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Why innovation is not happening in small scale medical equipments Industry?. Subject: Innovation Management Date: 28 Feb 2010 Submitted to: Shekhar Badve Submitted by: Kranti V, Sayli M, Sneha J. Table of Contents. Medical Equipments Industry Overview Equipments economy
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Why innovation is not happening in small scale medical equipments Industry? Subject: Innovation Management Date: 28 Feb 2010 Submitted to: ShekharBadve Submitted by: KrantiV, Sayli M, Sneha J
Table of Contents • Medical Equipments Industry Overview • Equipments economy • MSME in India • Hypothetical case • Issues hindering Innovation • Possible methods to manage Innovation
Medical Equipments Industry Overview The medical devices industry in India was valued at $2.7 billion in 2008, the market is forecast to grow by 12% annually for the next seven years to reach $6 billion in 2015.
Medical Equipments Industry Overview • India 2% of the World market. • Medical equipment is inherently low volume, highly intellectual and manual effort requirement business. • The upper age group spends more on his health for the last 5 years of his life than he did before, thus increase in demand for this industry.
Medical Equipments Industry Overview • Certain Features of US Market: • The US medical equipment and supplies distribution industry includes about 6,000 companies with combined annual revenue of about $53 billion. • The profitability of individual companies depends on merchandising and efficient delivery systems. • Large companies have economies of scale in purchasing, and highly developed infrastructure that allow for efficient distribution. • Small companies can compete effectively by specializing in a product line or servicing a local customer base.
Equipments economy: M Kikuchi, PhD, Department of Engineering, National Defense Medical College, Japan
MSME in India The MSME sector is a nursery of entrepreneurship, often driven by individual creativity and innovation. This contributes 8 per cent of the country’s GDP, 45 per cent of the manufactured output and 40 per cent of its exports.While one end of the MSME spectrum contains highly innovative and high growth enterprises, more than 94 per cent of MSMEs are unregistered, with a large number established in the informal or unorganized sector.
Hypothetical case Product comparison with US company: Hyderabad based Portable Gas analyzer company. Company name: Smart Embedded Technology Company profile: 20 years old in the industry Company Owner's profile: ME in Mechanical Engineering
Issues hindering Innovation Following are the issues which has direct/indirect impact on Innovation: • Inadequate and delayed credits • High cost of credit • Limited access to equity capital • Procurement of raw materials at competitive cost • Storage, design, packaging & product display problems • Lack of access to Global markets • Improper infrastructure facilities • Low technology levels • Lack of access to modern technology • Lack of skilled power for manufacturing, services, marketing etc. • Complicated labor laws • Issues relating to taxation
30% • Inadequate and delayed credits: • Improper banking services • Lack of initial investment • No high profits • Lack of Financial management knowledge • Finance 10% • Limited access to equity capital: • Poor marketing. • Unavailable Skilled labor • Lack of structured organizations • Mindset of Investors to underestimate R&D, Marketing 10% 10% • Lack of access to modern technology: • Patenting issues • No centralized body providing updates on invention • No laws to access technology. • Government Medical Equipment MSME • Weak Entrepreneurship: • Low risk taking Leadership • Lack of Management knowledge • Lack of SMART vision • People 10% 30% • Improper Infrastructure facilities: • Improper funding • Delay in funding • Inadequate or confused regulations Legal • Low Volume: • Low demand • Low market size • People exposure • Socio Cultural issues • Product Issues, Causes & % Distribution to Manage Innovation
Possible methods to Manage Innovation • Finance, R&D, Marketing, Legal, Government • Government can play an important role in regulating transparent and closed loop laws in order to promote the industry gaining max. profits. • Recruitment of skilled laborers at all levels. • Establishment of a governing body which weekly provides updates on new technologies across the globe. • Networking of all small and medium manufacturers in form of forums or festivals to exchange ideas and views from different departments.
