Will nanotech save the world or be just another bubble?

April 07, 2004|By JAY HANCOCK

LET IT be said at the very beginning of the column that the sound of Americans waxing goofy over nanotechnology has a refreshing, springlike chirp to it.

Given our grief from the last investment that was going to change everything and enrich everybody - the Internet - the growing volume of nanotech moon dust can be seen as a sign that the nation's risk-seeking, innovative, can-do spirit has revived.

It can also be seen as a sign that Wall Street thinks we have the perception and attention span of Chihuahuas. Much of the nanobabble you will hear in coming months is nonsense. Wear earplugs.

Nanotechnology is defined as - well, there are half a dozen definitions, and that's one of the beauties. If you stand on your head and look sideways, General Motors is a nanotech stock. But it has something to do with little tiny particles that will utterly Transform the World as We Know It.

Listening to the nanomessiahs is like reading computer magazines a decade ago to learn how the Internet would allow cross-country virtual sex and turn us all into neurons in the planetary "hivemind."

Here's Alan Marty, nanotech guru at J.P Morgan Partners, rattling a tin cup for federal funds last year before Congress:

"We are witnessing the dawn of a new era in science, industry and quality of life. More quickly than anyone could have imagined even just a few years ago ... nanotechnology is entering the marketplace and indeed changing our lives."

Here's Rice University Nobel Laureate Richard Smalley talking to Congress in 1999:

"The impact of nanotechnology on the health, wealth and lives of people will be at least the equivalent of the combined influences of microelectronics, medical imaging, computer-aided engineering and man-made polymers."

`Technical revolution'

Here's author William Atkinson in his book Nanocosm, published last year:

"For the first time in history, a technical revolution will approach the abruptness of a political event," he writes of nanotechnology. "No one in any age has heard, seen, or felt anything like it. But you will."

Guess he forgot the atomic bomb, which went from sketch to scourge in five years and was a huge political event.

Nanomania will not be as big as the Internet boom or perhaps even the biotech boom, but it's trying.

On April Fool's Day, the Merrill Lynch Nanotech Index was launched to fanfare on CNBC. This may surprise you, but the index has - soared! It's up 12 percent in less than a week.

President Bush committed billions to nanotech research in December. A month ago, First Trust Portfolios launched a nanotech unit investment trust - a package of shares. There is at least one nanotech mutual fund and dozens of companies with "nano" in their name.

(Is it too late to claim Nano.com? The answer is yes. The name has been reserved by Nanomix Inc., which is developing "nanoelectronic sensors that integrate carbon nanotube electronics with silicon microstructures.")

Like many over-enthusiasms, nano-pep is founded on facts. One nanometer is a billionth of a meter, the width of a small molecule. Nanotechnology involves working with matter smaller than 100 nanometers.

Advances in electron microscopy, industrial milling and other fields have shown that solid particles of this size frequently act very differently from their big brothers. Sometimes that's because of nanobits' greater surface-to-volume ratios; sometimes it's because the laws of physics get rewritten at atomic scales.

For example, Kodak found that nano-sized silver halide particles speed up and boost resolution of its film. Car companies are trying nanotech to reduce platinum in catalytic converters. Computer hard drives incorporate nano-scale quantum-physics effects. Nano-sized titanium dioxide particles produce transparent sunscreen unlike larger chunks, which make it opaque white.

Doubtful riches

And so forth. It's all wonderful, but it's hard to see how public investors will get rich off of these kinds of developments, which yield incremental improvements to existing products across a wide range of businesses.

And it's even harder to buy predictions about nanorobots that will ride through our arteries and cure cancer or nano- paint that will get brushed on your wall and then turn into a video display.

Technology investment fads, starting with trains and telegraphs, made this nation great. But they also involved big doses of hype, duds, busts and heartaches. Be careful out there.

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