South Korea – The ‘Art of Procurement and the NHS’

 

I was recently asked to speak on the ‘Art of Procurement and the NHS’ at a Conference linked to South Korea’s largest Medtech exhibition and a fascinating experience it was.

The event was held at the COEX centre South Korea’s largest Exhibition and Conference centre in the Gangnam district of Seoul. Yes, that Gangnam, made famous by Psy and his annoyingly catchy ‘Gangnam style’ song which you couldn’t avoid a few years ago. The song is celebrated outside the centre by a prominent sculpture, I resisted striking a pose.

In the morning before my presentation I was asked to attend a ‘meet the buyer’ event. I was sat at a desk with a translator in a vast hall populated with ‘foreign’ buyers from all over the world. I had ‘Desk 1’ which initially bolstered my ego until I realised it was probably not in order of importance but more likely alphabetical or just entirely random.

I met a series of companies ranging from major imaging suppliers to what would be described in the UK as ‘alternative therapies’ although considered more mainstream in South Korea and Asia generally. In common with most ‘Meet the buyer’ events the main reason for any company attending is to ask the question ‘how can I sell to … ‘ and in my case this meant  ‘how can I sell to the NHS’. I hope all the suppliers I saw went away knowing a bit more about how the NHS buys, where their products might fit and with an idea of the right contacts to make, be that direct or with distributors. One company seemed a bit disappointed that I was not going to be placing a massive order right there and then, too many sales courses I fear, ‘always closing’.

What did I learn from them? South Korea spend 4.23% of GDP on Research and Development, until very recently the world leader in this benchmark, as a comparison the EU spends 1.95%. This focus on innovation was reflected in everything I saw, both in the 1:1 meetings and in the vast exhibition. They are an innovative nation with a focus on the new and cutting edge and this is not just in the major conglomerates which dominate the corporate landscape; Hyundai, Daewoo, LG, Samsung but also in the numerous start-ups with a great idea and a determination to succeed.

As an economy South Korea have suffered in the global downturn. They have a huge reliance on exports, 46% of all production is exported. This compares with China’s 22% and Japan’s 18%. South Korea are also facing threats from powerful competitors particularly China who are eating away at the core transport and electronics markets.

Is the focus on R&D and innovation enough to see South Korea continue to prosper, they are a small country but the 11th largest economy in the world? I am no economist and certainly cannot foresee the future but the general impression I took from my time there was of a people who understand the route to prosperity as continuously delivering better and better products and services in new and innovative ways.

How does this fit with the NHS and NHS Procurement?   We all know the current financial problems in the NHS and the drive for greater efficiency and there is, and should be, a mixture of category related strategies focused on the problem. There is a danger however that we focus solely on the ‘more of the same, for less’ solution, driving down price rather than cost. We should ensure we don’t close out the ‘doing it better’ solution, saving cost across the whole economy with new and better products and services. There are innovative solutions designed and manufactured in the UK as well as globally and they come predominantly from start-ups, good ones often snapped up quickly by the major corporations.  ‘New and innovative’ is often a harder and potentially longer route but looking ‘up and out’ and ‘doing it differently’ is the only way to create the longer term radical changes required in NHS efficiency.

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