Wednesday, January 14 2015
The United States remains the largest medical device market in the world with a market size of around $110 billion, and it is expected to reach $133 billion by 2016. The U.S. market value represented about 38 percent of the global medical device market in 2012. U.S. exports of medical devices in key product categories identified by the Department of Commerce (DOC) exceeded $44 billion in 2012, a more than seven percent increase from the previous year.
There are more than 6,500 medical device companies in the U.S., mostly small and medium-sized enterprises (SMEs). More than 80 percent of medical device companies have fewer than 50 employees, and many (notably innovative start-up companies) have little or no sales revenue. Medical device companies are located throughout the country, but are mainly concentrated in regions known for other high-technology industries, such as microelectronics and biotechnology. The states with the highest number of medical device companies include California, Florida, New York, Pennsylvania, Michigan, Massachusetts, Illinois, Minnesota and Georgia. Other states with significant sector employment include Washington, Wisconsin, and Texas.
U.S. medical device companies are highly regarded globally for their innovations and high technology products. Investment in medical device research and development more than doubled during the 1990s, and research and development investment in the domestic sector remains more than twice the average for all U.S. manufacturers.
The United States also holds a competitive advantage in several industries that the medical device industry relies upon, including microelectronics, telecommunications, instrumentation, biotechnology, and software development. Collaborations have led to recent advances including neuro-stimulators, stent technologies, biomarkers, robotic assistance and implantable electronic devices. Since the industry is fueled by innovation and the ongoing quest for better ways of treating or diagnosing medical problems, the future growth of this sector remains positive.
NOTE: The company, shipment and employment figures cited above come from the 2007 Census of Manufacturers, a comprehensive gathering of data from manufacturing companies conducted every five years. The $98 billion shipment figure only includes medical devices from direct companies; several billion dollars of additional shipments likely are secondary products.
More and more companies are choosing to locate here after weighing the United States’ competitive advantages, including our:
1. Skills and productivity: The U.S. workforce is among the most skilled and productive globally – more than 30 percent more productive than Germany’s and nearly twice as productive as South Korea’s.
The massive U.S. trade deficit is a major cause of the decline of U.S. manufacturing over the past several decades, the high unemployment rate and debilitating budget deficit. Domestic suppliers have watched as large manufacturers have offshored work and well-paying jobs. Offshoring ultimately contributes to waste and instability.
For the nation, reshoring brings back desirable jobs that have been lost to decades of offshoring. Reshoring also helps manufacturers recover from offshoring's poor quality, trade secret thefts, supply chain disruptions and lengthy delivery times -- all while staying cost competitive.
Now the company benefits of reshoring are growing daily as offshore sourcing faces increased wages and currencies, higher transportation and fuel costs, and inability to provide required responsiveness. Nationally, reshoring breaks out of the waiting-for-policy-decisions problem (currency, trade negotiations) and the economic zero-sum-game (taxes and spending).
Many companies are shifting their operations back to the U.S. because offshoring has hindered their ability to rapidly deliver goods, maintain low inventories, uphold competitive costs and meet demand for rapid adjustments to unique products. In other words, Logistics plays an extremely important part of the decision.
Advancements in technology has a hand in improving the U.S. manufacturing industry’s readiness to investing in advanced manufacturing technologies, such as 3-D printing, robotics, and digital manufacturing. This new technology along with logistics and workforce development are all reasons why reshoring is a good idea.