Region/Countries: Europe, Germany Industry: Biosciences / Medical Devices, Other Date: January 2021

Why this is important to Wisconsin businesses: With the country's decentralized model of government, this will be a major project requiring innovative solutions for integration and standardization.

With a population of 83.2 million, Germany is the largest consumer market for products of the health care and life sciences industry in Europe. The economic power of Germany is remarkable, as its economy is the fourth-largest globally and accounted for almost one-quarter of the European Union’s GDP in 2019. The country’s economy is characterized by high industrialization as well as diversification due to its balanced concentration on products and services.

Attributable in large part to its fiscal austerity, Germany had a significant account surplus of almost $300 billion USD in 2019, and has been better able to cope with the economic effects of the pandemic than most other EU member countries. Germany still experienced a GDP decline of 5% in 2020, but by implementing flexible short-term work arrangements, managed to hold unemployment at 5.9%.

Both the EU and Germany consider health care and life sciences a priority industry and place strong focus on R&D and innovation in the sector. Germany is the largest medical device market in Europe, with revenues of $37 billion USD annually—roughly 27% of the total European market.

The German health care system is well established, especially in terms of infrastructure, hospital beds and trained staff. The health care sector is the country’s largest employer with currently 7.6 million employees equaling 16.6% of the total labor force. The German medical device market grew by 4% in 2019 and is projected to grow between 4 to 6% through 2021 as the health economy is subject to digitalization.

Despite being one of Europe’s largest health care markets, Germany has fallen behind in digitization of this sector, with challenges linked to Germany’s decentralized government structure and the complexity involved with adopting trends in a standardized—or at least integrated—fashion. Experts have pointed to the urgency of accelerating digitization for the pharmaceutical, medical technology and biotechnology sectors, and the German government has introduced initiatives to support this. The Digital Care Act aims to provide electronic health records for Germany’s 73 million statutorily insured residents and allow compensation of digital health apps, as well as promoting e-prescribing. The Hospital Future Act focuses on the improvement of patient care in hospitals, modernization of information technology, improvement of cybersecurity and funding of digitization efforts for medical services and processes, with $4.3 billion USD in funding for public hospitals. In the dental equipment market, digitization opportunities include 3D imaging and printing, CAD/CAM systems, robotics and innovations in materials.

The driving factors in Germany’s digital health scheme will include cloud computing, artificial intelligence, robotics, sensors, big data analytics and the Internet of Medical Things (IoMT). An aging population, rollout of e-health patient portals, and high internet and mobile phone penetration contribute to Germany’s potential to become a strong health information technology market offering valuable opportunities to specialty solution providers.

Germany’s commitment to moving its health ecosystem into the digital age is creating new export and partnering opportunities for U.S. health solution providers driven by innovation throughout the supply chain. Many of the world’s leading medical device manufacturers are based in the U.S., and nearly 40% of German medical device imports originate from the U.S., with $118 million of these imports coming from Wisconsin. Germany’s multimillion-dollar funding initiative unlocks enormous potential in the areas of e-procurement and e-commerce, machine-to-machine communication, mobile health and big data applications, telehealth and telemedicine for U.S. solution providers. Digitization trends, combined with legislative action, will further extend the importance and promote the potential of the growing health care ecosystem in Germany, creating new opportunities for U.S. exporters. The world-leading MEDICA trade show is a good opportunity for networking and to learn more about the German market.