Global MedTech Giants Pivot to China as Asia's Innovation Epicenter Shifts from Singapore

In recent years, a race between global healthcare giants and Chinese innovation has been in full swing.

July 2018,SanofiSanofi’s China Midwest Operations and Innovation Center and Sanofi Global R&D Operations Center were officially established in Chengdu High-Tech Zone; in June 2019,Johnson & JohnsonJLABS Innovation Incubator Officially Launches in Shanghai; In October 2019, with an investment of RMB 863 millionRocheThe Shanghai Innovation Center was inaugurated at the Roche Park in Zhangjiang High-Tech, Shanghai; in October 2019,Boston ScientificThe first innovation center in western China officially settled in Chengdu High-Tech Zone; September 2021,Siemens HealthineersThe Shanghai Innovation Center was officially inaugurated in Zhangjiang Science City; October 2021,AstraZenecaUpgrade the Shanghai R&D Center into the Global R&D China Center.

This is merely the “tip of the iceberg.” According to statistics, in Shanghai alone,18 of the top 20 global pharmaceutical companies have established their China regional headquarters or R&D headquarters in China., the establishment of these R&D centers has not only “heated up” China’s medical innovation market but also shifted the focus of Asia’s healthcare innovation hub, beginning toGradually blowing from Singapore toward China.

So, what exactly is the logic behind this?

When medical giants first set their sights on the Asian market, what they noticed first was not China, but a country with a land area of only 719.1 square kilometersSingapore。

There is certainly a reason for this. In the 1980s, Singapore, having completed its first wave of economic takeoff, began toRepresenting the economic eggs placed in the medical field.

But this was no easy feat. At the time, Singapore’s healthcare sector was essentially a “blank slate,” with no representative local enterprises, incomplete policy frameworks, and a lack of mature educational infrastructure to cultivate relevant talent.No information related to healthcare could be found.。

Fortunately, Singaporeans are smart enough.. They boldly launched “Foreign Aid Policy”, sparing no expense to recruit a cohort of star scholars in the field of life sciences from around the world, including pioneers of molecular biology and Nobel Laureates in Physiology or MedicineSidney Brenneris one of them.

In addition, Singapore has also formulated policies such as“BMS” Program、“RIE2020”、Pharmaceutical Innovation Initiativeincentive policies, and by promoting the integration of diverse resources to create an ideal business and export environment, with the aim of doing everything possible to meet the development needs of healthcare companies in Singapore.

However, what truly retains these industry “giants” is Singapore’s grasp of the key variable: “innovation.”. First, in terms of investment, Singapore invests approximatelySGD 1.5 billion(equivalent to approximately RMB 7 billion), and an additional allocation of approximatelyS$3.7 billion(approximately RMB 17.4 billion) for the construction of R&D infrastructure, primarily includingLaboratoryandIncubatorconstruction.

Secondly, in terms of cooperation. The Singapore government has established multipleA Multi-Stakeholder Collaboration Platform, with the aim of facilitating efficient communication among key stakeholders in the innovation ecosystem—including multinational corporations, domestic enterprises, research institutions, and government agencies—focusing on addressing theirTechnical R&D, Research Team Formation, and Financial SupportandBusiness Cooperationtargeted needs in core dimensions.

Finally, in terms of cultivating scientific research talent, Singapore has launched“Life Sciences Human Capital Development Program”, focusing primarily on three horizontal dimensions. The first is to continue the "external talent acquisition policy" by recruiting top-tier professionals in the life sciences sector globally; the second is to leverageNational University of Singapore, Nanyang Technological Universitytop-tier domestic universities to specially cultivate R&D talent in the medical field; third, collaborating with enterprises to orient training toward corporate R&D needs and develop a cohort of emerging professionals.

