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Germany Needs Lawyers Too

In a resent post I commented on brain drain from developing nations. Small Times reports that Germany doesn’t have enough engineers because “many students opted for less arduous studies such as management.”

The engineer is becoming an endangered species in Germany, threatening the quality of the nation's products and forcing companies to seek staff from abroad.

Europe's biggest economy is short of about 15,000 engineers, says the country's engineering association VDI.

At least they aren’t becoming lawyers.

Ohio Hits the Small Time (Repost)

The Ohio Nanotechnology Summit (Here is the Governor’s announcement) will be held March 2-3, 2005 at the Hope Hotel and Conference Center, Patterson Air Force Base.Big nano-names are coming; the speakers and presenters include:

Dr. Rick Smalley , Rice University
Dr. Liming Dai, Wright Bros. Institute Chair for Nanomaterials, Univ. of Dayton
Phil Kuekes, Hewlett Packard Labs
Prof. James Lee, Director, NSF NSEC for Affordable Nano Bio Products & Devices
Prof. Mauro Ferrari, OSU/NCI
Mark Cooper, Copernicus Therapeutics
Mark Brandt, The Maple Fund
Art Zucker, Ohio University
Alan Brown, VP, Chief Technology Officer, CAMP Inc.
Scott Rickert, President, CEO NanoFilm
Richard Schorr, President MetaMateria Partners
Roger Avakian, Chief Technology Officer, PolyOne Corp.

The objectives of the meeting are to:-capture a sense of what is happening in nanotechnology around the state in industry, academia and Ohio-based federal labs;-foster and promote collaborations within the state that will lead to positive economic outcomes based on nanotechnology; and-hear a national perspective on nanotechnology from prominent experts in the nanotechnology arena.

The summit will begin with a nanobasics primer or a tour of nanotechnology labs at the Air Force Research Laboratory Materials Directorate (sorry the link may not work). (If you are going on the tour be sure to bring your drivers license and a Passport, Birth Certificate or your Green Card)

I will be there presenting a poster on what nanobusinesses need to do to protect their investment in research and development. The first ten people to track me down and use the word NanoPundit will get a free drink at the hotel bar on Wednesday night.

Global Nano Meeting Misses the Point Entirely

The International Centre for Science and High Technology of the United Nations Industrial Development Organization (ICS-UNIDO) recently called a meeting in Trieste Italy to discuss the role that international organisations - and ICS-UNIDO in particular - could play in helping developing nations tackle this emerging field of technology. A report is here. Some of the reported conclusions are:

[D]eveloping countries were doing enough in terms of nanotechnology research and education. . . a forum of gathering entrepreneurs in the South and companies in the North would be valuable.

[F]unding agencies such as UNIDO help to obtain US$2 million a year for five years to fund a capacity-building project in the South that would give equal importance to research and entrepreneurial training.

[U]nless the industrial sector is brought on board "there will be no house for the research and development that we do, no home for the inventions".

My opinion is that these folks have missed the point entirely. The problem with developing nations and nanotechnology is that they lack the financial and industrial infrastructure to take advantage of nanotechnology developments.

Just as nations with developed shipping and railroads were able to take advantage of the internal combustion engine and build mighty automotive industries; countries with developed financial and entrepreneurial systems are in position to take advantage of the coming nanotechnology revolution. Government funding and international meetings will not build this foundation.

Money and equipment are fungible and flow across national borders to where they can be put to the best use. Right now cash isn’t flowing into developing nations because the risks are high and governmental inertia is often overwhelming. The answer is not government spending, it is government getting out of the way so entrepreneurs can get rolling.

The most critical problem developing nations need to solve is the so-called “brain drain.” Over the last 15 years working in patent law I have met some genius scientists and engineers from South Asia, Africa and South America all of whom were working in the United States. I have also spoken on the phone and traded faxes with some genius scientists and engineers from European and Japanese. The difference is that the Europeans and Japanese can stay in their native land and have rewarding careers.

New York Times Goes Nano

The New York Times goes nano with Tiny Is Beautiful: Translating 'Nano' Into Practical. It is mostly nanomedicine with a bit of nano-environmental engineering. There is only a small amount of fear mongering with a brief reference to brain damaged fish.

