Big tip o' the hat to Nanodot for noticing an excellent piece of analysis by Michael Berger at Nanowerk that debunks the "trillion dollar nanotechnology market size hype."
Berger says:
There seems to be an arms race going on among nanotechnology investment and consulting firms as to who can come up with the highest figure for the size of the "nanotechnology market". The current record stands at $2.95 trillion by 2015. The granddaddy of the trillion-dollar forecasts of course is the National Science Foundation's "$1 trillion by 2015", which inevitably gets quoted in many articles, business plans and funding applications...
The problem with these forecasts is that they are based on a highly inflationary data collection and compilation methodology. The result is that the headline figures -- $1 trillion!, $2 trillion!, $3 trillion! -- are more reminiscent of supermarket tabloids than serious market research. Some would call it pure hype. This type of market size forecast leads to misguided expectations because few people read the entire report and in the end only the misleading trillion-dollar headline figure gets quoted out of context, even by people who should know better, and finally achieves a life by itself.
To his credit, Berger doesn't settle for simply poking holes in the inflated statements about nanotech's financial impact. He's also interested in setting the record straight about what nanotechnology really means and what it's almost unimaginable value truly could be.
But before we get to that juicy stuff, let's enjoy Berger's dissection of a Cientifica white paper titled "Half Way to the Trillion Dollar Market," which predicts a "Global Nanotechnology Market" of $2.95 trillion by 2015.
Wow, that's a lot of money! However...
Somewhere in the text of the Cientifica report is this key sentence: "It should be noted that this is not the total value of nanotechnologies included in products, but the total value of the products. Thus a tenth of a gram of nanomaterials costing 10 cents may be included in a drug costing $100 per dose."
Just to be clear here: this means that the nanotechnology market size, as compiled by Cientifica and others, includes the $100 for the entire drug dose, not it's actual 10 cents nanomaterial ingredient. In this example they are therefore expanding their definition of "market" by a factor of 1,000 simply by including the entire product's value, not just the nanotechnology component in it. This methodology is then consequently applied to all industry sectors.
And Cientifica is not alone in hyping nanotech's future value.
Lux Research in a recent report ("Sizing Nanotechnology’s Value Chain") makes a similar stretching exercise as Cientifica by predicting a $2.9 trillion nanotechnology market by 2014. They correctly identify this number as "Sales of products incorporating nanotechnology". According to their example, the value of all Chevy Impalas -- just because the car contains a component that contains nanoparticles -- would be considered part of the nanotechnology market. That's got to be an even higher scale-up factor than the 1,000 X for the drug in the Cientifica example.
Berger finishes his piece by saying:
I guess the point I am trying to make here is 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.
What's most irritating is that these inflationary distortions are not really necessary. Unless, that is, you are trying to make a case for investing in a revolutionary technology while at the same time ignoring its most revolutionary possibilities.
Earlier in his analysis, Berger says:
Today, there isn't even a clear definition of what nanotechnology is. The CRN blog covered this confusing picture quite nicely in a recent post. [Thanks!] But taking every product that has anything to do with nanotechnology, however miniscule or remote, adding up the entire value chain of these products, and claiming this is "the market for nanotechnology", isn't very helpful either. On the contrary, it contributes to the confusion: first we are told how revolutionary nanotechnology is going to be (think molecular nanosystems such as nanorobots). Then we hear that actually there is quite a discussion going on among experts as to when or whether it's going to happen. And now we read that nanotechnology will be an almost three trillion dollar market within the next 8 years!
Confusing, yes? No wonder we have such a hard time getting people to think straight about nanotech. Berger's piece continues:
First of all, these market size forecasts are dealing with what is called evolutionary nanotechnology. The goal of evolutionary nanotechnology is to improve existing processes, materials and applications by scaling down into the nano realm and ultimately fully exploit the unique quantum and surface phenomena that matter exhibits at the nanoscale. This trend is driven by companies' ongoing quest to improve existing products by creating smaller components and better performance materials, all at a lower cost...
By contrast, truly revolutionary nanotechnology envisages a bottom-up approach where functional devices and entire fabrication systems are built atom by atom. There is no way today to put a market value on this visionary technology and its hypothetical products and it is therefore not covered in any of the nanotechnology market size reports.
Exaggeration and obfuscation are unnecessary (as is redefinition of terms). Without resorting to hype or distortion, we can safely say that the economic impact of atomically-precise nanotechnology-based manufacturing will be nearly incalculable. But in order to accept the reality of that statement, you also must accept the reality of the transformative and potentially quite disruptive implications of molecular manufacturing.
You can't have it both ways. Either nanotech is a revolutionary technology, potentially worth trillions in real dollars and with seriously destabilizing implications, OR it is an evolutionary technology with important -- but only incremental -- impacts and with limited economic value. Which is it?
As we've asked before: Who has the hype?
Mike Treder

Tags: nanotechnology nanotech nano science technology ethics weblog blog
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