Economic footprint of our industry

Our industry makes major contributions to the prosperity of the world economy. It is a robust sector that has been one of the pillars of industrialized economies and is also increasingly recognized as an important sector in the developing world as well. It contributes to employment (direct, indirect, and induced), trade, research and development (R&D) investments, and technological capacity building. It is also a necessary foundation for the existence of the generic industry.

The economic footprint of our industry is most visible in the form of investments in manufacturing and R&D. Globally, the production value of the biopharma industry amounted to USD 1.2 trillion in 2018, more than USD 200 billion higher than in 2014. The innovative biopharmaceutical industry is estimated to have invested USD 179 billion globally on biopharmaceutical R&D in 2018.

In 2017, the biopharmaceutical industry directly added roughly the GDP of the Netherlands (USD 532 billion) to the world economy. In addition to the immediate economic effects it directly generates, industry also supported the global GDP with an additional USD 791 billion triggered by its consumption of intermediate inputs from other sectors through its global value chains. Example of these intermediates include chemical compounds and active ingredients used in other industries. Moreover, the private consumption triggered by directly and indirectly generated income resulted in an extra USD 515 billion of GDP contribution to the global economy through induced effects. Therefore, combining direct, indirect and induced effects, the biopharmaceutical industry’s total contribution to the world’s GDP is USD 1,838 billion.

Our industry also contributes to job creation in both developing and developed countries. In 2017, it employed approximately 5.5 million people worldwide (including generics); a 1.1 million increase from 2012. In 2017, in the United States, spending on services and supplies totaled USD 589 billion, translating into more than 4 million jobs in this country.

On top of directly or indirectly creating jobs, the biopharmaceutical industry’s presence also leads to dissemination of knowledge in the workforce. Employees working for a biopharmaceutical company often receive qualified training and are exposed to new technologies and processes. This knowledge becomes an asset for the entire workforce, as the employees may later change jobs or start their own companies, hence fostering economic development.

Source: WifOR (2020) The Global Economic Footprint of the Pharmaceutical Industry