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Information and communication technology (ICT) diffusion in biopharmaceuticals is minimal, with only 0.5-1% value added. New metrics are needed to track the digitalization of healthcare and life sciences.

Keywords:
Global value chainsTrade in Added Value (TiVa) databasedigitalizationpharmaceuticals and chemicals

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Area of Science:

  • Biopharmaceutical Industry
  • Health Informatics
  • Digital Health

Background:

  • The biopharmaceutical industry is undergoing rapid digitalization, driven by precision medicine and evolving healthcare paradigms.
  • Measuring the integration and value contribution of Information and Communication Technology (ICT) within the life sciences sector is crucial.
  • Understanding the interplay between the life science and IT industries is essential for assessing the changing value systems.

Purpose of the Study:

  • To analyze the diffusion and value contribution of ICT within the global value chain (GVC) of the biopharmaceutical industry.
  • To assess the extent to which ICT is integrated into chemical and pharmaceutical products and processes.
  • To explore the economic implications of ICT adoption, including connectivity costs, in key global markets.

Main Methods:

  • Utilized the Trade in Value Added (TiVa) dataset from the GVC-OECD project to analyze global value chains.
  • Selected key indicators including foreign value-added share of gross exports and ICT imports in the chemical/pharmaceutical sector.
  • Analyzed trade data for the chemical (including pharmaceuticals) and ICT industries across the USA, Switzerland, France, Germany, UK, and Japan.

Main Results:

  • Information and Communication Technology (ICT) accounts for only 0.5% to 1% of the value added in final chemical and pharmaceutical products.
  • The USA exhibits higher connectivity service prices compared to Japan and Germany, potentially reflecting its open innovation model.
  • Analysis highlights the need for comprehensive data beyond traditional trade metrics to capture the full digital economy.

Conclusions:

  • The rapid digitalization of life sciences necessitates the development of novel measurement approaches.
  • Existing datasets like TiVa are valuable for specific IT components but insufficient for the entire digital economy.
  • The global value chain concept, while useful, requires supplementary data on connectivity and ICT investments (e.g., EU KLEMS) for a complete picture in the biopharmaceutical sector.