Harnessing Collaboration in Japan's Health Tech Ecosystem

Masaru Taguchi
Connected Care Business Marketing & Sales Leader
Philips Japan

February 2024

Philips, a renowned global medical and electrical device manufacturer headquartered in the Netherlands, has been selling medical devices and advanced personal health products, including oral healthcare products, for over 70 years in Japan since establishing a subsidiary in the country in 1953.

What attracts a leading company in the health tech area such as Philips to the Japanese market? To find out, we interviewed Masaru Taguchi, Connected Care Business Marketing & Sales Leader, who has been involved in the co-creation of various businesses in Japan's ICT (Information and Communications Technology) sector. "Japan's aging society has led to problems such as shortages of medical personnel, overwork and escalating medical costs," Taguchi observes. "To solve these social issues, we wanted to collaborate with medical institutions and research facilities, conducting demonstration research and streamlining a telemedicine system using IoT."

The Japanese government has also been an enthusiastic promoter of digital transformation (DX) in healthcare settings. For example. Philips Japan's project was selected as one of the Fiscal Year 2015 Subsidy Program for Global Innovation Centers, which came with subsidies worth up to two-thirds of the project costs for demonstrative research in ICT and other areas.

Taguchi reflects on this pivotal moment: "In Japan, a shortage in doctors and an uneven distribution of medical professionals meant that telemedicine was even more important to introduce. When we found out about the subsidy through JETRO, we were eager to take advantage of the support." To initiate their business, coordination with the Ministry of Health, Labour and Welfare and the Ministry of Economy, Trade and Industry was essential. Taguchi explains, "Because this was a first-case situation regarding new initiatives in healthcare, receiving approvals or certification from all relevant ministries and agencies was essential for our coordination. JETRO's support played a vital role in facilitating these connections." He continues, "To address social challenges, understanding and restructuring the Japanese medical field is necessary. We believe that the telemedicine system experience and technology we have garnered overseas will be crucial to our future success."

Philips' IoT-powered telemedicine system is already being used overseas and has proven effective. Based on this technology, a telemedicine system was first introduced in Japan in September 2016 at the ICU of Showa University Hospital and its affiliated hospitals. The system has been a success in a number of concrete ways, including bolstering short-staffed hospitals and clinics, and contributing to a reduction in mortality rates.
"We believe that Japan offers tremendous advantages as an investment target," says Taguchi, "Japan is facing an unprecedented aging society, but it has a universal health insurance system and a very good health checkup system." He highlights the dynamics of Japan's healthcare landscape, explaining, "While all citizens have easy access to medical care, there is also a great need for medical healthcare solutions to solve the shortage of specialized doctors, coupled with a necessity to improve the workflow of medical personnel and promote collaboration in regional healthcare." Taguchi emphasizes, "In this sense, Japan is truly an attractive market for companies in the health tech field."
Beyond the market appeal, Taguchi highlights the rich landscape of collaboration in Japan, with highly skilled third parties looking for partnerships in various domains. "Japan's healthcare environment is ripe for innovation through collaboration between industry, academia, and government," Taguchi notes. "Numerous health tech companies leverage technologies facilitating the sharing of patient diagnostic images on smartphones, and ambitious startups employ these technologies in clinical settings."

Concluding with a forward-looking vision, he states, "Our goal is to continue collaborating with these companies, alongside local governments and research institutions. In the future, we hope to use case data and results obtained through our R&D hubs in Japan to expand our medical business around the world."