fuse digital intelligence with biological function. Artificial intelligence and machine learning are no longer add-ons at the margins - they are embedded as decision-making engines in diagnostics, surgical robotics, and even semi-autonomous therapeutic interventions. Gene and cell therapies are not only redefining treatment modalities but are forcing the invention of new classes of delivery platforms and monitoring tools.

Meanwhile, material science innovations are shifting implants and prosthetics from inert supports to living interfaces - adaptive, regenerative, and in some cases self-healing. Synthetic biology is producing programmable therapeutics and biologically integrated sensors that blur the line between drug, device, and software. Each of these technologies alone would have redefined the industry; together, converging at speed, they are dismantling the legacy categories that structured healthcare technology for half a century.

The field of medical innovation is no longer strongly associated with just products - it is becoming an industry of platforms, ecosystems, and continuous scientific reinvention. The ground is moving faster than the structures built to govern it.

 
The Changing Market Landscape

The market context is entering a phase of disruption that is as much about geography and demography as it is about technology. Emerging economies such as India, Saudi Arabia, and a growing number of African nations are no longer peripheral markets - they are increasingly the laboratories of innovation. These regions are not just expanding demand; they are redefining product requirements, emphasising affordability, portability, and digital integration as foundational rather than optional.

Just as Japan, in the aftermath of World War II, leapfrogged legacy manufacturing constraints to build globally dominant automotive and electronics industries, today’s emerging economies are poised to bypass outdated healthcare delivery models. Their advantage lies in not being encumbered by entrenched infrastructures that slow transformation in mature markets. India’s push toward digital health records and telemedicine, Saudi Arabia’s strategic investments in biotech and AI, and Africa’s rapid adoption of mobile-first health platforms all reflect a trajectory that could set new global standards.
This leapfrogging dynamic positions these regions to define what the “next generation” of healthcare delivery looks like - blending value-based care with scalable, technology-enabled solutions. Value-based models are reshaping incentives, rewarding outcomes over throughput and pushing MedTech companies to design around patient journeys rather than isolated interventions. In emerging economies, however, the alignment between patient-centred care and systemic efficiency is stronger: what is affordable and portable for resource-limited settings also happens to be more sustainable and scalable globally.

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Adding further pressure and opportunity, the patient voice - amplified through digital networks and advocacy platforms - is now a determinant of adoption and reputation, not an afterthought. In this sense, healthcare is converging with broader consumer industries, where trust, transparency, and user experience dictate success. The next global leaders in healthcare may not emerge from traditional Western strongholds, but from those economies agile enough to leap ahead, leveraging digital-first infrastructures to reimagine care delivery at scale.
 
The Challenge for Legacy Leadership

This is an environment that rewards agility, interdisciplinarity, and vision. Yet it exposes the limits of a leadership model optimised for financial engineering. The next era of MedTech will not be won by the largest balance sheet, but by those who can harness science, technology, and patient insight with speed, fluency, and conviction.

For all the technological ferment at the sector’s edges, the centre of gravity in many boardrooms remains anchored in the finance era. The average age of C-suites is ~56 - leaders who are digital immigrants, shaped less by data and code than by balance sheets and capital markets. Their formative experience lies in M&A integration, operational cost discipline, and the choreography of quarterly expectations. These executives are skilled at optimising margins and executing acquisitions but often approach science and technology as assets to be financed rather than ecosystems to be inhabited. Yet healthcare itself is increasingly data-centric and digitally mediated, a trajectory that will only accelerate over the next decade - widening the gap between the capabilities at the industry’s core and the demands of its scientific frontier.

Financial orientation made sense in the years when growth was driven by consolidation and efficiency. But in a world where competitive advantage increasingly comes from anticipating scientific inflection points, it has become a structural vulnerability. The habits of financial leadership - rigorous capital allocation, risk minimisation, and preference for predictable returns - can inadvertently dilute the qualities that matter most: speed, curiosity, and tolerance for ambiguity.

The consequences are already visible. M&A sprees have left some companies saddled with high debt and complex remediation obligations, diverting capital and attention away from breakthrough innovation. Product portfolios skew toward incremental upgrades that can be forecast and monetised quickly, rather than R&D that might redefine a market. And while financial engineering can optimise a mature product line, it rarely creates the kind of disruptive leap that rewrites clinical practice.
  
Finance’s Lasting Value - But Changing Role

This is not about vilifying finance. The capital discipline and operational rigour it instilled remain essential to MedTech’s resilience. But the leadership archetype that powered the last three decades is not the one that will secure the future. A generation of executives fluent in the language of balance sheets yet unfamiliar with the lexicon of frontier science now face a world where mastery of both is essential. Without it, incumbents risk surrendering the future to smaller, science-led challengers - organisations able to perceive and pursue opportunities their financially minded rivals cannot.
 
