The U.S. dominates in its capacity to produce the latest in medical technology innovation, and is forecast to maintain its global lead, although the nation is expected to lose ground to other countries over the next decade, according to new research.

The United States remains the world leader in its capacity to produce the latest medical technology innovation, but emerging markets led by China, India and Brazil are catching up, according to a new report from PricewaterhouseCoopers LLP (PwC). While the U.S. is expected to maintain its leadership for the foreseeable future, even a narrowing of the gap has implications for the nation’s jobs and exports as well as Americans’ access to advances in medical technology.

The PwC report, titled Medical Technology Innovation Scorecard (free registration required), is based on the findings of a new, multifaceted assessment of the capacity of countries to adapt to the changing nature of innovation.

“While there has been much anecdotal evidence that the U.S. is losing ground as the world’s innovation leader, PwC analyzed the specific factors that contribute to medical technology innovation and quantified them, using 86 different metrics to evaluate how well each nation promotes the factors that advance innovation,” the firm said in an announcement of its findings. “The nine nations evaluated are Brazil, China, France, Germany, India, Israel, Japan, the United Kingdom and the U.S.”

Highlights of the findings include the following:

• On a scale of 1-9 (nine being the highest), the U.S. currently has a total score of 7.1 and is the global leader in medical technology innovation. Due to decades of innovation dominance, the U.S. continues to show the greatest capacity for med tech advances.
• The scores of the other developed nations (the U.K., Germany, Japan and France) are between 4.8 and 5.4. Among the developed countries included in the study, Germany and the U.K. demonstrate the strongest support for innovation and Japan shows the weakest.
• Despite its small size, Israel ranks near the level of the European countries, indicating its strong capacity to foster innovation.
• The emerging markets lag behind the developed ones. China, with its powerful economic growth engine, scores 3.4 on the scale, ranking it higher than India and Brazil, each of which score 2.7.

PwC forecasts the U.S. will continue to lead in med tech innovation, although the nation is expected to lose ground to other countries over the next decade. The innovation scorecard also projects relative declines for Japan, Israel, France, the U.K. and Germany.

China, India and Brazil are likely to see gains over the next decade. China, which has shown the largest improvement in its innovation capacity over the past five years, is forecast to continue to outpace other countries and reach near-parity with the developed nations of Europe by 2020.

“The medical technology field in the U.S. has long benefited from a confluence of social, technical, political and economic forces that came together to create an ecosystem [that] fosters medical technology innovation,” Michael Swanick, U.S. Pharmaceuticals, Medical Device and Life Sciences industry leader at PwC, said in a statement. “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 U.S. and around the world, who find themselves well-positioned to adapt to new modes of innovation,” Swanick continued.

The innovation scorecard indicated that, as the nature of medical technology innovation evolves, the innovation ecosystem itself is moving offshore. While some of the transformation is being driven by changes in the U.S. — such as more expensive, less-predictable FDA regulatory approvals and an increased focus on value and cost-effective solutions in health care — other dynamics are the result of changes abroad — including investment in local academic medical centers, investment in research programs, the return of foreign-educated scientists and doctors to their homelands and advances in mobile health technologies.

Because of these diverse factors, medical technology companies are increasingly going outside the U.S. to seek clinical data, new-product registration and first revenue. Accordingly, U.S. consumers are not always the first to benefit from advances in medical technology and could eventually be among the last to gain access to such advances. Med tech innovators are already going first to market in Europe and, by 2020, will likely move into emerging countries like China, India and Brazil before entering the U.S.

However, the shift away from the U.S. to emerging nations 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,” PwC makes clear.

Related

Vital Signs of the Med Tech Industry

Innovation Moves to New Frontiers

Resources

Medical Technology Innovation Scorecard: The Race for Global Leadership
PricewaterhouseCoopers LLP, January 2011

Emerging Markets are Gaining Ground in Medical Technology Innovation; US Maintains Lead…
PricewaterhouseCoopers LLP, Jan. 18, 2011

The Changing Face of Medical Technology Innovation
by Christopher Wasden and Douglas Mowen
IN VIVO (Elsevier Business Intelligence), Vol 28 No. 8 (September 2010)