Medical technology in Switzerland has a long and successful tradition. It is seen as a sector with a promising future, and for several years it has received special attention at federal level in Switzerland, with special programmes for innovation subsidy being launched and individual cantons making medical technology the key focus of their innovation policy.
This seems fitting, given that medical technology – with its short innovations cycles – brings together practically every knowledge-based future technology. Medical technology in Switzerland continues to be among the strongest growing sectors of industry.
The medtech sector in Switzerland comprises over 500 companies operating entirely or mainly in that field. Of these, around 200 are product manufacturers with their own brand or businesses which feature as OEM manufacturers.
The entire sector is characterised by major activities in the export field; 70% of its merchandise is exported all over the world, with 30% being destined for the domestic market in Switzerland. This makes Switzerland one of the countries with a positive trade balance on exports/imports for medtech products.
Estimates suggest that over 40,000 employees are working in this sector in Switzerland.
Although this figure is below 1% of the total Swiss workforce, the economic importance of the sector is considerably greater, given that it accounts for around 1.6% of a GDP totalling €300bn, and around 2.2% of all exports, out of a total of €125bn (2006 figures).
Medical technology is one of the fastest-growing sectors in Switzerland. Annual growth rates are of the order of 6–8%, showing that the sector is set to share in the global expansion of the healthcare system. Switzerland has already succeeded in expanding its global market share for medical products from 2.5% in 1991 to 4% in 2001. The assumption in various studies is that medical technology is set to grow over-proportionately, notably in the market segments for therapy systems, implants and prostheses. These are precisely the major areas of activity for companies in Switzerland.
It seems almost certain that Switzerland, as a centre for research and production, is well prepared for the challenges and opportunities which the future has to offer. For knowledge- and technology-based industries, Europe – especially Switzerland – has great potential to offer.
SWISS INDUSTRY AND MEDTECH
Medical technology has interfaces with electronics, the machine tools industry, pharmaceuticals and biotechnology. Switzerland has a wealth of experience and extensive know-how in all these fields. Swiss industry is famous for investing considerable sums year on year in research and development, since this is the only way in which Switzerland, a country poor in natural resources, can assert itself as an economic centre.
The intensive collaboration between university-level institutes and industry is a further well-developed feature of the situation in Switzerland. The interaction between the two partners is considered as one of the success factors for the sector’s capacity to innovate. In order to see that the results of both basic research and applied research can be transferred optimally into marketable products, in 1998 the Swiss government set up the initiative CTI/KTI Medtech (Commission for Technology and Innovation – Medtech) as part of its support for research activities. Today, alongside the Swiss national funding body Schweizerischer Nationalfonds (SNF), it constitutes one of the key pillars of public research funding in Switzerland.
Whereas the SNF supports basic research in universities, the CTI focuses on applied research and development in the technical universities and the universities for the applied sciences. The federal state supports joint projects involving universities and medtech companies, regardless of size, with the aim of transferring the results of leading-edge research into marketable products and product improvements. The state meets the overhead costs for the university partner. As a rule, rights to the jointly developed research outcomes belong to the industry partner.
In this manner, the CTI Medtech initiative has supported over 250 projects during the past nine years, involving investment in research of over CHF250m. With the expansion of knowledge and technology transfer agencies, spread right across the economic regions of Switzerland, and with a training and subsidy programme for formation of start-ups, the system of innovation is being continually expanded.
CENTRE OF FINANCE
The improved drive in Swiss medtech is reflected in the country’s financial community. Recent years have seen the creation of a number of funds focusing on private equity and venture capital financing. Many of them explicitly seek opportunities in the life sciences field.
Although the financing community is fairly cautious with investments in economically difficult times, the sector remains strong. With more than 40 venture capital firms and sector-specific investment funds, Switzerland offers an excellent climate for medtech and other life science companies. With the competency of the SWX Swiss Exchange added to it, all the ingredients for successful initial public offerings (IPO) are present.
THE INTERNATIONAL CONTEXT
According to Eucomed, sales of medical technology devices and aids in Europe in 2005 amounted to just under €64bn. With an estimated global market of €187bn, the medtech market in Europe ranks second in importance only to that of the US (€79.4bn). In Europe, Germany is by far the biggest market, accounting for 31% of all sales.
