Outsourcing Science: How Cros Drive Innovation through Labor Outsourcing

According to a 2024 report by BIO, 79% of U.S. biopharmaceutical companies rely on Chinese-based or Chinese-owned manufacturers, underscoring the integral role of Contract Research Organizations (CROs) in both the U.S. and China for driving scientific innovation. U.S.-based CROs, crucial to the country’s biopharmaceutical industry, depend heavily on the expertise of Chinese immigrant labor, whose specialized skills are fundamental to sustaining the global competitiveness of U.S. firms. These professionals contribute to research and development (R&D), ensuring that U.S. companies remain leaders in scientific discovery and technological advancement.

Simultaneously, China’s CRO industry has rapidly expanded, propelled by Western-trained returnees who have leveraged the country’s "engineer dividend"—a highly skilled yet lower-cost technical workforce. These returnees, many of whom previously worked in the U.S., have been instrumental in elevating Chinese CROs to meet international R&D standards, creating an interconnected relationship between the U.S. and China in biopharmaceutical innovation. U.S. firms, by partnering with Chinese CROs, gain access to advanced R&D capabilities while benefiting from the cost-efficiency of China’s labor market.

This study, drawing on 100 in-depth interviews and 300 hours of ethnographic observation in the Greater Boston Area and the Yangtze River Delta, reveals how CROs in both the U.S. and China are not only fundamental to the biopharmaceutical industry but are also indispensable to the broader landscape of U.S. scientific innovation. By navigating labor market differences and maintaining global regulatory compliance, these CROs continue to shape the future of global biopharmaceutical research and development.