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State of the Swiss Medical Technology Industry 2011

Stormy times ahead?


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MedTech Survey 2011

Background

The Swiss Medical Technology Industry (SMTI) survey 2010 was widely and well received and proved to be a vital instrument to the industry leaders. For our 2011 update, we wanted to respond to the current economic environment influencing the SMTI and provide management with new insights. Today’s economy exposes any marginal innovation, compliance and quality gaps faster globally, thus influencing performance of companies.

In late 2010 general sentiment had put the crisis in the past, signalled through many M&A activities. However, as of Spring 2011, the financial and economic crisis re-emerged more severely and now affects MedTech companies on a global level. New challenges have significant impact on the modus operandi of SMTI. These put management in a reactive and rather operational mode. Yet our industry has learned from the past and done its homework early. Our sample of companies remain competitive and grow at a “black zero”.

Key findings

  • The average expected growth for the SMTI is between -1% and 5% for 2011 and 4% in the long-term perspective, this signals the end of the double digit growth period
    and of single products (except niche products). Single market entries limit product launch success in a globalized and data richer world.
  • The current status of the SMTI is worse than 12 months ago; an operational hectic and crisis mindset reigns. However, in contrast to many other export industries several
    MedTech companies plan to increase their headcounts. There is limited headcount reduction anticipated, as well as strategic project stops foreseen.
  • The survey highlighted that SMTI management aims to achieve further efficiency gains in order to improve performance in the magnitude of +5% to +10%, despite
    ongoing lean and continuous improvement programs.
  • The previous years shaped the current mood of the industry and this crisis mindset is partly responsible for diminishing returns and shrinking revenues.
  • The SMTI has significant competitive advantages based on the Swiss MedTech ecosystem like closeness of cluster networks, networked innovation and reliability of
    supply chain management.
  • Value chain partner diversity might shrink if the down-turn continues (i.e. selection of suppliers abroad due to price pressure).
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