Jiangsu's Medical 'Little Giant' Firms: Strengthening Biopharma and Innovative Medical Device Clusters with Integrated Upstream-Downstream Supply Chains

Jiangsu, located at the heart of the Yangtze River Delta and bordered by both the river and the sea, ranks first nationwide in the scale of its advanced manufacturing clusters as a major manufacturing province in China. In recent years, biopharmaceuticals have become a new hallmark of this region, with numerous leading pharmaceutical companies and startups flocking to Jiangsu, where the seeds of innovation are taking root and sprouting.

In September 2022, the National Conference on the Development of Specialized, Refined, Distinctive, and Innovative (SRDI) Small and Medium-sized Enterprises was held in Nanjing, Jiangsu Province. SRDI SMEs are the leaders among small and medium-sized enterprises, characterized by specialization, refinement, distinctiveness, and innovation, symbolizing their leadership in niche markets. Among them, the SRDI “Little Giant” enterprises stand out as the vanguard, focusing on niche markets, possessing strong innovation capabilities, holding high market shares, mastering key core technologies, and delivering superior quality and efficiency.

In terms of “specialized, refined, distinctive, and innovative enterprises, strengthening foundations and securing supply chains,” Jiangsu is offering its own unique solutions.Among the fourth batch of national “Little Giant” enterprises specializing in refined, distinctive, and innovative fields, Jiangsu Province had 425 companies selected, including 43 A-share listed companies. The total number ranked third among all provinces in China, trailing only Zhejiang and Guangdong.

In 2022, Jiangsu Province included the cultivation of specialized, refined, distinctive, and innovative “Little Giant” enterprises as a key annual task of the provincial government. To date, Jiangsu has cultivated 1,998 provincial-level specialized, refined, distinctive, and innovative “Little Giant” small and medium-sized enterprises (SMEs) and 709 national-level specialized, refined, distinctive, and innovative “Little Giant” enterprises, with over 80% concentrated in the fields of advanced manufacturing and strategic emerging industries.

It is evident that the development of specialized, refined, distinctive, and innovative “Little Giant” enterprises in Jiangsu Province has entered a fast track. This article reviews medical “Little Giant” enterprises in Jiangsu Province from 2019 to 2021, analyzing them from multiple dimensions such as geographic distribution, development stage, and specialized fields, while also interpreting the support policies for “Little Giant” enterprises across various regions of Jiangsu Province. How will Jiangsu Province’s industrial cluster development strategy foster leaders in niche markets?

The classification of Jiangsu Province’s specialized, refined, distinctive, and innovative “Little Giant” enterprises has been constantly evolving.

In 2017, Jiangsu Province’s “Little Giant” enterprises specializing in refinement, innovation, and distinctiveness were categorized into two types: technology-focused “Little Giants” and specialized and sophisticated products. In 2018, these “Little Giant” enterprises were classified into four categories: specialized and sophisticated products, technology-focused “Little Giants,” “Hidden Champions,” and “Hidden” Little Giants.Since 2019, Jiangsu Province’s “Little Giant” enterprises specializing in refined, specialized, and innovative development have been categorized into three types: Specialized and Refined Products, Specialized and Refined “Little Giants” (Manufacturing), and Specialized and Refined “Little Giants” (Innovation).

Eligibility Criteria for Applying as a Jiangsu Province Specialized, Refined, Differential, and Innovative “Little Giant” Enterprise in 2020 and 2021

It is evident that the certification criteria for Jiangsu Province’s specialized, refined, distinctive, and innovative “Little Giant” enterprises are becoming increasingly granular, with heightened requirements in areas such as technology, revenue, and supply chain management.

Measuring the advantages of corporate products is no longer solely based on market share; integration into the supply chain systems of industry leaders is also a key indicator. One of the objectives for the development of “Specialized, Refined, Differential, and Innovative” (SRDI) enterprises is to continuously improve industrial supply chains and address critical bottlenecks, which requires close collaboration with upstream and downstream partners. Meanwhile, SRDI “Little Giant” enterprises focused on innovation must not only concentrate on emerging fields and original technologies but also achieve self-sustainability by generating substantial revenue.

