INVESTMENT
Investors wait for nanotech boom
26-06-2003
by Andrew McLindon
More than USD3 billion of government funding will pour into R&D projects looking at the developing science of nanotechnology in 2003.
Nanotechnology is the development and use of devices that have a size of between one and 100 nanometres (a nanometre is a billionth of a metre, or about the size of three atoms). Nanotechnology holds out the possibility of manipulating structures on a molecular level to produce products such as memory chips that utilize the smallest amount of matter and energy possible.
As such, nanotechnology has over the last couple of years taken over the "next big thing" mantle from the Internet. However, developments to date have not been earth shattering with commercial exploitation of nanotechnology restricted to initiatives such as the production of stain-resistant trousers and socks that don't smell.
However, a report from US venture capital firm, Lux Capital, has said that interest in nanotechnology remains high and that money continues to be pumped into research and development in the sector.
Most of this funding is from the governmental sector. The US government has invested around USD2 billion in nanotech projects since 2000, the year when then President Bill Clinton launched the National Nanotech Initiative. In May 2003, the US House of Representatives approved a USD2.4 billion bill to continue the Initiative over the next three years.
Lux Capital said nanotechnology will be the largest US government funded science programme since the Space Race, exceeding even the Human Genome project.
The European Union is also investing in nanotechnology R&D with it spending more than USD1 billion between 2002 and 2006, while Japan has increased its nanotech funding from USD120 million in 1997 to nearly USD750 million in 2002, the report said.
Commercial investment is also being made in the sector. According to the report, around USD900 million in venture capital has gone to nanotech companies since 1999, with USD386 million invested in 2002. The report identified more than 700 public and private companies working in the area.
Despite this heightened interest, the report does warn that the industry will take some time to develop as most of the basic research is still being created.
"The vast majority of work being done... is for the most part still in a form we consider science. This is why many firms committing resources in hopes of harnessing nanotech have partnered with university laboratories through joint ventures and funding initiatives," said the report.
The report also stressed that established chemical and electronics firms have prepared themselves for when the sector takes-off and won't be caught napping as some of them were with the advent of the Internet boom. For this reason, such companies will probably dominate the sector, predicted the report.
For instance, Intel said last year that it was to engage in extensive research into nanotechnology in order to develop smaller and more efficient microchips.
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