Chapter 8: Local upgrading strategies in response to global challenges: the surgical instrument cluster of Tuttlingen, Germany
Gerhard Halder1 1. INTRODUCTION The small town of Tuttlingen in Southern Germany has occupied an unrivalled position in the international surgical instruments industry. It now faces unrelenting price competition from producers in low wage countries and more exacting demands from increasingly powerful customers. Together, these factors are forcing prices to decline and quality to increase. Consequently, Tuttlingen ﬁrms have had to re-assess their position. Pressures in the traditional surgical instrument industry coincide with opportunities to make new products, notably instruments for minimally invasive surgery and surgical implants. This chapter examines if and how the Tuttlingen cluster of surgical instrument providers has responded to these challenges. First, there is a challenge to reduce costs. Public health care systems are under pressure in most industrialized countries, since demographic and disease proﬁles have changed, and new and costly methods have been introduced (Knappe et al., 2000). However, the cost challenge is also supplydriven, since new locations in developing countries entered the market (Nadvi and Halder, 2002). Second, advances in several technological ﬁelds have led to challenges for new product development. New materials and surface treatment including biomedical devices, ﬁbreoptics and laser technology, microsystems technology and the marriage of electronics, computing and information technology with surgery, have resulted in new medical equipment (Grönemeyer, 2000). Responding to these challenges requires substantial upgrading, and as Humphrey and Schmitz (2000) noted, upgrading requires substantial investment. This investment can not be restricted to ﬁnancial assets, nor to machinery and materials. Bell and Albu (1999) have analytically...
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