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Heady days of nanotech funding behind it, the U.S. faces big challenges

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Nanotechnology, stimulusNearly a decade after the U.S. launched its National Nanotechnology Initiative (NNI), the program’s $12 billion in funding has helped place the country at the head of the pack regarding the development of science and technology measured in billionths of meters. Yet, despite the U.S.’s unrivaled adeptness at patenting nanotech inventions, the country’s lackluster track record of bringing nano-scale technology products to market leaves the door open for China, Russia and other tech-savvy countries to challenge U.S. nanotech supremacy, according to a new report by Boston’s Lux Research.

The report, released Wednesday, contains much of the same data as the President’s Council of Advisors on Science and Technology’s (PCAST) March 12 report (pdf) assessing the NNI. Not surprising, given that Lux research director Michael Holman participated in PCAST’s NNI evaluation. Lux’s report takes the matter a bit further, however, with lead author and research associate David Hwang analyzing 19 countries competing in the emerging nanotech field and breaking down their ability to innovate as well as commercialize those inventions.

Hwang notes that global investment in nanotech held about steady last year despite tough economic times, drawing $17.6 billion from governments, corporations and investors in 2009, a 1 percent increase over 2008. Nanotech companies should take care to spend this money wisely because this deep-pocketed spending is not likely to last much longer. Venture capitalists—the investors whose money is often required to take technology from the lab and put it in consumers’ hands—have already dialed back their support, cutting investments by 43 percent relative to 2008, and NNI funding is expected to drop by 20 percent this year. New money for nanotech projects will have to come from funding set aside to improve specific technologies, such as hydrogen storage systems, military armor and batteries.

The U.S. led in terms of government funding, corporate spending and venture capital investment ($6.4 billion in all) as well as patent issuances, with 2,378. China fared poorly in terms of obtaining patents for its inventions but produced 13,049 nanotech-related publications, compared to 11,818 from U.S.-based researchers. One reason for this, according to Lux, is that the U.S. is not producing as many science and engineering graduates relative to its overall population as other countries, including China.

China and Russia launched new initiatives last year expected to challenge U.S. nanotech, whereas Japan, Germany and South Korea surpassed the U.S. in terms of commercializing nanotechnology and products, according to Lux. China’s efforts, not unlike those of the U.S., came mostly in the form of an economic stimulus package. Russia meanwhile doled out $757 million in 2009 to fund research, support commercialization and international collaboration, and build research and manufacturing infrastructure for companies like New Toolware Solutions, which develops nanostructured coatings for metalworking tools.

Lux makes a number of predictions regarding the future of international nanotech development, the most intriguing being that the U.S. and China will address their respective weaknesses in the field by teaming up. For evidence this is already happening, look no further than Cambrios Technologies, CNano Technology and Nanosys, three California-based startups partnering with Asian firms to manufacture and integrate carbon nanotubes and other microscopic materials into final products.

Image courtesy of iStockphoto/ Ben Greer

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  1. 1. Sez Me 8:16 pm 08/18/2010

    Jeeze, the corpse of the U.S. isn’t even cold yet and those three companies are already jumping ship. I have a thought that they aren’t alone either……!

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  2. 2. jack.123 6:36 pm 08/19/2010

    Those that will be negative will do so so let us learn what we can from the information on hand,where those whose criticise will learn nothing.

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  3. 3. jabailo 6:36 pm 08/19/2010

    Hold on. We have fewer scientists per capita, yet we hold more patents than anyone.

    And once again, the whole Al Gore "articles by the pound" approach to science is not very revealing.

    I think the real application for nanotech will be in alternative energy. However, Steve Chu’s evisceration of basic hydrogen research put the damper on that.

    So, we have all this quality research, and now that it’s time to use it…no one is making the manufacturing investment.

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  4. 4. stfree 11:34 am 08/20/2010

    The money flows to where the greatest return is offered. As long as Wall Street is allowed to have "products" such as SIVs and credit default swaps which promise (delivery is an issue) far greater returns than the application of new science to manufacturing, those "investments" will soak up the pool of money and the amount available for development will remain small.

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  5. 5. Wayne Williamson 3:08 pm 08/22/2010

    i think the "life" of a patent needs to be changed…if something is not produced using it with in 5 years, it should be voided…
    its great to come up with a great idea but if no one is interested…you should be screwed…
    i see the patents flow from universities with no ability to do anything with it….so sad…

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