I find the NYT science reporting is generally more horror story* than science so I am pleased that the story is generally positive. It lays out lots of potential benefits to society with a reasonable warning about the risks. I have written dismissively about nanoshirts, nano-stain fighting is great but it is not the kind of killer application that drives a society to change or accept any risk. We need to get out to the hustings and teach people about the potential benefits of nanotechnology. Lets push breast cancer cures, fuel cells and terabyte memory, not shirts. Society is not going to accept a risk of brain damaged fish for stain resistant shirts so I am glad the NYT is talking about cures rather than pouring cups of coffee on its nano-pants like CBS did a few weeks ago.

It seems that the New York Times Rolodex is full of the PR agents for:

Quantum Dot Corporation
Nanospectra Biosciences Inc.
Altair Nanotechnologies

It will be interesting to watch if this article will cause a bounce in the values of these stocks. Publicity never changed the long term value of a company or increased its sustainable competitive advantage but the power of the NYT can send these companies on a bumpy ride for the next few weeks.

There is also a medieval nano technology story that I haven’t seen in a major publication (and in fact, I did not know that the gold particles in ruby glass were ~25 nanometers). Of course by this definition Otto Diesel is probably the most successful nanotechnologist the world will ever create. His invention “diesel soot” contains a huge amount of nanomaterials.

*I think that The New York Times science reporting is mostly left wing environmental orthodoxy, worst case scenario, numerators without denominators and extrapolation of short term data far beyond any reason. “It is two degrees warmer today than yesterday, at this rate the oceans will be boiling by April.”

It's a Nano-World

Interesting news from around the world (or at least countries strating with I).

Ireland
Israel
India and India again.

The last link mentions the group ETC Group:

The ETC Group - a Canadian non-governmental organisation - has expressed concern that the new industry could be dominated by developed nations (through patents, for example) that would increase the gap between rich and poor nations, a phenomenon labelled the 'nano-divide'.

The worst thing that could happen to developing nations is that they listen to groups like ETC.

Tune in next week for countries starting with J.

Miniature Golf??

This strikes me as a load of C®@P.

As part of the reestablishment of the Wilson Staff line celebrating the company's 90th anniversary, it has introduced driver heads, balls and shafts with molecular nanotechnology - the same nanotechnology the U.S. Department of Defense and NASA have been researching and developing for use in their military and aerospace products.

"It's the biggest news in golf you can't see," said Wilson territory manager John White. "We've been working on it for 2½ years and we're the first equipment company to use it. It's going to allow us to make titanium obsolete, or at least give it a run for its money."

The process involves controlling individual molecule-building reactions to form complex molecular structures. Nanotechnology bonds materials together and eliminates microscopic separations, theoretically making the product lighter, stronger and more stable while transferring energy efficiently.

The technology is present in two Wilson Staff drivers, fairway wood heads, the core of three ball designs, and the bottom third of graphite shafts in Wilson Staff drivers, fairway woods and irons.

Maybe George Mannes was right.

You Aren’t Short You’re 1.5 Billion Nanometers Tall

South Carolina discovers nano. It’s for kids but looks like fun. This must be South Carolina’s attempt to break the tie and take over sole possession of Lux Research's ranking of U.S. states for economic development from nanotechnology.

Cypress Dump's MRAM

Cypress Semiconductor to dump MRAM (Magnetic Random Access Memories) unit.

"Based on our latest calculations at Cypress, we no longer believe that the 1T-1MTJ MRAM technology will be able to successfully attack the SRAM market, leaving MRAM as a niche technology with higher bit pricing than that of SRAM. While a niche MRAM business could be a profitable addition to Cypress's portfolio of products, we currently have more attractive places to invest than in the capital-intensive MRAM business.”

Wow. I’m shocked that they are moving out of this market. The folks a Cypress are pretty smart so there must be some pretty substantial barriers to lowering the cost/bit in MRAM.

MRAM technology leader NVEC took a pretty big hit on the news.

Reasons for the Venture Funding Drop

Technology Review on the drop of venture funding for nanotechnology dropped from $386 million in 2002 to $200 million in 2004.

That means nanotech startups are finding it harder to do research in areas that could have tremendous long-range impact: new nanomaterials for optics and chip-cooling systems; biological diagnostics based on ultrasensitive nanosensors; and smart, automated delivery systems for protein drugs. "Over the years, the financial community has pushed for shorter-term results," says Peter Garcia, chief financial officer of Nanosys, a nanotech startup based in Palo Alto, CA. "There are projects that are more long term technically that have the greatest potential to change how products are made, but the funding is not there."

