Today we release our 2011 report on global nanotechnology funding and impact.

It’s something we do every year, undertaking one of the world’s most exhaustive searches into the global funding of nanotechnologies in order to identify not only where the dollars, euros and yen are being spent, but also to gain an unique insight into the trends shaping tomorrow’s applications.

The major change for this year has been to develop a method of determining how effective government investment in emerging technologies is likely to be, using data from the World Economic Forum’s annual Global Competitiveness Report among other sources.

While countries such as the UK have academic excellence, the service based economy means that there is little outlet for the fruits of nanotechnology research, unlike for example Germany which has a large and vibrant manufacturing sector that is hungry for new technologies to stay competitive.

A white paper giving an overview of the key numbers, which we believe to be the most accurate available anywhere, can be downloaded here.

Key findings are:

• With US government funding of nanotechnology receding slightly in 2011, Purchasing Power Parity (PPP) estimates indicate that for the first time, China will spend more than the US to fund nanotechnology.
• In the last 11 years, governments around the world have invested  more than US$67.5 billion in nanotechnology funding. When corporate research and various other forms of private funding are taken into account, nearly a quarter of a trillion dollars will have been invested in nanotechnology by 2015.
• Corporate research and private funding were thought to have surpassed government funding figures as far back as 2004. But this year, according to Cientifica’s estimates, in PPP terms China will spend US$2.25 billion in nanotechnology research while the US will spend US$2.18 billion. In real dollar terms, adjusted for currency exchange rates, China is only spending about US$1.3 billion to the US’s $2.18 billion.
• This appears to be a temporary hiccup in US dominance in public funding of nanotechnology with the US again taking the lead next year even in PPP terms, spending $2.46 billion with China allotting $2.2 billion.
• Cientifica’s index of countries’ ability to take advantage of emerging technologies indicates the US, Germany, Taiwan and Japan have the combination of academic excellence, technology-hungry companies, skilled workforces and the availability of early stage capital to ensure effective technology transfer.
• When combined with levels of nanotechnology funding, the US is still the place to be, although China and Russia are increasingly attractive. The UK and India struggle at the bottom of the league.

]]> http://cientifica.eu/blog/2011/07/the-2011-report-on-global-nanotechnology-funding-and-impact/feed/ 0 http://cientifica.eu/blog/2011/06/the-russians-are-coming/ http://cientifica.eu/blog/2011/06/the-russians-are-coming/#comments Mon, 20 Jun 2011 19:35:33 +0000 Tim http://cientifica.eu/blog/?p=2360 TNTlog from Cientifica:

Or rather everyone involved in nanotech is beating a path to Russia and their new high tech cluster at Skolkovo. Not letting the grass grow under feet after splashing out a billion dollars on deals for Magnetic Random Access Memory (MRAM) from Crocus Technology and $700 million on organic electronics with Plastic Logic,  to coincide with [...]

The world of nanotechnology is a little poorer today with the passing of Charlie Harris, founder and chairman of the publicly traded VC fund, Harris & Harris.

Out of all the people buzzing around in the early days of nanotech, Charlie was one of the few people who got it, who understood that technology takes time to mature and that to make money you need to play a long game.

Charlie’s legacy of course includes Harris & Harris, (NASDAQ: TINY) but also some great memories.

I spent many pleasant evenings in a variety of wine bars around New York’s Rockefeller Plaza with Charlie and his long time partner Mel Melsheimer discussing where nanotechnology would take us and how to exploit it. I have to admit that I’m not a huge fan of VCs, there are plenty of arrogant know it alls in the business especially ten years ago, but Charlie was different, very different.

Out of all the investors I have worked with over the last decade, Charlie was one of the best, perhaps because he came from the old school of investing, or maybe because he had a deep passion for science and served as a trustee of Cold Spring Harbour Laboratory, or perhaps because he was a genuinely rounded individual, and conversations would range from nanotechnology to his passion for thoroughbred horses. Perhaps at the core it was just because Charlie was a decent person, who’d made some money, had nothing to prove, and while every other investor circling nanotechnology was out to prove how much (and in fact how little) they knew, Charlie had the sense and the patience to sit and listen to experts before he made his decisions.

Charlie’s family are planning a memorial service which will be announced at some point in the future.  In lieu of flowers, Charlie suggested contributions to Cold Spring Harbor Laboratory or the Center for Nanotechnology Science at the Koch Institute at MIT.

Rest in Peace Charlie.  I never thought I’d say this about a VC, but you were a decent honourable man, and a true friend to science.

The Future of Science Funding?

I was chuckling at The Nanoclasts take on the new US proposals around the new “Golden Triangle” of nanotech, biotech and IT – they must have seen once of my presentations!

