Medtronic CEO Jeff Messa: China is becoming a major hub for global medical technology innovation

Ask AI · How Will Medtronic’s Localization Strategy Upgrade Affect the Global Market?

The landscape of innovation in the global medical technology industry is quietly changing.

Over the past few decades, medical technology innovation has mainly been concentrated in the United States and Europe. Multinational companies have conducted R&D there and then promoted their products globally, entering emerging markets like China—this is the most typical business model. But in recent years, with the development of artificial intelligence, robotics, digital healthcare, and other technologies, as well as China’s rapidly growing medical needs and industrial capabilities, this pattern is being broken.

On one hand, the scale of China’s medical technology market continues to expand, driven by an aging population, increasing chronic disease burdens, and uneven distribution of medical resources, leading to a growing demand for new technologies and models in the healthcare system; on the other hand, domestic Chinese companies are gradually showing advantages in engineering capabilities, product iteration speed, and AI applications, with a number of innovative enterprises beginning to emerge on the global stage.

Against this backdrop, the positioning of multinational medical technology companies like Medtronic in the Chinese market is also changing.

“Historically, almost all innovation in the medical technology industry has come from the United States. But for the first time, we are seeing another country rise as a major source of innovation in this field—that is China, especially in robotics, digitalization, and artificial intelligence,” said Jeff M. Maza, Chairman and CEO of Medtronic.

This judgment has also become an important context for Medtronic to reassess its China market strategy.

In his view, China is not only one of the most important global medical technology markets but is also becoming a significant source of innovation in the field. This change is driving Medtronic’s China strategy into a new phase—“from an innovator of technology to a co-creator of the local ecosystem.”

Multinational Medical Technology Companies Are Reassessing the Chinese Market

During the recent China Development Forum, Jeff M. Maza repeatedly emphasized a core judgment: “China will not only become one of the largest global medical technology markets but also a major source of global medical innovation.”

Behind this statement is Medtronic’s 37 years of observation and reflection on the Chinese market, marking a comprehensive upgrade from version 2.0 to 3.0 of its localization strategy.

One of Maza’s most direct impressions from his visit is that China’s capacity for medical technology innovation is undergoing a qualitative leap.

At another high-level management forum hosted by China Europe International Business School (CEIBS), Maza said, “Historically, almost all innovation in our industry has come from the United States. Since Medtronic was founded 76 years ago, that has been the case,”

Jeff M. Maza speaking at CEIBS

He admitted, “But today, for the first time, you see another country becoming a major source of innovation—that is China.”

In his view, China’s rapid development in engineering manufacturing, medical device innovation, AI, and digital healthcare is transforming the country from a “fast follower” of innovation into one of the important sources of global medical technology innovation.

This shift is no accident. China’s enormous medical needs and diverse clinical scenarios provide a fertile ground for innovation.

Maza deeply feels from intensive exchanges with government, hospitals, and doctors that innovation driven by real-world needs is leading to many valuable technological breakthroughs. Companies can not only access large-scale market opportunities here but also validate the feasibility and clinical effectiveness of innovative technologies through local implementation.

Profound policy reforms are also reshaping industry patterns. Maza mentioned that China’s healthcare industry is undergoing a structural adjustment.

The promotion of DRG/DIP and other diagnosis-related group payment models is making hospital resource allocation and cost control more refined.

This presents new requirements for medical technology companies: not only innovative products but also comprehensive solutions aligned with value-based operation. This also means that companies must work closely with hospitals to explore new models that improve efficacy while controlling costs.

Meanwhile, the push for volume-based procurement further changes the industry’s pricing system.

In recent years, several high-value medical devices have been included in centralized procurement, leading to significant price reductions. The reshaping of the pricing system makes the previous reliance on high-priced products for growth increasingly unsustainable, prompting multinational medical technology companies to reassess their development paths in China.

In this process, some multinational companies have begun adjusting their China operations, reducing certain product lines or slowing investment, entering a new phase of industry adaptation.

Maza said that rapid price changes indeed pose challenges but also drive industry transformation. Currently, the healthcare system faces three major challenges: improving clinical outcomes, expanding healthcare accessibility, and reducing costs. China’s policy reforms are simultaneously advancing these three goals.

“This is a challenge but also an opportunity for the entire industry,” Maza said. As the healthcare system becomes more focused on efficiency and costs, the value of technology will no longer be just about point breakthroughs but about whether it can help improve the overall efficiency of the healthcare system.

In response to this shift, Medtronic is also adjusting its China strategy.

Maza mentioned that the company is responding to industry changes through various means, including strengthening local manufacturing capabilities, collaborating with Chinese innovative enterprises, and promoting digital and AI applications.

For example, in terms of cost structure, Medtronic is enhancing its local supply chain and manufacturing capacity in China to improve cost competitiveness; in terms of innovation collaboration, the company is investing in and partnering with Chinese innovative firms to develop more cost-effective technological products.

At the same time, Medtronic is also promoting Chinese innovation to the global market. By leveraging global channels, innovations developed or co-created in China are being introduced to overseas markets, forming a new growth model.

Against the backdrop of policy and market structure changes, the Chinese market is no longer just a growth market for multinational medical technology companies but is becoming a strategic pivot point for adjustment and innovation exploration.

Localization Strategy Upgrade: Co-Creating and Co-Building the Ecosystem with China

Based on an understanding and judgment of industry trends, Medtronic’s localization efforts in China are accelerating comprehensively. Its core localization strategy has evolved from early “introducing global innovation into China” to today’s “co-creating and co-building the ecosystem with China.”