This series of “precision services” has made the originally arduous process of medical innovation considerably easier. On one hand, in fostering innovation, SingaporeNot only does it provide funding for research teams, but it also helps them build talent teams and provides laboratories.; On the other hand, to unleash innovation, Singapore has established a fast-track approval pathway. Leveraging its favorable business environment and export policies, the country enables innovative achievements to reach the market rapidly while also allowing them to receive prompt market feedback.

These ample “sincerity” offers are hard for medical giants to refuse. According to statistics, as of now, there have been includingGlaxoSmithKline, Merck & Co., AbbVie, Novartis, Pfizer, Roche, Sanofi, Amgen, including11 World-Leading Pharmaceutical and Biotechnology CompaniesInvested in and established operations in SingaporeMore than 25 large-scale innovation research bases, with research directions spanning frontier fields such as clinical science, genomics, bioengineering, cell biology, pharmaceutical biology, bioimaging, and immunology, generating annual commercialization revenueOver $30 billion。

Given Singapore’s “sincerity” and the modest results achieved over the past three decades, why are global healthcare giants now turning their attention to China’s medical innovation market?

This is certainly not without reason. First and foremost, there has been strong policy support.. According to statistics, in 2021 alone, China issued 49 policies in the field of translation and commercialization of medical research achievements, among which16 National Policies, 33 Local Policies, with its core content primarily focusing on“Intellectual property, talent development, scientific research inc"Encouragement"Three Key Focus Areas.

Second is the optimization of the overall innovation environment.. First, on the innovation production side, an increasing number of research institutions and enterprises are engaging in medical innovation; second, on the innovation output side,Labs, Incubators, and Translation Centersas the “hardware” for scientific research gradually matures and becomes increasingly diversified.

Third, on the innovation implementation front, “buyers” such as investment institutions, enterprises, and governments are showing increasing enthusiasm for early-stage medical projects. Taking investment institutions as an example, a total of in China’s healthcare sector in 202159 Early-Stage Investment and Financing Events, with Total Funding Reaching RMB 2.5 Billion, in addition, it is particularly worth emphasizing that a total of 107 investment institutions participated in early-stage investments, among which there were manyMatrix Partners China, Legend Capital, Bohe Angel Fund, Sinovation Ventures, Vensource Capital, Kaifeng Venture Capitaland other well-known investment institutions.

Then comes the vast market potential for medical innovation. In recent years, with the intensifying aging population and continuous upgrading of consumption levels, China's pharmaceutical sector has consistently maintained a growth rate exceeding that of the global pharmaceutical market. From 2014 to 2018, the growth rate was 8.1%, with the market size increasing from RMB 1.1 trillion to RMB 1.5 trillion,In 2020, it reached RMB 1.75 trillion, has risen to become the world's second-largest healthcare market.

Finally, there is the untapped potential for innovation.. In recent years, thanks to the improvement of the overall innovation environment, the number of patents in China's medical field has surpassed that of the United States to become the highest globally, but the conversion rate remains "lackluster."Its data accounts for less than 5%., far behind the international leading level.

High patent volume on one side, low conversion rate on the other,Bridging the gap requires harnessing countless instances of “wasted” medical innovation.How to bridge the "Valley of Death" for these innovations is precisely where global healthcare giants excel, and it is also the key to their discovery of new growth curves in the Chinese market, and even across the broader Asian market.

Therefore, they came.

Although everyone is on the track of China's medical innovation, these healthcare giants are clearly unwilling to “follow the crowd.” They are in “How to Better Leverage Your Strengths in China’s Medical Innovation MarketOn this issue, each has its own unique “answer.”

October 11, 2021,AstraZeneca Global R&D China CenterOfficially opened in Shanghai, alongside the “hatching” ofShanghai International Life Science Innovation Park, namely Shanghai iCampus.

“iCampus”This industrial park model isCo-created by AstraZeneca and the local government, with its core focus on collaborating with local governments and leveraging AstraZeneca’s global top-tier medical resources to promote the integration of local innovative enterprises and cutting-edge medical technologies, tailored to local conditions.

