Xiaoru Fei, Benjamin Shobert, and Joseph Wong have collaborated with the [U.S.] National Bureau of Asian Research to produce a summary of the state of life sciences’ development in China.
Along the way they point out what China may lack in terms of sophistication in this field will be compensated, to some extent, by it’s scale. China is presently the world’s #2 spender on R+D behind the U.S. and by 2020 will almost certainly become the world’s #1. In 2011 they surpassed the U.S. in terms of number of patents applied for and in 2013 1/3 of all patents worldwide were applied for from mainland China.
The good news ends there. The authors conclude, ‘Although its near-term outlook is positive, China’s life science sector does not pose an immediate or even medium-term challenge to existing global biotech leaders.’; but why?
China lacks what the authors call an ‘..innovation ecosystem..’. There aren’t enough researchers coming out of Chinese universities to start their own businesses. Academics are rewarded for published work and patents but there’s no quality control so many patents are uncommercial. There isn’t a well developed private capital market and the dead hand of government sits on too many parts of the development cycle.
The report reminds that moving up the value chain in manufacturing is a fairly straightforward process; but life sciences are fundamentally different in terms of the time required to progress improvement.
My guess, and the authors sort of hint the same, is China will get there; but it’s going to take a while. Successful international incumbents in the space therefore shouldn’t fret about losing positions to Chinese competitors any time soon.
You can access the report in full via the following link Chinese Innovation in the Life Sciences
Happy Sunday.