The Bilingual Strategist: A New Leadership Archetype

If the finance era of MedTech was defined by leaders who mastered capital discipline, the next era will belong to those who can stand with one foot in the lab and the other in the marketplace. Leaders of the future will not be narrow specialists but bilingual strategists - fluent in the languages of science and capital, technology and regulation, patient need and shareholder value.

They will need to be scientifically fluent, able to sit in a room with geneticists, AI engineers, or materials scientists and engage meaningfully - not as distant sponsors, but as collaborators who understand the nuances and possibilities. They will be technologically engaged, tracking advances in machine learning, regenerative medicine, and bioelectronics not through second-hand briefings, but through direct dialogue with innovators and early adopters.

They will be ecosystem builders, recognising that the next big breakthroughs are unlikely to emerge from a single corporate R&D silo. Instead, they cultivate networks of start-ups, academic labs, and clinical innovators, investing “soft capital” - manufacturing expertise, regulatory guidance, access to distribution - alongside financial investment. They will be globally attuned, as comfortable discussing patient pathways in Riyadh or Mumbai as in Minneapolis or Munich, and alive to the cultural and economic nuances shaping adoption in emerging markets.

Crucially, they will understand soft power - the ability to earn trust and shape ecosystems through influence, relationships, and credibility. They move fluently among clinicians, regulators, and patient advocacy groups, recognising that success depends less on the performance of any single device and more on the trust surrounding the intelligent systems and data-driven platforms that support patients across their therapeutic journeys.

This archetype blends the curiosity of the scientist with the pragmatism of the operator, the vision of the innovator with the discipline of the investor. In an environment where the pace of change is accelerating and the boundaries of the industry are dissolving, these leaders will not just keep pace with science - they will help set its direction.

 
Transforming Leadership Culture: Five Deliberate Shifts

Transforming MedTech’s leadership culture is not about abandoning the discipline that has sustained the sector for decades. The financial rigour, operational efficiency, and consolidation strategies that built enduring enterprises remain essential. What is required now is a widening of the lens: ensuring capital works in service of scientific opportunity, patient value, and global healthcare dynamics - not the other way around.

The leaders who stewarded medical technology through its era of integration and scale are vital to its next chapter. But the sector’s centre of gravity is shifting. Innovation cycles are compressing, patient voices are growing louder, and science is intersecting with digital technology in ways that outpace financial logic. This is an evolution, not a coup - a deliberate broadening of the leadership portfolio through five strategic shifts:

1. Reframe Capital’s Role
Capital allocation will remain the industry’s backbone. But in the next era, finance must be reframed as a catalyst for science, not just its gatekeeper. That means board-level discussions weighing R&D roadmaps with the same analytical intensity as quarterly guidance and treating scientific optionality as a central part of investor communications. Leaders who can bridge financial and scientific worlds will anchor this shift.

2. Diversify Around the Decision Table
Historically, boards have been dominated by voices skilled in cost discipline, M&A, and market access. To thrive in the future, leadership tables must be rounded out with perspectives from clinical practice, patient advocacy, data science, and emerging health systems. Such additions do more than “broaden input” - they reshape the questions leadership asks and, therefore, the answers capital pursues.

3. Hybrid Innovation Models
Acquisition remains an indispensable tool. But when used alone, it cannot deliver the agility demanded by today’s innovation frontiers. Leaders must embrace hybrid models: structured partnerships with start-ups, academic labs, and hospital innovators. Financial resources should be paired with non-financial assets - regulatory expertise, global manufacturing networks, real-world data access - that create a multiplier effect. This is how incumbents maintain scale advantages while plugging into faster-moving discovery ecosystems.

4. Align Incentives with Long-Term Value
The industry’s strongest performers were built on predictable earnings growth. That remains essential, but it is no longer enough. Incentives at the top must now reward progress toward scientific breakthroughs, ecosystem scale, and patient impact. This realignment raises the bar: shifting ambition from extracting short-term multiples to creating durable value anchored in science and trust.

5. Global and Patient-Centric Intelligence
Emerging markets and patient engagement are no longer “adjacent skills” - they are determinants of competitive relevance. Tomorrow’s leaders will need fluency in how care is delivered, paid for, and demanded outside of legacy Western markets, as well as the agility to engage patients not as end-users but as partners in design, testing, and advocacy. Building these capabilities into leadership pipelines is a priority.

This is not a repudiation of MedTech’s leadership heritage. It is its extension. By layering scientific fluency, patient proximity, and global agility onto the industry’s proven financial and operational discipline, the field can define the next era of leadership - and sustain its position at the intersection of capital, science, and care.

 
Toward a Dual-Fluency Model of Governance

In practical terms, this means evolving governance into a dual-fluency model: financial acumen remains necessary, but it is matched by the capacity to interrogate a breakthrough technology, to understand the regulatory journey from concept to clinic, and to anticipate the market shifts it might trigger.

Such a shift does not threaten the incumbents who built today’s industry giants - it enhances their legacy. By embedding scientific and technological fluency at the highest levels, the sector can retain the scale, efficiency, and discipline finance delivered, while regaining the agility, curiosity, and daring that defined its birth. The reward is not only resilience in the face of disruption, but the opportunity to lead the next wave of medical innovation on the global stage.

