October 24, 2005 11:08 AM PDT

Nanotech: Is it soup yet?

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CAMBRIDGE, Mass.--Nanotechnology will never be a standalone industry, yet its effects are clearly taking hold, according to executives speaking at a conference here.

Speakers and executives attending the Lux Executive Summit put on by Lux Research said Monday that the adoption of nanotechnology will likely follow a path similar to other general-purpose technologies, such as electricity and Internet-based communications.

A material science, nanotechnology is the manipulation of matter on a nanoscale for a specific purpose. (A nanometer is a billionth of a meter. A human hair is about 80,000 nanometers wide.)

Nanotechnology will be applied across many industries, so a complete picture of its usages is difficult to ascertain, said Matthew Nordan, vice president of research at Lux Research. But when commercial and research efforts are viewed in total, the impact of nanotech becomes more evident, he said.

"The nanotechnology technology revolution is happening now. You just need to know where to look," Nordan said. "The first glimmers of nanotech are visible."

A brush with this technology is as simple as going to a sporting goods store, where tennis rackets, tennis balls and aluminum bats that incorporate nanotechnology to improve products' performance--making them lighter and stronger--are labeled as having the new technology.

Other applications might be less apparent. Incorporating nanotech-derived materials into a mobile phone's casing could make it stronger, yet the consumer and service provider could never know, Nordan noted. A fuel additive from British company Oxonica saves a bus operator millions of dollars a year.

Meanwhile, a very visible innovation has come from German start-up Magforce Nanotechnologies which has used nanotech principles in equipment to eliminate cancerous tumors in some patients, he said.

Investments in nanotechnology are coming from several directions, including governments, venture capitalists and large manufacturers such as Dupont, General Electric and Kraft. Corporate labs are the primary drivers of nanotechnology adoption, Nordan noted.

"Venture capital money in nano to date has been notable for its absence," Nordan said. Lux Research estimates there will be $460 million invested in nano-related companies by venture capitalists this year, up from $384 million last year. Still, the company expects one to three nano-related initial public offerings in one year.

The typical business model for nano-related start-ups is well-established, Nordan said. Many companies have adopted a model of licensing their intellectual property. But companies that take on research, manufacturing and other operations could well succeed by targeting specific industries, he said.

Chip designer Nantero, for example, adopted a model of licensing its memory chip manufacturing process to factories. The company has focused on the development of chip manufacturing around carbon nanotubes and is testing with two partners, said Greg Schmergel, CEO of Nantero.

"The big challenge for nanotech companies is mass producing something. Most companies have brilliant ideas that they can represent in a single device. The challenge is manufacturing," Schmergel said.

Experts at the conference also said that some of the potential health and environmental risks of nanomaterials has to be explored and weighed against the benefits.

Conference presenter James Surowiecki, author of "The Wisdom of Crowds," said small companies might get a "first-mover advantage" by developing promising, early technologies. At the same time, larger, established firms have an incentive to adopt nanotechnologies.

"The benefits may be reaped as much by businesses as nanotechnology companies," he said. As an example, he pointed to Dell, which effectively used other general-purpose technologies such as IT and the Internet to sell its products--and Dell has proved to be a better financial investment than Internet companies.

Nanotechnology adoption rates will hinge on the willingness of companies from different industries to pay a premium to adopt new products that use nanotechnology, Surowiecki added.

"The key (to timing), in large part, will be convincing corporate decision makers that these transformations and technologies can have a fundamental effect on business processes," he said.

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Someone better kick the US government in gear
Before the Chinese military becomes the leader in nanotechnology.
Posted by Gronar Snaggletooth (35 comments )
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