Post-pandemic shifts in medical electronics GVCs and changing value dynamics amidst new digitalisation: An analysis based on Indian subsidiaries of EU-based corporations

Realignments of global value chains (GVCs) are occurring at a time when the technological dynamics in manufacturing industries, including in healthcare-related industries like medical electronics, is undergoing significant changes due to the wave of new digitalisation. This study examines postpandemic changes in global medical electronics value chains through industry-level trade analysis and the GVC participation of selected Indian subsidiaries of medical electronics companies based in the European Union (EU), focusing on the implications of digitalisation and data-centric strategies for capturing value. The study finds that post-COVID-19 realignments in the industry proceeded gradually until 2023. Meanwhile, digitalisation is leading to a gradual expansion in operations by EU-based medical device multinational corporations (MNCs) in India. This is shown to be due to the increased role of software for product design and process optimisation in digitalising value chains. Leading EU-based medical device MNCs are found to be leveraging India's strengths in software design and data-analytics capabilities for co-developing their software-embedded 'health systems' and 'solutions'. However, even when software and services exports from India went up with increasing digitalisation, the shares of the EU-based lead firm groups in total revenue of the Indian subsidiaries were found to increase. This occurred through imports of software-embedded medical devices and equipment along with imports of higher-valued proprietary software platforms, health systems and the like, which are patented and marketed by the EU-based lead firms or their foreign subsidiaries back to India. It is stressed that, just like Big Tech, medical device lead firms' software platforms, when embedded in their proprietary devices and health systems, enable them de facto 'ownership' of data. Leveraging vast amounts of personal and non-personal data through different strategies enables them to keep refining and advancing the dataanalytics algorithms and software platforms embedded in their health solutions and medical devices. Given the resultant monopolisation of data and intelligence enabled by the self-reinforcing first-mover advantages of these lead firms, we highlight the need for the EU to develop a rights-based regime for data in order to ensure greater competition and innovation as well as more equitable development across the various countries participating in medical device GVCs.