Market insights

Singapore dazzles as a world leader in medical manufacturing

12 April 2018

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For a medical technology manufacturer, expanding into the Asian market can be decidedly daunting. You need to find R&D resources, build and staff a manufacturing facility, and develop a sales organization. And that doesn’t count all of the regulatory red tape you’ll have to manage. Typically all of this is done piecemeal, with global firms establishing outposts scattered throughout the continent. Managing all of this can be a logistical nightmare, which is why it can often take years for an Asian expansion to become profitable.

But what if there was one location where you could base all of these functions, thanks to a deep talent pool and a progressive environment designed to support medical technology manufacturing? There is – in Singapore, where manufacturers have those factors and more. For Western medical technology firms looking to grow in Asia, it’s the ideal place to be.

Asia-Pacific’s medical technology sector is downright monstrous. By 2020, McKinsey expects it to hit US$133 billion in size, growing from an already massive US$88 billion in 2015 to become the second-largest medical technology market in the world. Why such breakneck growth? Because of numerous factors the region is now facing: An aging (and massive) population – Asia Pacific is home to more than half the world’s population -- with more access to healthcare than ever, combined with a medical industry that’s undergoing significant upheaval as it rapidly modernizes.

But there are significant differences between the medical worlds in Asia and the West. Hospitals and doctors, for example, operate differently here than they do in Europe or North America. Even the patients tend to present distinct conditions that require different means of treatment. It can take years for a Western medical technology firm to understand the intricacies of this region well enough to succeed.

It’s those differences – and Singapore’s talent, infrastructure, and technological advantages – that have led numerous Western firms to establish presences in Singapore, a small country with an outsized influence on the region’s medical technology industry.

When it comes to building medical products, you won’t find a region of the globe with more varied and sophisticated production capabilities. From contact-lens production lines to life science instruments, Singapore’s medical technology manufacturing output reached over SG$11 billion in 2016, according to Singapore Economic Development Board.

In the last decade, medical technology manufacturing firms have moved to Singapore in droves. For example, Medtronic chose Singapore as the location for its first Asian plant, where it produces state-of-the-art cardiac devices. “Our partnership with Singapore began many years ago, and the diversity of opportunities within Singapore and Asia Pacific makes this region a critical part of our global strategy,” says Dr. Hsien-Hsien Lei, Vice President for Communications and value-based healthcare for Medtronic’s APAC region.

In addition to employing more than 400 workers in its manufacturing facility, Medtronic operates two commercial offices, two training centers, an innovation center, and a distribution center in Singapore. “We opened the Medtronic Singapore Operations (MSO) to ensure that our manufacturing capabilities can better address the growing epidemic of cardiovascular diseases in Asia Pacific, and meet the increasing demand for cardiac devices,” says Dr. Lei. “MSO also serves as our distribution hub for cardiac devices in the Asia Pacific region. As a leading biomedical sciences hub and regional logistics hub, Singapore helps us deliver meaningful innovation and technology to patients in the region and globally.”

Dr. Lei says that “Medtronic and Singapore share similar goals,” and praises Singapore’s trusted manufacturing base for complex and high-quality medical devices, its innovative ecosystem that promotes the development of new technology, and its stable and trained workforce. Add to that factors like strong intellectual property protection and a pro-business government environment, and it’s no wonder that medical technology manufacturing continues to explode in the region.

 

Singapore isn’t content to just be a key location for manufacturers today. The country is making significant investments in advanced manufacturing technologies to ensure it remains a hub for the world’s leading medical technology manufacturers well into the future.

This kind of diligence is vital, because manufacturing is rapidly transforming, driven by advanced technology that’s directly impacting the manufacturing floor. Specifically, Singapore’s government has created some key technology initiatives that are directly impacting the medical manufacturing industry, with programs designed to enhance the state of the art in 3D printing, robotics, and the industrial internet of things (IoT), to name just a few. For example, Singapore’s Research, Innovation and Enterprise plan has allocated S$3.2 billion to advanced manufacturing and engineering research through 2020. In July 2017, the National University of Singapore for Additive Manufacturing (AM.NUS) was launched to help develop additive manufacturing technologies — aka 3D printing — for the biomedical and healthcare fields.

