Funds for start-up firms will spur nanotech advances

According to a recent report by engineering design consultancy firm Frost & Sullivan, small start-up companies are the linchpins of nanotechnology innovation. The report says that, "Although investors have been cautious of late about funding anything, nanotech companies will rely on venture capitalists and government agencies to spur advances." Although investors are not taken in by the hype surrounding the potential of nanotechnology, they realise that the market, with fewer competitors, will be profitable for those with more stable business models and valuable products for many industries. Academic research, the driving force behind many start-ups, has been primarily fuelled by government grants. Despite the increased budget for research and development programmes, the global economic slowdown has pressured governments to regulate monetary allowances by curtailing discretionary funding. "Global nanotechnology R&D investment reported by government organisations has increased approximately five times in the last five years between 1997 and 2002 and currently stands at about $4 million," comments Girish Solanki, analyst at Technical Insights, a business unit of Frost & Sullivan. "No less than 30 nations have initiated national activities in this field." According to the report, "Consumers will demand competitive advantages over existing techniques and tools to justify the high retail price, which is a result of high development costs. Large customers might overlook the cost factor if the benefits are substantial but more enticing features will be required to persuade the smaller ones to invest in this technology. To penetrate the market, nanotech companies will have to develop more cost-competitive and readily implementable products." Apart from promoting the technology, campaigns will also have to work toward improving public knowledge about the implications of the use of these molecular-sized products with regard to people and the environment. DP