Banking for 7 billion and 7 million

GLOBAL INVESTOR 3.06 Switching — 54
The field of nanotechnology, a science that deals with objects the size of a few nanometers,
promises significant advances in a growing number of industries. The reason for nanotechnology’s
potential is not just the small size of the objects, but the fact that small particles behave
differently than objects in our macroscopic world.
Dr. Maria Custer Sigrist, Equity Sector Analyst
Nanotechnology is regarded as one of the key technologies of the
21st century, which will affect not just one industry or market but,
as an enabling technology, will create new opportunities in materials,
instrumentation, healthcare, electronics, defense, sensors,
manufacturing and environment areas. Although the commercialization
of nanotechnology is just beginning, nanotechnology was
used in approximately USD 30 billion of manufacturing goods in
2005. 1 Market observers forecast that USD 2.6 trillion of global
manufactured goods will incorporate nanotechnology by 2014. 2 In
order to meet the information needs of our clients, Credit Suisse
began following the developments in this area a few years ago.
The bank was present at Nanofair 2004 in St. Gallen, Switzerland,
and has published several reports, including the “Global Investor
Focus: Nanotechnology” in 2005.
Interactive field trip to Boston
So far in 2006, Credit Suisse has organized two interactive field
trips for the purpose of meeting with local organizations to exchange
know-how and experience. The second interactive field
trip was in Boston, and focused on nanotechnology. The main target
of the trip to the Boston area, an important nanotechnology
cluster (or network of research centers), was to learn about how
different industries can benefit from nanoscale developments. We
visited the companies described in this report. These firms are not
covered by our research and, hence, not recommended. Our intention
is to give our clients an overview of companies developing innovative
products using nanotechnology with applications in the
fields of healthcare, materials and electronics.
Currently, there are more than 600 start-up nanotechnology
firms in the USA, with a total of 3,966 US nanotechnology patents
having been issued since 1985. 3 This is not surprising considering
that the largest source of nanotech funding worldwide is North
America (investments in nanotechnology in the USA totaled approximately
USD 4 billion in 2005, or 41% of total global investments
in this technology last year), followed by Asia (Japan, South Korea
and China) and Europe. Besides the amount of funding, the main
difference between the USA and other regions is that all three
types of nanotech funding are provided: government support, funding
by corporations and venture capital (USD 1.7 billion from the
US government, USD 1.9 billion from corporations and USD 460
million from venture capital 4 ). Asia and Europe invested a total of
USD 3.4 billion and USD 2.06 billion, respectively, over the same
period of time. While the main sources of funding in Asia were
governments and corporations, Europe was mainly dependent on
government backing (approximately 60%). Many large corporations
with strong research and development departments [e.g. DuPont
(HOLD), General Motors (HOLD), BASF (BUY)] have significant
expertise in nanotechnology.
Nanotechnology in the Boston area
In the USA, local and regional efforts are already having a significant
impact on the development of nanotech companies. Massachusetts,
for example, enjoys a leading position in nanotechnology
research and development, with three top institutions (MIT, the
University of Massachusetts Amherst and Harvard) among the
institutions heading global research in this area. The region has an
excellent base of scientists and engineers in both academia and
industry, and hence a distinct advantage in the interdisciplinary
research needed for the most promising work in nanotechnology.
In 2004, the Nanoscience and Technology Institute (NSTI) and the
Massachusetts Technology Collaborative (MTC) estimated that
Massachusetts had over 100 companies focusing on nanoscale
products or processes. 5 More than half of these firms were focused
in the areas of healthcare (29%) and electronics (22%), most likely
due to the state’s historic expertise in those areas. Companies developing
instrumentation (17%) and materials (13%) are also represented
in the region.
Nanotechnology and healthcare
Cellular mechanisms and molecular biology methods are inherently
nanoscale processes. The combination of many new technologies,
such as the advances made by visualizing techniques (e.g. atomic
force microscopy) and the deciphering of human and other genomes,
is opening up a new era of understanding biological processes.
Advances in nanotechnology providing totally new approaches to
manipulate, modify and eventually design and fabricate molecular