The medtech ecosystem is ever-evolving worldwide, and Ireland is one of the more interesting pieces of the puzzle.
Significant R&D tax credits for companies engaging in in-house R&D, access to the European Union, and more make Ireland an attractive proposition for medtech companies, with several already quite established in the country. IDA Ireland — the foreign investment arm for the Irish government — plays a massive role in bringing those companies over the Atlantic.
Over the course of the past couple of years alone, a wide array of medtech companies have continued to expand their footprints in Ireland. That includes manufacturing expansions and enhancements from Abbott, GE HealthCare, Dexcom, Cook Medical and Neurent Medical. It also includes a new training center model for Stryker and new delivery services from Medtronic, which is run operationally out of Minnesota but officially headquartered in Galway.
In a presentation given at AdvaMed’s The MedTech Conference in San Diego, IDA Ireland’s VP for Life Sciences, John Hearty, noted that, in the last decade alone, annual in-house R&D expenditure by IDA Ireland’s clients increased 430%. Employment in R&D has increased by more than 140% to more than 34,000 people in that time.
“There’s an array of different reasons why medtech companies choose Ireland as a place to do business, but ultimately, we’ll always come back to three recurring themes, and that’s the people, it’s the talent and the long-lasting relationships that we’re able to build,” Hearty said. “It’s the forward-looking ecosystem, it’s the innovation, the transformation and sustainability, and it’s the consistent, stable, and pro-business environment that brings it all together.”
Speaking to MassDevice at The MedTech Conference, IDA Ireland’s Head of Medical Technologies & Healthcare Services, John Nugent, spoke more to that environment and what the future may hold.
The following has been lightly edited for space and clarity.
MassDevice: What message is IDA Ireland looking to share about the medtech ecosystem in Ireland?
John Nugent: “Talent, availability, operational excellence and innovation — that’s probably the message that medtech and that IDA Ireland have evolved into after initially being things like English-speaking, fairly abundant cheap labor and access to the European market. We remain the only English-speaking country in the EU, but I think our message for medtech is more of value creation, innovation, talent supply to deliver on that. It’s less about cheap, abundant labor and more about doing more with your assets and with perhaps less people. With more digitalization, automation and more advanced therapies being delivered with that operational excellence in mind.
“As companies look to medication management or diabetes or anything else they’re going to need, power electronics, embedded software, sensors, semiconductors… We see that as being a big part of the future, with those being developed and ultimately, hopefully, made from Ireland and supplied into the world from Ireland.”
What is the organization’s overall mission in medtech?
JN: “Our mission remains the same: To partner with global companies and give them a home in Ireland for the benefit of Irish people and the companies. It has to be win-win, right? Otherwise, it doesn’t work. Ireland has a fairly abundant talent supply. We’re pretty much at full employment, like a lot of places are. But, our talent supply is not just the island of Ireland, it’s the EU. So, we will support companies bringing talent from outside the EU, but within the EU, you have a labor force of 300 million from a population of 500 million. So we don’t view talent supply as a particular challenge in certain key disciplines, there would obviously be, perhaps, a longer time to hire.”
What has changed over the years in terms of Ireland’s position in the ecosystem?
“I suppose what has changed is probably our place in a more mature market where some products have just become more commoditized and under more cost pressure. Perhaps, once those are manufactured in Ireland and all the costs are removed through automation, digitalization, and all of the kind of ways that you reduce manual labor, there comes a point where you probably have to let some of those products go and backfill them with other more complex, more difficult-to-make, newer, high-growth products. We are seeing some of our companies shift the product portfolio in Ireland to suit Ireland. When I say ‘to suit Ireland,’ it’s to suit the capabilities that are there, that automation and the speed that companies are looking for to bring new products to the market.
“In Ireland, you have absolutely world-class operational excellence and [a world-class] regulatory environment. The speed with which companies can bring new products to market through Ireland is superior to most places on the planet. It’s probably about new products and leveraging that talent and driving that innovation through to the market — that’s probably the biggest change, I would say.”
Where does such significant R&D growth come from?
JN: “R&D growth, I think, is coming out of the heritage and manufacturing. The kind of heritage of supporting products on market, that operational excellence, continuous improvement mindset, leads to iterations or sustaining engineering when a product is on the market. That is a foundational capability for small “R,” big “D,” and then it migrates across the R&D, if you will. A lot of the R&D that we have seen has been leveraged over many years, and indeed, decades of manufacturing experience, and again, back to that capability of bringing products to market pretty quickly. I’d say it’s predominantly coming out of longstanding companies that are in Ireland.
“There are some exceptions to that, where we are seeing. For example, Johnson & Johnson acquired an Irish company called Neuravi. They became part of the Cerenovus story. They are now really the center of the neurovascular business within J&J MedTech, and they are the R&D engine for that business across all neurovascular indications, from stroke to subdural hematoma and everything else. Sometimes it comes through the acquisition of a really talented, indigenous company, but more often than not, it comes out of deep domain expertise in products, materials and technologies.”
What is the impact of recent U.S. tariffs?
