South Korea takes first place among all developed countries that have the best access to healthcare. Its internal handling of challenges due to COVID-19 earned it a well-deserved best-in-class reputation. As the second wave of the pandemic hit South Korea – the country’s response was unparalleled, yet again. It is now the opportune time to expand into the world healthcare markets using our hard-earned goodwill.
After robotics, machinery, electronics, and automotive, the South Korean medical device industry is positioned to win globally, with our government investing $10.3B in medical device R&D in the next 5 years. In a small market like South Korea, there is only so much internal growth: this investment aims to more than triple South Korea’s global share in the medical device market to 4.1% by 2026. Expansion and revenues brought home from abroad, in turn, will attract more capital and talent to the industry to sustain its leadership in the future.
Where can we grow? The two largest markets in the world are China (by the population size) and the U.S. (by cost per person on healthcare-related products and services). Given that China has its own manufacturing, all eyes are now on the U.S., where manufacturing is outsourced to China, and only innovation and commercialization ensue.
Currently, there are over 6,500 American medical device companies in the U.S., primarily small and mid-sized businesses (SMBs), where more than 80% of medical device companies have under 50 employees. Most new start-ups have no product to sell — the cycle to enter the market can last anywhere from 3 to 7 years (including development & testing of the new product, plus all necessary certifications).
With global trade disruption, U.S. companies are now facing uncertainty with shipment and manufacturing delays. SMBs do not have deep pockets to sustain additional delays caused by the global pandemic on top of the pre-existing long cycle to enter the market. Now is the opportunity for Korean manufacturers who have devices in the market and reliable production in Korea to step up and find the path to enter the U.S.
Market entry starts with obtaining FDA or similar certifications, and could also include finding local partners to form joint ventures with and entering the market together with the US.. local salesforce and Korean technical solutions. Besides a proven product, you must bring considerable value to the U.S. partners. For example, bringing case studies of successful implementation in Korean healthcare facilities to the table.
It is critical to move fast: good, viable potential partners are purchased very quickly. The U.S. medical device industry is undergoing a major M&A wave with rapid acquisition of promising start-ups by large players like CVS, Amazon Health, etc.
Notably, expanding overseas for individual manufacturers is risky, though our medical device associations from Korea can help by forming groups of delegates in specific segments – e.g. AI, telemedicine, emergency care devices, etc. Partnering with U.S. medical organizations for Korean companies and leading organizations can also be a great way to bridge the gap and help Korean medical companies move faster.
Our leading medical device trade show KIMES has valuable contact information about buyers around the world to reach out to. With coordinated efforts among these key players and active participation of innovative medical device manufacturers, South Korean products can take its well-deserved space in U.S. hospitals and clinics.