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Asia's rising star:
Nanotech
By Jayanthi Iyengar
PUNE, India - High-technology innovations such
as semiconductors and information technology (IT) over
the years have generated new income and hope for Asia,
which still reaps the advantages and is again poised for
techno-liftoff. Now the next technological revolution is
beginning, generating intense and widespread interest in
what Taiwanese President Chen Shui-bian calls "the new
century's rising star": nanotechnology.
While
most of the big spending is in the United States and the
West, Japan, South Korea and Taiwan are making major
investments. China has plans as well, and India sees
huge benefits from its existing expertise, technological
advances and low labor costs. India and China, Asia's
promising technology giants, however, spend very little
on this technology of the future.
Mass
production of hardware has yet to take off - this is
still in the rapidly evolving research and development
(R&D) stage - but nanotechnology applications
include soldiers' lightweight impenetrable suits of
armor, sensors, computers, military hardware, substances
that eat through metal and plastic, durable coatings,
rock-fuel additives, telecommunications advances, new,
better-targeted drugs and delivery systems, artery and
capillary replacements - and new fashion and utility
fabrics, even better sunscreen, now a hot seller in
Australia.
Global spending is projected to be at
least US$1 trillion over the next six years.The United
States spent $610 million on nanotechnology in 2002, and
scaled up this budget by 39 percent to $847 million in
2003 - a big chunk goes to defense.
Billed as
the next revolution in technology after semiconductors
and IT, nanotechnology is a whole new field, working
with materials that are smaller than small: a nanosecond
is a billionth of a second; a nanometer is a billionth
of a meter. As new players increasingly are drawn to
this burgeoning field, experts are projecting a
nanotechnology products and services market worth $1
trillion by 2010, and possibly double that amount by
2015. This is roughly 10 percent more that the world's
total global manufacturing output.
With its
potential in defense - or offensive - applications, a
nanotechnological edge also aids the geopolitical
ambitions of nations. As in the case of IT, this field
could provide new opportunities in which Asia could
excel, using its low labor costs and technological
advantages.
So what exactly is nanotechnology?
What is its future? What does it mean for business? And
what does it mean for countries that are pumping in such
huge sums of money, and those that are failing to do so?
Smaller than small
Simply defined,
nanotechnology is the creation, use or manipulation of
matter on the nanoscale, to take advantage of properties
that reign at that scale, a billionth of a meter or
less. In ordinary parlance, it means working with
materials that are smaller than small.
To create
perspective, working on the nanoscale often has been
described as working with materials that are smaller
than a hair's breadth, although nanotechnology experts
often find this gross comparison odious. For them, hairs
are not identity and they vary greatly in width. Another
example is soot. At one level, it is a carbon
nanoparticle. In nanotechnology, scientists work on
materials at that level to take advantage of their
properties. One area of significant development, for
example, has been in carbon nanotubes, or minuscule
tubes made out of carbon nanoparticles. Futuristic uses
of nanocarbon tubes could include electricity generation
in a laboratory or the replacement of damaged arteries,
veins and capillaries in the human body, assuming
eventually that the cost allows the commercialization of
these tubes for life-saving medical purposes.
Given today's rush for technology patents,
countries, companies, investors and scientists want to
sew up patents in this emerging area, thereby
controlling future returns. For countries, it could mean
an opportunity for global trade supremacy, wealth
creation and unemployment alleviation. For pioneering
companies, it could mean new areas of growth. For
employees, a technological edge, which could mean access
to some of the highest paying jobs. For scientists and
academicians, unprecedented risk returns. For venture
capitalists and inventors, new markets for their
products.
Asia views nanotechnology as a chance
to make good on technological innovations that once
passed it by and could very well come out on top in this
emerging field.
"The capital required for many
of the disruptive technology developments within
nanotechnology is not prohibitively high," said Dr
Deepak Srivastava, senior scientist and group leader for
computation materials at National Aeronautics and Space
Administration (NASA) Ames Research Center at Moffet
Field, California.
"The strong cultural
influences on the value of higher education, the
infrastructure for nanotechnology-related R&D and
services is already well set up. Also, the relative cost
of advance developments in Asia will be much lower as
compared to the similar developments in the West,"
Srivastava said.
Girish Narasimhan, operations
head of IndiaNano, a non-profit venture-capital fund
allocation for nanotechnology research, put it more
simply: "We envision a strong possibility in the
materials."
Leaving no one
behind
Naturally, nobody wants to be left behind,
particularly the developed West. Every country is
banking on its scientists, and India has evolved a
unique experiment. Short on capital and having lost out
through time, it is inviting non-resident Indian
scientists such as Professor V K Varadan of Penn State
University, Professor Ajay Malshe from the University of
Arkansas, Professor Shekhar Bhansali from the University
of South Florida, and Dr Srivastava from NASA to help it
reduce the learning curve. India, like China, is banking
on private-public partnerships to help it reap the
benefits.
