Life sciences competitiveness indicators 2024: life sciences ecosystem
Published 11 July 2024
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1. Life science ecosystem
The Life Sciences Vision, published in July 2021, set out the UK government, NHS and UK Life Sciences Sector’s shared ambition to make the UK a Life Science Superpower. The Life Sciences Vision sets out our 10-year strategy, co-developed between government, life science companies, medical research charities and the NHS, to build on these successes, the underlying excellence of the UK science base, and scale and potential of the NHS.
The life science ecosystem is a set of interacting elements impacting the life science ‘value chain’, which comprises the activities carried out by the key players in the sector to achieve the twin goals of improving UK health outcomes and achieving economic growth.
Metrics within the LSCIs have been aligned to the elements of the life science ecosystem they intend to measure. The ecosystem defines the necessary components to achieving a competitive Life Sciences sector, and over time will monitor progress towards achieving the high-level ambitions set out in the Life Sciences Vision.
Figure 1 provides a schematic representation of the ecosystem, with an explanation of the components below.
Figure 1: UK life science ecosystem
UK life science ecosystem
The centre of the schematic highlights the 2 most important goals of the life science industry:
- Patient outcomes: to research, develop and utilise the tools required to tackle the leading causes of morbidity and mortality in the UK, and improve the health of the nation.
- Economic growth: a competitive life science sector bolsters economic growth through job creation, increased innovation and health resilience.
The value chain (dark blue) surrounds the central goal of the schematic and describes the set of activities that lead to value creation in the life science sector.
Elements (brown, yellow, green, grey) around the outside are the key factors which impact this value chain. Some have effects on every stage of the value chain, while others are linked to just one stage. Within each element are some key sub-elements
Attached to each element are the key players involved, of which there are up to 4:
- Industry
- Academia (Universities & Charities)
- Healthcare System
- Regulators
2. Life science competitiveness indicators
The sections below set out more details on the importance of monitoring each element of the ecosystem and how they are measured in the LSCI publication. Not all elements currently have representative metrics in the LSCIs due to international data availability, but the intention is to expand the report to cover more elements in future.
2.1 Research environment
Why it is relevant to measure
Research takes place in each of the 4 sectors of the economy: government, higher education, private non-profit organisations and businesses, and drives innovation of new technologies that save lives and bring economic growth.
A strong research environment is dependent on high quality academic institutions, collaboration between the 4 sectors of the economy, and the ease with which research such as clinical trials can be conducted. Clustering and collaboration between the sectors can accelerate innovation.
Clinical trials are a critical component of R&D to establish evidence-based practice and deliver benefits to patients. Access to a diverse pool of patients with the ability to conduct trials at pace and scale improves the quality and quantity of research output.
Strong academic institutions and prestigious life sciences companies draw in the world’s best talent and conduct cutting-edge research. Analysing citations data can give an indication of how influential a country’s publications are and how much impact they have globally, whilst data on patent applications can indicate when and where inventive activity took place.
Research environment metrics included in this report
- Government budget allocations for health R&D as a percentage of GDP
- Gross domestic expenditure on medical and health sciences R&D performed by government as a percentage of GDP
- Gross domestic expenditure on R&D performed by the private non-profit sector as a percentage of GDP
- Gross domestic expenditure on pharmaceutical R&D performed by business enterprises (UK only) as a percentage of GDP
- Gross domestic expenditure on medical and health sciences R&D performed by the higher education sector as a percentage of GDP
- Percentage share of patients recruited to a subset of commercial global studies
- Median time from clinical trial application to a regulatory authority and the first patient receiving first the first dose for a subset of commercial trials
- Share of life sciences academic citations
- Proportion of each country’s medical sciences publications which are amongst the most highly cited (top 1%) globally.
- Life science patent applications per capita
2.2 Domestic market
Why it is relevant to measure
The domestic market consists of the individual health needs of a country which should drive targeted research to address the bespoke challenges faced.
Once a new treatment has been developed and approved by a regulator, the quicker it is adopted and rolled out by the health system, the quicker the benefits can be delivered to patients.
It is important to measure whether patients are accessing treatments, including through uptake of innovative medicines at pace.
