Emerging markets will make waves in medical innovation

The march of the emerging markets, particularly China, India and Brazil, is clearly evident in the heady rates of GDP growth, something which this column has touched upon before. But their growing strength in hi-tech fields such as medicine is less obvious. Stereotypes – China as the world's factory, for instance, and India as its call centre – cloud the picture.

Against this backdrop, a survey from PricewaterhouseCoopers offers some timely figures, and reveals that emerging markets are "gaining ground in their capacity to produce the latest in medical technology innovation" – so much so that they may surpass the more mature economies of the West over the next decade.

Using more than 80 different metrics, PwC looked at how well nine countries – Brazil, China, France, Germany, India, Israel, Japan, the UK and the incumbent global leader, the US – were promoting innovation.

Using data from the past five years, they projected the likely course of developments over the next decade. The results show that the US currently has the greatest capacity for innovation in medical technology. Given its years of investment and dominance in the field, it is also well placed to keep the top spot in the years ahead. On a scale of one to nine, then, the US scores a healthy 7.1 in terms of its overall capacity.

Other mature economies, such as the UK, Germany and France, fall within a tight range of between 4.8 and 5.4 points. The emerging giants lag behind, with scores of less than 4. China notches up a result of 3.4, while both India and Brazil score a fairly modest 2.7.

Looking ahead to 2020, PwC said that although it expected the US to hold its lead for years to come, its long-term dominance "is no longer assured". The report also projects "relative declines for Japan, Israel, France, the UK and Germany", while China, India and Brazil will make new strides.

"China, which has shown the largest improvement in medical technology innovation capacity during the past five years, is expected to continue to outpace other countries and reach near parity with the developed nations of Europe by 2020," the report explained.

"If developed countries do not step up levels of investment in innovation, over the next decade new markets will surpass developed countries in innovative healthcare delivery," said Simon Friend, the global pharmaceuticals, medical devices and life sciences industry leader at PwC. "Stimuli for new technologies is being built through the education system and we will see businesses focusing on new markets for new ideas and expanding sales bases."

Though auguring good things, the report did add a word of caution, with PwC saying that despite the size and the opportunity represented by the likes of China, India and Brazil, "their global leadership in medical technology innovation is not necessarily pre-ordained".

Issues such as low levels of intellectual property protection and weak local supplier networks could yet throw a spanner in the works.



Quoted companies set for awards



The FTSE 350's finest will suit up for the annual Grant Thornton Quoted Company Awards in London this week. Chairmen and chief executives will gather at the Natural History Museum in South Kensington on Wednesday night. In addition to the usual gongs – chairman of the year, chief executive of the year, deal of the year and so on – the organisers are offering a new award, snappily entitled "AIM to Main".

As the name suggests, the prize is for companies that have moved from the Alternative Investment Market (AIM) to the official list of the London Stock Exchange. Given that this is the first year for this award, the organisers looked at the whole range of companies that have moved up since AIM's inception. The idea is to reward those that have registered "considerable gains in terms of sales, profits, earnings and share price growth".

The shortlist boasts some pretty successful names, including Domino's Pizza, the fast-food group that seems to have a peculiar knack for posting upbeat updates. Also in the running are Centamin Egypt, KSK Power Ventur, Great Eastern Energy, Mears, Genus, Synergy Healthcare and First Quantum Minerals. All the best to everyone.



Counting the cost of deal activity



Deals can be stressful affairs – and not just for the companies involved. The consequences of takeovers often reverberate beyond the predators and targets to customers, vendors and the like. A case in point is the telecoms technology firm Filtronic. Last week, Nera, a key Filtronic customer, was acquired by the Israeli communications equipment manufacturer Ceragon Networks.

Soon afterwards, Filtronic published an update, warning investors that, while it was too early to gauge the consequences, the Israeli group made the sorts of products that Nera buys from Filtronic. "As such [it] may choose over time to substitute its own products for some of those currently produced by Nera or supplied by Filtronic to Nera," it said, spooking the market. The shares, which closed at 57p on 14 January, fell sharply, closing at 38p on Friday – a fall of more than 30 per cent over the week.

So, how bad could it be? The loss – if it comes about – may well be significant, according to Panmure Gordon, whose analysts said that up to 20 per cent of Filtronic's estimated revenues for 2012 were potentially at risk. Not that they were entirely negative, adding: "Assume the worst, but ... some level of sales remains possible on a long-term basis. Ceragon's expertise lies in the short-haul market, so the long-haul part of the overall production could still be an opportunity for Filtronic."

This leaves the question of how quickly Filtronic might end up losing this business. "Companies cannot immediately change the make-up of a product due to design, interdependence, inventory and supply change issues, so replacing Filtronic's modules with Ceragon's in-house technology will take some time," Panmure explained. "This may be 12 to 18 months for customers with long-term framework agreements, but much quicker for new customers."

The broker was careful to point out that, given the uncertainties, "it becomes fairly academic as to how forecasts will be affected". Bearing that caveat in mind, Panmure put its detailed numbers under review ahead of Filtronic's half-yearly results at the end of this month.

"Our initial assumption sees 50 per cent of Nera revenues falling away in 2012 and 75 per cent in 2013," the broker said. "However, our 2012 revenue forecast of £38.9m was already looking high, so we provisionally move this down to £30m. We also took a precautionary 10 per cent cut to our 2011 revenue forecast, which moves down to £20m."