JN: “Obviously, any additional cost on any product supplied to a patient is going to have an impact. There’s no getting away from that — there will be an impact on the response. We don’t necessarily welcome the tariffs. We will be advocates of free trade, and I guess we’ve been the beneficiaries of that. Patients and companies have been the beneficiaries of that as well. Our view would be that — well, my view would be — I have a sense, that we’re going to see more region-for-region supply. U.S., Europe, Asia, Pacific. I think Ireland stands in a very, very strong position for medtech. We win more medtech per capita than anywhere else in Europe.”
“I think our ability to be the engine of innovation and product supply into the European Union, our federated 27 states, we’re in a very strong position to be that and support that. I think we’re also in a strong position to support us Asia Pacific and non-European companies, and indeed some European companies who want to come to Ireland for the expertise to supply product into the European Union.”
“Across the ecosystem, we see a lot of the pieces of the puzzle that are there in Ireland that will continue to be strong and make us strong. But, there’s no doubt there will be some impact, and we will see some consequences that are negative and some that are positive. Hopefully, they’ll more than balance out on the positive side.”
How can IDA Ireland mitigate that tariff impact?
JN: “I do sense that we’re we’re in a world where tariffs will probably exist at whatever level. I think what you’ll see is different jurisdictions and administrations taking a different approach to different things, with exemptions or with the level of tariff, but there’s no question that will have an impact on patients and the ability of companies to provide cost-effective, safe products to the patients into the healthcare system. It’s not something we’re thrilled about, but we will navigate that environment as best we can.”
“We come from a position of strength, we feel, certainly in manufacturing, operational excellence… We feel we have remarkable longevity in medtech and position of strength across a lot of sectors that are really going to help us the mission of medtech. … The life sciences of medtech and biopharma will stand to gain from some of that talent supply that’s in Ireland, some of it that has chosen to be there, maybe post-Brexit, or from a European Union perspective, to be in an English-speaking European country. I’m optimistic that we’ll continue to be in a good position for all the things that make our value proposition as good as it is, but it changes the world.
“Let’s be honest, it changes the trade environment. Uncertainty is never good. What we what we feel —what I feel — is that, for companies, it’s very difficult to make big decisions for product supply into markets which take years to come to reality and years to come into productive use and make profits when you have the uncertainty of inflation, whatever it may be, currency or tariffs. Any kind of uncertainty like that is not helpful.”
Are there any other noteworthy challenges faced by Ireland’s medtech ecosystem?
JN: “The challenges that we see are probably the continuation of supply of that talent — keeping that talent learning all the time, supporting our companies to keep those people aware of digitalization, machine learning and AI. I think most companies and their employees are very interested to keep going in that direction. I wouldn’t say that’s necessarily a challenge, but I think it’s an offering we’ve got for the challenge that presents of the digitalization and the application of AI and ML.
“Some of the European administrative burdens that have been perceived around IVDR and MDR and other things, they remain a bit of a challenge for us, but we see positive movement there. … I think in Ireland, we welcome the publication of the EU Life Sciences Strategy, and we’re about to publish our first Life Sciences Strategy in Ireland as well, again, to marry into that framework that is the EU Life Sciences strategy. I think they will help address some of the challenges of be it competitiveness, be it regulation or or I suppose having the talent supply to meet the needs of the industry. So I think they’re the challenges. But, again, I feel we’re in a fairly good position. Without becoming complacent, I think we’re in a fairly good position of strength.”
“I think our strategy has set out our stall to address all of the challenges that we see ahead of us. The global trade environment is probably the one that’s the most difficult to navigate with any real certainty.”
Innovation is coming from within Ireland as well
Ireland’s indigenous medtech ecosystem plays its own role in the country’s presence in the space as well. Several homegrown companies — such as the likes of CardiacBooster, Fire1, CroíValve, Neuromod Devices, Head Diagnostics, FeelTect, Innovation Zed and more — have delivered recent milestones and continue to grow in their respective fields within the medical world and beyond.
Enterprise Ireland — the Irish government’s enterprise development agency — plays a significant role in that. The agency invests in and supports Irish-owned companies to enable them to achieve greater scale.
In a recent trip to Dublin, courtesy of Enterprise Ireland, MassDevice saw first-hand some of the innovation happening from within the country, beyond the business it’s able to bring in from elsewhere.
“We have a very strong indigenous sector… From Enterprise Ireland’s point of view, we’re really about that indiginous, homegrown talent and investing in those companies and then helping them scale internationally and really focus on, not just the seed investment, but the very critical follow-on investment,” Marika MacCarvill, communications manager (Ireland & International) for Enterprise Ireland, said during a press event in Dublin last month.
According to EI, the country has become the second-largest importer of medtech in Europe behind only Germany. With hundreds of medtech companies established in Ireland, the footprint and ecosystem continues to grow.
“We’ve become a leader in medtech and innovation internationally,” said MacCarvill. “It’s that cluster effect, really. It’s that knowledge transfer as well. We have companies exporting to 160 countries across the world. We’re also the highest per capita number of people working in the medtech sector. We have 450 companies. It’s a pretty hefty cluster at this stage.”
On innovation within Ireland, Nugent added:
“The capability is coming out of Ireland, and those startups are coming out of the environment that a lot of the multinationals have helped create in Ireland. The application of machine learning, AI, software, cyber, patient data, all of that — you can see that’s what the indigenous startup companies are looking at. You can assume that the global medtech companies that are in Ireland are looking at similar technologies for their production environment, or for their products, or for their patients.”