 
Takeaways

The MedTech industry owes much to the era of financial leadership. Capital brought order to a fragmented sector, created global reach, and built the infrastructure that still underpins much of the industry’s strength. But every architecture is designed for the problems of its time - and the challenges now facing health innovation are no longer those of scale, compliance, or operational efficiency. They are challenges of scientific opportunity, technological acceleration, and shifting global health demands.

The next chapter will not be authored by leaders who simply manage existing assets. It will be shaped by those who can anticipate what lies ahead - who can read the signals from AI labs, genomic research centres, and emerging-market models of care, and convert them into products, services, and platforms that improve patient lives. This calls for leaders as fluent in the dynamics of innovation as they are in the mechanics of capital.

The shift does not demand that we discard the strengths of the finance era. On the contrary, the discipline, global networks, and operational mastery it produced will be essential assets in the science-led age now taking shape. But if MedTech does not rebalance its leadership to place science and technology on equal footing with financial imperatives, it risks being overtaken by more agile, more scientifically attuned challengers.
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Africa is the world’s next healthcare frontier - young, bold, unstoppable. With rapid urbanisation and a booming youth population, the time to act is now. In this episode of HealthPadTalks, we explore why Africa’s moment demands daring investment, co-creation, and scalable innovation - driving health to the core of prosperity.

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The HealthPad Team would like to extend our thanks for your continued support. As we celebrate another year together, we sincerely hope you've found our Commentaries interesting and helpful and we look forward sharing more thought-provoking content with you in 2024.

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  • GE HealthCare, Siemens Healthineers, and Philips Healthcare entered the Chinese market in the 1980s and prospered
  • The once-booming era for Western MedTechs in China has slowed and become challenging
  • Latecomers to the Chinese MedTech market face geopolitical uncertainty, changing market dynamics, domestic competition, stringent regulations, IP risks, and healthcare reforms
  • Due to these obstacles and the Chinese’s economy slowing MedTechs are seeking international growth opportunities beyond China and Asia
  • Africa is emerging as the new frontier driven by its burgeoning population, growing middleclass, economic growth, abundant natural resources, and Beijing’s investement
  • MedTech pioneers in China, such as GE HealthCare, Siemens Healthineers, and Philips Healthcare, are early entrants in the African market
  • Prudential plc, an insurance giant, has made a vast strategic bet on Africa’s growth potential
  • Given insurers are healthcare payers, should MedTechs view Africa as the new Asia?
 
Is Africa the New Asia for Western MedTechs?


Preface

In the realm of international expansion for Western MedTech companies, Asia, particularly China, has historically been a key focus due to its vast size and rapid economic growth. However, the shifting global economic and geopolitical landscape suggests a re-evaluation. Is Africa positioned to emerge as the next hub of opportunity and growth for MedTech enterprises? China's remarkable economic ascent, initiated by reforms in 1978, accelerated it to the status of the world's second-largest economy, following the US. Western MedTechs that ventured into China's market in the 1980s prospered. Yet, those who hesitated due to concerns, including intellectual property (IP) theft, now face mounting challenges, which include geopolitical uncertainties, evolving Chinese attitudes towards Western corporations, a limited understanding of the Chinese market, and China's ambition to lead global technology by 2030. The recent deceleration in China's economic growth adds to the apprehensions of Western businesses. Moreover, China's rapid economic expansion has led to an aging population, characterized by declining birth rates, and increased life expectancy. By 2040, those aged ≥60 are projected to reach ~402m, constituting ~28% of the nation’s population. This demographic shift, with a shrinking workforce and a rising number of elderly consumers, is expected to exert downward pressure on China’s GDP growth, while straining public budgets with escalating healthcare and retirement costs. Given this evolving landscape, it becomes prudent to explore whether the once-promising prospects for Western companies in China and Asia are diminishing, prompting an examination of alternative international markets. While established MedTech players in China continue to provide essential healthcare products and services, they may benefit from contemplating strategic adjustments and, in many cases, restructuring their commercial operations to adapt to the changing dynamics of the Chinese market. Notably, some companies view Africa as a promising new frontier. Early entrants into the Asian medical device market, such as GE HealthCare, Siemens Healthineers, and Philips Healthcare, have already established footholds in Africa. Could Africa be on the verge of becoming the new frontier, reminiscent of what Asia once represented?
 