Move over to page two for a graph showing a precipitous drop in venture funding since 2000. the totals from all funding rounds peaked in 2000 and dropped every year until 2003. Also note that the big bucks are in the “later round” category (third and later). “Later round” funding is always larger than earlier round funding; products are ready for commercialization, risk is lower, payoff is closer. These later rounds are triggered by seed and first round funding that take place previously. The drop in funding in 2001-3 has left a gap in companies ready for “later round” funding. This gap is being filled with new investments and I expect to see a dramatic upsurge in funding as these nanostarts mature.

Page two also includes a graph that includes a legend “more than $50 billion in venture capital raised since 2000 remains unspent.” This venture capital is not making them any money and as the pain from 2000 goes away it will come into the market and fund all sorts of new companies. Then nano will be competing for venture dollars with bio, IT, security and who knows what else. It will be interesting and fun to watch.

The best line is about internet companies and their funding "Twenty-four months ago, they couldn’t get any love from venture guys. Now they’re beating down their door." Is it time for nanotech to get some love? It’s going to happen, I’m just glad I’m not trying to go public right now.

Methinks I Protest Too Much

George Mannes at theStreet.com is making fun of nanotechnology, or at least Steve Forbes and his Nanotech Report.

In an article entitled “The Five Dumbest Things on Wall Street This Week” nanotech hits number 1 with “Is That a Sugar Cube in Your Pocket or Are You Just Happy to See Me?”

Forbes' new Nanotech Report, a $295-a-year newsletter intended to guide your investments in nanotechnology, which we at the research lab formally define as "the science of itty-bitty things."

Nanotechnology is "the next, next big thing!" writes Steve. As in, a cash-out-all-your-shares-of-Microsoft (MSFT:Nasdaq - news - commentary - research - analysis)-and-invest-in-this opportunity. As in, get-in-on-the-ground-floor-before-it's-too-late hot.

Among the "theoretically feasible" applications for nanotech, according to Wolfe:
"Engineered molecules" that can be "the key to curing diseases."
"A sugar-cube-sized supercomputer capable of storing everything in the Library of Congress."
"Smart combat fatigues" that detect biological weapons, secrete "the appropriate blocking agent" and change colors like a chameleon.
"Bathrooms that never need cleaning."
"Automobile tires that never go flat."

These claims raise a number of questions -- chief among them, how long have people at Forbes been dropping acid?

We may not have learned much from the dot-com bubble, but we have learned that if someone promises that a new technology will cure cancer, improve homeland security, shrink a library to the size of a sugar cube and clean your toilet, the whole thing is probably a scam.

I think that Mr. Mannes is still angry that his scene from The Graduate hit the cutting room floor. You know, right after Mr. Maguire says “Plastics” Mannes piped in “No, asbestos is the future.” Other Mennes quotes include:

A machine that flies like a bird, impossible.
Electricity, If I can’t see it I don’t need it.
I’ll get the 20MB hard drive; no one could ever fill up 40MB’s.
De. . . deox. . . deoxynuculear, aw if I can’t say it I ain’t going to invest.
Microsoft at 120 and rising, this is too good to miss.

As all six of my regular readers know, nanotechnology is the science of manipulating materials on the atomic level and it is going to open up huge new areas of endeavor. If the analogy is plastics, nanotech is still in the Bakelite era. There is money to be made in nanotechnology. I think that 80% of the market is overvalued, but the market as a whole is undervalued. I have said it before, people way smarter than me are trying to figure out where the money is and somebody is going to get rich.

Fear and Greed

Technology Review writes about the concentration on later-stage technologies from research universities.

Industry doesn’t seem to be as interested in fundamental breakthrough technologies in areas such as nanotech; instead it favors more short-term and less risky technologies that are closer to commercialization and have clear markets and customers, says Katharine Ku, director of Stanford University’s technology licensing office.

University of Texas at Austin is actively trying to spin off more companies, rather than licensing technologies to existing companies. "We are aggressively doing startups," says Neil Iscoe, director of the University of Texas’s office of technology licensing. "We have to change our approach to get more things out," he adds. "How do you market a disruptive technology? You do it through a startup."

I think that part of the emphasis on later stage technologies is that the risk is substantially lessened with a marketable technology. As with all investments the reward is less as well. MIT’s Lita Nelsen sees "more folks realize there’s not much money in late-stage deals." and has noticed a dramatically increased interest in technologies, even early-stage ones, related to security.

