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Article
Publication date: 13 February 2019

Jana Vlckova and Bublu Sarbani Thakur-Weigold

Medical technology (MedTech) is a growth industry, which like other manufacturing sectors has undergone fragmentation of production and emergence of Global Value Chains (GVCs)…

Abstract

Purpose

Medical technology (MedTech) is a growth industry, which like other manufacturing sectors has undergone fragmentation of production and emergence of Global Value Chains (GVCs). The purpose of this paper is to compare how two open European economies position themselves competitively within MedTech GVCs: highly developed Switzerland and the emerging Czech Republic.

Design/methodology/approach

The research applies a mixed methodology to analyze the performance of each location in the MedTech GVCs. It draws on macroeconomic, industry, trade and a proprietary sample of firm data, combined with onsite interviews.

Findings

The economic outcomes and GVC positions differ in both cases, whereas Switzerland focuses on high value-added activities such as R&D and after-sales service. Specialized manufacturing is also located here in spite of high costs. By contrast, the Czech Republic focuses mostly on low value-added activities, like manufacturing disposables, although some domestic innovative companies are notable. The authors generalize four types of firms in the industry, comparing their presence in both locations.

Practical implications

The competitive positions and challenges faced by each location when engaging in MedTech GVCs are summarized and related to economic outcomes. In the Czech Republic, the barriers to upgrading include its business environment, and weak links between education institutions and industry. Switzerland’s high cost structure is offset by adding high value in core competencies. Both countries should protect the inherent advantage their locations offer within responsive European supply chains.

Originality/value

GVC research in the MedTech sector has been limited. There is no comparison of two European countries, and their position in MedTech GVCs, nor of how firms, participate successfully in them.

Details

International Journal of Emerging Markets, vol. 15 no. 1
Type: Research Article
ISSN: 1746-8809

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