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, according to a report from PricewaterhouseCoopers (PwC). Moreover, their market power is shifting innovation resources and activity overseas, according to the PwC report “Medical Technology Innovation Scorecard: The race for global leadership.” 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.

The report is based on the findings of the PwC Medical Technology Innovation Scorecard, 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 US 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 nine nations evaluated are Brazil, China, France, Germany, India, Israel, Japan, the United Kingdom and the United States. The online report includes an interactive graphic to view the scores and data for each country and to compare any two of the nine countries.

In addition to providing a current view of innovative capacity and capability in these countries, the Innovation Scorecard looked at the past five years to gain a historical perspective and projected into the future to present the outlook for medical technology innovation leadership over the next decade to 2020.

A top-line view of current results of the Innovation Scorecard reveals the following highlights:
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.

According to PwC, 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. The Innovation Scorecard also projects relative declines 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.

"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," says Michael Swanick, US Pharmaceuticals, Medical Device and Life Sciences Industry Leader, PwC. "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."

The Innovation Scorecard examined where each of the nine countries evaluated stands in relation to five broad "pillars" that have supported medical technology innovation in the US for the past several decades: Powerful financial incentives, such as reimbursements for adoption of new technologies; resources for innovation, such as academic medical centers; a supportive regulatory system; demanding and price-insensitive patients; and a supportive investment community of venture capitalists and other investors.

Continue on next page