Letting China Take Over The World

March 2, 2005
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GRAND RAPIDS — The health-care industry accounts for 15 percent of today’s economy. Already nearly double the 1970 GNP representation, that percentage could double in the next 20 years, according to Steven Krakoff, administrative director of the Ohio State University Medical Center.

As that happens, he said, there will likely be no aspect of the economy left untouched by the evolving health-care industry.

“With the pervasive nature of health care across all industries, I think it’s safe to say that whether you’re in advertising or manufacturing, if you provide some other service no matter what it is, you are going to be affected by the fundamental changes in health-care values and behaviors in our society,” he said.

“I think it’s not an exaggeration to equate this to the fundamental change that happened with the plague in Europe.”

The fact that smoking, obesity and chronic illness consume an enormous amount of the nation’s resources has become well known. The strain on employers to provide health care has been likewise publicized, as has the looming threat of an aging population.

Health care has become a concern for society across the board, and Krakoff was in town to talk to the American Marketing Association-West Michigan recently to help identify ways that businesses can take advantage of that evolution.

Nearly every segment of product design and marketing has already been affected, he said.

Products from automobiles and helmets to snow shovels and step ladders are being designed and sold with safety in mind. The particle-free hospital environment has worked its way into commercial construction through green building. Public areas are now designed so that nothing has to be touched, especially when using a bathroom.

Alongside growing nutrition and pharmaceutical markets, businesses are trying harder and harder to connect their products to a healthy lifestyle — even beer and candy bars.

“With that we should expect to see a lot more scrutiny before associating a product with good health,” Krakoff said.

The flip side of this strategy is that marketers now must engage and respect a nation with diverse health conditions. Both design and marketing efforts have to be aware of individuals with physical and mental handicaps.

Likewise, formerly taboo subjects have become fair game in the general environment: erectile dysfunction, incontinence, feminine hygiene, herpes.

“We’re starting to sanction those who don’t acknowledge the fact that there are people with physical and mental disabilities,” Krakoff said. “The other side is that there really is no limit to what we can talk about on television now. It’s OK to sell these products in the general environment.”

Krakoff also said to be aware of new market opportunities as they arise. One such opportunity is oral health. Only recently, studies have begun connecting periodontal inflammations with cardiovascular disease. The implications are that brushing and flossing can help prevent heart disease, an entirely new selling point for the dental industry.

Another piece of advice Krakoff offered concerned the growing problems of health-care costs and access. As those place more of a strain on the average family, they will have less to spend on capital expenditures like washers, dryers and automobiles. This will put more price pressure on manufacturers.

Connected to that is the growing economic threat of China. Recently, he said, the Chinese have captured much of the Asian motorcycle market with an inexpensive bike called Honga.

“The Chinese are tremendously resourceful not just in copying the products of the western world but, because of their sheer size, the speed (with which) they are able to do so,” Krakoff said. “Being from Michigan, it strikes home that it won’t be long until the Chinese introduce automobiles and motorcycles in this country. If we can’t control the health-care costs, we will be supplanted by the Chinese as the world’s foremost economy.”

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