This “collaboration model” not only fully unleashes the potential for local economic development, but also effectively assists innovative enterprises inTechnical R&D, Commercialization and Promotionachieving “resonance” with global enterprises in these and other areas, which holds positive significance for the incubation of innovative achievements within China, and these innovations will also meet the substantial needs currently present in China’s clinical sector.

As of now, AstraZeneca“iCampus”Expanded to7 Cities, respectivelyBeijing, Wuxi, Chengdu, Hangzhou, Shanghai, Yixing, and Guangzhou, and successfully attracted includingAbbisko Therapeutics, Dizal Pharmaceutical, and Bloomage Biotechmore than 60 renowned pharmaceutical companies, including

In 1997, when Boston Scientific first entered China, it had fewer than 10 employees. Today,Boston Scientific has approximately 1,200 employees in China., and in recent years, its revenue has even grown at a double-digit rate.

Such rapid development is inseparable from its China market strategy, which isFully Integrate into the Local Medical Innovation Ecosystem, accelerating the translation of innovative technologies in China, thereby creating synergies for win-win cooperation with more local partners.

It is specifically manifested in three aspects:First is the cultivation of local innovative talentBoston Scientific leverages the “Innovation Academy,” a professional development platform for physicians, to establish a comprehensive training network through diverse academic activities. This network extends to major provincial hospitals across China, thereby expanding the talent pool within the Chinese healthcare industry.

Second, foster deep collaboration with key stakeholders in the innovation ecosystem to facilitate translation among “industry, academia, research, and healthcare.”. In 2018, Boston Scientific and the Technology Transfer Institute of Tsinghua University jointly established“T3 Innovation Hub”; In 2019, Boston Scientific’s second China headquarters and its first innovation center in Western China were officially established in the Chengdu High-Tech Zone; in 2020, Boston Scientific and West China Hospital of Sichuan University jointly established the “West China–Boston Scientific Joint Innovation Center.”

Third, integrate global healthcare resources to achieve open innovation. As a global leader in the field of minimally invasive interventional medical technology, Boston Scientific has injected significant innovative vitality into the Chinese market in recent years, primarily by effectively integrating international innovation experience with local R&D practices, accelerating the translation of innovative achievements, and promoting the integrated development of industry, academia, research, and clinical practice.

September 2021,Siemens Healthineers Shanghai Innovation CenterThe official launch of the Zhangjiang Science City facility, one of Siemens Healthineers’ four global innovation centers and currently its first globally open joint innovation platform.

It is reported that the innovation center mainly focuses onAdvanced Diagnostic and Therapeutic Technologies, Medical Digitalization and Artificial Intelligence, and Intelligent Medical DevicesThree frontier sectors, focusing primarily on collaboration with local startups, medical institutions, and research institutes, to accelerate the localization of more innovative achievements in China.

Specifically, the Innovation Center offers two collaboration models for local startups:First,Join the Startup Program, i.e., to validate innovative technologies and solutions and seek opportunities for collaboration with Siemens Healthineers;Second, after settling in the Innovation Center, you can enjoy one-stop innovation services.. The Innovation Center features over 4,200 square meters of office space and is equipped with innovative platforms such as a rapid prototyping laboratory, a digital simulation laboratory, a medical AI R&D platform, and an intelligent imaging laboratory, enabling startups to leverage these resources for higher-quality innovation.

According to statistical data, Siemens Healthineers currentlyHolds over 560 patented technologies in China, with annual innovation investments reaching hundreds of millions of euros, fully demonstrating Siemens Healthineers’ commitment to localized innovation in the Chinese market.

From Johnson & Johnson’s perspective, current medical innovation and translation can no longer be accomplished independently by a single individual, company, or institution as in the past; instead, they require a robustInnovation Ecosystem, namely, jointly creating with various parties including the government, industry partners, academic institutions, and local business partners“Open Innovation” Ecosystem.

