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MD+DI recently spoke with a panel of three key opinion leaders about how they see the medtech market continuing to evolve and how they expect advancing technology to determine the direction of the industry’s future products.

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Among those who participated in the panel are:

• Dave Evans, CEO and co-founder at Fictiv Fictiv, a global manufacturing company based in the San Francisco Bay Area, CA

• Adam Hesse, CEO at Full Spectrum Software, based in Southborough, MA

• Ross Meyercord, CEO at Propel Software, based in Redwood City, CA

Prediction: Vietnam will steal the “manufacturing crown” from China

“The incoming administration has identified China and its manufacturing prowess as a key national security risk,” Meyercord said. “Many United States and Western companies have already, or will soon plan their exit — or at least partial withdrawal from China. With robust infrastructure and manufacturing expertise already in place, Vietnam is poised to be the next Asian manufacturing champion. Vietnam is leveraging AI to overcome the last major hurdle — language barriers — to fast track its global manufacturing ambitions. Vietnam’s ascent as a manufacturing leader will accelerate, solidifying its role as a critical player in the future of global production.”

Prediction: The most significant impact related to deregulation in the short term will be simpler and faster pathways to studies

Today, the burden to get an investigational device exemption approved from FDA is high, and I expect more devices will be able to be studied with institutional review board approval only,” Hesse said. “In the long term, I do not imagine the FDA will lower the bar for device approval, but being able to study a device with lower burden will accelerate the pace of innovation.”

Prediction: Companies that analyze and react to ongoing global developments effectively will see the most success

Global developments related to geopolitics, economies, climate changes, and technological advances, as well as the uncertainty that they each can cause individually, are expected to collectively continue to have profound impacts on the overall supply chain.“The main challenge is to scale medical device production while maintaining compliance with regulatory requirements and ensuring quality,” Evans said. “Successful medical device companies can navigate these complex regulatory frameworks while optimizing manufacturing and operations through a number of ways.”

Strategies that can assist these initiatives include continuous monitoring of trade policies and regulatory changes, ongoing evaluations of geographical optionality, investing in advanced manufacturing technologies, and prioritizing sustainable practices.

“Companies should stay informed about evolving regulations in key markets by monitoring [the appropriate] regulatory agencies such as the FDA and Medical Device Regulation (MDR), as well as the various Asian regulatory agencies and frameworks,” Evans said. “Companies should build flexibility into their manufacturing processes to comply with varying standards while avoiding costly delays or redesigns.”

To effectively evaluate geographical optionality, Evans suggests a few approaches, including:‍

• The development of “boots-on-the-ground” in-region teams to help oversee regulatory compliance and quality assurance to enable easier resolution of manufacturing issues such as materials shortages. “Local resources can also help to manage supply chain complexities, including vendor reliability and logistics,” he said.

• Assessing the viability of reshoring or nearshoring manufacturing will also help to mitigate global supply chain risks and reduce lead times.

• Considering diversification of operations into additional regions such as Vietnam, India, or Mexico while maintaining strong operations in established hubs such as China.

• Investing in advanced manufacturing technologies such as digital twins, the internet of things, and predictive analytics will also further enhance efficiencies and allow for better remote monitoring of production processes. “We can also minimize dependency on manual labor, especially in regions prone to workforce disruptions, by automating more processes,” said Evans, who also encourages the prioritization of sustainable practices. “Incorporate circular economic principles into product design and operations to align with environmental regulations and consumer expectations, and seek partnerships with suppliers committed to sustainability to future-proof the supply chain,” he suggests. “By continuously analyzing global trends and aligning their strategies with agile, technology-driven practices, medical device companies can navigate uncertainties while maintaining their competitive advantage.”

‍Prediction: Artificial Intelligence will move from flashy experiments to solving real-world problems

The next phase of AI will evolve from unstructured and unpredictable large language models looking for problems to solve to a more process-simplifying use of agents to improve productivity and decision-making, Meyercord said. “Agents will take proactive steps, executing based on natural language processing and chaining together a sequence of actions to perform complex tasks. These agents will finally realize the long-promised productivity benefits of AI for business users.”
Furthermore, Meyercord believes that the AI landscape will be defined by a stark divergence between models that share information publicly versus those that keep enterprise data protected. “Keeping data and proprietary models secure within the ecosystem and safeguarding sensitive information is what will differentiate science projects from enterprise-ready applications,” he said.  

