Sunday, April 10, 2005

Cleantech and Nanotech

Nanotech has been getting a lot of attention, not only in the mainstream venture community where it has been a hot investment area for some time now, but also in the cleantech venture community where such materials sciences plays have the potential for significant breakthroughs in a number of clean technology areas. However, these materials are also criticized by many in the environmental community.

To begin with, many investors may be confused about what "nanotech" is and how it's special. It has been commonly defined as any technological developments on the nanometer scale. That is a very broad description. But what it really gets at is that new developments in manufacturing and manipulating such tiny-scaled materials have allowed them to be used in more and more applications, and in many cases the smaller scale yields very different physical, electrical, or optical effects than are seen with more traditional, larger-scale materials (see the above link for a better explanation of why that is so).

The potential advancements are being seen in a wide range of clean technologies.
  • Nanotech-based solar companies such as Miasole, Nanosolar, Konarka and others are making strong progress toward effective thin-film photovoltaics that could achieve significantly lower costs than existing silicon wafer-based approaches.
  • Advanced solid-state lighting, as previously discussed, holds promise for dramatic energy savings, and companies like Luminus Devices and Nomadics are among those pursuing breakthroughs in this area.
  • Companies such as Argonide are developing water purification technologies based upon nanoscale materials.
  • Other companies such as NanoHorizons are developing antimicrobial coatings, advanced sensors, pollution absorption methods, and other potentially clean technologies using nanoscale materials.
And yet, nanotechnology is under attack from some in the environmental community. As this Forbes column relates, some leading scientists and environmentalists worry that the very same nanoscale effects that drive desired properties as described in the above list could also have unforeseen effects on health and the environment. They point to some early studies which show the potential for brain damage from some of these materials, and for some greens -- such as the ETC Group -- there are enough unknowns and potential dangers to warrant a moratorium on manufacturing of nanotech materials until after much more study and debate.

In many ways, these developments are similar to those that were seen in the early days of the genetically-modified organisms (GMO) debate, which continues to rage on. GMOs have in some cases enabled more food production with less erosion and use of pesticides, but many activists and customers also worry about health effects and impacts on biodiversity. The issue has become very divisive, as anyone who has tracked the international debate can attest, and this has had important impacts on the development of that industry.

Similarly, the early concerns over nanotech are not to be taken lightly, and the resolution remains unclear. For cleantech investors, nanotech holds a lot of promise for breakthroughs that address known environmental and health risks, and that are advantaged in the face of looming natural resource constraints -- what the cleantech venture investment thesis is all about.

But it is still very early days for nanotech, and investors should also be aware of the risks that some of these technologies may in turn be creating new problems as well -- problems that could be obstacles to the much-ballyhooed massive market development that some pundits are predicting for nanotechnologies...


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