In the 1967 movie “The Graduate” the wimpish, east-coast college graduate Benjamin, played by Dustin Hoffman, is advised: “Plastics. The future is in plastics.” But now the future appears to be in nanotechnology, the science of altering matter at the nanometer scale.
“Nanotechnology is like plastics was to industry in the 1960s,” Larry Bock, executive chairman of Nanosys, tells fDi. “Plastics allowed industry for the very first time to control the physical property of material from the bottom up. Prior to that all you had was materials provided by nature such as steel and wood.”
While plastics have revolutionised every major industry in the world and fed the growth of industrial companies, Mr Bock believes nanotechnology has the power to be even bigger: “Nanotechnology allows you to do something even greater than controlling properties: it allows you to control electro-magnetic and thermal properties. We are just seeing the beginning of what can happen.”
In order to ensure that nanotechnology lives up to its enormous potential, Mr Bock has helped US Senator Max Baucus, a Democrat from Montana, introduce the Research Competitiveness Act of 2006.
The Act is the fourth in a series of bills that Mr Baucus has introduced to enhance the US’s economic competitiveness. If signed into law, the act will update, streamline and extend the research and development tax credit and other tax incentives to help American innovators create and commercialise cutting-edge technology.
“The Research Competitiveness Act is designed to foster research and commercialisation in innovative sectors of the US economy, and nanotechnology is a prime example,” says Mr Bock. “It will help promote investment in small companies on the forefront of nanotechnology research and development efforts. It promotes investment at the crucial development stage, which will help small companies get their breakthrough ideas to the marketplace.”
Mr Bock sees the Act as being particularly critical because every major industrial country, including China, has its own nanotechnology initiative. While US federal funding exceeds that of any other country in the world, when gauged on a per capita basis, it is one of the lowest.
“When you factor in labour costs, we don’t come close to China,” he says. “Their investment goes much further. If people believe, as I do, that nanotechnology is going to be the next industrial revolution, the US needs to do more to fund the effort.”
Mr Bock is no newcomer to the topic. Other companies he has founded or co-founded include Neurocrine Biosciences, Pharmacopeia, Caliper Technologies, ARIAD Pharmaceuticals, Athena Neurosciences, GenPharm International, Vertex Pharmaceuticals, Onyx Pharmaceuticals and Illumina Technologies. His education is based in biochemistry and business administration and he started his career as a researcher in the early days of Genentech, winning a string of honours that included the Einstein Award for lifetime contributions in the field of life sciences. Mr Bock is one of Venture Capital Journal’s 10 Most Influential Venture Capitalists; ranked by Forbes-Wolfe NanoReport as the Number One Powerbroker in Nanotechnology; was a finalist for Ernst & Young’s Entrepreneur of the Year; is listed among Red Herring’s Top 10 Innovators; and was cited by SmallTimes as Innovator of the Year.
He stood alongside President George W Bush in December 2003 when the president signed the $3.7bn 21st Century Nanotechnology Act, has involved himself in a number of government agencies and is a member of the business advisory board and environmental, health and safety advisory board of the NanoBusiness Alliance; the President’s Export Council Subcommittee on Export Administration; and the Blue Ribbon Task Force on Nanotechnology formed by Congressman Mike Honda and California state controller Steven Westly.
Having been involved on both sides of the equation, Mr Bock is conscious that the amount of private dollars going into nanotechnology is only a fraction of those coming from the public sector. But private funds are not that forthcoming: “Venture capitalists understand clearly the work that private industry can do as a result of government funding for research related to the Human Genome Initiative and cancer research.
“But in nanotechnology, someone needs to do a proof-of-concept to show how it can be used at a level to attract venture capital money.”
Nanosys itself focuses on high performance, inorganic nanostructures made out of materials such as silicon. “These are the same materials that built Silicon Valley, only at the nano level,” he says. The company has already been highly successful.
Covered by approximately 430 patents and patent applications, Nanosys’ work is being applied to address opportunities in multiple industries, including energy, defence, electronics, computing and life science. Some current application areas of its technology include flexible electronics, lightweight and conformal solar cells, memory, and novel nanostructured surface coatings.
“We are pursuing nanotechnology as a platform technology to address multiple applications,” Mr Bock explains.
Nanosys leverages its nanotechnology platform by working with companies in each of its target markets to develop products. Nanosys has 10 partners, including Intel and Micron Technology; In-Q-Tel; SAIC; two collaborations with Japan’s Sharp Corp; and multiple collaborations with US government agencies.
In April, the company was awarded approximately $4.6m in new US government contracts from government agencies such as the National Science Foundation, Defense Advanced Research Projects Agency, the Department of Energy, Defense Threat Reduction Agency and the US Army. The contracted programs focus on the development of products and capabilities that incorporate Nanosys’ proprietary inorganic nanotechnology for use in thin film electronics, solid-state lighting, communications, taggants, and high-performance textiles. Nanosys also has a multi-year development agreement with Sharp to develop display technologies to help develop high-performance fuel cells for use in portable consumer electronics.
All of its work is based on the same common technology: the ability to construct tiny nanostructures that can be built into a functioning device. “We build the tiny nanostructures and then use simple materials like a silicon roll coating to pattern those down in large areas,” Mr Bock explains, adding: “What distinguishes us from most other companies is that we are not utilising nanotechnology to make new materials. We are making devices within those new materials.”
The company’s approach is relatively unique since most of its nanostructures are being made out of both nano materials and non-nano materials. “This is the area we have stacked out,” he says. “By doing this we can build all sorts of functionality.”
Originally located in Boston, Nanosys now employs about 70 full-time employs from its site in Palo Alto, in the heart of California’s Silicon Valley. Nanosys moved its operations to Palo Alto because of the region’s talent pool and the vast amount of research and development going on.
“Palo Alto is in close proximity to major universities that are working in our field – places like Stanford University and University of California at Berkeley with its Berkeley Labs,” Mr Bock says. Its staff is complemented by significant support from its partners.
Economies of scale
Silicon Valley is also well known for venture capital investment. Consequently, Nanosys has been able to raise the vast majority of capital needed for its endeavours. “That combination of talent and capital is critical for nanotech businesses,” he says.
“There is a valley of death between fundamental research going on in the academic lab and the type of applied research that venture capital firms will bet on with no funding for the gap in between the two.” Again, this is why he sees tax support via the Research Competitiveness Act as being critical to encouraging much-needed private investment.