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Life sciences competitiveness indicators 2023 report released

By July 21, 2023No Comments

The ninth annual life sciences competitiveness indicators (LSCIs) report, which details the UK’s life sciences sector’s performance and our position in global rankings. Most of the data in the report covers the pandemic years of 2020 – 2022 and therefore offers a helpful indicator of our industry’s trajectory. The picture the report paints, however, is far from optimal.

The report acknowledges the Government’s generous health R&D budget in 2020, which stands at £3.2 billion, behind only the USA when compared with comparator countries when adjusted for GDP. But in reality, the UK only ranks middlingly for R&D performed by Government, higher education and private non-profit sectors.

One of the most significant datapoints is the UK’s significantly low export value for medical technology products in 2021, ranking below all comparator nations including Mexico, Ireland and Singapore. This is not surprising news, given the UK has remained either in last or penultimate place for the last decade. However, slow growth in value has occurred each year since 2016, with a 16% increase between 2020 – 2021.

Moreover, the value of UK imports of medical technology products declined in 2021 despite most other comparator nations noting increases. This was the first year that the UK saw a decline in imports since 2016, with a 9% reduction compared to 2020. In this metric, the UK remains in seventh place among comparator countries, as it has done since 2010, ahead of only Canada, Italy and Mexico.

Despite a downward trend in life science patents, which have declined slightly from 0.2 applications per thousand population in 2016 to 0.14 in 2020, this still represents the fourth best figures among comparator countries, up from sixth place in 2016. Clearly this is evidence of a wider, global malaise.

Statistics for non-in vitro diagnostics are globally abysmal, with the UK possessing the lowest number of MRI units, CT and PET scanners per million population in 2021 amongst comparator countries and recording the fewest number of diagnostics exams per 1,000 population in 2020, with only Finland trailing. For context, using the same metric, Austria and Belgium carry out more than double the tests that the UK does.

In more positive news, employment in medical technology stood at 43,000 in 2020, ensuring the UK retained its fourth place among 12 comparator nations in Europe, having occupied this position since 2010. The UK remains behind France and Italy, with all nations lagging significantly behind Germany who employ roughly five times the amount as the UK. It should be noted that these figures only apply to the manufacture of irradiation, electromedical and electrotherapeutic equipment and medical and dental instruments and supplies.

Levels of foreign direct investment (FDI) into the UK life sciences industry has fluctuated wildly between 2011 – 2022. While the UK was in a healthy position in this regard in 2021, FDI plummeted in 2022, recording a 37% drop in that timeframe. In the comparator rankings, this represents a fall from second place behind only the USA to ninth place. The Government has suggested this huge fall could be due to investments prompted by the pandemic tailing off.

Equity finance raised by the UK life sciences industry also fell in 2022, decreasing by 54% compared to 2021. However, as previously noted, this significant decline was also replicated among most other comparator countries and is most likely explained by the resumption of post-pandemic, ‘normal’ conditions globally. For the same reason, UK IPOs in life sciences also fell dramatically between 2021 – 2022, with the UK recording its lowest IPO yield since 2018.

In a concerning turn of events, the percentage of graduates from tertiary education graduating from natural sciences, mathematics, and statistics programmes also experienced a significant drop between 2019 – 2020. While the UK ranks very well internationally for our number of life science graduates, this figure fell from 13.4% in 2019 to 9.2% in 2020. This development is ameliorated somewhat by a 25% increase in apprenticeships in 2021/22 compared to 2020/21 showing a healthy growth in the sector’s skill base. Almost a third of these apprenticeships were equivalent to a bachelor’s or master’s degree.