Global value chains in the MedTech industry

Abstract

Purpose Medical technology (MedTech) is a growth industry, which like other manufacturing sectors has undergone fragmentation of production and emergence of Global Value Chains (GVCs). The purpose of this paper is to compare how two open European economies position themselves competitively within MedTech GVCs: highly developed Switzerland and the emerging Czech Republic. Design/methodology/approach The research applies a mixed methodology to analyze the performance of each location in the MedTech GVCs. It draws on macroeconomic, industry, trade and a proprietary sample of firm data, combined with onsite interviews. Findings The economic outcomes and GVC positions differ in both cases, whereas Switzerland focuses on high value-added activities such as R&D and after-sales service. Specialized manufacturing is also located here in spite of high costs. By contrast, the Czech Republic focuses mostly on low value-added activities, like manufacturing disposables, although some domestic innovative companies are notable. The authors generalize four types of firms in the industry, comparing their presence in both locations. Practical implications The competitive positions and challenges faced by each location when engaging in MedTech GVCs are summarized and related to economic outcomes. In the Czech Republic, the barriers to upgrading include its business environment, and weak links between education institutions and industry. Switzerland’s high cost structure is offset by adding high value in core competencies. Both countries should protect the inherent advantage their locations offer within responsive European supply chains. Originality/value GVC research in the MedTech sector has been limited. There is no comparison of two European countries, and their position in MedTech GVCs, nor of how firms, participate successfully in them.

Capability mapping to improve manufacturing network performance: how a factory can target growth

“…Co-locating engineering with production restores the feed-forward and feedback loops which were disrupted by progressive de-verticalization (Berger, 2013, p. 158). The second insight was the concentration of the Swiss company's high margin accounts in a sunrise industry, MedTech, where Switzerland has a growing startup scene, cantonal clusters with ties to research universities, and spillover effects from the pharmaceutical industry (Vlckova and Thakur-Weigold, 2019; Dümmler et al , 2014; Thierstein et al , 2008). MedTech firms in the regional cluster were developing new smart devices which required close, ongoing and interactive collaboration with suppliers certified for highly-regulated medical applications.…”

Emerging research themes in global value chains

“…Best practices of how to navigate the complexity of GVC systems when new worlds of trade arise are noted in the following three papers. Vickova and Thakur-Weigold (2020) examine and compare the economic outcomes and positions of both a highly developed and emerging GVC within the medical technology (MedTech) industry. Their findings highlight organizational barriers (i.e.…”

Fatores Determinantes de Inserção nas Cadeias Globais de Valor: Uma Análise da Participação da Indústria Mineral

“…Neste aspecto, apesar da diversidade de metodologias disponíveis na literatura para mensurar o nível de participação dos países, setores e indústrias nas CGVs, o indicador de participação proposto por Koopman et al (2010) continua sendo um dos mais utilizados nos trabalhos empíricos (De Backer & Miroudot, 2014;Kersan-Škabić, 2019;Mikhailov et al,2017;Reis & Almeida, 2014;Vlckova & Thakur-Weigold, 2019). O motivo é que ele pode ser aplicado para uma amostra maior, uma vez que não é necessário para o cálculo desta medida, tabelas completas de entrada e saída, as quais em muitos casos, não estão disponíveis para um amplo conjunto de países (Kersan-Škabić, 2019).…”