In this Commentary

This Commentary is divided into two sections. In Section 1, we briefly mention the early successes of prominent MedTech companies in the Chinese market during the 1980s. The section also notes that because geopolitical tensions between Beijing and Washington have increased, and recently China's economic growth has slowed, some Western MedTechs are seeking alternative growth regions to expand their international presence and reinvigorate their stagnant market values. Section 2 challenges popular perceptions by proposing that Africa could emerge as the new frontier for the MedTech industry. Despite Africa's enduring challenges, including political instability, corruption, poverty, and limited literacy, it seems to have potential. Albeit from a low start, Africa is projected to be the world's fastest-growing region in 2023, characterized by a youthful population, abundant natural resources crucial for renewable technologies, and an emerging middleclass. Decades ago, Beijing recognized Africa's potential, and more recently, a group of MedTechs, including early entrants to China, have established a presence in the African market. The section concludes by noting the strategic entry of a giant insurance company into the continent. Given the role insurers play in healthcare expansion and the demand for medical technology this maybe a positive omen for the MedTech industry, with Africa as its new frontier.

Part 1
MedTech pioneers in China

In the 1980s, as China underwent transformative economic reforms under President Deng Xiaoping, several Western MedTechs, including GE HealthCare, Siemens Healthineers, and Philips Healthcare, entered China, and capitalized on the nation's economic growth and modernization over the ensuing decades. GE HealthCare, equipped with medical imaging devices and healthcare solutions, forged relationships with Chinese hospitals and research institutions. Siemens Healthineers, a leader in imaging and laboratory diagnostics, followed suit in the late 1980s, emphasizing local R&D and strategic partnerships with Chinese healthcare providers. Philips Healthcare, with its diverse range of patient monitoring systems and diagnostic imaging equipment, also made its mark.

These companies showed their ability to adapt and succeed by adjusting their products to fit the needs of local customers and by encouraging new ideas through partnerships. Initially, they embraced expansion-type business models with multiply marketing and sales tiers, which emphasized rapid growth over stringent financial discipline. The plan worked well because China's medical technology sector was thriving, and experienced annual growth rates of ~10 to ~15% during the first two decades of the 21st century. However, since then, things have changed. Now, the focus is on making operations smoother and more efficient, which has meant reducing the number of marketing and sales layers between enterprises and their principal customers.
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Recent Western MedTech entrants, attracted by the vast Chinese market, faced heightened scrutiny and regulatory obstacles. Their limited knowledge of local markets and different administrations hindered their growth, which was compounded by concerns about safeguarding their IP. Meanwhile, Chinese MedTech firms rapidly advanced, increasing competition for Western latecomers. As of December 2022, the number of Chinese medical device companies amounted to 32,632. The once-lucrative "gold rush" in China for Western MedTechs has faded due to shifting sentiments, regulatory hurdles, and local competition. As China pursues global technological leadership by 2030, Western firms are likely to encounter mounting challenges. To sustain international expansion, they should consider exploring alternative global markets where they can leverage their expertise and resources more effectively. This suggests a turning point, highlighting the need for strategic diversification and adaptation to evolving global dynamics in the MedTech industry.
Headwinds for MedTechs expanding in China

Here we describe some of the headwinds facing Western MedTechs attempting to increase their footprints in the Chinese market.
 

Geopolitical Uncertainty
Ongoing geopolitical tensions, such the political status of Taiwan, which Beijing claims is a province of the People's Republic of China, whereas Taiwan’s current Tsai Ing-wen administration maintains it is an independent country, and South China Sea disputes, which involve conflicting island and maritime claims by China, Taiwan, Brunei, Malaysia, the Philippines, and Vietnam. These and other geopolitical uncertainties pose risks, particularly for late entrants to the Chinese market. However, despite these tensions, US-China trade remains strong, but doing business in China has become increasingly challenging.
 

Changed Market Dynamics
China's healthcare landscape has evolved driven by the largest middleclass cohort in the world. Beijing has increased healthcare spending, which has intensified competition in the MedTech sector. Trade conflicts between the US and China add complexity to market dynamics. Relationships between the two countries deteriorated in January 2018, when American President Donald Trump began setting tariffs and other trade barriers on China. The objective was to force Beijing to make changes to what the US says are longstanding unfair trade practices and IP theft. A recent example of such tensions occurred in September 2023, during a visit to China by US Secretary of Commerce Gina Raimondo, who oversees regulating technology. The Chinese tech giant Huawei chose this time to release its new smartphone, powered by an advanced chip. This shocked American industry experts who could not understand how Huawei could have obtained such an advanced chip following efforts by the US to restrict China’s access to foreign chip technology.

Domestic Competition
Chinese MedTech companies (>32,000) have rapidly gained market share, technical sophistication, and innovation capacity. They understand local customer needs and regulations better, posing increasing competition for Western counterparts. In 2021, China’s 134 listed MedTech companies generated US$44bn in revenues, a compound annual growth rate (CAGR) of 36% since 2019, ~3X the market’s overall rate of growth. More than five Chinese MedTechs have obtained the US Food and Drug Administration’s (FDA) breakthrough designation, with innovations like the VenusP-Valve, which has already been approved in >30 countries, and in April 2022, secured EU’s CE marking under its Medical Devices Regulation (MDR). This suggests that Western corporations will not only encounter heightened domestic competition but are likely to face increasing competition from Chinese MedTechs in the global arena.
 

