Tijuana claims title of North American medical device capital

Ask an industry watcher to name the North American medical device capital and you might hear Minneapolis/Saint Paul or perhaps up-and-comer Costa Rica, but the real answer in on the U.S.'s southern border: Tijuana. The Tijuana Economic Development Council (EDC) notes in a new white paper that its local medical device sector has seen annual employment growth of 8.7% since 2004, pushing the total number of its residents employed by the industry to more than 30,000 workers. These employees are concentrated in 40 medical manufacturing companies, including some well-known names like Care Fusion, Medtronic, DJO Global, and GreatBatch.

Manufacturing employees, Tijuana Mexico

The economic council notes that Tijuana has experienced base of more than 180,000 manufacturing workers. The EDC reports that the majority of the local medical device manufacturing companies operate under FDA or CE marking regulatory requirements, with fully 90% of all manufacturing firms with 250-plus employees certified under ISO 13485 or ISO 9000 standards.

Medical devices made in Tijuana include electronic thermometers, hemodialysis components, infusion pumps, IV administration sets, lenses, nebulizers, orthopedic braces, oximeters, pacemakers, stents, surgical kits and equipment, urinary catheters, wheelchairs, and x-ray film marking systems, among others.

According to 2008 data from the EDC, Tijuana's biomedical device industry employs more people (27,280) than the local aerospace-defense (20,426) and automotive (17,542) clusters.

The Mexican states of Nuevo León (9696 new jobs) and Baja California (3,590 new jobs) were the top job-creating states in the northern part of Mexico during May 2011. Nuevo León's 1,214,099 registered employees for the month give it the largest workforce of Northern Mexico. In addition to being adjacent to San Diego on the U.S./Mexico border, the EDC also reports that Tijuana is within five hours of flying time to anywhere in the U.S., with wages that are anywhere from 40-80% lower than American pay rates.

Backing up Tijuana's claim, the Crossborder Group looked at medical device cluster employment data from the U.S. Bureau of Labor Statistics for key U.S. counties and states, along with late-2010 employment data from 38 companies in Tijuana and regional data from Canada. According to its findings, Tijuana's medical device manufacturing employment was indeed the largest in North America, topping Minneapolis-St. Paul's metro area by more than 7000 employees.

NAFTA's impact

Marking the 10-year anniversary of the North American Free Trade Agreement (NAFTA), the U.S. Department of Commerce's International Trade Division noted that the first decade of the landmark trade deal had a tremendous impact for the industry on both sides of the border. In 2002, U.S. firms exported a total of $26.6 billion in medical equipment, with $2.7 billion sent to Canada and $1.7 billion to Mexico, with the NAFTA partners accounting for 16% of all U.S. medical equipment exports. Over the first 10 years of the trade deal, U.S. companies boosted exports of medical equipment to Mexico by 143%, so that by 2002, they captured 68% of the country's medical imports.

The report also noted the impact on Mexican manufacturing of medical devices.

NAFTA has improved the stability of the regulatory environment in Mexico and has encouraged U.S. investment in Mexican assembly plants and production sharing. NAFTA allowed U.S. companies to own Mexican assembly plants. Increased investment has led to cost-cutting production techniques and facilitated the introduction of new technologies in U.S. industry, and the introduction of new U.S. products in Mexico.

Mexico and the U.S. are inextricably linked via trade in all goods and services. In 2010, the U.S. Census Bureau showed that Mexico accounted for 12.3% of all of America's foreign trade, trailing only Canada (16.5%) and China (14.3%).