Europe longs to play catch-up
in nanotech commercialization

MUNICH, Germany — When Tim Harper stood in front of a largely European audience here to talk about the Old World lagging dangerously behind the United States and Asia in nanotechnology business, he was careful to preface his remarks with, “I’m sure some of you will disagree with me.”

No one did.

The 50-odd scientists, engineers and venture capitalists at this European Nanotech Planet Conference gathered here to talk business and look at ways Europe might bridge the “disconnect,” as some were calling it, between the research lab and the board room.

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The conference verdict was that Europe is very strong on the scientific side, but when it comes to getting its new findings to the market, Europe needs to play catch-up.

“If you look at the number of articles in academic journals, Europe is on a par with the U.S.,” said Meyya Meyyappan, director of NASA’s Center for Nanotechnology at the Ames Research Center. But when it comes to the number of companies and new opportunities, he continued, Europe is bringing up the rear.

According to the Nanotechnology Opportunity Report, released in March by Harper’s nanotechnology information company CMP Cientifica, there are some 230 nanotech companies in the United States. Europe is running second, and not even a close one at that, with some 145 nanotech firms.

Christian Reitberger with the Munich-based venture capital firm Apax Partners said he has looked at 16 nanoelectronics proposals in the past year and a half. All of them came from the United States. Europe was nowhere to be seen.

Industry watchers on both sides of the Atlantic say there are several reasons for this. One is the continent’s sheer variety — 16 countries in the European Union alone. All them have widely different laws, not to mention business and research practices. They do not always talk to one another.

“One estimate says 20 percent of European spending is wasted because EU nations’ projects duplicate one another,” Harper said. “There’s a European nanotechnology program, a German one, a British one and so on. None of the research programs are aligned.”

Another reason for Europe’s poor performance is the bureaucratic hurdles new companies have to jump just to become companies. Costs of incorporation can be high and mountains of red tape can discourage even the most determined entrepreneur.

Finally, the dense jungle of EU regulations has some potential European companies looking for sunnier shores abroad. According to Jurgen Schulte, a German who set up his nanotech consulting business nABACUS in Asia, a new EU regulation on chemical compounds slated to go into effect in the next two years will put a heavy burden on future and existing nanoelectronic companies.

“What I can see is going to happen is that this industry which is about to emerge in Europe is probably going to migrate to the Asia-Pacific region,” he said, “which is good for us, because we get the business. It’s not so good for Europe.”

But conference participants repeatedly stressed that there is a deeper, cultural reason the United States is winning the nano race against Europe — the American entrepreneurial spirit. “If you go to Stanford University, everybody there wants to be a millionaire. They want to be an entrepreneur and you have venture capitalists hunting like packs of dogs down the corridors,” said Harper, who is based in Spain.

“If you go to a university in Spain, for example,” he continued, “nobody there has any interest in business whatsoever. There isn’t a venture capital industry and even if there was, people wouldn’t know what to do because there’s no connection between academia and industry.”

According to Harper, if Europe does want to catch up with the United States on the commercialization end of small tech and make use of the resources it has — top notch academics, high levels of government support, excellent basic research — university research labs, industry and the governments will have to start acting together, especially on the European Union level.

“Europe should have as much potential as the U.S. I think if the European Union focused on bridging the gap between academics and real-world business and put something in place along the lines of the National Nanotech Initiative in the States, they might be on their way,” said John Burdick of the U.S.-based Inframat Corp.

Harper basically agrees, but laughed that he had some doubts about getting Brussels involved too much.

“It’s like creating a standard Euro sausage, it never works” he said, referring to the European Union’s oft-derided attempts at creating EU-wide standards. “Instead of betting the best of everything, you usually end up with the worst.”


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