Nanotechnology products measure no larger than 100 nanometres or 0.0001 mm. So, why would investors be interested in risking their money on a product that is smaller than one-900th the width of a single human hair?
To answer this question, it is necessary to understand what nanotechnology can do and the history of companies and investment in nanotechnology.
What can nanotechnology do?
At the heart of nanotechnology is the concept that materials work differently at the nanoscale than how they work at the macroscale. As the US government’s National Nanotechnology Initiative explains, “Matter such as gases, liquids, and solids can exhibit unusual physical, chemical, and biological properties at the nanoscale, differing in important ways from the properties of bulk materials and single atoms or molecules. Some nanostructured materials are stronger or have different magnetic properties compared to other forms or sizes of the same material. Others are better at conducting heat or electricity. They may become more chemically reactive or reflect light better or change color as their size or structure is altered.”
By modifying nanoproducts to provide specific properties, manufacturers can then add those nanomaterials to the polymers, sensors, medicines, metals, glass, rubber etc. that they are making to provide added benefits.
For example, car tyres with added carbon nanotubes can be made 20% lighter (reducing fuel consumption), more durable (lasting twice as long), and electrically conductive (a crucial requirement in tyres).
What is the history of nanotechnology?
When manufacturers first became aware of the potential for nanoproducts, investors flocked to bankroll the earliest nanotech companies.
The technology became seen as the ‘next industrial revolution’ and predictions of quick profits began to emerge. As the financial journal Investing News reports, “Back in 2006, Lux Research estimated that revenues from products using nanotechnology would reach $2.6 trillion by 2014 (a staggering increase from the $14 billion that nanotech produced in 2004).”
A typical consequence of this optimism led Lux Research and PowerShares Capital Management to form the PowerShares Lux Nanotech Portfolio – an exchange-traded fund worth an estimated $89 million dollars.
Unfortunately, the number of nanotechnology products going to market was a steady stream, not the predicted tidal wave, and investors soon realised that the amount of money put into the nanotechnology industry had created a bubble. This led to an exodus of investors from nanotech stocks and funds. Like many other investments, the PowerShares Lux Nanotech Portfolio began taking losses and folded in 2014.
However, the story of investing in nanotechnology does not end there.
As the financial journal Investing News notes, “What has emerged out of a boom-and-bust market is an industry focused on strategic long-term business plans, and in-demand innovative products. Many firms receive steady revenue from nanotech products, which they re-invest in the market to drive explosive innovation.”
One example of how the nanotechnology industry has turned investment into profit can be seen at the manufacturing giant 3M, who have successfully applied nanoproducts into a wide range of their product portfolio. Everyday items from dental fillings and crowns, brightness-enhancing optical films for LCD displays, fertilizers, and oil extracting lubricants for drill heads all use nanoproducts to improve performance.
As a result, optimism has returned to nanotechnology investment alongside real evidence of how widespread nanoproducts are being used.
As a study in the journal Molecules, entitled The History of Nanoscience and Nanotechnology, notes, “In only a few decades, nanotechnology and nanoscience have become of fundamental importance to industrial applications and medical devices, such as diagnostic biosensors, drug delivery systems, and imaging probes. For example, in the food industry, nanomaterials have been exploited to increase drastically the production, packaging, shelf life, and bioavailability of nutrients.”
The report also notes how, “Nanomaterials are being used to build a new generation of solar cells, hydrogen fuel cells, and novel hydrogen storage systems capable of delivering clean energy to countries still reliant on traditional, non-renewable contaminating fuels.”
Nanotechnology also has vast potential in medicine, chemistry, and material science.
In the field of industrial raw materials, for example, the Prague-based company AG CHEMI GROUP(who host this webpage) are expanding rapidly beyond their long-term success of supplying industrial raw materials into delivering nanoproducts for manufacturers.
Since 1994, AG CHEMI GROUP has been supplying raw materials to America, Europe, and Asia in industries as varied as glass blowing, agriculture, plastic production, detergents, construction, industrial chemicals, and explosives.
Now the move to providing nanomaterials will build on this network of established suppliers and customers, as the company’s founder and CEO, Igor Sevcenko, explains, “There are now fixed plans to open a NANO DEVELOPMENT CENTER in Kladno, Czechia by the end of 2020.”
Here the company will use its patented process for mixing nanomaterials to boost productivity and performance in the polymer, elastomer, textile, and construction industries.
As a whole, the industry is forecast to have compound annual growth rate (CAGR) of around 14.3 percent between 2020 and 2025. While investment consultants at IndustryARCpredict that the global nanotechnology market will be worth more than $121 billion in just five years.
The market for nanotechnology is already available and nanoproducts are already being manufactured. The history and current times for investing in nanotechnology are solid, and it seems that the future looks fairly bright too.