Regulatory challenges
Regulatory hurdles in China pose challenges for Western MedTechs. Adherence to regulations, standards, and compliance measures, often different from Western counterparts, necessitates an in-depth understanding and adaptation. Central to China's regulatory framework is the National Medical Products Administration (NMPA), which is akin to the FDA. It prioritizes safety, efficacy, and quality in evaluating medical device registrations for market entry. While global acceptance of real-world evidence (RWE) in healthcare is rising, China is in the early stages of embracing the concept. Notably, a 2020 NMPA draft guideline hinted at the potential utilization of RWE from Boao Lecheng. Situated in Hainan, an island province in the nation’s southernmost point, Boao Lecheng has become a medical innovation hub, focusing on technology, high-quality healthcare, and medical tourism. It actively promotes advanced clinical research, housing globally recognized medical institutions like the Raffles Medical Group and Brigham and Women’s Hospital (BWH). The collaboration between Western MedTechs and initiatives like Boao Lecheng holds promise in tackling China's regulatory complexities.
 

Intellectual property (IP) risks
Protecting IP is a concern for Western MedTechs in China. Enforcing IP rights can be challenging due to factors like judicial protectionism, evidence gathering obstacles, modest damage awards, and perceived foreign bias. China follows a "first-to-file" principle for IP registration, granting ownership to the first registrant. Foreign companies also face pressure from government and state-owned enterprises to transfer technology for market access, investment opportunities, or approvals. Some are compelled to license technology at below-market rates. Despite China's efforts to enhance IP protection, concerns persist. Corporations need to balance IP protection with local engagement and government cooperation to navigate China's complex IP landscape effectively.
 

Healthcare reforms
China's healthcare system has undergone a significant transformation driven by various factors, including increasing incomes, heightened health awareness among its citizens, and a rapidly aging demographic. The government has placed substantial emphasis on healthcare, as evidenced by its ambitious goals outlined in the Healthy China 2030 plan. This plan envisions the nation's healthcare market reaching a value of ~RMB16trn (~US$2.4trn) by 2030. China's dedication to enhancing healthcare is underscored by the establishment of a comprehensive health insurance system that now provides coverage to ~96% of the population, benefiting >1.36bn individuals. According to a 2023 McKinsey Report, China's MedTech sector, which was valued at ~US$70bn in 2021, is poised to potentially double in size by 2030. Such growth would elevate China's MedTech market share to ~20% of the global market. To thrive in this burgeoning market, enterprises must be agile in adapting to changes, forge strategic partnerships, and effectively navigate the evolving healthcare landscape.

Navigating China’s Diversity
Succeeding in the Chinese market hinges on effective communication and a deep understanding of Chinese culture. China's administrative divisions include 23 provinces, five autonomous regions (Inner Mongolia, Guangxi, Tibet, Ningxia, and Xinjiang), four municipalities (Beijing, Tianjin, Shanghai, and Chongqing), and two Special Administrative Regions (Hong Kong and Macao). Furthermore, China boasts 129 dialects, with Mandarin as the standard and Chaoshan as predominant in the Guangdong region. Given this diversity, Western MedTech companies often grapple with cultural and linguistic barriers. Establishing vital connections within China's intricate administrative and business landscape can prove challenging. Therefore, crafting effective market entry and expansion strategies is imperative. Chinese consumers have preferences and expectations when it comes to medical technology. Western companies must be ready to adapt their offerings to align with these preferences, a critical factor in gaining market acceptance. Failing to do so can hinder market penetration and long-term success.
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Data Privacy and Security Concerns
Data privacy and security are concerns in China. Entrants must navigate stringent data protection regulations, which may differ significantly from Western standards. Building trust with healthcare providers and patients is essential to address these concerns. Failure to do so can lead to regulatory issues, damage brand reputation, and erode customer trust.
 
Reassessing global strategies amid China's economic slowdown

China, as the world's second-largest economy, has been a pivotal market for major Western MedTech companies. However, the current economic climate calls for a strategic re-evaluation. China's economy has recently experienced a slowdown, with repercussions felt not only in neighbouring nations but also globally. South Korea, a historical driver of global growth, faces its longest factory activity decline in nearly two decades. Other major Asian exporters are also dealing with sluggish demand, and Japan's manufacturing activity has declined, with Taiwan reporting contracting output and weakened foreign demand. In September 2023, concerns grew as China experienced deflation, raising questions about currency stability, challenges in the property sector, and high local government debt. China's decision to not stimulate its economy further exacerbated the situation, impacting key financial hubs like Hong Kong and Singapore, as well as satellite economies. This economic slowdown in China is expected to persist and likely have far-reaching global consequences. Businesses worldwide, including those in the US and Europe, heavily reliant on China for growth, should explore alternative regions for sustainable value and expansion. Western MedTech companies need to carefully assess the challenges and costs associated with further expansion in China.