As we get further from the tech bubble we will see increased interest in partnering with universities and institutes to bring earlier stage technologies to market. Risk taking brings bigger benefits to society and this is where the big money is.

Shakeup at HP

Carly get the boot. Bet the farm on Compaq and lost. This probably will not effect HP’s nanotech efforts. I think HP was a great company that got bogged down in personal computers and inkjet printers when they should have been on the cutting edge of science where they got their start. Hey HP, monetize those cash cows and get back to your “core competency.”

NanoClarity to NanoRank

NanoClarity announces a rating of all nanotech companies. The companies will be rated on: company business model, where a company is on the nanovalue chain, the need for additional investment and other measures. NALA rates the next 2 – 4 years of company operation. This looks interesting but probably falls into NanoBot’s “that's how you build buzz and sell paper” category. You can subscribe to NanoClarity here. Everybody’s doing it.

Alan Shalleck, publisher of NanoClarity, the new nanotechnology monthly newsletter, announced today that NanoClarity will rate each promising nanotechnology company on its outlook for “sustainable profitability” using NanoClarity’s proprietary “NALA* Index” rating system. NanoClarity is distributed over the Internet at www.nanoclarity.com. A company’s NALA* Index will be available only to NanoClarity’s subscribers. Mr. Shalleck said, "To date no one has evaluated investment in nanotech companies based on “sustainable profitability” … the only evaluation that makes investing sense. I expect a company’s NALA* Index to become a standard measure for all nanotechnology investors.”

Biodegradable NanoParticles?

The Washington Times has a story on developments at the Oregon Nanoscience and Microtechnologies Institute (ONAMI). The story is mostly the standard “fuel cells” and human hair metaphors but there was one section that caught my eye about health effects and interesting way to reduce the fear about grey goo, biodegradable nano-particles.

Nanoscale particles generally have increased toxicity because they are highly reactive. To eliminate hazards, Oregon institutions are working on benign versions of nanoparticles that contain cellulose and biodegrade in six months. ONAMI is developing a portable factory where nanoparticles are made in microreactors exactly where they are needed. "It completely eliminates the dangers of making them in a factory in one place and shipping to the point of use," Mr. Drost said.

Very interesting. A lot of nanotech work relies on the interesting structures that can be formed of carbon so biodegradability is not a complete solution.

Japanese to Study Nano Health Efffects

Yomiuri Shimbun has a story out on how the Japanese Government will evaluate the safety of nanotech materials. UPI has a brief English language story here. The effect of nanotech materials on human health and the environment will be studied with the thrust being toward the creation of environmental, health and safety regulations. Carbon nanotubes and fullerenes get a specific mention. The story states: “This will be the first time that the [Japanese – Ed. any?] government examines the effects of a new technology before it goes into practical use.”

I applaud the Japanese government for taking on this difficult task. This will be the most important study relating to nanotechnology, and I hope that the Japanese do it right. Any reported health effects, no matter how minute, will be used as a cudgel against the budding nano-industry. I hope they do these studies right.

Business Week Discovers Nano

Business Week Magazine has a number of articles on nanotechnology.

Nanotech's Heartland Lift
Cleveland's Five Star Technologies is the kind of new company that's proving the Rust Belt can become part of the Next Big Thing

Why the Old Rules Don't Apply
At the nano scale, familiar materials can do things they couldn't do before

Rebuilding Things "Atom by Atom"
Nanoscience expert Chad Mirkin discusses the promise of supersmall materials, what breakthroughs are likely, and what's just hype

The Skinny on Nanotubes
Theoretically perfect for the chips of tomorrow, these complex carbon structures have a problem: They're almost impossible to work with

The Vast Potential of Very Small Things
Nanotechnology promises medical care tailored explicitly and exactly to the individual, says the physicist and entrepreneur Michael Roukes

Nanotech: Universe In A Grain Of Sand
Scientists are finding that ultratiny materials behave in unexpected ways.

Mega Questions About Nanotech
Rice's Kristin Kulinowski on the thorny biological and environmental issues

Nanotech: Beyond the Hype -- and Fear
Kristen Kulinowski's job at the Center for Biological & Environmental Nanotechnology is "to draw attention to proactive, responsible development"

Disease Detection and NanoBio Sensors

One of the most exciting areas of nanotechnology is the use of nanosensors, especially in the area of protein detection. Alzheimer’s, cancer, coronary artery disease and Creutzfeldt-Jakob disease (Spongiform Encephalopathy; Mad Cow) all produce disctinctive protiens. Sufficiently sensitive protien sensors will be able to detect these protiens and make an early diagnosis of these and other diseases. Currently, Alzheimer’s Disease may only be definitively diagnosed post mortem.