Singapore has positioned itself as an international leader across the spectrum of manufacturing technologies. The country’s Agency for Science, Technology and Research (A*STAR) attracts visitors by offering masterclasses and workshops on the latest manufacturing tech, and its model factories at the Singapore Institute of Manufacturing Technology and the Advanced Remanufacturing and Technology Centre draw partners from around the world. Private industry has even joined the party.

“We have a well-equipped application lab in Singapore which is very popular with our customers, as they can see demonstrations of our instruments and can get hands-on experience with those technologies,” says Ravi Shastri, Thermo Fisher Scientific’s Vice President and General Manager of Southeast Asia and Taiwan. 

Singapore is also investing in partnerships between OEMs and suppliers of automation and advanced manufacturing technologies. The S$250 million Partnerships for Capability Transformation program was introduced to encourage partnerships between foreign corporations and local suppliers by aiding with knowledge transfer, upgrading supplier capabilities, and developing collaborative processes. The program and similar investments have been huge hits. Five of the world’s top 10 Electronic Manufacturing Service companies based in Singapore undertake activities across the entire value chain, from design to mass production. Directly supporting this value chain and the medical manufactuers are more than 2,700 precision engineering companies with advanced capabilities in product design, component creation, and even high-tech packaging.

All of this adds up to a world-class concentration of services that fully support medical technology manufacturing. Says Shastri, “Thermo Fisher employs a ‘hub-and-spoke’ strategy where Singapore-based design firms, universities, and research institutions play significant roles in supporting the development of our instrument platforms. Key partners include the publicly funded research institutions at A*STAR, universities and academic centers. Our projects cover a wide range of medtech areas including synthetic biology tools, cancer biomarkers, and cell line optimization for drug production.”

There’s an additional fact that’s impossible to overlook: Across industries, Singapore is among the most sought-after locations for companies looking for a place to anchor their presences in Asia. Companies cite the business-friendly environment as key to helping them accelerate and optimize operations -- making it easier to bring new products to the Asian market.

For decades, Singapore has cultivated an atmosphere that streamlines businesses’ access to complex Asian markets. Strong IP protection laws, a business-friendly regulatory climate, and access to a predominantly English-speaking workforce only sweeten the deal. Manufacturers often benefit the most: The Centre of Regulatory Excellence (CoRE), a professional organization that’s part of the Duke-NUS Medical School, serves the needs of the biomedical industry by enhancing collaboration between academia, industry, and regulatory agencies. It’s among the latest efforts that have helped to make Singapore a world-class location for medical technology businesses.

Says Medtronic’s Dr. Lei, “Singapore is a strategic business hub for the region, and it enables us to fully leverage the developed infrastructure, world-class healthcare systems, technology advancements, open business policies, and skilled workforce to deliver our expertise and innovation -- and scale them to other markets in the region.”

Singapore isn’t just a great place for R&D and manufacturing operations, it’s the ideal place from which to launch those products into the Asian market. It’s also an exciting place to live, with everything from a world-renowned airport to a vibrant restaurant scene that boasts top-shelf cocktails. If you’re looking to set up shop overseas, the region’s plentiful amenities are likely to have your staffers clamoring for the assignment. This is a truly global area -- one where expats mix with locals, and business professionals and students commingle in a progressive, energizing environment.

“As the future of medical technology,” says Dr. Lei, “Singapore is a true ‘living lab.’ Companies can experiment with new business models or collaborative frameworks and then extend them around the region or the world.”

No place can match Singapore’s combination of technology leadership, its proximity to Asian markets, and its pioneering medical infrastructure.