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Nanotechnology, a concept once confined to theoretical literature, is now a global multi-billion dollar industry. Far from being locked away in some space-age laboratory, nanotech materials now frequent everyday products from mobile phones to sunscreen.
These materials possess superior properties; they are harder, brighter and more conductive than traditional materials. Some are even capable of healing themselves.
As nanotechnology evolves, the scope for commercial expansion is huge. IHS forecasts that in 2015, the global nanomaterials industry will grow to $7.4 billion, up from $5.6 billion in 2010. Growth is projected to continue and reach $12.4 billion by 2020.
IHS projects carbon nanotubes (CNT) and carbon nanofibers will post the highest growth in the market. CNTs’ versatility, the main driver for their market growth, allows widespread application in a wide range of commodity products right down to hockey sticks and baseball bats.
Despite the vast scope for commercial growth, the nanotechnology market faces multiple challenges in the coming years. These include:

  • Consumer concerns—users still question the value of nanotechnology and worry about its effects on health and the environment.
  • Increased legislation—in August 2014, the European Commission concluded a period of public consultation on transparency measures for nanomaterials now on the market. This is an example other countries are likely to follow.
  • Cost—production expenses in the chemical industry are still too high. This is caused by high manufacturing costs, which can make up 80 percent of overall cost.
  • Pricing—the chemical industry must determine the mechanism for setting the value-in-price for nanomaterials, setting a high level for these precious materials without stifling market growth.
  • Scaling production—small-scale production is expensive. Until demand increases, the chemical industry faces high production costs.
Entry into the nanotechnology market is challenging due to the expense and high risk. Unless an organization can quickly generate a sustainable revenue stream and healthy profit margin from the sale of nanomaterials, the business may not be viable. Pre-competitive government initiatives can act as a promising avenue for market entry.
Business opportunities in nanotechnology are significant for companies willing and able to take a long-term view. For example, identifying existing markets where a nanotech product can displace an existing inferior solution could be highly lucrative.
There is also huge opportunity for companies utilizing nanotechnology and nanomaterials to solve previously unanswered problems. Imagine, for example, clothing that doesn’t stain or pills that track vital signs.
Nanotech is on the verge of revolution. The chemical industry needs to position itself to take advantage of this revolution, as nanotech becomes a general-purpose technology. Today, the world over, industry executives should be asking themselves how nanotech can change and improve their products.
It’s only a matter of time until a company produces the high-volume, billion-dollar application that launches the nanotechnology industry into the stratosphere. The revolution could even be initiated by an unknown startup company. This hasn’t happened yet—but make no mistake—it will happen soon.
Michelle Lynch is the senior consultant at IHS Chemical
Dr. Mark Morgan is a managing director for IHS Chemical
Jagdish Rebello is senior director of cloud and computer electronics at IHS Technology
Posted December 5, 2014

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