Nanosphere, is working with Northwestern University to further develop a bio-barcode assay which is 100,000 times to one million times more sensitive than other available tests in the detection of a protein in the brain linked to Alzheimer's disease. The more sensitive tests will allow earlier diagnosis and treatment of these diseases. These tests may also speed the development of new treatments for disease by providing feedback as to the efficacy of an experimental treatment.

The bio-barcode assay was developed by researchers at Northwestern University and is now exclusively licensed to Nanosphere. Nanosphere reports that they have provided research laboratories with a manual version of the technology and will provide an automated form later this year.

As regular readers know (all twelve of you) one of my concerns is that the real benefits of nanotechnology will be lost among stories of self cleaning glass and stain resistant shirts and that the Luddites among us will force impossible levels of regulation on the nanoindustry. As for me I am not worried about regulations on self cleaning glass but lets rush the cancer detection to market.

More Comments on State Rankings

As usual, Howard Lovy over at Nanobot has a good take on state rankings by those in the media. I wish I was as smart as him.

Yeah, I know, that's how you build buzz and sell paper and all that -- by getting regions and states to brag about their rankings and buy the reports and mags that rank them.

and

I think any state would be hard-pressed to point to any economic benefit yet.

Nanometer Schmanometer

Jim Jones and Sharon Wienbar at Electronic Business Online have an interesting article about MEMS (microelectromechanical systems) and how in the rush to nano how they are being ignored. Since this is NanoPundit rather than MicroPundit, I am guilty of the same thing.

The article mentions JDS Uniphase and their difficulty with “a downturn in capital spending by telecom carriers and low MEMS product yields due to packaging challenges.” The article goes on to discuss the industry overcoming some of these problems and the MEMS market growing to $5B in 2004 with the potential to reach $10B by 2008.

What is unmentioned is the wild ride the JDS investors took. I expect that the NanoIndustry will face similar challenges and selected stocks will go on similarly wild rides. I just hope I am smart enough to by at $2 and sell at $160 rather than the other way around.

Q: How do you become a millionaire investing in nanotechnology?
A: Start as a billionaire and . . . (BaDumBump)

MEMS (microelectromechanical systems) are complex semiconductor-like devices in which electrical circuits; mechanical structures; and other physical structures such as valves, gears, mirrors, pumps and actuators, are integrated onto a single device tailored for a specific application. Many people are now familiar with MEMS as the basic technology behind accelerometers, which control the air bags in your car. But they may not realize that half a dozen MEMS devices in a new car are monitoring and controlling the tire pressure, antitheft systems, active suspension and fuel.

Five years ago, the electronics industry was abuzz with the promise of MEMS to manipulate light in optical switches (for an earlier article on MEMS, see "At Long Last MEMS," February 1, 2002). The hype and expectation for success in optical networking culminated in the acquisition of MEMS foundry Cronos by JDS Uniphase in 2000 for approximately $750 million. Two fundamental issues ultimately stopped this momentum: a downturn in capital spending by telecom carriers and low MEMS product yields due to packaging challenges.

Small Times Reads the VC Tea Leaves

Small Times has an interesting article on the drop in VC funding of Nanostarts and finds more but smaller companies being funded. Not surprising in view of the large funding rounds acquired in 2003.

At first glance, private nanotechnology funding appears to be contracting. But that's not necessarily the case. By the end of the third quarter, only $122.1 million had been invested in the field in the U.S., according to a Small Times analysis of the MoneyTree Survey by PricewaterhouseCoopers, Thomson Venture Economics and the National Venture Capital Association. That puts funding on track to be well below $200 million for the year, a far cry from the $301 million invested in 2003.

While the dollar amount has come down significantly, there has actually been a dramatic uptick in deal volume. By the end of the third quarter, investors had already invested in 30 nano companies, on pace to significantly outstrip the total of 34 funded during the entire year of 2003.

Beneath those numbers are essentially two generations of startups. The more mature of the companies founded in 2001 and 2002 raised fat rounds in late 2003 in anticipation of a possible exit window in 2004 or 2005. Consequently, they had no need to raise venture dollars last year.