News
scienceExcitement from alien hunters at 'evidence' of extraterrestrial life
Life and Style
Customers can get their caffeine fix on the move
food + drink
News
newsRyan Crighton goes in search of the capo dei capi
Extras
indybest

PROMOTED VIDEO
Arts and Entertainment
Actors front row from left, Jared Leto, Jennifer Lawrence, Meryl Streep, Ellen DeGeneres, Bradley Cooper, Peter Nyongío Jr., and, second row, from left, Channing Tatum, Julia Roberts, Kevin Spacey, Brad Pitt, Lupita Nyongío and Angelina Jolie as they pose for a
film
Sport
sport
Life and Style
techCould new invention save millions in healthcare bills?
Sport
David Moyes gets soaked
sport Moyes becomes latest manager to take part in the ALS challenge
Voices
A meteor streaks across the sky during the Perseid Meteor Shower at a wind farm near Bogdanci, south of Skopje, Macedonia, in the early hours of 13 August
voicesHagel and Dempsey were pure Hollywood. They only needed Tom Cruise, says Robert Fisk
News
peopleEnglishman managed quintessential Hollywood restaurant Chasen's
Life and Style
food + drinkHarrods launches gourmet food qualification for staff
Arts and Entertainment
Michael Flatley prepares to bid farewell to the West End stage
danceMichael Flatley hits West End for last time alongside Team GB World champion Alice Upcott
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Life and Style
Horst P Horst mid-fashion shoot in New York, 1949
fashionFar-reaching retrospective to celebrate Horst P Horst's six decades of creativity
News
Members and supporters of the lesbian, gay, bisexual, transgender (LGBT) community walk with a rainbow flag during a rally in July
i100
Life and Style
Black Ivory Coffee is made using beans plucked from elephants' waste after ingested by the animals
food + drinkFirm says it has created the "rarest" coffee in the world
Life and Style
news

As Voltaire once said, “Ice cream is exquisite. What a pity it isn’t illegal”

Life and Style
food + drinkThese simple recipes will have you refreshed within minutes
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Market Administrator (1st line Support, Bloomberg, Broker)

Negotiable: Harrington Starr: Market Administrator (1st line Support, Trade Fl...

Service Desk Analyst (Windows, Active Directory, ITIL, Reuter)

£35000 per annum: Harrington Starr: Service Desk Analyst (Windows, Active Dire...

Data Support Analyst (Linux, Solaris, Windows Server, Reuters)

Negotiable: Harrington Starr: Data Support Analyst (Linux, Solaris, Windows Se...

Helpdesk Support Engineer (Windows, MS Office, Exchange)

Negotiable: Harrington Starr: Helpdesk Support Engineer (Windows, MS Office, E...

Day In a Page

All this talk of an ‘apocalyptic’ threat is simply childish

Robert Fisk: All this talk of an ‘apocalyptic’ threat is simply childish

Chuck Hagel and Martin Dempsey were pure Hollywood. They only needed Tom Cruise
Mafia Dons: is the Camorra in control of the Granite City?

Mafia Dons: is the Camorra in control of the Granite City?

So claims an EU report which points to the Italian Mob’s alleged grip on everything from public works to property
Emmys look set to overhaul the Oscars as Hollywood’s prize draw

Emmys look set to overhaul the Oscars as Hollywood’s prize draw

Once the poor relation, the awards show now has the top stars and boasts the best drama
What happens to African migrants once they land in Italy during the summer?

What happens to migrants once they land in Italy?

Memphis Barker follows their trail through southern Europe
French connection: After 1,300 years, there’s a bridge to Mont Saint-Michel

French connection: After 1,300 years, there’s a bridge to Mont Saint-Michel

The ugly causeway is being dismantled, an elegant connection erected in its place. So everyone’s happy, right?
Frank Mugisha: Uganda's most outspoken gay rights activist on changing people's attitudes, coming out, and the threat of being attacked

Frank Mugisha: 'Coming out was a gradual process '

Uganda's most outspoken gay rights activist on changing people's attitudes, coming out, and the threat of being attacked
Radio 1 to hire 'YouTube-famous' vloggers to broadcast online

Radio 1’s new top ten

The ‘vloggers’ signed up to find twentysomething audience
David Abraham: Big ideas for the small screen

David Abraham: Big ideas for the small screen

A blistering attack on US influence on British television has lifted the savvy head of Channel 4 out of the shadows
Florence Knight's perfect picnic: Make the most of summer's last Bank Holiday weekend

Florence Knight's perfect picnic

Polpetto's head chef shares her favourite recipes from Iced Earl Grey tea to baked peaches, mascarpone & brown sugar meringues...
Horst P Horst: The fashion photography genius who inspired Madonna comes to the V&A

Horst P Horst comes to the V&A

The London's museum has delved into its archives to stage a far-reaching retrospective celebrating the photographer's six decades of creativity
Mark Hix recipes: Try our chef's summery soups for a real seasonal refresher

Mark Hix's summery soups

Soup isn’t just about comforting broths and steaming hot bowls...
Tim Sherwood column: 'It started as a three-horse race but turned into the Grand National'

Tim Sherwood column

I would have taken the Crystal Palace job if I’d been offered it soon after my interview... but the whole process dragged on so I had to pull out
Eden Hazard: Young, gifted... not yet perfect

Eden Hazard: Young, gifted... not yet perfect

Eden Hazard admits he is still below the level of Ronaldo and Messi but, after a breakthrough season, is ready to thrill Chelsea’s fans
Tim Howard: I’m an old dog. I don’t get too excited

Tim Howard: I’m an old dog. I don’t get too excited

The Everton and US goalkeeper was such a star at the World Cup that the President phoned to congratulate him... not that he knows what the fuss is all about
Match of the Day at 50: Show reminds us that even the most revered BBC institution may have a finite lifespan – thanks to the opposition

Tom Peck on Match of the Day at 50

The show reminds us that even the most revered BBC institution may have a finite lifespan – thanks to the opposition