"We envision significant potential to
enterprise creation and added value to existing
technologies by catalyzing public-private partnerships
to see a high growth rate in creation of nanotechnology
startups, and to benchmark India as one among the
world-class players in nanotechnology applications,"
said Rahul Patwardhan, chairman of the Nanotechnology
Research and Education Foundation.
Although
about 1,700 nanotechnology companies are operating
worldwide, with about 4,000 nanotechnology patents held
by the United States alone, the technology is still
largely at the lab-to-land stage. Commercial
penetration, however, has taken place in some areas with
the creation of nanotextiles, plastic nanocomposites,
nanosunscreens and nanotech drug-delivery systems.
Nanostructured catalysts have also been used for years
by petroleum and chemical-processing companies to remove
pollutants.
Nanotextiles are among some of the
most popular nanotechnology-based products on the
market. This product, made stain-repellent by a fine
nano-whisker coating, was developed by Burlington, North
Carolina-based Nano-Tex and has found markets even as
far off as India, where it is manufactured by Arvind
Mills. Plastic nanocomposites are rustproof and
scratchproof, and are being used for certain parts in
General Motors vehicles and for bumpers on Toyota
automobiles.
Nanosunscreens have extraordinary
ultraviolet-ray-absorbing qualities and have become so
popular that by 2001 they had captured 60 percent of the
sunscreen market in Australia. Furthermore,
nano-drug-delivery systems use nanoparticles to deliver
drugs to targeted body parts, including a gene used in
gene therapy. Indian pharmaceutical companies such as
Dabur and Shanta Biotech are just two of the outlets
using drug-delivery applications on a commercial scale.
In a field projected at $1 trillion over the
next six years, the largest growth is expected to be in
materials, at about $340 billion, followed by
electronics, $300 billion; pharmaceuticals, $180
billion; chemical manufacturing, $100 billion;
aerospace, $70 billion; health care, $30 billion; and
modeling tools, $20 billion.
Spending
strategies
Amid growing fears in the West that it
was lagging in new technology sectors, the United States
spent $610 million on nanotechnology in 2002, and scaled
up this budget by 39 percent to $847 million in 2003.
Despite these figures, there remains a huge outcry about
the inadequacy of the sum. The science and technology
(S&T) lobby wants nothing less than $1 billion
earmarked for this year.
The European Union,
meanwhile, has committed itself to spending $1.4 billion
on nanotechnology from now until 2006. Japan is one of
the few Asian countries that have been able to compete
with the West on this scale. In 2001 Japan allocated
$465 million to nanotechnology, raising that amount to
$630 million in 2002. The country's nanotechnology
budget for fiscal 2004, which began on April 1, rose 3.1
percent to $875 million, according to Japan's Council
for Science and Technology Policy.
Nanotechnology budgets are increasing elsewhere
in Asia as well, but unlike the US and Japan, where
yearly budget figures reach into the billions, budgets
of that magnitude must be spread out over five or 10
years.
For instance, after Taiwan slipped from
No 3 to No 4 in the high-tech gear market in 2001,
President Chen Shi-bian announced his intention to pump
$600 million into small-technology research and another
$1.6 billion into biotechnology. The investment,
however, was to be spread over five years, with
biotechnology R&D spending beginning in 2001, and
nanotechnology spending scheduled to start in 2003.
About 60 percent of the funds set aside for
nanotechnology were to go the Industrial Technology
Research Institute (ITRI) for fundamental research in
raw materials, electronics, machinery and biomedicine.
The rest were slated to go toward the development of
nanotech products in research establishments such as
Academia Sinica and universities including the National
Taiwan University in Taipei and the National Tsinghua
University in Hsinchu.
Additionally, in South
Korea, then-president Kim Dae-jung, who formerly headed
the National Science and Technology Committee, cleared
an inter-agency nanotechnology blueprint budget for
$1.14 billion in July 2001. This sum, spread over a
10-year period, was scheduled to go into research and
development, manpower training and the construction of
related facilities.
China and India, on the
other hand, still do not have clearly defined
nanotechnology budgets. But documents and presentations
by Chinese officials indicate that since 2001 Beijing
has planned to spend about $2 billion leading up to
2005, half of which will come from private
participation. India, meanwhile, has formally allocated
about $26 million to nanotechnology, and promises to
spend more from the S&T budget, if needed.
Still, the allocations made by many Asian
countries seem scant compared with the US National
Nanotechnology Initiative (NNI), launched by president
Bill Clinton in 2000, and in which the ballooning amount
of nanotechnology spending that it tracks is approaching
$1 billion, creating sharp interest among the White
House Office of Science and Technology Policy in the
NNI.
However, nanotechnology research in many
Asian countries, including China and India, may be
drawing funds from hidden assets, where all research
allocation comes out of a common S&T research pool.
According to experts such as Dr Srivastava of NASA and
Narasimhan, operations head at IndiaNano, these hidden
or other assets can be diverted to nanotechnology.