Therefore, Johnson & Johnson has built“JLABS@”This innovative incubator model. Before entering the Chinese market, “JLABS@” had already been established in San Diego, San Francisco, Boston, Lowell (Massachusetts), Houston, Toronto, Beerse (Belgium), and New York City.

June 2019,JLABS@ShanghaiOfficially put into use at Zhangjiang Hi-Tech Park, this is Johnson & Johnson’sThe First in the Asia-Pacific Region, alsoThe World's Largest by Floor Area. It is reported that the incubator has adopted “Unconditional"model," meaning "there are no additional conditions for companies to join; if new achievements emerge, Johnson & Johnson will collaborate with them."

In terms of incubating innovative enterprises, unlike general incubation platforms, Johnson & Johnson, with its deep understanding of the development trajectory of technology-driven companies, not only provides operational support to startups but also strives to offer a one-stop solution for their experimental needs in life sciences, biotechnology, and medical technology. This is specifically reflected in cultivating “Innovative Leader"and for itsIncorporate Johnson & Johnson's management model, capabilities, and cultureTwo aspects.

In 1994, Roche entered China, becoming the first multinational corporation to establish a presence in Shanghai’s Zhangjiang Hi-Tech Park. In 2004, Roche R&D (China) Ltd. was established, primarily engaged in pharmaceutical research and early-stage development. In 2019, Roche investedRMB 863 millionUpgrade it toRoche Shanghai Innovation Center, dedicated to establishing Shanghai as the next global hub after Basel and San FranciscoThe World's Third-Largest Strategic Center。

It is reported that the Innovation Center will integrate the resources and strengths of the Roche Group to provide tailored support for startups in fields such as innovative drugs, diagnostics and personalized medicine, and artificial intelligence. Notably, the Innovation Center will primarily focus on “firstin class” of China's homegrown innovative enterprises.

This also serves to fully leverage Roche’s strengths in innovative medicines. The Roche Shanghai Innovation Center not onlyCovers the entire innovative pharmaceutical industry chainacross all stages, including early-stage drug R&D, manufacturing, and commercialization, while maximizing synergies across the industry chain to accelerate the translation of medical innovations into practice, thereby ensuring that drug development continuously meets the needs of patients in China.

As of the end of 2020, Roche Shanghai Innovation Center had produced a total of271 itemsPatent applications for inventions, of which 144 have been granted. In the future, the Innovation Center will continueIncrease R&D InvestmentandNumber of Scientists, strengthenImmunologydrug development, and establish capabilities in drug development and antibody discovery in the field of oncology, promoting innovative drugs developed locally in China to reach the global market.

China’s healthcare sector is rapidly emerging as a blue ocean of innovation, but to successfully capitalize on this opportunity, multinational healthcare giants must overcome multifaceted headwinds in the years ahead.

This is mainly reflected in three aspects: first, China's currentImperfections in the Innovation System, insufficient innovation capacity and low conversion rates remain thorny issues; secondly,The Strong Rise of Innovation Capabilities among Domestic Enterprises, an increasing number of domestic healthcare companies have begun to focus on innovation and translation, yielding a substantial volume of innovative achievements in recent years; third,Homogeneous Competition Among Overseas Giants, which requires them to not only cover distance but also pick up speed on the track of localizing medical innovation in China.

However, regardless of how changes unfold, these overseas giants cannot escape the following four basic principles in their current-stage innovation and translation:First, accurately grasp the innovation system of China’s current healthcare market. Second, fully understand the core demands of China’s current healthcare market. Third, leverage one’s own strengths to focus primarily on localized innovation. Fourth, actively collaborate with ecosystem partners across the innovation chain to jointly facilitate the implementation of innovative outcomes.

As a market continues to expand, competition will inevitably become more intense than ever before. Nevertheless, those that truly stand out are“innovators” who always closely align their strengths with local needs to maximize output and benefits, this applies not only to overseas giants but also to domestic enterprises.