By Richard Gaughan, Small Times contributing editor
October 5, 2007 — The Netherlands and the U.S. provide complementary strengths that can nurture nanotechnology startups and bring new technologies into reality — that’s according to organizers of the recent High Technology Connections conference (San Francisco, September 23-25),
Mark Bünger, research director at Lux Research, pointed out the parallel interests between the US and Europe. In 2005 the US government targeted $1 billion for funding nanoscience and nanotechnology, while the EU investment was 1.4 billion Euros. According to Bünger, the Netherlands’ investment in nanotechnology is visible through the numbers of published papers and granted patents. Corporate funding of nanotechnology is relatively low perhaps in part because, as Bünger said, “few countries appreciate brazen entrepreneurship in the same way as the U.S.”
Much of the technology commercialization of the Netherlands is centered around the University of Twente in Enschede. Founded in the 1960s, it didn’t embrace collaboration with small companies until the 1980s—but did so with a vengeance: more than 500 existing companies trace their origins to spinoffs from the University of Twente. More than 350 of those spinoffs benefit from the “TOP Programme,” a guided-entrepreneurship framework that boasts a 5-year company survival rate of better than 80%. TOP is administered by Nikos, the Dutch Institute for Knowledge Intensive Entrepreneurship, run by Aard Groen, who is also a professor in the School of Management and Governance at the University. In a sense, he said, TOP “creates in a formal way the kind of business development network that has informally arisen in Silicon Valley or the Route 128 region around Boston.” The TOP program has been successful because it creates an “ecosystem” where business, academic, and scientific expertise is equally valued, creating interfunctionally coordinated teams.
Interfunctional coordination was addressed by several speakers, who agreed that the inventor of a technology is unlikely to have the skills and tendencies required to effectively run a company. For nanotechnology in particular, this difficulty is exacerbated because of the unique nature of the fundamental science. Shaker Zahra is the Robert E. Buuck Chair of Entrepreneurship at the University of Minnesota, and he also holds other professorships at universities in the U.S. and The Netherlands. He noted that in nanotechnology, “the industry itself is interconnected: many competencies are linked.” The boundaries between physics, chemistry, and biology become blurred even when conducting basic research that reveals key opportunities. Market uncertainties and questions about the role of government regulation make it difficult to acquire and maintain support for developing nanotechnology, particularly as investor nervousness is increased at the “lumpy,” uneven pace of knowledge development.
There are additional barriers to marshalling the resources necessary for developing nanotechnology. Steven Walsh, Alfred Black Professor of Entrepreneurship at the University of New Mexico, pointed out that nanotechnology is different from other scientific disciplines simply because it encompasses so many things. One application tends to rely on one process with one testing procedure and so on, defining a riskier development path because the unique technologies are not easily transferrable to another application. Walsh also noted that funding cycles for development differ substantially depending upon whether the technology is supportive or disruptive, and small companies must stay focused on the path appropriate to their technologies. Regardless of the funding path, he said, funding organizations are weary of the hype surrounding nanotech and have little tolerance for failure.
So where is the strength of Dutch-American nanotechnology development collaboration? Duco Wildeboer, manager of listings at the NYSE Euronext Amsterdam Exchange, reminded the audience that The Netherlands is the third largest investor in the United States, and, as echoed by other panelists, there is a long history of cultural and trade links between the two countries. But there are also some differences that foster collaboration. For example, The Netherlands is now home to Alternext, a “lower level” stock market with easier maintenance requirements. For companies not yet in a position to efficiently comply with Sarbanes-Oxley requirements, the “lighter touch” of Dutch regulations may allow them to focus on maturing their technology. In addition, a $100 million market capitalization company in the United States is like a gnat in a muster of peacocks—unlikely to be noticed. That same company would be solidly in the middle of the Euronext exchange, attracting greater notice from investors.
As Groen of the University of Twente summarized, “nanotechnology development requires multidisciplinary teams and cross-cutting disciplines that can only be assembled by connecting networking in a clever way.”