The report “Health Industry Export”, prepared by Menon Economics with input from several stakeholders, including LO, NHO, Abelia, IKT-Norge, the Norwegian Association of Pharmaceutical Manufacturers (LMI), the Directorate of Health, the Research Council of Norway, and the Oslo Cancer Cluster, was published recently.
While there are signs of increased revenue, employment, and exports within this sector, there is a negative trend in R&D investments, industrial production, and general investments. The profitability of the health industry has weakened in recent years. The pharmaceutical industry accounts for 74 percent of the health industry’s total exports, but a few large pharmaceutical companies represent a major share.
The pharmaceutical industry is an example of an R&D-intensive sector, and the report reveals challenges such as declining use of NRC SkatteFUNN and fewer patents. The number of SkatteFUNN projects, which are intended to stimulate increased R&D in the business sector, has fallen by 17% from 2021 to 2023.
Meanwhile, researchers in Norwegian academic institutions are beginning to feel the economic tightening affecting the sector. The 2024 report from the Research Association’s survey detailing employees’ experience clearly shows researchers’ concerns that the lack of investment in the field will result in weakened research quality and reduced innovation potential. They fear less time and energy for actual research activities, applying for external funding, and not least for the creative process of coming up with new ideas. Innovation is a surplus phenomenon that requires energy, time, and forums that facilitate interdisciplinary meetings. Outcomes may take time to materialize, and will not be visible in the next annual report.
Against this background, the findings in the Menon report may not be so surprising. The gap between ambitions and conditions becomes apparent. Perhaps the new situation will drive innovation according to the saying “necessity is the mother of invention”. Innovative approaches can be part of the solutions to present challenges in and of themselves. It remains to be seen how the sector will adapt to the new realities, but it is clear that both challenges and opportunities are ahead.