Maza repeatedly mentioned during his China visit that Medtronic’s China strategy is entering a new stage.

In R&D, Medtronic is continuously strengthening local R&D capabilities.

According to Medtronic’s disclosed data, its China R&D center has developed 70 innovative products, covering surgical techniques and devices, respiratory and monitoring solutions, and interventional vascular therapies, with 64 successfully launched and 30 exported overseas.

The wholly owned subsidiary, Medtronic Medical Technology (Shanghai) Co., Ltd., located in the Lingang New Area of the China (Shanghai) Free Trade Pilot Zone, has developed the NuPace™ series implantable pacemakers, cardiac pacing leads, and programmable device software, which have received approval from the National Medical Products Administration and are about to enter clinical use.

Such developments also mean that the role of Chinese teams within the global R&D system is being elevated.

On the other hand, localizing supply chains and manufacturing systems has become an important direction for strategic adjustment among multinational companies.

With increasing global supply chain uncertainties in recent years, medical technology companies are paying more attention to regional supply capacity building. Medtronic continues to strengthen its local manufacturing and supply chain layout in China to improve responsiveness and reduce operational costs.

It is reported that Medtronic has nearly 7,000 supply chain partners in China. In fiscal year 2025, Medtronic’s procurement in China will reach about 5 billion RMB, with 90% of indirect procurement supplied by local vendors; approximately 90% of direct procurement for key components, raw materials, and contract manufacturing is supplied to Medtronic’s overseas factories, supporting its global manufacturing system.

In addition to internal capacity building, Medtronic is also strengthening cooperation with Chinese innovative enterprises, attempting to participate in China’s healthcare innovation ecosystem in a more systematic way.

Its China fund is a key part of its local strategic layout and the only regional investment fund Medtronic has established globally.

The first phase of the fund has successfully invested in 10 local healthcare startups across fields such as surgical robotics, neurostimulation, and ENT; a second phase was launched in 2023, focusing on major diseases like cardiovascular, neuroscience, and oncology, as well as AI, digitalization, and robotics; a third phase is also being actively prepared, with plans to introduce local government funds to build a “two-way bridge,” continuing to support local innovation while strengthening links with Medtronic’s global operations.

Maza believes that Chinese innovative companies often possess strong engineering and rapid iteration capabilities, while multinational companies have advantages in global commercialization and clinical resources. Collaboration between the two can be mutually beneficial.

This model also reflects a shift in the relationship between multinational healthcare companies and China’s innovation ecosystem—from “competitors” to “partners.”

More importantly, this cooperation is no longer limited to the Chinese market but is oriented toward the global stage.

Some Chinese innovative products may enter international markets through multinational channels in the future; simultaneously, multinational companies can leverage Chinese innovation to reduce product costs and accelerate technological iteration.

In the increasingly competitive global medical technology landscape, this collaborative model is becoming a new development path.

AI and Data-Driven Approaches: The Chinese Innovation Logic Behind the Beijing Innovation Center

If the localization strategy upgrade represents organizational change, then AI and digitalization are becoming key tools to drive the implementation of this strategy.

Maza believes that AI is transforming the underlying logic of the medical technology industry. Especially in surgery, chronic disease management, and telemedicine, AI and data are pushing healthcare from “experience-driven” to “data-driven.”

He detailed how AI empowers surgical procedures: by analyzing vast amounts of surgical videos through deep learning, AI models can recognize surgical steps, key anatomical structures, and potential risks in real time, guiding surgeons like an experienced mentor. Post-operation, AI can automatically generate reports, track timing, and enable peer comparison, helping doctors improve continuously.

In spinal surgery, Medtronic has built the “AiBLE” ecosystem, achieving a complete closed loop from preoperative AI planning, intraoperative robotic navigation, to postoperative recovery tracking, and approaching automation of some surgical steps.

These technologies not only help improve medical quality but may also shorten the training cycle for surgeons, alleviating resource disparities.

In this wave of medical AI revolution, China is seen as one of the most promising innovation scenarios.

On one hand, China’s large patient population and rich clinical scenarios provide abundant real-world data for AI models; on the other hand, the rapid development of domestic AI and digital healthcare companies accelerates technology deployment.

Against this background, Medtronic regards Beijing—the Medtronic Digital Healthcare Innovation Center—as a key pillar of its China AI strategy.

In October 2025, Medtronic’s first digital healthcare innovation center in China officially opened in the Beijing International Medical Innovation Park.

One of its core missions is to develop disease management solutions based on AI and big data. Maza describes the value of this center as “convening”—it has the ability to bring together Medtronic’s technological advantages, clinical data from Chinese hospitals, and local AI algorithms to jointly solve specific clinical challenges.

In specific collaborations, Medtronic is working with Chinese hospitals and research institutions through this innovation center.

Recently, Medtronic signed a broad cooperation framework with Beijing Anzhen Hospital, focusing on cardiovascular and other key areas, jointly advancing clinical trials of innovative products and exploring the clinical application of cutting-edge technologies.

This multi-party collaborative innovation model also reflects a change in the path of medical technology innovation—from single-company R&D to ecosystem-based innovation.

China’s unique advantages in this model include abundant clinical resources, a rapidly growing AI industry, and policy support for digital healthcare, making it an important testing ground for medical technology innovation.