An alternative strategy emerges; companies should consider complementing their Asian focus and explore the growing economies of Africa. Just as early MedTech pioneers capitalized on Asia's rapid expansion, companies today should contemplate laying the groundwork for a fresh international strategy in Africa. The continent has potential, and a proactive approach could yield sustainable growth opportunities, helping to mitigate the impact of China's economic challenges and slowdown on global ambitions.


Part 2
Africa's Ascendance

 
With a few notable exceptions, Western MedTech executives tend to overlook Africa due to its challenging socio-economic conditions, which include political instability, corruption, extreme poverty affecting ~50% of the population, limited access to necessities, and a high illiteracy rate of ~40%. Notwithstanding, China has long recognized Africa's potential, which mainly revolves around Africa's abundant natural resources, which constitute ~30% of the world's mineral reserves, including critical resources for renewable and low-carbon technologies. For instance, Zambia leads in unrefined copper exports, Guinea boasts the world's largest bauxite reserves, and South Africa contributes ~90% of the world’s platinum group metal reserves. Furthermore, Africa has the world's youngest population, with substantial projected growth.
 
Asia plays a pivotal role in Africa's trade dynamics, accounting for >42% of its exports and >45% of its imports, surpassing Europe in both cases. According to a 2023, Business Insider Report, Africa is poised to become the world's fastest-growing region, with six of the ten fastest-growing economies located on the continent, albeit starting from a relatively low economic base. In addition to its mineral wealth, the continent's path to economic success is partly based on developing an export-led manufacturing economy, akin to China's transformation in the 1980s. This, already in progress, has the potential to lift >0.5bn people out of poverty, create >100m jobs, and establish a substantial and rapidly growing middleclass that will demand improved services, including healthcare.
 
Currently, Africa's manufacturing sector contributes only ~9% to the continent's gross domestic product (GDP) and ~2% to global manufacturing output. However, the African Union has placed manufacturing at the forefront of its Agenda 2063, a strategic framework supported by all 55 African countries, aimed at achieving socio-economic transformation over the next 50 years. This commitment gains significance amid escalating trade tensions between the US and China, which have global economic implications. Africa has weathered recent shocks, including weakened external demand, global inflation, higher borrowing costs, and adverse weather events, which have hindered its post-pandemic recovery. Nonetheless, in the coming decades, the "Made in Africa" label may come to symbolize quality products, solidifying the continent's position as a prominent player in global manufacturing, akin to how "Made in China" became synonymous with quality two decades ago.
 
China’s impact on African manufacturing

China has been instrumental in the economic transformation of African nations, which partly stems from the Chinese strategy to relocate its low-level manufacturing operations to Africa. As China's domestic manufacturers have advanced technically, they have systematically shifted their basic manufacturing capabilities to African countries. This provides Africa with an opportunity to mirror China's journey from standard manufacturing to advanced production processes over several decades.
 
Chinese companies have made substantial investments in labour-intensive manufacturing facilities notably in Ethiopia. This has created jobs and fueled the growth of local manufacturing sectors. For instance, the Huajian Group, a leading Chinese footwear manufacturer, established plants in Ethiopia in 2012, employing >7,000 people and producing ~5m shoes annually. The Group’s partner in this project is the China-Africa Development Fund (CADFund), a private equity facility promoting Chinese investment in the continent. Huajian also invested in Ethiopia's Jimma industrial park, contributing US$100m to build shoe and coffee processing plants and a technical education centre.
 
As Chinese enterprises expanded in Africa, they provided training to local workforces, and transferred their manufacturing expertise. This collaborative effort is helping to develop a skilled labour pool important for sustaining manufacturing growth. Notably, Ethiopia's Eastern Industrial Zone, supported by Chinese investment, evolved into a thriving manufacturing hub, attracting both domestic and foreign investors. Additionally, Beijing's Belt and Road Initiative has led to significant infrastructure developments across Africa, including roads and ports, which further stimulate the continent's manufacturing sector. China’s investment in Africa stands out due to its tangible presence, in contrast to other nations whose involvement in the continent is characterized by distant and arms-length financial engagements. With the influx of such investments, technology transfers, and ongoing skill development, some African nations are positioned to follow China's path towards a manufacturing transformation. 
 
MedTech’s early entrants to the African market

For years, support for Africa’s healthcare tended to concentrate on education and malaria nets. In recent years however, as developed-world disorders, like cancer and heart disease, grew in Africa so medical technology companies increasingly found a market in supplying devices to private healthcare operators and investing in healthcare initiatives through partnerships with governments. US President George W. Bush recognised Africa’s strategic importance, emphasising investments for development and health initiatives, including the President’s Emergency Plan for AIDS Relief (PEPFAR), which, announced in 2003, reflected a commitment to fostering stability and wellbeing on the continent. Since then, American governments have not shown much interest in Africa. However, the MedTechs that entered the Chinese market ~4 decades ago and prospered, have established footprints in the African market by adapting their products and services to local needs, building partnerships with local healthcare providers, and addressing challenges such as infrastructure limitations and affordability. Their presence caters to Africa’s large and growing middleclass and has contributed to the improvement of healthcare standards in the region.
 