What the President’s Innovation and Technology Advisory Committee (PITAC) wants to know is

What are the critical infrastructures that only government can help provide that are needed to enable creation of new biotechnology, nanotechnology, and information technology products and innovations that will lead to new jobs and greater GDP?

One has to wonder what the point is of convening a committee of experts, only to have them ask the general public? But in these dark days of science budget cuts, the Simon Cowell business model is beginning to look attractive. While Andrew Maynard is tied up in I’m A Scientist Get Me Out Of Here, answering questions about his salary and sex life, it’s far too tame for us. He should be made to eat kangaroo anuses washed down with a beaker of foaming green liquid, while running around yelling “Ah-Ha” if we want to be innovative about science funding.

It seems that everyone wants to do public engagement these days, holding meetings, setting up web sites, convening multi stakeholder dialogues, but they have it all back to front. It’s not the scientists who desperately want to communicate, it’s Joe Bloggs who wants to be heard, and if he’s perfectly well prepared to blow a pound on voting on Big Brother/Britain’s Got Talent/American Idol/Strictly Come Dancing etc then I’m pretty sure he’d be willing to shell out again to give his opinion on nanotechnology, synthetic biology or any other -ology that I could think of.

Understanding anything about the subject isn’t a prerequisite for having an opinion, as PITAC seem to have demonstrated.

Just think how much extra research funding could be generated if scientists had to compete for research funding on live TV, with the audience voting by SMS or phone lines? 19 Entertainment, the company behind American Idol made $233 last year, and that would fund a lot of science. Imagine if EPSRC started doing it, we’d have nanotech labs and synchotrons on every street corner by the end of the decade.

So there’s the solution to the science budget. More public engagement, more wild hair, lots of foaming liquids, and no need to bother the hard pressed Government.

Where did they all go?

My colleague Dexter Johnson (aka the Nanoclast) highlights a forthcoming report about the decline in the number of Australian nanotech companies, but it’s hardly surprising. Before anyone heralds the death of anything consider this:

• The global economy has resulted in a reduction of the number of companies in just about every sector of the economy. High streets where a third of the shops have closed are now common outside London, and everyone from estate agents to Starbucks have been rationalising, downsizing or going bust.
• As I mentioned back in 2001, most nanomaterials companies will go bust, some sooner, some later, but there is almost no way that anyone apart from large diversified chemical and materials companies can create a sustainable business in that sector. Of course if you told your VCs that nanotubes were the new gold you probably got closed down five years ago.
• Nanotech has been subject to a large amount of M&A activity, Singular ID being snapped up by Bilicare for example, thereby disappearing from the Singapore register of nanotech companies and joining the Indian pharmaceutical industry.
• Most nanotech companies were start ups, and most start ups don’t survive too long, whatever the sector.
• I can think of plenty of companies making use of nanotechnologies that no one would consider being nanotech companies, so how a nanotech company is defined is also part of the problem.

Of course I’m pre judging the report, and there may be more granularity and methodology than in this brief report. However what isn’t in doubt is the stupid and irresponsible nanotech market numbers that Lux Research keep repeating and which keeps finding its way into business plans and foresight documents. Any business plan that starts waffling on about the ‘nanotech market’ gets binned straight away. In our investment business we interested in tangible and quantifiable numbers not abstract, artificial and absurd concepts.

Now if I was working in a government agency which was being judged on the number of nanotechnology companies created/attracted/sustained I’d be looking trying to figure out how far and how fast I could move the goalposts.

Gold for Good

I first came across the World Gold Council back in 2002 at a nanotechnology conference in Ireland. While most gold goes into jewellery, and doesn’t require too much marketing, a growing amount goes into high technology applications, everything from microelectronics to drug delivery.

Today we can publish the fruits of our recent collaboration with the World Gold Council, a white paper called “Gold for Good” which looks at the history of gold and nanotechnology.

One of the most fascinating parts of working on this publication was the realisation that gold nanoparticles have been used for several millennia, from the Romans to Michael Faraday, but it is only recently that we have been able to understand why they have the properties that they do, which has led to a host of other applications.

While the World Gold Council is often seen as a marketing organisation, they do actually invest in companies making use of gold – for example Nanostellar who use gold nanoparticles in catalysts to reduce diesel emissions.

Good for Gold!

It seems to be the season for dodgy statistics as well as good cheer – though perhaps overdoing the good cheer has an impact on the statistics (hic!).

Firstly the UK Governmemt’s £1Bn innovation fund is accused of shaky maths by Richard Tyler in the Telegraph who also questions the wisdom of the Government setting up its own fund rather than giving the private sector tax incentives to do it.

