2015: The Year of the Trillion Dollar Nanotechnology Market?

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Announcing the US National Nanotechnology Initiative (NNI) in 2000, President Bill Clinton declared:

“Imagine the possibilities: materials with ten times the strength of steel and only a small fraction of the weight -- shrinking all the information housed at the Library of Congress into a device the size of a sugar cube -- detecting cancerous tumors when they are only a few cells in size. Some of our research goals may take 20 or more years to achieve, but that is precisely why there is an important role for the federal government.” ¹

One of the most widely repeated predictions for nanotechnologies was its role in the creation of a trillion dollar industry by 2015, predicted by Mike Roco and his colleagues at the National Science Foundation.²

Looking back at the original National Nanotechnology Initiative forecasts, the biggest economic contributions of nanotechnology came from materials ($340bn), electronics ($300bn), pharmaceuticals ($180bn), chemicals ($100bn), transportation ($70bn) and sustainability ($100bn).

But as is often the case with headline numbers, these were not the product of a huge data collection exercise, but estimates based on a few reports and private communications (see below).

My Nanotech Is Bigger Than Your Nanotech

The NNI predictions spawned a series of reports promising ever higher numbers. The high water mark was the $3.6 trillion predicted by Lux Research back in 2005, which coincided with the peak of nanotech excitement.

The large numbers caused some debate at the time as to whether it was the value of the nanotechnology, or the value of the product, that should be used. One oft-cited example was that in some analyses, the addition of a nanotech-based anti-scratch paint to an automobile would result in the entire value of the car being added to the “nanotechnology market’ column, while in others it would be just the value of the nanoparticles used.

My preference at the time was to use the value of something that would not have existed without the nanotechnology; the automobile clearly would have done, but the anti-scratch paint would not.

While market numbers are always speculative I can still point to one prediction I got right: "there is not, and never will be, a nanotechnology industry".³

Predicting The Unknowable

So why did we spend so much time trying to size something so nebulous? Why did everyone spend so much effort on predicting the size of an industry that would never exist?

Michael Berger suggested that:

“These trillion-dollar forecasts for an artificially constructed 'market' are an irritating, sensationalist and unfortunate way of saying that sooner or later nanotechnologies will have a deeply transformative impact on more or less all aspects of our lives." ⁴

It’s easy to pooh-pooh forecasts, but someone has to make a guess at what is coming over the horizon.

There is a need for big numbers, and it’s not all about hype. With perfect hindsight we may raise an eyebrow at some of the predictions, but no government would have invested half a billion dollars in something predicted to be a hundred million dollar market.

Nobody would have written front page newspaper and magazine articles about a bunch of companies that would lose a few million dollars and go bust within a few years, and perhaps more importantly, no corporate finance director would have signed off on investment in a new area of research unless the numbers were big enough to trigger the twin corporate neuroses of fear and greed. This fed through to governments worldwide triggering an annual worldwide spend of $10Bn a year.⁵

Back To The Future

So were the early predictions from Bill Clinton and his advisors right?

The Library of Congress held a few terabytes of data in 2000 - although that is estimated to now be tens of petabytes - so holding the 1999 data on a sugar cube sized device is more or less possible. Methods to detect cancerous tumours at an early stage using nanotechnology are under development.

In fact, most of the "Grand Challenges" stated in the early NNI documents have been met - with the exception of a "continuous presence in space outside of the solar system with low-powered microspacecraft". Given that it took 18 years for a bit of my atomic force microscopy work at ESA to arrive at a comet, I’ll forgive this one.

Mission Accomplished?

Fifteen years on from the inception of the National Nanotechnology Initiative, there’s not much to carp about. Nanotechnology research is well funded globally, and leading to exactly the kind of breakthroughs that were envisaged back in the late 90’s. As nobody managed to predict the iPhone, Twitter or Facebook, that is remarkable.

But nobody involved with the NNI explicitly promised or predicted a trillion dollar market by 2015 - and with the contribution of nanotechnology being virtually impossible to quantify, we probably shouldn't get too hung up on that one number.

The greatest legacy of the mythical “trillion dollar market” was the fear of missing out (or even of allowing the US to dominate), and that was sufficient to spur many similar efforts in other countries. This, combined with widespread adoption of the Internet, made nanotechnology the first truly global scientific revolution.

Original 2001 Market Estimates

• Materials with high performance, unique properties and functions will be produced that traditional chemistry could not create. Nanostructured materials and processes are estimated to increase their market impact to about $340 billion per year in the next 10 years (Hitachi Research Institute, personal communication, 2001).

• Electronics: Nanotechnology is projected to yield annual production of about $300 billion for the semiconductor industry and about the same amount more for global integrated circuits sales within 10 to 15 years

• Improved Healthcare: Nanotechnology will help prolong life, improve its quality, and extend human physical capabilities.

• Pharmaceuticals: About half of all production will be dependent on nanotechnology — affecting over $180 billion per year in 10 to 15 years (E. Cooper, Elan/Nanosystems, personal communication, 2000).

• Chemical Plants: Nanostructured catalysts have applications in the petroleum and chemical processing industries, with an estimated annual impact of $100 billion in 10 to 15 years (assuming a historical rate of increase of about 10% from $30 billion in 1999; “NNI: The Initiative and Its Implementation Plan,” page 84).⁶

• Transportation: Nanomaterials and nanoelectronics will yield lighter, faster, and safer vehicles and more durable, reliable, and cost-effective roads, bridges, runways, pipelines, and rail systems. Nanotechnology-enabled aerospace products alone are projected to have an annual market value of about $70 billion in ten years (Hitachi Research Institute, personal communication, 2001).

• Sustainability: Nanotechnology will improve agricultural yields for an increased population, provide more economical water filtration and desalination, and enable renewable energy sources such as highly efficient solar energy conversion; it will reduce the need for scarce material resources and diminish pollution for a cleaner environment. For example, in 10 to 15 years, projections indicate that nanotechnology-based lighting advances have the potential to reduce worldwide consumption of energy by more than 10%, reflecting a savings of $100 billion dollars per year and a corresponding reduction of 200 million tons of carbon emissions (“NNI: The Initiative and Its Implementation Plan,” page 93).⁶

References

1. National Nanotechnology Initiative: Leading to the Next Industrial Revolution - White House Report, 2000 (PDF)
2. Societal Implications of Nanoscience and Nanotechnology - National Science Foundation, 2001 (PDF)
3. The First and Last Nanotech Conference - Cientifica, 2009
4. Debunking the trillion dollar nanotechnology market size hype - Nanowerk Spotlight, 2007
5. Global Funding of Nanotechnologies & Its Impact - Cientifica, 2011
6. NNI: The Initiative and Its Implementation Plan - National Science Foundation, 2000

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