Spiraling trade tensions between the U.S. and China are injecting uncertainty into what was already a complex environment for MedTech manufacturers. Accelerating steps, some medical technology firms have already been starting to move their operations to other countries in the region. Directly benefiting are countries like Malaysia, Singapore, India, and Vietnam.
According to the International Trade Commission, Singapore, Malaysia, and Vietnam accumulated nearly $1 billion in foreign direct MedTech investment between 2008 and 2018. Malaysia and Singapore are both top 10 MedTech suppliers to the U.S. market. And although India and Vietnam are far behind, they are making rapid strides in its quest to become a key supplier to the US MedTech market.
Among the top factors driving the investment are low labor costs. Vietnam, India, and Malaysia have wage rates that are lower than China’s, according to World Bank estimates. However, labor costs in Singapore are among the highest in the region. But Singapore offers high access to very well-educated information technology and engineering professionals, is a telecommunication hub, and they can also produce very sophisticated MedTech products.