Investing in Japan
Success Stories GE Healthcare Japan Corporation
Industry: Biotechnology / Life science
GE Healthcare Japan Corporation is working to create solutions within the healthcare market in Japan, a country facing the challenges of an aging population, in collaboration with research institutes, university hospitals and Japanese companies. We interviewed the President and CEO, Soichiro Tada, about the advantages and challenges of the Japanese healthcare market and the company’s activities.
From product sales to solution provider
GE Healthcare Japan Corporation (GE Healthcare), a company within the General Electric Company (GE) group in the United States, is a major healthcare company that develops, manufactures, markets, and services CT, MRI and ultrasonic diagnostic equipment and promotes biotechnology-related business.
The company started its operation in Japan as early as 1982, as Yokogawa Medical System, a joint venture between GE and Yokogawa Electric Corporation, changing its name to GE Healthcare Japan Corporation in 2009. Headquartered in Hino City, the company operates sales and service bases in about 60 locations around the country with nearly 2,000 employees. With sales in 2017 at 139.1 billion yen, the company is actively developing operations in the Japanese market.
Mr. Tada, President and CEO, explained, “GE has been transforming itself from a company selling only hardware products such as aircraft engines and motors to a company providing solutions.” Hinting at a change in the GE group’s business model, he said, “One of our keywords is ecosystem development in Japan. Rather than a single company tackling all issues individually, we aim to build a framework for problem solving together with other companies and institutes that share the same goal.” Specific activities are already ongoing, one of which is “Brilliant Factory,” the next-generation plant that makes effective use of digital technologies.
Experimental study of IoT at plants and hospitals in Japan
GE has been promoting a “monozukuri (manufacturing) revolution” with the aim of improving productivity and product quality through effective use of “Predix,” its own IoT open architecture platform for industry, and by incorporating IoT and digital technologies such as sensors. The company’s Hino Plant, as one of the first seven showcase sites selected among all plants, is leading the world in this reform initiative.
JETRO supported the company’s experimental study to demonstrate the integration of Predix and Japanese sensor technology through the Subsidy Program for Global Innovation Centers for FY2016. In this project, the Hino Plant developed applications to acquire and visualize mobility data pertaining to operators, products, and facilities to identify any opportunity to improve productivity in the manufacturing process of CT detectors.
Furthermore, there is a hospital version of this project called “Brilliant Hospital.” The concept is to analyze big data collected through networked medical equipment with “Predix,” visualize problems and give consultation to healthcare providers and business owners for optimizing and streamlining medical services.
At the hospital where the experimental study was conducted under the JETRO subsidy program, GE Healthcare developed an algorithm and a system to optimize the hospital assets by combining the data on location, usage and assets of ultrasonic diagnostic equipment. “We confirmed that we are proceeding in the right direction regarding how to improve operational efficiency thanks to the collaborative work with Murata Manufacturing and Okabe Marking Systems,” remarked Mr. Tada.
Universal healthcare system, a major advantage of the Japanese healthcare market
Mr. Tada said that the attractiveness of the Japanese healthcare market “owes greatly to the existence of its universal healthcare system.” He said, “Japan has established a social environment that enables all the people to receive high-quality advanced medical services,” and added that, although its maintenance is challenging, “the system makes the Japanese healthcare market more attractive.” He continued, “Other appealing points are its market size and the high level of concern related to health among the people and the government.” He praised the Japanese market, saying, “An environment is in place enabling the launch of new technologies, faster than any other country,” thanks to its excellent medical education system and highly skilled healthcare professionals.
Promotes the Japanese model of problem-solving to the world
Mr. Tada also mentioned that one of challenges of Japanese healthcare is the “extension of healthy life expectancy.” “Medical care costs of cardiovascular afflictions, such as strokes and heart failure, as well as of dementia, now exceed that of cancer, imposing a heavy burden on both patients themselves and their family members. Prognosis are poor and the quality of life is highly likely to decrease,” he pointed out. Acknowledging that fact, he emphasized that “helping those patients live happily is the company’s mission and problem-solving in Japan should contribute ultimately to problem-solving in the world.”
Furthermore, Mr. Tada said, “Japan will be the first country forced to take on the challenge of giving optimal diagnoses and choosing proper treatment for patients who suffer from multiple diseases.” He continued, “For example, currently in Japan, if a patient suffers from cancer and cardiovascular disease, drug administration is decided by a simple decision-making approach which relies on the experience of each doctor. The strength of Japanese medical care lies in categorization based on the organ or disease in question, but there is an increasing need for primary care based on consideration of each patient as a human being in which all of the problems he or she faces in terms of both mind and body are treated comprehensively,” he explained. And then he stressed that “using the technologies of monitoring, sensoring and AI is critical in improving the quality of primary care.”
