Medtronic, the world’s leading medical device producer, opened its innovation center in Shanghai in August 2012, underscoring the United States headquartered company’s commitment to China, one of its fastest growing overseas markets.

Covering an area of 17,000 square meters, the facility in the Pudong New Area is Medtronic’s first multi-business research and development facility outside the US and Europe. It is home to a wide range of research, development and new product innovation projects from across Medtronic’s eight business units, including cardiovascular therapies, spine products and diabetes-related medical devices.

Starting from ground zero, it has quickly taken shape, growing into a team of more than 20 people in 18 months. The center launched its first product — a titanium cranial closure system used for treatment of skull damage — in November.

Behind this progress is Zhou Zhengrong, head of the Medtronic Shanghai Innovation Center, who has positioned the center as “a start-up team in a big company.”

“To be successful in R&D, we should be as passionate as entrepreneurs,” Zhou said.

Zhou shared the center’s innovation processes and his views on China’s R&D environment with Shanghai Daily.

Q: How does your team create innovation in China?

A: Our team creates value in many ways. In the short term, we leverage our team’s areas of technical expertise to ensure fully compliant and rapid market entry and the adoption of Medtronic’s imported products so that Chinese patients can benefit from these world-class innovative therapies at the earliest possible time.

In fact, we invest to develop in-vivo training models so our customers can gain the experience they desire to feel confident using Medtronic’s products on patients, while we are getting first-hand feedback for further product innovation.

In the long run, we also have a significant portfolio of localization projects that include value engineered products and market appropriate, breakthrough new technologies and therapies for local customers.

Value engineering means adapting global products to better serve the needs of Chinese customers by addressing affordability and accessibility challenges, while market appropriate products and therapies are intended to be designed specifically with China’s needs as the first priority.

Q: Which group of consumers are you targeting in China?

A: Locally-developed products mainly target the value segment — which refers to doctors and patients in China’s lower-tier cities and rural areas that are home to the bulk of the Chinese population. This group of customers is more price-sensitive than others. We aim to bring higher-quality and lower-price solutions than competitors to these customers.

The Ti-Hot Cranial Closure System is our first product designed for the value segment of the Chinese healthcare industry. It’s used in surgeries to treat patients with skull damage, defects and post-neurosurgery closure. Ti-Hot development prioritized the needs of hospitals in China’s second and third tier cities.

Q: What’s special about your innovation process?

A: The first step of our innovation model is to identify and understand customers’ explicit wants and needs.

After we understand which needs are unmet and addressable, we move to ideation, the category that includes brainstorming; however, there are many more effective ways to create new concepts.

Once we have ideas we think are viable, we produce prototypes. At first these are rough and fast and then — once we’re confident we’re on the right track — we use more refined methods like computer modeling and 3D printing.

This process lets us quickly transfer customer needs into engineering language. And then the prototypes will go through constant testing and validation to ensure the safety and effectiveness of end products.

What makes our innovation team special is that we’re customer-oriented rather than technology-driven. For the Medtronic Shanghai Innovation Center, the voice of customers is the foundation of product development.

In our laboratory, we maintain global standards of excellence. However, we strive to ensure that the technology performance is strongly connected to customers’ needs, rather than simply pushing on the limits of technology for technology’s sake.

Our commitment is to fulfill market needs with the most appropriate technology, which may be developed by Medtronic or our partners, in order to provide better economic value for customers.

Another uncommon trait is that our innovation team also engages in the commercialization process, which is unusual among research and development centers.

The commercialization refers to the process bringing our inventions from the lab to the market, including technical improvement for mass production, regulatory registration, the building of supply chain, etc.

Letting engineers who are familiar with products drive the commercialization process, which greatly shortens the development cycle.

Q: How do you explore customer demand?

A: We gather insights in many ways. Some of the common methods include in-depth, on-site interviews and focus groups. We engage with medical professionals and students in many formats. We also invite sales people and marketing professionals to assist product development.

Moreover, observational techniques such as ethnographic research are also included in our market research toolkit to detect implied needs.

For example, we observe how patients interact with our products in their natural environment or we record the process involving a doctor in a surgery in order to find gaps in product performance and areas for potential improvement.

Q: How do you see China’s R&D environment?

A: It is an exciting time for medical device R&D in China because it is a fast-growing area.

There are lots of companies focused on competing better in China. An interesting point; there has been much concern about the intellectual property protection here. However, Chinese authorities are strengthening protection for IP rights and imposing stricter enforcement of IP laws in an effort to attract foreign investors.

In terms of human resources, the R&D talent pool for the medical device industry still lags behind the chemical and pharmaceutical industries.

Part of the reason is that there were not many R&D centers of multinational medical device companies until two years ago — much later than those of chemical and pharmaceutical industries.

At the same time, medical device R&D has higher requirements regarding expertise and training of employees since many medical devices involve interdisciplinary, system-level engineering. We need people who combine technical expertise with integrative roles, like product development and project management.

Besides medical technology areas, we have been recruiting talents from various industries like information technology, machinery, automobiles and aviation.

Executing on the Medtronic Shanghai Innovation Center’s roadmap for growth will require a lot of top talent, and we are always on the lookout for the next innovator to join the team.