Philips Healthcare has made inroads into the African market and operates in several African countries, including South Africa, Kenya, and Nigeria. One of the advantages they offer is a wide range of medical devices and equipment tailored to different healthcare settings, from high-end hospitals to remote clinics. Their focus on technology that can operate efficiently even in areas with unreliable power grids has been instrumental in their success. GE HealthCare has a presence in countries like South Africa, Nigeria, and Egypt. Their commercial advantage is in their commitment to providing innovative medical technologies across various healthcare domains, from diagnostic imaging to healthcare IT solutions. The company collaborates with local healthcare providers and governments to build sustainable healthcare infrastructures. Siemens Healthineers is active in South Africa, Kenya, and Ghana. The company’s advantage stems from their portfolio of medical equipment, laboratory diagnostics, and digital health solutions. They often tailor their offerings to meet the specific needs and budgets of healthcare providers in Africa, contributing to improved patient care and diagnostic accuracy.
 
Unveiling MedTech opportunities: the impact of insurers

Large insurance firms wield significant influence in shaping the trajectory of the medical technology industry. They play a pivotal role in extending health insurance coverage to middle-class populations worldwide, not only bolstering healthcare systems but also driving the demand for medical technology. In essence, these insurance giants act as catalysts for the MedTech industry's growth.
 
A case in point is Prudential plc., a global insurance powerhouse with >23,000 employees and 2021 annual revenues of >US$70bn. The company holds dual listings on the London and Hong Kong Stock Exchanges and is a constituent of the FTSE 100 Index. It also maintains secondary listings on the New York Stock Exchange and the Singapore Exchange. In February 2023, shortly after Anil Wadhwani assumed the role of Prudential's new CEO, he publicly declared his intent to chart a new course and focus on Africa for growth. Wadhwani highlighted that the growth drivers in Africa today closely resemble the trends previously witnessed by the company in Asia: rapidly expanding middle-class populations with a growing appetite for insurance and enhanced services, including healthcare. He emphasized that Africa would complement Prudential's expanding Asian presence. IMF's 2023 reports indicate that countries such as South Africa, Ghana, Kenya, Ethiopia, Côte d'Ivoire, and Rwanda are prime candidates for substantial future growth. It is increasingly plausible that Africa could emerge as the next frontier for MedTech companies, thanks to the leadership of individuals like Anil Wadhwani, who steer insurance giants toward new horizons.
 
Takeaways

In recent years, Western MedTechs have witnessed a significant transformation in China's healthcare landscape, driven by changing demographics and an increased emphasis on technological self-reliance. Notably, industry giants such as GE HealthCare, Siemens Healthineers, and Philips Healthcare, which established a presence in China during the 1980s, are now extending their reach into Africa with hopes of replicating their prior successes. While some may view this expansion as unconventional due to factors like political instability, corruption, and poverty, the continent has potential. Africa's attraction for MedTechs includes some of its countries with significant economic growth potential, a burgeoning youthful population, a growing middleclass, and abundant natural resources that align with the evolving demands of a rapidly expanding global green economy. Much like the historical pattern of MedTech companies venturing into Asia, a similar trend is emerging in Africa among a select group of firms. Another critical point to consider is the emerging role of insurance companies as potential guides in this new journey. These insurers are participating in the continent’s healthcare expansion and innovation, and where they lead, MedTech companies should consider following. The growing middleclass, equipped with medical insurance, will eventually exert pressure on healthcare systems in the region to enhance access to quality care. This, in turn, will expand the market for medical devices. Despite the complexities and contradictions that Africa presents, it represents an opportunity that warrants consideration. The question of whether Africa will become the new Asia suggests the need for MedTechs to embrace a new era where innovation and progress thrive on the courage to venture beyond the familiar. By doing so, corporations can discover a promising landscape for growth and innovation, tapping into Africa’s underserved opportunities and playing a role in enhancing global healthcare.
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Here's the paradox: cancer is the most preventable of all the chronic illnesses and yet the incidence of cancer growth in Africa and other developing regions of the world is of pandemic proportions, which is exacting a significant economic and social toll.

Reason 1: There is a massive difference between global spend on cancer and on infectious diseases. Although cancer claims more lives globally than HIV/AIDS, malaria and tuberculosis combined, it receives less than three percent of public and private funding from global health. The overwhelming amount goes to infectious diseases.

Reason 2: African countries lack financial clout to attack cancer. They lack epidemiological information to guide resource planning. They lack health workers. They lack the political will and they have competing healthcare demands.

Reason 3: Bad advice. For example, recently a well resourced UK global health advisory group travelled to a poorly resourced African country, which had one of the world's highest rates of cervical cancer mortality and recommended that it should improve its road transport infrastructure to enable health workers easier access to rural areas.

