New research suggests that as the United States’ global share of research and development (R&D) spending in the biomedical sciences falls, Asia will be set to take its place as the world leader in biomedical R&D.
The results of a study that will appear in the New England Journal of Medicine later today find that the United States global share of biomedical R&D fell from 51 percent in 2007 to 45 percent in 2012, while Asia’s share increased from 18 to 24 percent during the same period. European investment was found to remain constant at 29 percent.
The study is based upon extensive research conducted by industry experts, academics and economists in the biomedical and pharmaceutical industries.
“The United States has long been a world leader in driving research and development in the biomedical science. It’s important to maintain that leadership role because biomedical research has a number of long term downstream economic benefits, especially around job creation,” said study author Reshma Jagsi, M.D., D. Phil., and associates professor of radiation oncology at the University of Michigan Health System.
Adjusting for inflation, U.S. biomedical R&D spending fell from US$ 131 billion to US$119 billion between 2007 and 2012, while Japan and China increased spending by US$9 billion and US$6.4 billion respectively.
According to the report, the United States’ decline in biomedical R&D spending was driven almost entirely by reduced private industry investment rather than public sector funding cuts.
According to Jagsi, companies in the biomedical sciences are finding themselves increasingly drawn to Asia as a base for expanding their R&D operations due to fewer regulations, lower labor costs and government subsidies.
At the inaugural Technology Transfer Summit Global Initiative in Singapore last month, Chairman Lim Chuan Poh of the Singaporean Agency for Science, Technology and Research discussed Asia’s growing role in research and innovation.
“The combined effects of lower production and research costs, availability of a sizeable and highly trained talent pool, and access to large and previously untapped markets are to make Asia a very compelling location for the whole spectrum of activities from research to innovation to production for the market and the rest of the world,” Lim said.
According to Lim, the commitment of many Asian governments to increase their innovation capabilities and capacities have led to rapid investment and expansion of R&D projects and increased participation in patent activity across Asia.
At the current rate, Asia will be the largest pharmaceutical market in the world with total gross domestic expenditure on R&D predicted to exceed combined US and European spending by a factor of two by 2017, according to estimates by the Organization for Economic Cooperation and Development (OECD).
While South Korea, Japan and Singapore currently lead Asia’s high-tech and biomedical R&D market, China is also seeking to transform itself from a manufacturing base to an innovation hub in the near future. Investing a cumulative US$160 billion in biomedicine, China is poised to take Japan’s place as the second-largest spender on R&D with significant increases in pharmaceutical-related patent filings and 15 new drug innovation centers and clusters in five major provinces.
For the time being, however, Singapore appears set to remain one of Asia’s most important hubs for R&D, and the gateway to establishing operations throughout ASEAN.
“The extensive healthcare and regulatory expertise, strong intellectual property regime and the ability to attract top-notch international talent are unique value propositions that make [Singapore] attractive as a launch pad to the region,” Lim said.
“After a decade of dedicated investment in biomedical science R&D, we are at an inflection point where we are starting to reap the benefits. Singapore also embraces a much more open innovation approach through fostering public-private partnerships with both MNCs and local companies. This is both our recognition of constraint of a small population and turning this constraint on its head by also seeking partners from around the world.
“We believe that Singapore can be a valuable partner for any company who wants to access this market through research and innovation. Our value proposition lies in our excellent R&D, our access to an internationally rich and diverse talent pool, our ability to execute well and our approach to forming public-private partnerships under an open innovation framework,” Lim added.
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