Inviting China and other Emerging Countries to a Medical Technology Innovation State Dinner

by Clive Riddle, January 21, 2011

China and other emerging market economies are breathing down the neck of the United States. Look no further than current headlines such as AP’s China's economic might empowers Hu on return U.S. visit, which included the lavish state dinner Hu was denied in his 2006 visit.

Evidently this applies to Medical Technology Innovation as well. PricewaterhouseCoopers (PwC) has just released their Medical Technology Innovation Scorecard, which assesses nine countries’ capacity and capability for medical technology innovation: Brazil, China, France, Germany, India, Israel, Japan, United Kingdom, and the United States.

According to PwC, the “United States continues to lead the world in its capacity to produce the latest in medical technology innovation, but emerging markets led by China, India and Brazil are catching up, and their market power is shifting innovation resources and activity overseas…While the United States is expected to maintain its leadership for the foreseeable future, even a narrowing of the gap has implications for US jobs, exports and Americans’ access to advances in medical technology.”

Michael Swanick, PwC’s US Pharmaceuticals, Medical Device and Life Sciences industry leader tells us “the medical technology field in the US has long benefited from a confluence of social, technical, political and economic forces that came together to create an ecosystem which fosters medical technology innovation. However, the balance of these forces is beginning to change, driven by global economic dynamics, governmental policies and the actions of individual companies and entrepreneurs. As the innovation ecosystem evolves, it creates challenges for those countries and companies that have ridden this wave – and offers opportunities to those, in the US and around the world, who find themselves well-positioned to adapt to new modes of innovation.”

Some key findings PwC has shared include:

• “On a scale of 1 to 9, with 9 as the highest score, the US currently has a total score of 7.1 and is the global leader in medical technology innovation.  Because of decades of innovation dominance, the US continues to show the greatest capacity for medical technology innovation.”

• “The scores of the other developed nations (the UK, Germany, Japan and France) fall within a tight band of 4.8 to 5.4. Among the developed countries included in this study, Germany and the UK demonstrate the strongest support for innovation and Japan the weakest.”

• “Israel, despite its small size, ranks near the level of the European nations, which indicates its strong capacity to foster innovation.”

• “The emerging markets lag behind developed ones. China, with its powerful economic growth engine, scores 3.4, ranking it higher than India and Brazil, each of which scored 2.7.”

• “Looking to the future, the US is expected to continue to lead in medical technology innovation, but also will lose ground to other countries during the next decade.” 

•  Relative declines are projected “for Japan, Israel, France, the UK and Germany. By contrast, China, India and Brazil are likely to see gains during the coming decade.”

• “China, which has shown the largest improvement in its medical technology innovative capacity during the past five years, is expected to continue to outpace other countries and reach near-parity with the developed nations of Europe by 2020.”

But PwC tells U.S. companies that all is not lost. “The shift away from the US to nations such as China, India and Brazil is not necessarily preordained. Factors related to intellectual property protection, difficulty of doing business in some emerging countries and weak local supplier networks could make these markets less attractive, despite their size, and could hinder these nations’ effort to assume innovation leadership.”