The first big nanotechnology success story may be already sitting in
the portfolios of millions of investors.
Some traders have soured on the
search for a nanotech start-up that can repeat the success that
Intel saw in semiconductors,
Microsoft saw in software and
Google has seen in Internet
search. Judging from the scarcity of big names that have emerged after
decades of nanotechnology research and years of hype, some have
concluded that the science is just one big fizzle.
Reading between the lines of a new report by New York-based market
research firm Lux Research, it's hard to avoid the conclusion that those
frustrated investors are simply looking in the wrong place. It's the
large, established companies that are investing in nanotech, doing the
homework to turn the science into marketable products -- and they're the
same ones that will be the first to harvest the results.
The report, titled
How Industry Leaders Organize for Nanotech
Innovation, underscores a point that many in the science have been
making, often in vain: Nanotechnology isn't an industry per se, but a
realm of innovation, materials and science that could potentially change
many existing industries by making possible new products and new
efficiencies.
That explains why, according to Lux, corporate R&D spending on
nanotechnology is more than nine times greater than institutional
venture-capital funding. In 2005, the 1,331 companies in 76 industries
that Lux tracked invested $3.2 billion in nanotech and sold $32 billion
in products that incorporate some form of nanotechnology.
While $32 billion is barely a drop in the $14 trillion bucket of
revenue for those same companies, it's more than twice as much as the
$13 billion in nanotech-related revenue in the previous year.
Of course, the bulk of those investments are in industries that are
R&D intensive to begin with, including medical devices, aerospace and
defense.
General Electric, which has always had a sensitive antenna for promising
innovation, earmarked $50 million for nanotech research last year, or
1.6% of its total R&D budget. CEO Jeffrey Immelt has ranked nanotech
with personalized medicine and renewable energy as top priorities.
Kevin Kelleher
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