In terms of market volume, at 2% Switzerland’s role is a modest one. But the position is different when considering the volume of imports and exports in a European comparison. With an import volume of €1bn and an export volume of €3bn, Switzerland ranks among the countries with a clear export surplus for medical technology goods.
Unlike most other European countries, Switzerland – along with Ireland – has succeeded in significantly increasing its position in the global medical technology market. A look at the employment figures likewise demonstrates the sector’s major importance. There are just over 450,000 employees in the European medical technology industry, and 9.2% of these are working in Switzerland – more than in Italy or Spain and on a par with France.
With its excellent framework conditions and well-qualified specialist personnel, strong university institutes, flexible employment market and adequate source of available investment capital, Switzerland is an attractive location for companies operating on a global footing. Many US-based groups have elected to site their European headquarters in Switzerland and benefit from its central position in Europe. An additional benefit is that Swiss workers are multilingual and the employment market is largely deregulated, with workers from other countries being welcomed in.
It is gratifying to note that not only are international business relations maintained from Switzerland, but also a whole range of well-known groups manufacture complex and knowledge-based instruments and devices in the country. In parallel with this, some Swiss companies have established themselves in their market segment as ranking among the key players in their particular field.
While these companies generally limit their focus to their core competences, a finely integrated network of highly specialised supplier companies and contract research partners has been developed in Switzerland. Many of these have become such strong players in their field that they no longer produce purely for the Swiss domestic market, but have long found their skills and services in demand internationally.
As a consequence, not only have the Swiss medtech companies become internationalised, but certain supplier and service companies are now sought-after partners for medical technology companies all over the world. Swiss supplier companies have a presence at all relevant international trade fairs, and benefit from the excellent reputation of Swiss precision engineering and of the ‘Swiss made’ brand.
ONE NATION – ONE MEDTECH CLUSTER
It was roughly ten years ago that the concentration of medical technology companies in the Berne area provided the trigger for the establishment of the Medical Cluster. At that time, the region already offered the best pre-conditions for developing medical technology into a key sector of industry, given its excellent research infrastructure, easy access to various university hospitals and local micro-engineering expertise from the clock-making and robotics industries.
The aims of those establishing the Medical Cluster have, over the intervening period, been implemented step-by-step. The primary focus is on lasting improvements to the framework conditions and to services for businesses:
- Supporting the innovation process throughout the value-added chain from research through production to market
- Optimising knowledge and technology transfer
- Expanding the opportunities for initial and continuing training in medical technology
- Providing venture capital for innovative young enterprises
Right from the off, the cantonal government in Berne recognised the importance of medical technology and supported the Medical Cluster financially and ideationally. Starting from this strong local base, the Cluster has now developed its activities into an industry association operating on a national footing.
To that end, the Medical Cluster recently became a member of the Swiss Life Science Marketing Alliance, an integrating body involving all the economic regions in Switzerland with the objective of promoting biotechnology and medical technology on a national level and positioning and publicising them internationally.
The Medical Cluster and the alliance together form a strong partnership, providing benefits to companies in the following areas:
- A single brand to promote Swiss medtech in other countries
- A web-based portal as a source of information about Swiss medical technology
- A joint presence by Swiss medtech companies at international trade fairs
- Periodic reporting on the Swiss medtech scene (Swiss Medtech Report)
- Professional knowledge and technology transfer via the Competence Centre for Medical Technology (CCMT) foundation
- Initiating and supporting in the development and expansion of courses of study at Bachelor and Masters levels in medical technology
- Subject-specific expert seminars on medtech issues
- Promoting the development and realisation of product innovations and of business start-ups through comprehensive innovation management
- Organisation of company visits as examples of best practice, and organisation of specialist and networking events
Through all these measures, the Medical Cluster is coming closer to its vision of a national Medical Technology Innovation Centre. Its aim is to offer the best framework conditions and support services in the world, both for existing companies and also for young medtech enterprises. Together with the public authorities in Switzerland, with its partner organisations and with the domestic medtech industry, the association welcomes the opportunity to provide more detailed information to interested parties from Europe and the whole world about Switzerland as a centre for medtech and industry.