Prediction: The use of AI moving forward will separate medtech companies competitively

As Hesse sees it, the differentiator here will be the ability to efficiently evolve and advance AI capabilities.

“Many companies will be quick to release initial versions of AI-enabled products, but fail to invest in the infrastructure to ensure AI is a core competency of their organization,” he said. “To lead in AI-enabled products, companies must be able to ensure their systems continue to advance."

With AI essentially constantly evolving, Hesse believes that true innovation in this space is defined by the respective developing companies’ ability to translate their innovative elements into value through disciplined, nimble approaches. “Discipline, in this case, means being deliberate about where the technology is applied and ensuring that it is being used to solve real business problems,” he said. “It is too easy to get excited about a new technology and get lost in the possibilities. Additionally, since the technology is evolving, what is good today may not be good in a year. Being nimble allows an organization to keep up with the evolution.

”For those companies that will be seeking FDA approval of devices, whether or not AI is involved, there are certain trends that can assist the development process, Hesse said.

“DevSecOps and MLOps are two initiatives that many organizations are embracing,” he said. “Both are intended to keep your development process under control, and I expect these initiatives to play a larger role in medtech organizations in the coming years. They will play a critical role in both pre-market and post-market development.”

At the same time, the potential for the AI “hype cycle" to end could happen sooner than later.

“I expect we will enter the trough within the next two years,” Hesse said. “Too many organizations will over-invest in AI without translating those investments into sustainable value.”  

Prediction: Companies in the U.S. will not have to pull out of China entirely if they use alternative strategies

With the potential for new tariffs in the U.S. to impact international business, medical device companies should diversify sourcing regions as soon as possible to prevent system failures caused by external pressures, Evans said. “When costs rise due to tariffs or increased wages in a region like China, manufacturers don’t have to pull out completely. They can maintain access to China’s infrastructure while reducing costs by relocating some production to regions like Vietnam, India, or Mexico. Diversification can also reduce exposure to policy-driven disruptions like U.S./China trade tensions.”

While reliance on China (or any single region) creates vulnerabilities to disruptions, such as natural disasters or energy shortages, establishing operations in multiple countries will ensure continuity and reduce downtime in the case of emergencies. “When a medical device manufacturer wants to serve a specific region more efficiently, setting up production closer to major markets, such as Mexico for North America or India for Southeast Asia, can reduce shipping costs and lead times,” Evans said.

Prediction: Infrastructure improvements in Mexico will spur a manufacturing hub

As Meyercord estimates, Mexico’s proximity to the United States is more than a strategic geographical advantage.

“It’s a game changer,” he said. “The country’s investment in infrastructure is transforming the region into a high-tech manufacturing hub, with modernized roads, enhanced facilities, and a skilled workforce ready to meet global demand. Guadalajara reigns as Mexico’s Silicon Valley, as the country continues to attract high-tech manufacturing at an unprecedented rate.”

By slashing supply chain cycle times and alleviating risk, Mexico’s proximity to the United States will make it an unrivaled choice for high-tech and complex manufacturing, Meyercord said, representing a powerful convergence of convenience, speed, and forward-thinking economic investment.

Prediction: As real-world adaptation of AI becomes more of a focus, the public will become more untrusting of technology overall

“I see the trust factor being a significant problem,” Hesse said. “There are many deceptive applications of AI, and I expect those applications to receive enough air time that consumers’ concerns about AI used in healthcare will increase. Medtech companies may be pressured to rebrand AI, or potentially give people the option to disable it.”

Prediction: Companies will mitigate supply chain risks while expanding global operations with proper planning

Mitigating supply chain risks while expanding global operations requires a strategic approach that balances diversification, technological integration, and proactive planning, Evans said.Companies can navigate these challenges through multiple pathways:

• Leverage technology and advanced manufacturing. “Using AI-driven supply chain management tools can predict demand fluctuations, identify bottlenecks, and optimize inventory,” Evans said. “Real-time visibility enables early identification of disruptions and faster decision making. Digital manufacturing increases supply chain visibility and flexibility.”