The weirdest statistic comes from the normally excellent UK Trade and Investment who claim that the town of Lowestoft is the ‘Enterprise Capital of Britain’ on the basis of having set up 50,000 new businesses. Given that the town’s population is only 60,000, it’s ether even more impressive or total and utter rubbish (unless of course that the numbers are calculated for businesses set up in ‘Greater Lowestoft’ over the last three millennia).

More serious is dodgy numbers in the business plan I was reviewing earlier for a nanomaterials company. All of the market numbers came from a rather infamous report which predicted nanotech markets in the trillions of dollars with phenomenal growth rates across the board, which led the company to expect fantastic revenues in half a dozen diverse and unrelated market segments. I usually suggest that any business plan which relies entirely on third party market research, and in this case the sunniest and most optimistic research imaginable, goes straight in the bin.

Most of the market research we perform at Cientifica helps validate data acquired elsewhere by our clients, and helps to build an overall picture of the oppotunities and inform discussions about strategy. Clients are sometimes disappointed that our numbers are not as big as other forms would predict, but in a long tern business such as nanotechnology it’s better to spend more time worrying about the accuracy of the numbers than their magnitude.

The recent news about the debt problems in Dubai contrast with the glitzy no expense spared hotels and conference centres where I spent last weekend with the World Economic Forum, but probably do more to highlight the importance of a diverse technology enabled economy than any amount of lobbying we could do.

While Dubai has led the way for the emergence of the Gulf as a major economic centre, most of my technology work has been done in the neighbouring states, Abu Dhabi, Qatar and Saudi Arabia who, while perhaps being slightly envious of Dubai’s dash to pre eminence in the region with the worlds tallest tower and an indoor ski slope have been taking a more measured approach to development. Most of these countries have been playing the property game too, but also backing this up with major investments in science and technology, and that doesn’t just mean taking stakes in AMD or IBM but making sure that technology fits into the local economy.

The reasons to do this are all the more obvious this week, and in a region with tiny but fast expending populations, ensuring that jobs are created for locals rather than overseas labourers is of increasing importance. It is estimated that Saudi Arabia has 25% youth unemployment, and in a country where 40% of the population is under 15 the petrochemical industry isn’t going to provide all the jobs that will be needed to prevent social unrest.

What is? Increasing the size of the manufacturing sector is a key policy goal in many states, and Mubadala, one of Abu Dhabi’s investment agencies has already announced plans to build an AMD fab in the emirate but this is only the start. The longer term goal, and the financial and political situation in many of the the Gulf states allows the luxury of long term planning, is to develop new technology based industries in materials, aerospace, semiconductors, renewable energy and pharmaceuticals but based on a whole host of new and emerging technologies such as nanotech, industrial biotech and regenerative medicine.

While Dubai may in the eye of a storm right now, the longer term prospects for the region look as bright as the desert sun.

Ozymandias by Percy Bysshe Shelley

I met a traveller from an antique land
Who said: “Two vast and trunkless legs of stone
Stand in the desert. Near them on the sand,
Half sunk, a shattered visage lies, whose frown
And wrinkled lip and sneer of cold command
Tell that its sculptor well those passions read
Which yet survive, stamped on these lifeless things,
The hand that mocked them and the heart that fed.
And on the pedestal these words appear:
`My name is Ozymandias, King of Kings:
Look on my works, ye mighty, and despair!’
Nothing beside remains. Round the decay
Of that colossal wreck, boundless and bare,
The lone and level sands stretch far away”.

I’ll be back in Dubai next week for what is describes as the “World’s Largest Brainstorming”

The ‘Investors‘ page on the Oxonica site looks a bit bare today, after their de-listing from the AIM market yesterday. The move was billed as a cash saving measure. Presumably updating the web site less frequently is a similar tactic.

@Lord Drayson had a quick look at my take on the new innovation fund and tweeted

This article misunderstands how this fund will work. I will blog on the BIS site to spell it out.

I’m looking forward to it.

There is no doubt about the commitment of the Lords Mandelson and Drayson to stimulating the UK economy though science and technology, they have been banging on about it for years. It’s rare to see one person in government who ‘gets it’ let alone two, but the devil is always in the details (cue another rerun of Yes Minister)

In fairness, I haven’t heard a squeak about science and innovation from the opposition Conservative party recently apart from a few general remarks to the Royal Society.

Perhaps a half baked plan is better than none at all?

I’m probably nor the only one to be underwhelmed by the UK governments new £1Bn “Innovation Fund” – it’s actually £150m but there are hopes that with private sector leverage it could swell to £1Bn by, erm, 2019!

