Nanotech creeping in, bit by tiny bit

Nanotechnology will never be a standalone industry, yet its effects are clearly taking hold, according to experts speaking at a conference on Monday.

Speakers and executives attending the Lux Executive Summit put on by Lux Research said 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 nanometre is a billionth of a metre. A human hair is about 80,000 nanometres 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 sports shop, where tennis rackets, tennis balls and aluminium baseball bats that incorporate nanotechnology to improve products' performance, making them lighter and stronger, are labelled 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 would never know, Nordan noted. A fuel additive from British company Oxonica saves a bus operator millions of pounds a year.

Meanwhile, a very visible innovation has come from German start-up company Magforce Nanotechnologies, which has used nanotech principles in equipment to eliminate cancerous tumours 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 $460m invested in nano-related companies by venture capitalists this year, up from $384m last year. Still, the company expects one to three nanorelated initial public offerings in one year.

The typical business model for nanorelated start-ups is well established, Nordan said. Many companies have adopted a model of licensing their intellectual property. But more vertically integrated companies, which 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, Nantero president and CEO.

"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 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. He noted that 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 how willing companies from different industries are 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 markers that these transformations and technologies can have a fundamental effect on business processes," he said.