MedTech market revenue expected to reach USD 571B

This year, revenue from the MedTech market is expected to reach $571 billion, according to Statista. The largest segment—medical devices—will reach a projected market volume of $472 billion. As with most industries experiencing steady growth, the MedTech market faces several challenges, including supply chain issues, price inflation on materials and energy, labor shortages and increasing regulations.

To better understand manufacturers’ most pressing concerns, we sponsored the State of Manufacturing Technology survey. This is a free resource that medical device manufacturers can download to benchmark their own businesses and IT strategies against those of their peers. In our own analysis of the findings, we observed four key takeaways.

Continued concerns around market volatility
Market volatility was the No. 1 concern for medical device manufacturers, followed by supply chain disruptions, geopolitical issues, climate events and trade agreements that continue to affect production and availability of materials. Following is a breakdown of the top concerns cited by respondents:

• 7% – transportation and logistics will be more unreliable and unpredictable
• 7% – suppliers will become unreliable and unpredictable
• 2% – inability to meet unexpected spikes in demand
• 2% – lack of agility to shift product or production mix to meet market needs

Increased investments in digital transformation
Many companies are engaged in digital transformation initiatives. According to the survey, most respondents are planning to increase their investments in cloud-based applications and platforms over the next 12 months to assist with these efforts.

We asked respondents to share what they feared most if they failed to progress further along the digital transformation path. Here is what they said:

• 4% – lacking the digital competency to leverage new business models, such as offering products as a service or on a subscription basis
• 7% – lacking operational adaptability to react to disruptions
• 3% – being unable to collaborate with external suppliers and/or customers
• 4% – disconnected or siloed data sources (internal and external)

A move toward could-based solutions
Respondents that had systems coming to the end of life, or legacy applications that were failing to keep up with the demands of their business, are looking to cloud-based solutions to future-proof their operations. Those who had already adopted cloud-based system experienced these benefits:

• 6% – an ability to drive innovation and/or digital transformation
• 9% – reduced overall costs (operational / financial performance)
• 7% – improved IT security
• 5% – the ability to gain control over IT solutions
• 5% – simplification and standardization of IT infrastructure and application platforms

Harnessing cloud capabilities
The large-scale disruptions in semiconductor chips seen during the pandemic had a significant effect on medical device manufacturers, causing depleted inventories, reduced manufacturing capacity and extended lead times. Our survey showed that many manufacturers have since taken proactive steps to adopt digital solutions to better manage future disruptions to supply chains. The CHIPS and Science Act has also helped. This act infused $52 billion in investments and incentives to bolster domestic manufacturing of chips. This government support coupled with manufacturers’ own cloud investments have been a model approach to foster resiliency in the face of inflation, economic uncertainty and ongoing market volatility.

Some manufactures may fear they lack the digital competencies to achieve digital transformation on their own. But help is available. Solution providers and consultants can provide added technological expertise, and connecting with peers in the MedTech industry can help companies define their own needs and strategies to meet the challenges of tomorrow with the best digital tools of today. MedTech Intelligence