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Imagining the Future of Medtech

New technologies, demographic change and market currents are reshaping the future of the medical devices industry.

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By Shagun Singh
Published August 16, 2022
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Key Points

  • The value drivers in today’s healthcare markets are changing, creating new opportunities for growth.
  • An optimistic outlook for medtech rests on several powerful forces that will generate meaningful value creation.
  • Foremost is the impact of an aging population globally and the adoption of personalized virtual healthcare over longer lifespans.
  • The mining of extensive healthcare datasets with AI will also spur new waves of capitalization, collaboration and transformation.

Investment research comes with the disclaimer “past performance is no guide to the future.” Given how quickly the value drivers in today’s markets are changing, that’s never been truer – particularly in a sector like medtech.

Disruption, innovation, collaboration and transition have always been focal points for the medtech sector, but a confluence of technological, medical and structural trends have created a backdrop of unprecedented upheaval and exciting growth potential.

The optimistic outlook for the medical devices sector rests on several powerful forces that will generate meaningful value creation. Foremost is the impact of an aging population globally and the adoption of personalized virtual healthcare over longer lifespans. The World Economic Forum estimates the number of adults over age 65 will double by 2050, creating a 1.6 billion “age wave” that will profoundly expand the sector’s total addressable market.

Innovation abounds

Another factor driving value creation is innovation itself, which we expect to accelerate as companies drive category-leadership strategies in response to market demand for scalable solutions. Significant trends in smart implants, AI-driven procedural integration and robotics will create significant investment opportunities.

The galvanization of virtual health, a more consumer-centric delivery of in-home “on demand” healthcare, accelerated industry convergence and the mining of extensive healthcare datasets with artificial intelligence and machine learning. We expect this will also spur new waves of capitalization, collaboration and transformation as the industry continues to reinvent the way we treat patients at record-breaking speed.

Personalization at scale

Hospitals, in particular, are increasingly leaning on external vendors for specialized or technology-heavy work, and are increasingly looking to capture emerging revenue streams as medical care moves towards in-home care.

With the continued adoption of personalized virtual healthcare over longer lifespans, longer-term trends for medical devices will facilitate the movement of care into less costly settings – including at home – at scale.

The underlying fundamentals of the medical devices sector remain robust, but it’s important to recognize that the medical devices sector is not monolithic. We see several compelling sub-sectors. For instance, transcatheter mitral and tricuspid therapies are in the early stages of substantial growth, with revenues projected to increase from $1 billion in 2021 to $5 billion by 2028.

Surgical robotics is another subsector that should experience significant growth, as robotics become the “standard of care” in several areas, such as surgery and reconstruction of hips, knees and spines.

Reimaging the future

The future holds promise for the sector. However, the short-term thinking of today’s investment world reveals little about the possibilities for returns when new medical technologies emerge and evolve.

RBC Imagine™ is a global research initiative that helps you see the change drivers of tomorrow to sharpen your business thinking today. This unique platform uncovers transformational trends that will reshape our world, pinpointing their impact on key industries. Learn more with our signature report, Preparing for Hyperdrive.

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