Korea’s medical equipment industry lags far behind those of advanced countries in technological prowess, lacks in research and development workforce, and is strategically vulnerable to coping with international standards, a state agency said recently.
According to a technical report released by Korea Trade-Investment Promotion Agency대한무역투자진흥공사(KOTRA), out of about 3,000 medical equipment makers, only 38 are listed on the stock market (one in KOSPI, 28 in KOSDAQ and nine in KONNEX). On average, they are hiring 16 workers, having 4.5 products, and registering industrial production of 1.7 billion won ($1.5 million). More than half of these makers (54 percent) recorded the output of less than 100 million won, and 80 percent recorded less than 1 billion won in production.
KOTRA pointed out that the technology of the domestic medical equipment industry stood at 60-70 percent of advanced countries’ level, but is not making a vigorous investment into R&D.
“Korean manufacturers are small in scale, lacking in capacity to develop high added value, facing limits in R&D investment, and their advances to original technology market are sluggish,” the report said. “Also, these makers have shown limitations in developing high value-added overseas markets because of low brand recognition.”
Despite their urgent need to make R&D investment, the related workforce is insufficient, and the companies are not even trying hard to train practical workers. Low brand recognition is another serious problem. In the case of a local maker that has signed original design manufacturing (ODM) contact with 14 global businesses, for instance, the company will have to pull down its product prices to half of the present level if it sells those products under its brand, the KOTRA report said.
However, KOTRA evaluated some Korean equipment, such as ultrasound image equipment, dental implant and IT convergence product, as having world-class technological competitiveness. Korean-made ultrasonic image apparatus enjoys the largest share in global markets, and domestic hospitals use homemade devices to store and transmit medical images in up to 90 percent of cases.
"Korea has the world’s best ICT convergence technology and manufacturing foundation as well as the competent medical workforce. Because of the short history of medical equipment industry, however, it is experiencing difficulties in entering global markets due to such problems as low levels of original and core technology, low brand recognition and intellectual property rights,” the report said. “The industry needs to develop next-generation equipment to create a new market with its focus shifting from treating to preventing diseases, and come up with a strategy to enhance added value for the existing equipment.
As the ways to strengthen the industry’s competitiveness, KOTRA proposed the government to induce domestic medical institutions to use homemade equipment, enhance certification services to help Korean makers’ advance to foreign markets, train expert workforce, and expand support for permission and licensing processes.
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