In many cases there is no consensus as to what the ideal level of uptake should be. As such, high or low usage should not be interpreted as good or bad performance in itself. Nonetheless, uptake with respect to an international benchmark may be used to understand how adoption of innovative products changes in the years following their introduction.
Domestic market metrics included in this report
- Percentage of new medicines made available
- Median time to availability for new medicines
- Per capita uptake of new medicines – NICE approved (relative uptake against average comparator uptake 5 years after launch)
- Number of CT scanners, MRI units and PET scanners per million population
- Number of CT MRI and PET exams per thousand population
2.3 Production environment
Why it is relevant to measure
Manufacturing of medicines and medical technologies can support economic growth by creating high-value jobs in life sciences. It can also bolster health resilience in a country by providing the capacity and capability needed to manufacture a greater proportion of medicines and medical technology products in the country.
The production environment is crucial to monitor as companies can base decisions on where to manufacture medicines and medical technologies can depend on access to appropriately skilled labour.
Production environment metrics included in this report
- Number of people employed in manufacture of basic pharmaceuticals and pharmaceutical preparations
- Number of people employed in manufacture of medical technology products
- Gross value added for pharmaceutical manufacturing
2.4 International collaboration
Why it is relevant to measure
Participating in international trade enables businesses to expand into international markets more quickly, to increase profits (through access to cheaper materials), and to benefit from the sharing of domestic and overseas specialisms/expertise.
Trade can play an important role in promoting economic growth, and it can also stimulate increases in productivity through progressively greater specialisation in both exporting and importing activities[footnote 1].
The benefits are also felt by consumers, who see the effects of international trade through lower costs and increased choice. Increased trade can also lead to the creation of jobs and increased wages (through increased productivity)[footnote 2].
International collaboration metrics included in this report
- Global exports of pharmaceutical products
- Global exports of medical technology products
- Global imports of pharmaceutical products
- Global imports of medical technology products
2.5 Investment environment
Why it is relevant to measure
Life science companies are particularly reliant on funding to scale up & operate given the development of new medicines is research intensive and can take 10-15 years.
When deciding where to go public, a company will assess the strength of various countries’ public markets, including considerations of liquidity and valuations.
FDI is considered to deliver economic benefits by improving economic competitiveness and enabling improvements in productivity for both new and existing firms. FDI can create an important positive contribution to an economy by generating employment, increasing tax revenue, and by providing external resources such as capital, technology and managerial know-how that can substantially aid productivity and economic growth.
Investment environment metrics included in this report
- Life sciences inward foreign direct investment projects
- Life sciences inward foreign direct investment – estimated capital expenditure
- Share of global life science Initial Public Offerings (IPOs)
- Amount raised in global life sciences Initial Public Offerings (IPOs) (where known)
- Equity finance raised by life science companies
2.6 Access to skilled labour
Why it is relevant to measure
The growth of a sector is dependent on businesses having access to the right skilled labour. In order for countries to maintain a competitive edge in life sciences, they need to have a workforce made up of individuals with statistical literacy, digital/computational and leadership skills, as well as a range of other cross-disciplinary and transferable skills.
Looking at the proportion of graduates who graduate from natural sciences, mathematics and statistics programmes is a way of measuring upcoming talent and the potential skills base for the life sciences sector.
Access to skilled labour metric included in this report
- Percentage of graduates from tertiary education graduating from natural sciences, mathematics, and statistics programmes
2.7 Regulatory environment
Why it is relevant to measure
Having a regulatory environment that acts as a driver of investment and innovation is vital for the ecosystem.
Having clear and accessible information around regulation and supporting businesses and researchers to understand them is an important role of the regulators.
Effective regulations minimise business costs and maximise incentives to innovate whilst not forgoing patient safety. An innovative regulatory system ensures patients can access innovative treatments and transformative technologies.
Regulatory environment metrics included in this report
Not currently measured in the LSCIs
2.8 Information environment
Why it is relevant to measure
Health data facilitates medical research and diagnostics. This can enable the development of treatments and earlier detection of disease.
A rich supply of health data can allow for analysis of key health indicators, including genomics, to diagnose disease earlier when it is easier and less expensive to treat.
High quality data and associated architecture can bring together datasets to allow more detailed research, development of artificial intelligence and support the development of health technologies.
Information environment metrics included in this report
Not currently measured in the LSCIs.