The main worry is that the UK government has made a habit in recent years of announcing things and then forgetting about them. There was a a £750 million fund for innovation to “stimulate growth in the UK’s industries of the future” announced in April, and according to the Telegraph

This new ‘UK Innovation Investment Fund’ is not the first initiative launched this year. The much heralded £75m Capital for Enterprise fund, set up in January to take stakes in over-indebted companies, has still to announce its first investment. A women’s enterprise venture capital fund, launched almost a year ago, has also so far resisted the temptation to profile its progress.

One has to wonder whether the true purpose of these initiatives is simply to produce sound bites such as

“This fund will help build Britain’s future by investing in key sectors. It will provide crucial support for our most promising start-ups and existing small companies just when they need it most. Venture capital finance is the lifeblood of innovation and crucial to ensuring the commercialisation of the discoveries coming out of our research base. The fund will boost future UK competitiveness,” the Prime Minister said..

or headlines like this

Government Launches £1 Billion VC Fund!!!!

The fund hopes to make investments by the end of the year, but the maths does look a bit dodgy, even for the VC industry as discussed here

We’re obviously not in receipt of the facts (and this sort of addition might be responsible for MP allowances scandals). £150 million of public money plus equal participation from the private sector equals £300 million and not £1 billion. Now – we can make allowances that this is over 10 years so the revenue gained from licensing and exits of companies funded might contribute sufficient back to increase the value of the fund. Might.

Either way, the £150 million will barely cover the administration fees of the various private VC funds that will be needed to make up the other £850 million to make this into a £1 billion fund.

Given that the Lords Mandelsonand Drayson are passionate about the need for technology investment, I’d love to think that we are missing something and that there is a solid and well thought out initiative behind this announcement, but for the moment it does look somewhat half baked, especially in light of the fact the government doesn’t appear to have any money to pay for any of this!

Our old friends Oxonica are looking for a new CEO and are making a number of other redundancies as well.

Having developed product offerings in all of its businesses, Oxonica is now focusing on partnering the Group’s businesses to secure profitable platforms for growth. In 2008, Oxonica’s Diagnostics business was partnered with BD and the Company is currently in partnering discussions for its remaining three businesses. The structure and value of the resulting partnerships will be announced on completion of the negotiations.

An interesting statement which could be read as the code for flogging off all remaining assets and hoping to get a few quid from licence fees and royalties but not attempting any further business development, something the company describes as a “sustainable, relatively low?-?risk business model”

There’s probably no better way to enrage the proponents of precautionary principals than proposing using geoengineering to make obscene amounts of money by working the carbon credits system.

One one hand John Holdren, the chief scientific adviser to US president Barack Obama, said about geoengineering: “It’s got to be looked at . . . We don’t have the luxury of ruling [out] any approach” while others take a more cautious approach urging that “scientists must beware of tinkering with a system you do not fully understand,” a philosophy which simultaneously rules out both using a computer and all medical research since Paracelsus.

Interesting to see Zettacore raising a $21m series C, some six years after they first started our promising to replace silicon with molecular memories, although that’s not the application that is attracting interest right now.

As Nikkei Electronics reported last week – they look to have a customer for their Molecular Interface (aren’t most interfaces molecular?) technology that helps with conventional semiconductor manufacturing. While their initial plan for global domination of the memory business seems to have been elbowed aside with the fall in price of flash memory from a dollar a Mb 2001 to less than a dollar a Gb 2009, the R&D does seem to have been useful for something…

ZettaCore said MI technology enables deposition of copper on smooth dielectric, and lamination of dielectric on smooth copper in high-performance IC substrates, HDI boards, high-speed boards, flexible PCBs, and wafer level packaging. Since surface roughening is eliminated, customers can realize finer line/space dimensions and improve signal integrity while using conventional materials and processes.

“ZettaCore MI technology offers IC substrate customers the ability to leverage their manufacturing infrastructure and yet realize finer line/space design rules. For example, customers can advance interconnect geometries with the current GX-13 material beyond what is possible with conventional roughening technologies. Since the interfaces are smooth, losses related to skin effect are minimized which would improve system performance,” said Takao Sakurai, general manager of Specialty Chemical Dept, Ajinomoto Co Inc.

By working with Ajinomoto, ZettaCore is offering a complete and seamless solution to substrate manufacturers.

“Ajinomoto GX-13 build-up resin has a dominant market share in flip-chip IC substrates. Customers can now realize 10µm line/space design rules and beyond by using ZettaCore MI technology in conjunction with GX-13 material,” said Srinivas Nimmagadda, VP of Business Development at ZettaCore.

That’s another set of rebels assimilated into the world of CMOS then.