Since 2020, Jiangsu Province has implemented the Three-Year Plan for the Upgrading of 1,000 Enterprises (2020–2022), incorporating a cohort of enterprises with strong growth potential, high specialization, robust innovation capabilities, distinct product and service characteristics, and core technologies into an online incubation pool. Subsequently,The cultivation and accreditation of provincial-level or higher “Specialized, Refined, Differential, and Innovative” Little Giant enterprises will both involve selection and recommendation from companies included in the database.Currently, the number of enterprises included in the Jiangsu Province Thousand-Enterprise Upgrade Platform has reached 36,933.

Innovation is proportional to investment. Most of Jiangsu Province’s specialized, refined, distinctive, and innovative “Little Giant” enterprises face challenges such as small scale, high asset-liability ratios, and difficulties in financing. The certification of specialized, refined, distinctive, and innovative “Little Giant” enterprises not only affirms their meticulous innovation but also serves as a catalyst for their further efficient development.

In response to enterprises successfully recognized as national- and provincial-level “Specialized, Refined, Differential, and Innovative” (SRDI) firms, various regions in Jiangsu Province have formulated targeted incentive measures.

Incentive Measures Across Regions in Jiangsu Province

In addition to support from various regions, Jiangsu Province continues to empower specialized and sophisticated “Little Giant” enterprises. Support for these specialized and sophisticated “Little Giant” enterprises at the provincial level can be mainly divided into the following aspects:

Special Awards: In the annual application for the Jiangsu Provincial Special Fund for Industrial Transformation and Upgrading, a cultivation project for specialized, refined, distinctive, and innovative “Little Giant” enterprises is established. Subsidies are provided to enterprises recognized as provincial-level specialized, refined, distinctive, and innovative “Little Giants” in the previous year, with the subsidy amount not exceeding 20% of the total comprehensive investment in the project, capped at RMB 5 million.

Economic Subsidies: Jiangsu Province has guided financial institutions in developing exclusive financial products such as “Specialized, Refined, Differential, and Innovation Loans” and “Little Giant Loans.” In 2021, credit lines totaling RMB 668.5 billion were extended to “Specialized, Refined, Differential, and Innovation” enterprises. Leveraging the provincial government’s industrial investment fund as a fund of funds, RMB 12.09 billion in various capital sources were mobilized to invest in 105 such enterprises, facilitating the initial public offerings (IPOs) of 15 companies.

Specialized Services: Jiangsu Province implements a service commissioner system for specialized, refined, distinctive, and innovative small and medium-sized enterprises (SMEs). In accordance with the principle of “tiered service and localized management,” one service commissioner is assigned to each national- and provincial-level “specialized, refined, distinctive, and innovative” SME across the province, with each commissioner responsible for no more than five such enterprises. The duties of service commissioners include handling enterprise-related requests, promptly delivering preferential policies, facilitating resource matchmaking, promoting capacity building, and safeguarding corporate rights and interests.

Meanwhile, the Jiangsu Provincial SME Development Center has launched “point-to-point” on-site consultation services, prioritizing enterprises in key industrial chains such as biopharmaceuticals, novel medical devices, and construction machinery. The consultation teams have gone deep into the front lines of these enterprises to provide personalized diagnostics and technical support tailored to their development and service needs, with a primary focus on production capacity, internal management, and digital transformation.“The Specialized, Refined, Distinctive, and Innovative” SMEs Diagnostic Tour is a key support initiative for the “Thousand Enterprises Upgrade” campaign launched by the Jiangsu Provincial Department of Industry and Information Technology.

Jiangsu Province has established a cloud service platform dedicated to “intelligent transformation and digital conversion” for small and medium-sized enterprises (SMEs). It provides free diagnostic services for smart manufacturing to SMEs in the advanced manufacturing industrial chain, helping them identify solutions. Meanwhile, it offers a patent data service platform for specialized, refined, distinctive, and innovative (“Little Giant”) enterprises to meet their customized database needs.

