REPORT SCOPE
INTRODUCTION
The previous (2008) edition of this report began by noting that the hype, both positive and negative, that has surrounded nanotechnology appears to be growing less extreme: today, rosy projections of a “trillion-dollar” nanotechnology market in 10 years or apocalyptic predictions about a “Faustian bargain” or a “Pandora’s box”[1] are heard less often.
However, while the hype may have slowed somewhat, it is still there. Growing public awareness combined with the complex, diverse nature of the technologies that are commonly grouped together under the heading of nanotechnology virtually invites misunderstanding, if not actual misrepresentation.
For example, in 2010, a respected journalist wrote a series of stories for AOL News with the title, “The Nanotech Gamble: Bold Science, Big Money, Growing Risks,” that faulted the U.S. government’s performance in identifying and protecting the public against alleged health hazards posed by nanotechnology. One interviewee asked rhetorically, "How long should the public have to wait before the government takes protective action? Must the bodies stack up first?"
So stinging was the piece to the National Nanotechnology Initiative (NNI) and the National Nanotechnology Coordination Office (NNCO) that the director of the NNCO felt compelled to issue a formal rebuttal. According to the rebuttal, the author “takes an alarmist perspective,” “uses irrelevant examples,” and fails to balance the risks against the benefits of nanotechnology. As some observers have noted, the debate over the AOL News article (which was still simmering when this report was written) is at best a distraction from the research that needs to be done.
Business, academia, the media all have an incentive to attempt to cash in on nanotechnology. Various manufacturers have tacked “nano” onto their products and processes, whether or not they deal in nano-size elements, in an attempt to boost sales. Companies that have nothing to do with nanotechnology have “nano” in their names to make them sound more technologically advanced than the competition. Some academic researchers worry that the nano buzzword is being misused to bring in research dollars for dubious technologies and applications, at the expense of legitimate research.
Hype inevitably carries with it the risk of a backlash, because it can create unrealistic expectations for nanotechnology. Then, when expectations are not met, people tend to withdraw or worse turn oppositional. A blog entry on The Bespoke Investment Group’s website observed that:
“Back in the ‘good ‘ole days’ of the mid-2000s, investors were riding a bull market wave and looking for ‘the next big thing.’ One of those ‘next big things’ was nanotechnology. Ever since the collapse began in 2007, however, the nanotech craze seems all but forgotten. We can’t remember the last time we read or watched something about nanotech. …Stocks and ETFs relating to nanotech have also lost investor interest.”
As a result, legitimate nanotechnology products and applications are hurt along with the rest, as funding and markets dry up. The dot.com boom and bust provides a cautionary example of the dangers of hype, but nanotechnology has a more tangible nature because it is a set of technologies. This report takes a realistic look at the nanotechnology field and tries to provide a road map to the technologies and applications that are most likely to be commercialized in the next 5 years.
STUDY BACKGROUND
While it appears inevitable that nanotechnology will have a broad and fundamental impact on many sectors of the U.S. economy, various technical, marketing and other hurdles need to be overcome before nanotechnology fulfills this promise. These challenges and differences of opinion regarding commercial applications are reflected in the widely diverging estimates of the U.S. and global nanotechnology markets.
Estimates of the global nanotechnology market in 2010 range from about $15.7 billion (the figure used in this report) to $1 trillion. By 2015, the market may be worth more than $2.4 trillion, according to different analysts. These differences reflect not only different analytical methods and assumptions, but also different definitions of the nanotechnology market (e.g., whether to include decades-old technologies such as carbon black rubber reinforcers and photographic silver, or whether to base the market value on nanotechnology inputs alone, as opposed to the total value of products that incorporate nanotechnology).
Perhaps as a reflection of the difficulty of quantifying the market for nanotechnologies, some analysts downplay the commercial dimensions of the nanotechnology market, and focus instead on the supply side, i.e., the development of new nanoscale technologies and applications. These analysts have made valuable contributions, raising investors’ awareness of and interest in nanotechnologies.
However, by itself, the work of these analysts does not provide sufficient information in order to guide corporate or individual investment decisions. Investors require additional data, such as the size of specific nanotechnology markets, prices, and competition, as well as potential regulation.
STUDY GOALS AND OBJECTIVES
The goal of this report is to provide investors and others with information on the commercial potential of various nanotechnologies and to complement the growing body of technical information. Specific objectives include identifying segments of the nanotechnology market with the greatest commercial potential in the near to mid-term (2010 through 2015), projecting future demand in these segments, and evaluating the challenges that must be overcome for each segment to realize its potential in order to estimate the probability of successful commercialization.
