Over the past few months, Torrey Smith has swallowed 17 power capsules to explore his stomach. This former aeronautical engineer is the co-founder of Endiatx, a Californian start-up that wants to revolutionize digestive endoscopies. Today, these require the introduction of an optical fiber into the esophagus, a procedure that is done in the hospital, under sedation. In the scenario imagined by Endiatx, the patient swallows a pillbot single-use, guided via the doctor’s smartphone, which visualizes the photos taken continuously. Unveiled at the end of May at the Asia Summit on Global Health in Hong Kong, the capsule has a transparent shell that reveals its degree of miniaturization: micromotors with water jets used for movement, camera, diodes for lighting and battery.
If Endiatx is legally American, in practice it is already Asian. All components of the pillbot are manufactured in Shenzhen, the huge manufacturing area located opposite Hong Kong. Funding is provided in part by Verge HealthTech, a Singapore-based venture capital fund. Its director, a Hong Konger trained at Stanford, does not hide that the start-up is also targeting the Asian market. “For us, this new economic entity called the Greater Bay Area is a tremendous opportunity: 86 million inhabitants and a GDP of 1.7 trillion dollars per year, with access to mainland China in the north, and the rest of Asia to the south…”
A new giant agglomeration
Officially called Guangdong-Hong Kong-Macao Greater Bay Area, the GBA is a special economic zone launched by Xi Jinping in 2017. It includes 11 cities including Hong Kong, Macao, the factory towns of Shenzhen and Dongguan, and extends to Canton 120 kilometers to the north. The whole covers 56,000 square kilometres, twice the size of Belgium, but with a GDP more than three times higher, and equivalent to two thirds of that of France.
For tech entrepreneurs and their investors, the GBA has a dual appeal. It is a gateway to mainland China, and, thanks to its geographical position, its five international airports and the weight of the financial center of Hong Kong, it remains connected to the rest of the world. This link is essential in the current climate, where everyone is wondering how far the Chinese government will take control. In Hong Kong, this question elicits evasive answers. We simply know that Beijing is gradually placing trusted people in key positions in the former English colony. “But the Chinese Communist Party will not kill the goose that lays the golden eggs, assures a consultant who has been based in China for several decades. The GBA project is essential for the region, because it carries, in principle, an enormous growth.” Obviously, it will be necessary to adapt and extend business law, as well as the Hong Kong Tax Code – very favorable to individuals and companies – to megalopolises located in mainland China.
Demographic collapse in sight
The medical technology sector will be the big beneficiary of this expansion, and it is preparing for it vigorously. China is facing a major demographic crisis, following the one-child policy introduced in 1979 under Deng Xiaoping. It was lifted in 2016 by Xi Jinping, but as old habits die hard and lifestyles have changed, the birth rate has not taken off and remains below the replacement rate of 2.1 children per woman. Today, each Chinese woman has an average of 1.7 children, compared to 3 in 1979 (and 6 in 1968). The country is aging at high speed. It must count today with almost 200 million people over 65, and demographers predict that by the end of the century China will have only one asset for each retiree, against four today. Currently, 18% of the Chinese population is over 60 years old. The United Nations predicts that this segment will increase from 250 million to 400 million in 2050 with, already, huge disparities, some cities showing a rate of 40% of seniors…
Dr. Gerald Chan, present at the Asia Summit on Global Health, delivers a harsh prognosis. For this scientist who created the American investment fund Morningside, China and the rest of the world are facing the same demographic crisis: “The population is aging, health systems are on the verge of collapse.” He cites three factors: the increase in life expectancy – in China, it has risen from thirty-three years in 1960 to seventy-eight years today – the consecutive surge in chronic diseases linked to age – osteoarthritis, heart disease, dementia, etc. – which absorb three-quarters of health expenditure, and finally the fall in the number of practitioners, whether nurses or doctors. “The health sector, like the others, is experiencing the ‘great resignation'”, he assures, pointing to elite training courses such as Harvard or MIT whose graduates give up the practice of medicine for less stressful, more lucrative careers.
The consequence in China? A drastic rationing of the public healthcare offer. Patients submitted to the Hong Kong health system must wait 3 to 9 years for a hip or knee replacement, when the operation is carried out in three days in a private clinic in Shenzhen, notes Dr. Chan.
For him, the solution involves the massive use of technology to reduce the pressure on the hospital: specialized artificial intelligence for care, basic prescriptions, referral of patients to specialists, and increased development of surgical robotics, in order to reduce hospitalization times.
Technology transfer is in full swing
Half an hour from the city center, the Hong Kong Science Park embodies the conquering pragmatism of this Chinese medtech. The place looks like a little Silicon Valley at the bottom of one of Hong Kong’s bays, with a more coherent architecture and without cars. The Medical Robotics Center (MRC) is a sort of incubator where the most advanced techniques in robotic surgery are invented. On the tables, transparent mannequins are riddled with probes connected to robots, while young doctoral students pilot endoscopes remotely. This assisted surgery is a crucial element to treat better and cheaper. If today changing a heart valve requires opening the rib cage, robots only require tiny incisions to pass instruments, cameras and lighting between the patient’s ribs. The surgeon operates from a console, his gestures are multiplied – ideal for sutures or microscopic resections. And the patient stays three times shorter in the hospital, while recovering faster.
In addition to appealing to neighboring universities, the center is clearly oriented towards cooperation with foreign countries. The MRC has signed agreements with three world-renowned centers in the field of medical robotics: Johns-Hopkins University in Washington, Imperial College in London and the Swiss Federal Institute of Technology in Zurich.
In fact, these agreements are very similar to technology transfers. One of the MRC’s directors, Prof. Samuel Au, trained at MIT, spent eight years at Intuitive Surgical, a world leader in surgical robotics based in California. Asked about relations with Western research, Bryan So, the development manager, admits that intellectual property sharing is frequent on the innovations developed at the Science Park.
“For the moment, the United States is still ahead in surgical robotics, observes a business manager from Shanghai who is taking part in the visit, but the teams here are learning very quickly.” In China, acquisition often rhymes with appropriation, as recalled by the lawyers present at the Asia Summit on Global Hearth. Some draw parallels with Chinese electric cars, which have modeled the Tesla model. Local medtech is inspired by Boston or Zurich. 20 kilometers to the north, the Shenzhen factories are in the starting blocks to take over R&D. And flood the world with cutting-edge equipment of all kinds.