Agile R&D in sight of the issues
Although the Japanese healthcare market has both appeals and challenges, Mr. Tada explained that “we need to conduct R&D in sight of the issues more than ever before because Japan is a country facing the medical challenges fastest in the world.” Behind this attitude is the company’s management policy of “pursuing agility.” “GE, in the past, analyzed the data, wrote a plan, and then requested approval, but such a process prevented us from keeping up with the speed of the world. We changed this and now promote prompt experimention based on an initial hypothesis and modification through trial and error, which we call FastWorks,” he said.
Mr. Tada also cited another reason for conducting research and development in Japan, saying that there are many attractive companies who have the technologies to solve health issues. “Even if not the Silicon Valley style of ecosystem in terms of financing, Japan has an outstanding business environment in terms of the geographical proximity between market and place of techology developement to solve issues,” he mentioned. Citing an example of a cardiovascular doctor working together with an industrial wire company to develop a wire with the fine mobility necessary for catheter treatment, he argued that it is important to conduct R&D activities close to highly capable companies which can respond to market needs. About self-developed pocket-sized echo (ultrasonic diagnostic equipment), he appreciated the technical strength of Japanese companies, saying, “We localized the product for rural areas in China and India where no power source is available, and then proceeded with reverse innovation to develop the medical equipment more durable and smaller for emergency use in developed countries. In the course of such activities, we found that some batteries or cables can be manufactured only by Japanese companies.” Mr. Tada said, “We, as a Japanese company, would like to be the first to develop the technologies that can be applied worldwide here in Japan. But first it is important to succeed as a business in Japan’s ecosystem and establish sustainability.”
Mr. Tada, President and CEO of GE Healthcare Japan
Toward the establishment of an ecosystem
Mr. Tada said, "We would like to build a model of multiple companies working together capitalizing on their respective strengths, rather than do everything as one company." Regarding collaboration among organizations, he said, "It means a lot when one plus one makes more than three. We need to share the same goal and exchange opinions with each other with an awareness of the issues to translate diversity into creativity." GE Healthcare launched the project of building a framework for embodying this collaboration in the Kansai region.
The company made a framework agreement with the National Cerebral and Cardiovascular Center (NCVC) in Suita-city, Osaka in March 2017 to form a partnership to develop cutting-edge medical technologies and build a next-generation hospital system. The company chooses research themes among more than 20 subjects by screening based on the following three criteria: “Can both NCVC and GE Healthcare capitalize on their respective strengths?” “Is there a social need and is there a sufficient market size?” and “Is there clinical value and social significance?”
Mr. Tada said that NCVC is a unique national medical institute in the world in that it works on both cerebral and cardiovascular diseases. Since many patients afflicted with, or at risk of, cardiovascular diseases, heart failure and strokes visit NCVC, it is expected that patient-centered research conducted to predict and prevent such diseases will eventually lead to reduction of medical costs and healthcare providers’ workload.
Mr. Tada also said, “The company wants to contribute to the realization of the Medical-based Town (kento - healthy city) concept of Suita City.” In this town, in order to increase the efficiency of medical practices, multiple medical institutes enter into partnerships to see the same patients and intervene, predict and prevent at an early stage. In the course of such activities, GE Healthcare eyes the possibility of working together with Japanese device makers and Kansai-based medical companies and cooperating with small and medium-sized enterprises in Higashiosaka city to commercialize their basic technologies. The ultimate goal is to “establish a medical ecosystem.” Mr. Tada explained that “proximity between market needs, technologies and beneficiaries is critical to solving problems. Since it is necessary to modify through trial and error, distance between these three factors results in the requirement to break up our time and money. Their proximity definitely supports cooperation and partnership with Japanese companies.” They also want to build and expand such ecosystem framework across Japan.
“In addition to the partnership with NCVC, we would like to work together with other academic institutions in Japan from 2018 onward and share the results with the world. We want to create something here in Japan which will become a standard for the world,” he asserted.
(Interview in November 2017)
|1892||Establishment of General Electric Company in the United States|
|1903||Establishment of sales office in Tokyo|
|1982||Establishment of Yokogawa Medical System, a joint venture between GE and Yokogawa Electric|
|1994||Company name changed to GE Yokogawa Medical System|
|2009||Company name changed to GE Healthcare Japan|
GE Healthcare Japan (Japanese corporation)
|Business||Development/manufacturing/marketing of medical diagnostic imaging units, sales and maintenance of medical devices and networking for hospital information systems, etc. Import/sales, etc., of biotechnology-related devices and reagents|
|Parent Company||General Electric Company|
|Address||4-7-127 Asahigaoka, Hino-city, Tokyo, 191-8503|
Support from JETRO
- Adopted the JETRO “Subsidy Program for Global Innovation Centers.”