"It is true that nanotechnology is an
interdisciplinary subject. Thus a significant fraction
of the budgetary allocation in the enabling fields such
as advanced materials, devices, biotech, health care,
engineering and sciences, and aerospace and defense
could be directed towards doing nanotechnology-related
developments," Srivastava said. But he also believes
that specific budget allocations are necessary.
In search of a better budget
Now come
the crucial questions of just how valid are the national
nanotechnology budgets and what kind of relationship
exists between R&D budgets and marketable patents.
Also, why are Asia's two most populous and most
ambitious nations - China and India - spending so little
on this field?
In this context, a presentation
by Professor Bai Chunli before the Sixth Asian Science
and Technology Conference in Tokyo in 2002 was
illuminating. Chunli is a top-ranking Chinese official,
the vice president of the Chinese Academy of Science
(CAS) and the chief scientist for the National Steering
Committee for Nanoscience and Related Technology. His
presentation is considered to be the single most
important "official" source of information on what is
happening in China on the nanotechnology front.
According to Chunli, 530 research projects were
funded by CAS between 1999 and 2001, 73 of which
received as little as $60,000. Yet CAS had produced
world-class research results in carbon nanotubes,
nanoparticles and powder materials, though over 10 years
it spent what the US government spends in one year on
nanotechnology research. Moreover, Chunli made clear
that the ratio of investment to patents is far more
important than absolute investments themselves.
China, like India, is, to an extent, handicapped
by its S&T structure when it comes to the state
allocation of funds for nanotechnology. China privatized
R&D in 1985 and further introduced a new research
project subcontracting system in 2001, making R&D a
"public-private partnership". This is the case in Japan
as well, although Tokyo has made hefty allocations for
nanotechnology research in spite of this. Though R&D
subcontracting does not exist in India, the nation is
gradually moving to recognize its importance.
Another common factor in India's and China's
approach to S&T expenditure is that both countries
have a common S&T budget from which various
constituents draw their share. In China, for instance,
R&D expenditures are routed through five major
sources, namely the S&T Ministry, the National
Commission for Development and Cooperation (NCDP), the
Chinese Academy of Sciences, the National Natural
Science Foundation of China (NSFC), and the Ministry of
Education. In India too, the Department of S&T and
the Center for Scientific and Industrial Research (CSIR)
are at the helm of affairs.
But other
organizations and ministries also devote funds to this
scientific research. A case in point is India's National
Program for Smart Materials (NPSM). The $15 million MEMS
Fund under this program is administered not by the
Ministry of S&T, but by the Allahabad Development
Authority (ADA). The Agricultural Ministry funds
agricultural research. So does the Ministry of Defense.
Normally, such research would be accounted for under a
separate head as compared to industrial and
technological research, but given nanotechnology's
undisciplined - or multidisciplinary - nature, it is
quite possible that these ministries also are funding
nanotechnology projects.
China and India:
Promising technology giants
These could be
reasons why China and India, two promising technology
giants, are not spending as much as their neighbors even
within Asia. However, Dr Srivastava sees other possible
factors, pointing out that budget announcements, such as
those of the US National Nanotechnology Initiative, have
a "down the stream" impact, as scientists and engineers
at the ground level start to refocus or align their
goals with the current nanotechnology-related
development.
"The hard budget allocations, thus,
not only define the rough limits of what a government is
planning to spend under that umbrella, but also act as a
magnet or leverage to generate additional resources or
funding from the contributing or enabling fields,"
Srivastava said.
Further, the way commercial
technology development works in the US, Europe and Japan
proves that the budget allocation versus down-the-stream
commercial product developments have a very strong
positive correlation. This is because seed investors,
venture capitalists, and corporate research houses make
significant investments for technology development and
exploitation. Based on government budgetary allocations
or announcements, they also start to sniff around, pay
attention, make investments, and start looking for
commercial opportunities where they can exploit not yet
fully developed technology, which has great future
potential. All this has a kind of cascading effect,
which results in successful downstream commercial
products.
"In a sense, the commercial technology
developments in the developed countries are very
strongly tied up with the R&D in academia and
government labs. That is why there is a very strong
correlation between the budgetary allocations and
commercial technology developments," Srivastava said.
In developing countries such as India and China,
the situation may be different, possibly because seed
investors and venture capitalists are not yet
significant drivers of commercial technology
developments. In addition, big business houses are not
yet at the cutting edge of these technology
developments, and the academic and government
laboratories are not strongly tied up in an
infrastructure that promotes the commercialization of
the developed technology. "I believe in China this
situation is changing very rapidly," said Srivastava.
"In India also this has to happen if they want to keep
pace with the rest of the developing and developed
world."
Jayanthi Iyengar is a senior
business journalist from India who writes on a range of
subjects for several publications in Asia, Britain and
the US. She may be contacted at jayanthiiyengar1@hotmail.com.
(Copyright 2004 Asia Times Online Co, Ltd. All
rights reserved. Please contact content@atimes.com for
information on our sales and syndication policies.)
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