Molecular spectroscopy is made up of a diverse set of analytical techniques from room-spanning NMR instruments to photometers that can fit in your pocket. This segment of analytical instrumentation accounts for over $3 billion of the total market, and will see moderate growth over the next five years. The current situation surrounding the COVID-19 pandemic continues to change day by day, and is no doubt the defining event for short-term market trends. As for long-term trends, several different end-markets point toward potential areas of growth for molecular spectroscopy.
In recent history, China’s fast-growing economy has seen much attention from various pharmaceutical manufacturers. While costs associated with Chinese manufacturing have been slowly rising, drug production has begun to look to other regions. This situation appears to only be exacerbated by the COVID-19 pandemic, with some multi-national companies looking to move away from a China-centric production base. In the last few years, India, Southeast Asia, and Latin America have been seeing increasing investment in their regional pharmaceutical markets. In particular, generic drug production has been moving to these areas to meet regional demand, as well as take advantage of lucrative tax incentives. With generics already for accounting for 70% of the pharmaceutical retail market, the importance of these geographies to the pharmaceutical industry as a whole will only continue to grow. These regions are also characterized by rising standards of living, leading to greater healthcare access and greater pharmaceutical spending, signaling promising long-term growth for its pharmaceutical industry. For analytical instrumentation, nearly all molecular spectroscopy techniques are utilized by pharmaceuticals in some capacity. Whether it be through discovering new therapeutics with NMR or assessing raw materials for production with IR spectroscopy, the pharmaceutical industry is one of the largest end-markets for molecular spectroscopy, making these regions key for long-term growth.
Academia is another major market for molecular spectroscopy, with many of the techniques being used as both teaching tools and as research instruments. While the current situation has forced many universities to transition to an online-only format, the long-term prospects of this end market are mixed. In some regions, like China and other Asian countries, strong economic and population growth has resulted in the development of many new universities and research centers. This has led to an explosion in scientific output, catapulting China to the top ranking for new scientific research produced. Elsewhere, Japan has seen steady declines as a result of educational defunding and demographic changes. In Europe, the Horizon Europe program will provide a boost to research funding, while the US faces a more mixed future with government backing for R&D steadily declining for the past two decades, while still having the highest R&D expenditures of any country. Over the long-term, molecular spectroscopy will continue to see strong growth from Asia-Pacific, offsetting slightly slower growth in other regions. NMR will continue to be central technique for this end-market, given its strong applications for research and its exceedingly high price ceiling.
Growing Food Demand
Another long-term trend that will affect molecular spectroscopy comes from food & agriculture. According to the UN, the world will need to produce 70% more food on a calorie basis in order to meet the food needs of an additional 2.3 billion people by 2050. Some ways highlighted by the UN Food and Agriculture Organization include reducing food waste as well as adopting more sustainable farming techniques. Several current trends point toward a potential future for the ag/food industry. In the United States, many large farms already employ autonomous farming equipment and data-driven approaches to produce food more efficiently. In China, extremely fast economic growth has transformed the country from that of mostly small, family-owned, sustenance-based farms into large, corporate-owned, industrial-scale farms. As food production continues to grow to keep up with demand, so will the need for food testing instruments under molecular spectroscopy. Concerns surrounding food safety and quality from emerging economies will also drive the need for food testing forward. The ag/food industry represents the third largest market for molecular spectroscopy instruments, making trends in this end-market of a particular interest for molecular spectroscopy techniques.
Molecular Spectroscopy Demand by End Market, 2019
While three different end-market trends are presented here, many other end-markets factors play into the long-term prospects of molecular spectroscopy and the rest of the analytical instrumentation market. SDi’s Global Assessment Report 2020 gives clarity to the future featuring 83 different analytical technologies with segmentation by product type, region, end-market, and more. Additional updates through the 2020 Global Datastream provide the most up-to-date information and analysis on the current state of the analytical instrumentation market, including the effects of COVID-19.