Declining NIH Investment Threatens U.S. Global Competitiveness

May 17, 2012


WASHINGTON - A new report released this morning shows the United States' leadership in the global life sciences industry is under threat due to a constant dollar decline in NIH biomedical research funding and intensifying global competition from countries such as China, Germany, Singapore, Sweden and the United Kingdom. In recent years, these countries have expanded their financial support for biomedical research and enacted policies to enhance their biomedical innovation ecosystems.

Leadership in Decline: Assessing U.S. International Competitiveness in Biomedical Research was published jointly by the Information Technology & Innovation Foundation (ITIF) and United for Medical Research.

According to the report, many countries are choosing to secure their future well-being by increasing investments in biomedical research - in stark contrast to the United States. China, for example, has identified biotechnology as one of seven key strategic and emerging industries and has pledged to invest $308.5 billion in biotechnology over the next five years. If present trends continue, China's financial commitment to biomedical research will be twice that of the United States' in the next five years (and four times greater as a share of GDP). Other countries are also investing more in biomedical research relative to the sizes of their economies. When it comes to government funding for pharmaceutical industry-performed research, Korea's government provides seven times more funding as a share of GDP than does the United States, while Singapore and Taiwan provide five and three times as much, respectively. 

The report examines a number of key indicators in the life sciences industry, finding that:

  • Growth in high-wage, high-skill jobs in the life sciences sector are flat-lining in the U.S., while employment in other countries, like Germany and France, shows consistent growth;
  • The U.S. share of global biopharmaceutical patents and overall industry output is shrinking, while China's continues to expand in these areas; and
  • China already has more gene sequencing capacity than the entire U.S. and about one-third of total global capacity.

The report showcases the need for Congress to prevent fluctuations in NIH funding that disrupt research progress and lead to uncertainty in capital markets. It also recommends that NIH receive annual baseline funding of no less than 0.25 percent of national GDP to maintain American leadership in this crucial sector of the global economy.

If the United States were to continue down its current path, the country would face diminished employment, lost economic growth and patients would risk missing out on the benefits of innovative new drugs and therapies, according to the report. In the immediate future, the looming 2013 budget sequestration would slash NIH funding by at least 7.8 percent or $2.4 billion, the largest cut in the agency's history.

"What we're seeing in life sciences illustrates why the United States is at risk of falling behind as an innovator. We cannot grow the economy and shrink budget deficits without sustained investments in this critical, cutting-edge sector where the United States still has a strong competitive position," said Robert D. Atkinson, president of ITIF. "We should boost NIH funding to signal to research institutions and businesses that a robust national commitment to biomedical R&D is something they can count on and should invest in for the long term." 

Put simply, the notion that America cannot afford to increase its investment in biomedical research is false; the reality is that America cannot afford not to increase its investment in life sciences research, the report concludes. In fact, the Congressional Budget Office (CBO) estimates that an increase of just 0.1 percent in the GDP growth rate could reduce the budget deficit by as much as $310 billion cumulatively over the next decade. One important way to reduce the budget deficit is to invest in boosting the rates of innovation produced by key sectors such as the life sciences, says the report.

"Over the last sixty years, funding for NIH has enabled and sustained the United States' position as the world leader in the life sciences," said Carrie Wolinetz, president of United for Medical Research. "But, as this new report demonstrates, maintaining our competitive edge in a globalized, 21st century economy will require us to make a renewed and strengthened commitment to public investment in biomedical research. We cannot afford to fall behind our international competitors as they attempt to emulate our past success."


The Information Technology and Innovation Foundation (ITIF) is a Washington, D.C.-based think tank at the cutting edge of designing innovation strategies and technology policies to create economic opportunities and improve quality of life in the United States and around the world. Founded in 2006, ITIF is a 501(c)(3) nonprofit, non-partisan organization that documents the beneficial role technology plays in our lives and provides fact-based analysis and pragmatic ideas for improving technology-driven productivity, boosting competitiveness, and meeting today's global challenges through innovation. For additional information, visit ITIF at or contact Steve Norton at (202) 626-5758 or [email protected].