Talent Development: Taking Nanjing as an example, we will promote collaborative innovation between universities and enterprises. The "Several Policy Measures of Nanjing City on Deepening University-Enterprise Collaborative Innovation to Build a Demonstration City for Cultivating Specialized, Refined, Differential, and Innovative (SRDI) Enterprises" mentions organizing 1,000 SRDI enterprises to establish normalized cooperation mechanisms with 100 universities, facilitating the flow of university talent into enterprises to prevent brain drain, while simultaneously advancing enterprise talent team development and promoting employment. Nanjing City will officially launch the SRDI "Thousand Universities, Ten Thousand Enterprises" Zijin Action starting September 29.

According to data from the Jiangsu Provincial Department of Industry and Information Technology, a total of 1,275 provincial-level specialized, refined, distinctive, and innovative “Little Giant” enterprises were certified in Jiangsu Province between 2019 and 2021. Among them, 149 were medical companies, accounting for 11.68%. Of these 149 enterprises, 37 were nationally recognized specialized, refined, distinctive, and innovative “Little Giant” enterprises, representing 24.83%, or approximately one-quarter.Specialization, professionalism, and innovation are all hallmarks of the healthcare industry. Although “Little Giant” firms specializing in niche, refined, and innovative areas account for a small proportion of the sector, they excel in their precision and expertise.

Development Stages of Jiangsu Province’s “Little Giant” SMEs Specializing in Specialization, Refinement, Distinctiveness, and Innovation in the Medical Sector (Excluding Non-Public Companies)

From the perspective of development stages, Jiangsu Province’s specialized, refined, distinctive, and innovative “Little Giant” SMEs in the healthcare sector exhibit significant polarization, with a high proportion of companies in the early Series A and B rounds as well as those at the IPO stage. These “Little Giant” enterprises are generally small in scale; for those prior to Series A financing, attention should be paid to their revenue-generating capabilities to achieve self-sustainability without relying on external capital infusion.

Among IPO companies, eight were listed on the STAR Market. The STAR Market prioritizes support for emerging and high-tech industries such as information technology, high-end equipment, and new materials. Companies listed on the STAR Market often exhibit strong characteristics of being specialized, refined, distinctive, and innovative.

Classification of Specialized, Refined, Distinctive, and Innovative “Little Giant” Enterprises in the Medical Sector in Jiangsu Province

From the perspective of industry sectors, biopharmaceuticals and medical devices are the key highlights among Jiangsu Province’s specialized, refined, distinctive, and innovative “Little Giant” enterprises in the healthcare sector. As of mid-August 2022, Jiangsu Province was home to more than 4,000 biopharmaceutical companies, with the number of pharmaceutical manufacturers ranking first nationwide and the number of medical device manufacturers ranking second nationwide.

Jiangsu Province is a leader in China’s biomedical sector. In 2020, the province filed over 10,000 patent applications in the biomedical field and granted more than 5,000 patents. Meanwhile, the output value of Jiangsu’s biomedical industry accounted for approximately one-sixth of the national total, ranking first in China. According to the “Global Top 100 Pharmaceutical Companies Report,” Jiangsu Province rose to sixth place globally in the biotechnology sector, and four enterprises from Jiangsu were included among the top 100 companies on the Global Top 1000 Pharmaceutical Companies list.

In the biopharmaceutical sector, Jiangsu Province is actively developing industrial parks, with a total of 15 biopharmaceutical parks across the province, thereby establishing a complete upstream and downstream industrial chain.The development of biopharmaceutical enterprises has driven the growth of companies in drug packaging, pharmaceutical raw materials, and CXO sectors. Among the 2021 cohort of “Little Giant” firms specializing in niche, refined, differential, and innovative products, there was a marked increase in upstream raw material suppliers, with their number exceeding the combined total of the previous two years.

Beyond biopharmaceuticals, Jiangsu Province’s medical device sector is also experiencing rapid growth, with medical consumables and in vitro diagnostics (IVD) advancing most swiftly. According to the latest data, since 2022, Jiangsu has approved 262 Class III medical devices, ranking first nationwide.

