Home > Nanotechnology Columns > Should Investors Roll the Dice with Nanotechnology? > Should Investors Roll the Dice with Nanotechnology?
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Deborah Sweeney CEO MyCorporation.com |
Abstract:
Great rewards typically only come with great risks, and investing in Nanotechnology is a definite and substantial risk. But with all investment opportunities, potential backers of Nano-products need to determine whether the gamble is worth the initial risk, or if their money would be better spent on safer, older products. The answer to that is not very simple, and all investments should be considered carefully, but there are signs that it may not be such a bad idea to place a bet on Nanotech's future.
August 8th, 2011
Should Investors Roll the Dice with Nanotechnology?
Great rewards typically only come with great risks, and investing in Nanotechnology is a definite and substantial risk. But with all investment opportunities, potential backers of Nano-products need to determine whether the gamble is worth the initial risk, or if their money would be better spent on safer, older products. The answer to that is not very simple, and all investments should be considered carefully, but there are signs that it may not be such a bad idea to place a bet on Nanotech's future.
The US dominates the Nanotechnology field, but that may soon change if steps aren't taken to protect the fledgling industry from outside competition and give it the necessary funding to grow. There is a lot of money being pumped into Nanotech research and development but, so far, not enough return. The commercial applications of nanotechnology are limitless, but too few innovations of the field are tweaked to become viable, commercial products. This needs to change if investment is expected to continue. Before looking at a project, and potentially sinking money into it, investors must ask if this can be sold to someone. Whether it is the military, the health care industry, or just to the average consumer; what is the end game for this product? If they, or the person seeking funding, cannot answer that question, then investors may want to look elsewhere in the field.
Recently, the US government has become more involved with the safety of Nanotechnology, which means investors are just as concerned. The United States federal government's nanotech program, the National Nanotechnology Initiative, has begun to work closely with public health organizations like the FDA, indicating safety is a priority. If a project you invest is found to have a harmful impact on the environment, or worse consumer health, it will likely be shut down. The United States invests quite a bit of federal money into Nanotechnology as well, so they have the economic, as well as legal, sway to ensure the demise of any questionable innovation. The company seeking investment should be as open as possible when it comes to their product's safety. An in-house safety group is great, but a third-party testing service is even better.
One of the primary reasons that the government became involved in funding nanotechnology, however, is due to the emergence of funding from foreign governments in their own country's nanotech sector. Russia, Japan, Korea and China are all investing a significant amount in an attempt to move the US out of its leading position, threatening years of development and research. While this is frightening for industry leaders, it may be good for the individual investment group. The US government, generally, prefers private rather than public capital being tied up in emerging markets and technology.
As things progress and the government becomes more involved, they are going to want their investment to specifically aid them. The NNI has indicated in its 2011 budget that, as things progress, nanotech projects seeking federal funding should be more suited for the benefit of the United States. If a nanotech company wishes to develop commercially, they will need private investors. A need for investors means better terms for investment firms, and more money for them in the long run. There is a lot of money in commercial applicability, and there is already concern that many of the foreign countries that invest in nanotech do not have the research and development departments to find commercial uses for their discoveries. American firms do, and with private capital they can continue to focus on market-applicable solutions using new nanotech innovations.
The nanotechnology industry is estimated to grow by around 18% between 2010 and 2013; a substantial amount if you realize the advanced science and possible applications of this industry. Any market expected to grow by that much is worth the risk associated with investment. The earlier the investment, the higher the risk, but the greater the profit if the product you invested in does well. Nanotechnology is definitely worth the gamble, but not every company or invention within the industry may be. Consider your investments carefully, and remember to focus on commercial development. There are emerging competitors, funded by government initiatives, to create nanotech for use in defense, security, and environmental applications. While private investment is always welcome, and investments in federal projects are a little safer, you should remember that you would be competing against other, foreign, nationally funded nanotech programs. Private investors and investment firms should look around, and ask hard questions regarding the actual usefulness of whatever nanotech project they are looking at. The risk in such a fledgling industry can be great, but the rewards may be even greater if investments are made wisely.
For more information visit MyCorporation.com
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