INTENDED AUDIENCE
The report is especially intended for entrepreneurs, investors, venture capitalists, and other readers with a need to know where the nanotechnology market is headed in the next 5 years. Other readers who should find the report particularly valuable include nanotechnology marketing executives and government officials associated with the National Nanotechnology Initiative and other state-level programs that promote the development of the nanotechnology industry. The report’s findings and conclusions should also be of interest to the broader nanotechnology community.
SCOPE OF REPORT
The global market for nanotechnology applications will be addressed. Nanotechnology applications are defined comprehensively as the creation and utilization of materials, devices, and systems through the manipulation of matter at scales of less than 100 nanometers. The study covers nanomaterials (nanoparticles, nanotubes, nanostructured materials, and nanocomposites), nanotools (nanolithography tools and scanning probe microscopes), and nanodevices (nanosensors and nanoelectronics).
A pragmatic decision was made to exclude certain types of materials and devices from the report that technically fit the definition of nanotechnology. These exceptions include carbon black nanoparticles used to reinforce tires and other rubber products; photographic silver and dye nanoparticles; and activated carbon used for water filtration. These materials were excluded because they have been used for decades, long before the concept of nanotechnology was born, and their huge volumes (especially carbon black and activated carbon) would tend to swamp the newer nanomaterials in the analysis.
Nanoscale semiconductors are also excluded from the study, although the tools used to create them are included. Unlike carbon black and activated carbon, nanoscale semiconductors are a relatively new development. However, they have been analyzed comprehensively elsewhere, and like carbon black and activated carbon, would tend to overwhelm other nanotechnologies by their sheer volume in the out-years towards 2015.
The study format includes the following major elements:
- Executive summary
- Definitions
- Milestones in the development of nanotechnology
- Current and potential nanotechnology applications
- Applications and end users with the greatest commercial potential through 2015
- Global nanotechnology market trends, 2009 through 2015
- Factors that will influence the long-term development of nanotechnology
- Market shares and industry structure.
METHODOLOGY AND INFORMATION SOURCES
Projecting the market for emerging technologies, such as most nanotechnology applications whose commercial potential has not yet been proven, is a challenging task, which may help to explain why many analysts focus on supply-side technology assessments. A multiphase approach was used in the preparation of this report to identify the nanotechnology applications with the greatest commercial potential and quantify the market for these applications, as described below.
In the first phase of the analysis, BCC Research identifies a long list of potential nanotechnology applications (including applications that are still under development) and mapped them against potential end-user industries, such as information technology/electronics, biotechnology, and health care. In the second phase, BCC eliminates those nanotechnology applications that appear to have little likelihood of making it into commercial production in the next 5 years. This was accomplished through a literature review and interviews with industry sources. The result of phase two is a short list of applications and end-user industries with the greatest near- to mid-term commercial potential.
The third phase focuses on quantifying the potential broader market for each short-listed nanotechnology application and identifying the main prerequisites for commercial success. Various methodologies and data sources were used to develop the projections, including trend-line projections, input-output analysis, and estimates of future demand from industry sources.
ANALYST CREDENTIALS
Andrew McWilliams, the author of this report, is a partner in the Boston-based international technology and marketing consulting firm, 43rd Parallel, LLC. He is the author of numerous other BCC Research nanotechnology studies, including the predecessor to this study, Nanotechnology: A Realistic Market Assessment(NAN031C); Global Medical Markets for Nanoscale Materials and Devices (HLC058A): Nanostructured Materials for the Biomedical, Pharmaceutical, & Cosmetic Markets (NAN017D); Nanostructured Materials for Energy, Catalysis & Structural Applications (NAN017E); Nanostructured Materials: Electronic/Magnetic/Optoelectronic (NAN017F); Nanotechnology in Energy Applications (NAN044A); Advanced Ceramics and Nano Ceramic Powders (NAN015E); Nanocomposites, Nanoparticles, Nanoclays, and Nanotubes (NAN021D); Nanopatterning (NAN041A); Nanotechnology in Life Sciences Applications (NAN038A); Nanotechnology for Consumer Products (NAN037A); Nanotechnology for Photonics (NAN036A); Nanocatalysts (NAN028A); and Nanosensors (NAN035A).
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DISCLAIMER
The information developed in this report, is intended to be as reliable as possible at the time of publication and of a professional nature. This information does not constitute managerial, legal, or accounting advice; nor should it serve as a corporate policy guide, laboratory manual, or an endorsement of any product, as much of the information is speculative in nature. The author assumes no responsibility for any loss or damage that might result from reliance on the reported information or from its use.
