Nano-technology – more investor folly?

Under the microscope

Nano-technology, which revolves around the development of even more powerful technologies on a microscopic scale, (the term nano derives from the word nanometer, which is one billionth of a metre), is becoming a fashionable technology topic, writes Bob McDowall, of Bloor Research.

Indeed, it is awaking active investment interest and participation from financial institutions, venture capital companies and more mainstream institutional investors alike. Even the UK Government recently announced plans for an independent study to examine the benefits and risks of nano-technology.

Why is this happening now?

Current technologies will reach their practical commercial limitations in their current form and application over this decade. A breakthrough beyond these constraints opens up a huge range of business opportunities for investors, technology companies and, principally end user commercial and retail consumers.

Some of the strongest proponents of nano-technology view it as "a new industrial revolution" where machines operate on a microscopic scale rather than on a substantial scale.

What are the drivers behind it? This is where there must be some unease. Investors and technologists alike want a share of the commercial success and personal rewards, which they believe, will derive from early technical and subsequent commercial success with this technology. They are seeking a slice of the action; they are fearful they might miss out if they are not early investors in and providers of nano-technology.

Should we be cautious?

The critical issue is to understand the technologies which provide and deliver commercial applications for nano-technology, otherwise the delivery is nothing more or less than pure research; certainly of intellectual value but of unproven commercial application.

The commercial benefits and applications of nano-technology must be examined in the very specific confines of the business to which it is intended to apply them. For example, what may be a commercially successful application in the context of medical science, may not work successfully in the context of the automobile industry.

Is this yet another dot.com bubble?

Bubbles like that are created when greed and enthusiasm substitute for analysis and understanding of the technology and its application and limitations. Viewing nano-technology in terms of blanket commercial applications to enhance the power of technology operating on a microscopic scale is dangerously simplistic.

The danger lies in the possibility of hype from investors, pundits and poorly informed commentators. Education and briefing from technology experts and independent analysts should be applied and will go some way to dispelling any myths about the technology and presenting its application in an appropriate and realistic context.

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