Medical device companies are slowly but surely recognizing that the emerging markets have specific needs that won’t be satisfied by recycling older models of pricey products meant for the first world.
One evidence of that comes from Covidien PLC (NYSE:COV), which announced Thursday that it had opened a $45 million research and development center in the bustling city of Shanghai.
The so-called China Technology Center, occupying 100,000 square feet and housing 17 laboratories, will hire more than 300 people over a three-year period. A news release said that the facility boasts state-of-the-art surgical and simulation capability.
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“Establishing this R&D facility in Shanghai reinforces Covidien’s continued commitment to providing innovative new products that will help healthcare providers worldwide improve patient care and extend healthcare delivery to more people and more places,” said Jose Almeida, chairman, president and CEO of Covidien, who attended the opening event, in a statement. “China is a key market in our global strategy, and this investment is a reflection of our strategic initiatives.”
Covidien’s footprint in China is not small. It has 10 commercial offices, a manufacturing center and training facilities for healthcare professionals. And now comes the R&D facility.
The China Technology Center has a dual purpose:
- identify and develop products that meet local demand, both in China and other emerging markets;
- discover disruptive platforms in medical technology by using the “unique skill sets and expertise of employees in Asia” — this is referring to the engineering talent in the region, which is plentiful, high quality and cheap.
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Covidien’s vice president of R&D in China said as much.
“We are dedicated to improving patient outcomes, and we recognize the immense potential of basing an R&D facility in Shanghai,” said Dong Wu, in a statement. “This location will help us tap into internationally renowned experts based here in China, including world-class engineering talent. We believe this collaboration will drive innovation in China and across the emerging markets healthcare landscape.”
