Industry Bullish in 2010, Says Medtech Survey

“There was a lot of uncertainty going into 2009,” says Schorre. At the time, credit markets were frozen and the international economy was in the midst of an upheaval, he says. “This year people feel a little bit better. There is general economic news that at least the markets are stable.”

That optimism is evident in various responses to the survey. For example, 31% of respondents indicated that their sales had increased during a three-month period versus 20% that indicated a decrease in sales during the same months in 2008. And more than 70% of respondents said they expect sales to increase. Although the number of people who indicated they are “very positive” dropped three percentage points from last year, there was a substantial increase in people who indicated they are “somewhat positive” about the upcoming year. Schorre extrapolates that people in the medical device industry feel that the economy is more stable now than one year ago and are cautiously optimistic. “People just fundamentally understand that the demand for diagnostics tests and devices will grow. It’s not surprising that those medical devices are looking positive,” he says. “Year after year, I think that people will always be positive about this industry.”

Even so, Schorre says he was surprised by some of the results, particularly when it comes to international data. For example, it was a surprise to him that Brazil came in as the number one foreign market that companies are looking to enter. “Asian companies are really interested in Brazil, even more than [they are interested in] Europe,” he says. According to Schorre, Brazil has gotten a lot of press, particularly after the term BRICs (Brazil, Russia, India, and China) was coined, referring to their fast-growing economies. These countries are poised to be among the most dominant economies by 2050, according to Jim O’Neill, global economist at Goldman Sachs.

International interest also applied to what Schorre calls secondary markets. Nearly 64% of companies that export said they plan to enter at least one new international market in 2010. Many companies are showing strong interest in emerging markets such as Mexico. “Mexico has been one of our most successful markets in terms of interest during the last six months or so,” Schorre explains. “People are feeling the U.S. market tighten belts, so secondary markets are a way to cast a wider net.”

Healthcare legislation in the United States was noted as the single most important topic in the device industry. This is not surprising, says Schorre, because more than 60% of the respondents were based in North America, specifically the United States. “People just aren’t sure what is going to happen with legislation. Once we get access to the fine print, as it becomes more well understood, I think we’ll see more feedback.”

The Emergo survey was conducted November 1–15, 2009. A total of 1141 people participated in the survey. Schorre explains that the response was heavily skewed toward regulatory and quality assurance titles. “I think that’s what makes these data interesting,” says Schorre. “Regulatory people are often the first people to know where their individual companies are going.”

The Emergo Group conducts the survey annually. Schorre says he hopes to get more international participation as the survey matures. This is the second year that the company has collected such data.