• Build stronger relationships with suppliers. “To simplify sourcing, work with a digital manufacturer with established supplier relationships across multiple countries,” Evans said. He recommends conducting regular audits and joint risk assessments with key suppliers, and developing long-term contracts with suppliers to secure capacity and pricing stability.

• Invest in local and regional supply chains with a focus on supply chain agility. “Shortening the supply chain reduces the risk of delays and geopolitical exposure,” Evans said. “Focusing on local sourcing will lower transportation costs and lead times, though this might increase labor costs.” He also suggests considering the use of automation and modular manufacturing setups to shorten production cycles and building flexible logistics networks to reroute shipments when necessary.

• Evaluate total cost of ownership. “By combining technological tools, strategic planning, and diversified sourcing, companies can mitigate supply chain risks and build resilience while expanding their global footprint,” Evans said. “The focus should be on agility, visibility, and strong supplier relationships to navigate uncertainties effectively. Cost savings from low labor costs in one region may be offset by higher risks. Assess your risks, transportation costs, and tariffs when expanding operations while including sustainability costs and carbon footprint reductions in all decision making.”

Prediction: Domestic manufacturing shifts from construction to production

Fueled by landmark legislation such as the and new U.S. manufacturing is rapidly transitioning from construction to production, Meyercord said.

“After significant infrastructure investment, factories are moving to the next phase — equipping facilities, hiring skilled workers, and integrating advanced technologies to support a surge in domestic manufacturing,” he said. “With bipartisan support for supply chain security and reducing reliance on foreign sources, the U.S. is positioning itself as a powerhouse for high-tech manufacturing in an era of global economic shifts. As one of the largest recipients of the CHIPS Act, Taiwan Semiconductor Manufacturing is blazing the trail with U.S. yields outperforming Taiwan counterparts. Its brand-new Phoenix-based facility recently reported a 4% increase in usable chips compared to output from Taiwan plants, which previously had been considered the gold standard of productivity.”

Prediction: There will be an increased focus on leveraging a product’s generated data

“Organizations that are able to turn their fielded products and research and development (R&D) group into a closed loop of continuous improvement will be most competitive in the market,” Hesse said. “AI is only one method of utilizing data generated by your device. Proactively being able to identify problems and/or opportunities allows R&D teams to be highly focused on the most valuable initiatives.”

Prediction: Evolving federal policies do not have to result in medtech companies sacrificing resiliency

Making a commitment to proactively align operations with evolving federal policies while ensuring compliance, adaptability, and innovation will present opportunities for medical device companies to enhance their resiliency, Evans said. Navigating this dynamic will present challenges, but there are various steps companies can take to improve their potential:

• Monitor policy changes and regulatory updates. “Evolving FDA regulations, healthcare policy shifts, and trade agreements can impact product development and market access,” Evans said. “Establish a dedicated regulatory affairs team to track policy changes and ensure timely compliance and leverage AI-driven tools to monitor regulatory updates while assessing their potential impact.”

• Prioritize regulatory compliance and leverage federal Incentives to foster innovation. Evans suggests companies implement robust quality management systems that align with and to regularly audit manufacturing processes to ensure compliance with FDA and international regulations. “Explore federal programs, grants, and credits for developing environmentally sustainable or advanced technologies,” he said. “Also, prepare for changes in trade and tariff policies that could affect cost structures and sourcing strategies by conducting scenario planning to understand the financial and operational impact of potential trade changes and utilizing free trade zones or partnerships with tariff-exempt suppliers to mitigate cost increases.”

• Embrace digital transformation and data-driven insights. "With federal policies increasingly focusing on interoperability and data security in healthcare, it’s important to invest in secure, cloud-based platforms that support regulatory compliance and enhance operational efficiency,” Evans said. “Medical device companies can build resilience and agility into their global supply chain by staying agile, embracing technology, and diversifying sourcing regions. Additionally, a proactive approach to compliance and strategic planning not only mitigates risks but also positions companies to seize new opportunities.”

Stay ahead of the curve and ahead of disruption in the medical technology industry with Propel Software.