Nanotechnology’s impact on the future wouldn’t be miniscule
Despite the rebound from the Nasdaq’s low last year, worries remain that technology may be doomed to nothing more than a cyclical future no different than autos, housing or chemicals. If, however, good things do come in small packages, as they say, then the future for technology is very promising.
Technophiles might characterize the concept of nanotechnology as old news, but nonetheless, the study of the sub-atomic has huge implications.
Nano comes from the Greek word nannos, which means dwarf. To get a sense of nanometric proportions, consider that a nanometer is the distance your fingernails grow in a second. A human hair is between 50,000 and 100,000 nanometers thick.
But from proportions smaller than most people can comprehend could come some of the world’s most revolutionary products that change the way we do nearly everything and affect our lives across a wide spectrum of businesses and products.
A recent industry report described the potential impact of nanotechnology by suggesting that, “New companies will displace a high percentage of today’s leading companies. The majority of the companies in today’s Dow Jones Industrials Index are unlikely to be there 20 years from now.”
The intriguing aspect of nanotechnology, which had its genesis more than 60 years ago, is the belief that nanotech materials could be self-replicating.
Sub-atomic “machines” theoretically will be able to produce materials or actual devices that can fix or clone themselves when needed.
Already, the U.S. government reportedly is spending three-quarters of a billion dollars annually on nanotechnology research while private companies worldwide are spending sums many times that of our government.
Is nanotechnology a far-fetched notionâ¢ Consider that decades ago, the comic book character Dick Tracy’s wrist radio (now a cell phone) or Buck Rodgers’ space vehicles (not unlike the space shuttle) seemed equally unbelievable, yet many of those “way out there” concepts are now reality.
Unlike Dick Tracy and his comic book hints of the future, the time between the concept and reality could be considerably shorter now. Like all technology developments, progress will come in stages, but by the time we begin to accept the concept, the industry already will be influencing business dramatically.
Instead of worrying about how DRAM (dynamic random access memory) chips are selling or whether personal computer sales will increase or decrease, it might be more worthwhile to view the current state of the art in about the same light as blacksmiths should have viewed their business when Henry Ford was marketing the Model T.
We can refine semiconductors to make them smaller, faster and more capable, but these workhorses of today’s state of the art may be doomed to be technology glue-factory fodder. Despite the fact that some people will cling to the notion that we have reached the pinnacle of tech development, in reality, we are only at a plateau for a rest that likely will be much shorter than technology resting periods have previously been.
Appropriate to this notion is an old technology saw that says that the leaders of the most recent technology wave have never been the leaders of the next move in technology. If so, there are a few old corporate horses that may be headed for retirement pasture en route to their eventual extinction.
From an investment viewpoint, nanotechnology may be at the same relative stage biotechnology was 20-30 years ago with inherently the same risk. There are several huge firms that have established a major stake on nanotechnology. But there are many smaller firms involved also, some of which that may not live to harvest the fruits of their labors and others’.
In the meantime, the market will deal with what it knows, but as time passes and nanotechnology develops, there is a increasing likelihood the market will not be willing to pay today’s relatively high multiples for businesses that increasingly could be viewed as being more like dinosaurs than dynamic.
The trick now is to look through the tech group for stocks that might be stuck in a technology tar pit while keeping an eye open for the industry’s next evolutionary move.