Narrowing the global medical knowledge gap
Sixty years ago, cervical cancer was one of the most common causes of death for western women. However, between 1955 and 1992, the cervical cancer mortality rate in affluent western countries declined by almost 70% as medical knowledge to detect and manage the disease improved. Similar outcomes are true of other forms of cancer to the point where cancer is now preventable and manageable in most developed economies.

According to Margaret Chan, Director General, World Health Organization, the exponential growth of cancer in Africa can be significantly reduced and managed by narrowing the medical knowledge gap between the develop world and African countries.

Notwithstanding, well resourced dedicated centres of global health in affluent developed countries are failing to narrow this gap and thereby failing to reduce and control the 12 million cancer cases that occur annually. If this gap continues over the next 20 years, cancer is expected to exact a significant toll in morbidity, mortality and economic cost particularly in Africa. By 2030, the number of new cancer cases each year is projected to increase to 27 million, cancer deaths to 17 million and much of the cancer burden will fall on poorly resourced African countries.

Mobile phones rather than tarmac
Narrowing the medical knowledge gap between rich and poor countries will neither be achieved by building more roads nor continuing traditional ways of communicating medical knowledge. Such means are slow, costly and ineffective. Narrowing the medical knowledge gap will only be achieved by widespread use of the most ubiquitous healthcare innovation: the mobile telephone.

Although operationally relevant, the mobile telephone is an underdeveloped healthcare application. However, in Africa, the implementation of any healthcare strategy to reduce the burden of cancer and other debilitating health conditions should not be contemplated without leveraging mobile telephony. Why? Because Africa has one of the fastest growing telecommunication infrastructures in the world.

According to a recent joint World Bank and African Development Bank Report there are 650 million mobile users in Africa, surpassing the number in the US and Europe. "In some African countries more people have access to a mobile phone than to clean water, a bank account or electricity," the Report says.

A recent Deloitte's Report suggested that between 2000 and 2012, mobile phone penetration in Africa increased rapidly from one percent to 54%. Today it is over 60%. The main catalyst for this explosive growth is youth. "The cell phone is their landline, ATM and email in one device. Cell phones are central to their life," says Teresa Clarke, CEO, Africa.com.

According to Maurice Nkusi from Namibia Polytechnic who designed a mobile phone-based curriculum, most African youths, "have never even used a computer, but the rapidity with which they master mobile telephony reflects the era in which they live".

Mobile telephony in Africa has narrowed divides between urban and rural, rich and poor and African youth today is the first generation to have direct access to mobile phones, which are used for communicating, transferring money, shopping, listening to the radio and mingling on social media. It is a relatively small step to integrate healthcare content on mobiles that would help prevent and manage cancer.

Africa internet use increases as costs fall
Internet prices in Africa are falling and speed is increasing thanks to fibre-optic submarine cables running along the east and west coasts of Africa and connecting many countries and millions of people.

The Eastern Africa Submarine Cable System (EASSy) is a 10,000km fibre-optic cable deployed along the east and south coast of Africa to service voice, data, video and internet needs of the region. It links South Africa with Sudan via landing points in Mozambique, Madagascar, the Comoros, Tanzania, Kenya, Somalia and Djibouti. The system also interconnects with multiple international submarine cable networks for onward connectivity to Europe, the Americas, the Middle East and Asia.

At a 2013 BRIC summit in South Africa, Andrew Mthembu, chairman, i3 Africa announced that EASSy is to be complimented by a new marine cable connecting 21 African countries with Brazil, Russia and China.

Along the West African coastline is a similar submarine fibre-optic cable, which links West African countries with Europe and brings ultra-fast broadband to a region from Seixal in Portugal through Accra in Ghana to Lagos in Nigeria and branches out in Morocco, Canary Islands, Senegal and Ivory Coast.

This existing 7,000km cable has been recently complemented by a France Telecom-led system, which uses high-speed fibre optic technology to link Europe with 18 countries along the west coast of Africa and provides the capacity to allow approximately 20 million ordinary videos and up to five million high definition videos to be streamed simultaneously, without any buffering.

Today, there are 84 million Internet-enabled mobiles in Africa, all of which can access data and rich media from the internet. By 2014, 69% of mobiles will have Internet access in Africa. In response to the burgeoning demand, African markets are rapidly transitioning from mobiles with limited data access to low-cost smartphones with access to the Internet. Chinese handsets are readily available in Africa for as little as US$20.

Takeaways
Previous HealthPad commentaries have described mHealth initiatives in Africa, but few western centres for global health have fully appreciated that medical knowledge has become mobile, digital and global. Further, they have not fully appreciated the telecommunications revolution that has taken place in Africa over the past decade. Such failures help to explain why the medical knowledge gap between the developed world and African countries has not been narrowed.

This failure is also an opportunity for centres of global health to take a lead in capturing and organising medical knowledge to assist in the management of cancer and other chronic diseases and then to leverage established telecommunications infrastructures to distribute that knowledge to where it is needed the most. What a pity that narrowing the medical knowledge gap was not a Millennium Development Goal.

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