Major Distribution Regions of Jiangsu Province’s Medical “Little Giant” Enterprises Specializing in Refinement, Specialization, and Innovation

By region,Jiangsu Province’s specialized and sophisticated “Little Giant” enterprises in the medical sector are primarily distributed across Nanjing, Suzhou, Taizhou, and other regions, with Nanjing ranking first.Nanjing is building itself into a model city for “specialized, refined, distinctive, and innovative” (SRDI) enterprises. In recent years, it has successively issued the Action Plan for Promoting High-Quality Development of Specialized, Refined, Distinctive, and Innovative Small and Medium-Sized Enterprises in Nanjing and Several Measures on Accelerating the Development of Specialized, Refined, Distinctive, and Innovative Small and Medium-Sized Enterprises to guide enterprise development.

Support Measures for Specialized, Refined, Differential, and Innovative SMEs in Nanjing

Among the “Little Giant” enterprises designated as specialized, refined, distinctive, and innovative in Jiangsu Province, while Nanjing maintains a clear lead, cities such as Suzhou and Changzhou are also experiencing rapid development. In 2021, the number of companies from Suzhou included in the “Little Giant” list surpassed the total for the previous two years combined, with firms in the pharmaceutical sector accounting for the highest proportion.

Jiangsu Province’s development model focuses on building industrial clusters, supporting specialized, refined, distinctive, and innovative enterprises in carrying out mergers and acquisitions along the industry chain, and attracting upstream and downstream companies as well as leading firms to concentrate in Jiangsu.

In 2021, Jiangsu Province issued the "Jiangsu Province 14th Five-Year Plan for High-Quality Development of Manufacturing," further focusing cluster cultivation and industrial chain development strategies on 16 advanced manufacturing clusters and 50 key industrial chains. Among these, the "Biopharmaceutical and Novel Medical Device Cluster" will prioritize the development of two major industrial chains: "Biopharmaceuticals" and "Novel Medical Devices."

Jiangsu Province exhibits a distinct pattern of biopharmaceutical industry clustering, with over 80% of the province’s biopharmaceutical enterprises concentrated in eight cities: Suzhou, Nanjing, Taizhou, Lianyungang, Xuzhou, Nantong, Changzhou, and Wuxi. Among the top 50 most competitive biopharmaceutical industrial parks nationwide, Jiangsu has had 15 parks rank first in China for four consecutive years.

Biopharmaceuticals is Suzhou’s premier industry. In recent years, the city has established biopharmaceutical industrial parks to promote clustered development, optimized the allocation of talent, land, finance, and legal resources, and removed various institutional barriers across the biopharmaceutical value chain, including research and development, manufacturing, and distribution.

In accordance with the Implementation Plan for Building an Innovative Cluster of the Biopharmaceutical Industry in Suzhou, Suzhou focuses on key areas including innovative pharmaceuticals, high-end medical devices, CXO, integration of biotechnology and information technology (BT+IT), industrial chain support services, and commercial supply chains, while promoting initiatives such as the integration of digital technologies, collaborative development among large, medium, and small enterprises, and the aggregation of biomedical talent.

Meanwhile, with Wuxi as the hub, Jiangsu Province is building a sci-tech innovation cluster in the Yangtze River Delta, attracting leading enterprises such as AstraZeneca, WuXi AppTec, Fresenius Kabi Huarui Pharmaceutical, and GE Healthcare. This initiative aims to establish a comprehensive, integrated pharmaceutical R&D service platform covering drug design, target screening, biosynthesis, clinical trials, regulatory approval, and commercialization.

In the field of medical devices, Jiangsu Province is also building an industrial innovation cluster ecosystem. As the only region under Jiangsu Province’s “One District, One Industry” policy that receives key support for the development of the medical device industry, Suzhou New District has currently gathered nearly 1,000 medical device enterprises.

Building industrial clusters, empowering through digitalization, promoting communication between upstream and downstream enterprises, and introducing talent to foster industry-academia-research collaboration are all experiences that Jiangsu Province has shared with other provinces across China. Within the province, an ecosystem for biopharmaceuticals and innovative medical devices has been established, achieving self-sufficiency within the ecosystem while also facilitating external investment attraction and talent recruitment.