July 2019 Issue: The U.S. – China Trade War: Here’s what it means for medical device industry suppliers

Welcome to the era of ‘right-shoring’

President Donald Trump likes to brag about “literally hundreds of companies moving back” to the United States, and tariffs against a competitor such as China are a major part of the strategy.

At least with the medical device industry, though, the situation is more complicated. The U.S.-China trade war is causing medical device industry executives to take a harder look at whether they should be manufacturing in the Asian giant — but they’re talking about shifting manufacturing to other low-labor-cost locations such as Malaysia, Thailand, Vietnam, Costa Rica or Mexico.

“They are looking at what I would call ‘rightshoring,’” Freudenberg Medical CEO Max Kley said of his company’s medtech customers.

That said, I’ve witnessed firsthand the vibrancy of the United State’s medical device manufacturing hubs in Minnesota, Massachusetts and California — three states alone where the industry provides more than 110,000 jobs. There are other smaller manufacturing centers in places such as Grand Rapids, Mich., and Warsaw, Ind.

The manufacturing is advanced. The jobs require skills. The sector is thriving because when medtech reaches a level where there is little room for error, quality trumps labor costs.

If we truly want more manufacturing jobs in U.S., perhaps our government should find ways to better foster growth in medtech and other sectors that require advanced processes and skilled workers to make their products.

I encourage you to check out our cover feature, in which Kley and others provide a medical device industry supplier’s view of the U.S.-China trade war. Other highlights in this issue of Medical Design & Outsourcing include:

• Medical device industry suppliers are increasingly coming up with their own answers to potential design and manufacturing challenges — enabling medtech innovation in the process. For example, Swedish company Trelleborg developed an advanced two-component injection technology to produce complex, high-precision parts for medical devices.
• California, Minnesota and Massachusetts dominate the U.S. medical device industry. But many other states also play a significant role in medtech. We looked up data including industry employment, venture capital investment, notable industry suppliers and more to compare the top medtech states in the country.
• The medical device industry and its suppliers are still dominated by men, especially when it comes to leadership positions. But there are a growing number of women executives making a difference in the medical device contract manufacturing space. We interviewed them to gain insights about how the industry could become more diverse.

Chris Newmarker
Editor
Medical Design & Outsourcing
cnewmarker@wtwhmedia.com

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