Innovation and Business Climate

Challenges

The UK industry is at an early stage of the development and application of nanotechnologies.  While there is commercialisation in a number of areas, such as medical diagnostics, electronics and materials, most is still for the purposes of research and development.  Our understanding of how nanotechnologies are being used, or developed for use, in a range of industry sectors is described elsewhere on this website.

If UK businesses are to position themselves to derive the maximum advantage from nanotechnologies, we need to make sure that we (collectively) understand our strengths, weaknesses, opportunities and threats and identify what we wish to do about them.  As well as helping potential investors identify business opportunities, business should benefit from more informed dialogue with the public and other stakeholders and from helping to develop measures (voluntary or mandatory) to identify and manage risks at an early stage.

Identifying opportunities

There are a number of current estimates of the impact of nanotechnologies on global markets with numbers ranging from billions to trillions of dollars within the next 10 years.  What is clear is that there will be a significant economic impact where nanotechnologies can offer significant benefits to society and/or the environment through the key challenges of -

• Living with environmental change
• Living with an ageing and growing population
• Living in an intelligent connected world

The Technology Strategy Board views nanoscale technologies as underpinning a number of Key Technology and Application Areas including -

• Advanced Materials
• Medicines and Healthcare
• Electronics Photonics and Electrical Systems
• High Value Manufacturing
• Energy and Environmental Sustainability.

Defra has also sought to identify how nanotechnologies could help Government deliver its objectives, for example in respect of alternative energy sources, energy efficiency and environmental remediation.  These are detailed in a report on the environmentally beneficial applications of nanotechnologies.

The UK Science and Innovation Network (based in British Embassies and High Commissions overseas) provides information and advice to Government Departments, Research Councils, universities, companies and others on the research expertise and priorities of other countries, including in nanotechnologies.

Enabling development

The development of new products using nanotechnologies or nanoscale materials is heavily dependent on having -

• highly-skilled people;
• an underpinning base of high quality research;
• knowledge-sharing and transfer;
• essential, sometimes costly equipment;
• confident investors;
• an exploitation base; and
• good governance arrangements.

In addition to the support for basic research and the associated skills development, the Research Councils fund more applied research aimed at a range of application areas.  Much of this is conducted in collaboration with industry.  A key initiative is the Research Councils’ Grand Challenges which provided £50 million (in addition to usual funding) for large-scale integrated projects where the UK nanotechnologies research base could make a significant impact on issues of societal importance.  These offer exciting opportunities to use nanotechnologies to make a unique and significant contribution towards solving major problems.  The three calls for proposals have been for research to develop innovative approaches to -

• energy, focusing on the harvesting of solar energy;
• health care, focusing on the targeted delivery of therapeutic agents and healthcare diagnostics; and
• environmental solutions, focusing on carbon capture and utilisation.

Social intelligence

If research is to lead to products and techniques that are of genuine benefit, it should be informed by the views of consumers and the wider public.  For example, the direction of the Research Councils’ call for proposals on health care was informed by public dialogue and Unilever participated in the Government-funded “Nanodialogues” project.

However, in general, businesses are unwilling to engage in public dialogue, despite being concerned about the potential damage to their interests that would result from a loss of public confidence in nanotechnologies.  Stakeholder engagement tends to be perceived as costly, difficult and best undertaken by others such as the Government or industry bodies.  There are also concerns about revealing commercially sensitive information.

Knowledge transfer

To encourage the dissemination of information to industry, the Technology Strategy Board funds a number of activities to translate the knowledge and ideas generated by basic research (often by University research groups) into new products and services in areas where there are market opportunities and where the UK has academic and industrial capacity.  Knowledge Transfer Networks (KTNs), Knowledge Transfer Partnerships, Innovation Platforms and the Small Business Research Initiative are key ways of supporting knowledge transfer.

The four KTNs most active in the exploitation and commercialisation of nanotechnology are those working in Nano, Materials, Sensors and Chemistry.  Their aim is to foster an appreciable growth in the size of the UK’s nanotechnologies community and an expansion in industrial activity, particularly in nano-enabled products and market development.  They are achieving this by informing, linking and facilitating innovation and collaborations between suppliers and users with the aim of strengthening the supply chains. The interactions between these KTNs and the UK science base and industry will improve the understanding of nanotechnologies through an ever expanded network. They also increase the flow of knowledge and funds into national and regional facilities from sources such as EU FP7 and private finance.

Organisations such as the Institute of Nanotechnology also play an important role in this area, as does the UKTI in encouraging collaborations with researchers and businesses in other countries and in attracting inward investment.

Business development

The level of industry investment is increasing, as is the number of products coming to market.  To help drive market development and exploitation of nanotechnologies, the Technology Strategy Board, the Regional Development Agencies and Devolved Administrations fund the Micro and Nanotechnology Centres.  The Centres help industry access cutting-edge research and resources by identifying spare capacity in business and academia.  The Centres are grouped into four main themes (nanometrology; nanomaterials, nanomedicine and nanofabrication).

Regulatory environment

Good governance arrangements are important to enable innovation to proceed in a responsible manner.  In addition to legislation, other measures can be used to ensure that proactive attitudes are adopted to address business risk, health, safety and environmental implications.  Such measures, if widely adopted, might help to avert the threat of retrospective or unilateral cost being imposed through future legislation and of business risks such as risk-averse behaviour by insurers, executives or market advisers.  Increased public confidence in the business or its products may also be a benefit.

Advice and guidance is provided in support of legislative compliance.  For example -

• the Government funds SAFENANO to provide advice to industry to help them develop nanoscale technology safely and responsibly; and
• the Health and Safety Executive has published guidance on the safe handling and disposal of carbon nanotubes.

Codes of conduct provide a voluntary means of setting standards and the Royal Society, Nanotechnology Industries Association, Insight Investment and the Nanotechnology Knowledge Transfer Network have worked to develop the Responsible Nano Code.  The European Commission has also developed a Code of Conduct for Scientists in the EU who work with nanotechnologies.

Some companies adopt and publicise a policy of Corporate Social Responsibility, primarily as a means of reducing risks and operational costs although a few of the larger, more socially responsive companies perceive CSR as a means of driving product innovation and contributing to social values beyond those with a financial dimension.  Smaller companies tend to lack access to CSR expertise and can find that CSR requirements impose additional business costs.

Similarly, larger companies are more likely than small ones to perform life cycle analyses, because of cost and lack of expertise.  However, the lack of toxicological data is also a barrier to the use of life cycle analyses on products containing nanomaterials.

Labelling is used by some companies as a marketing tool, while others are reluctant to label products containing nanomaterials.  The British Standards Institute has produced guidance to help manufacturers and retailers decide when and how to label products containing nanomaterials.

Your views

We would welcome your views on how the UK can create the right environment for innovation and business developments in nanotechnologies.  The SWOT analysis below summarises Government understanding, from discussion with stakeholders, of the major strengths, weaknesses, opportunities and threats facing the UK in this area. This (and the questions to the right hand side) is intended to help you think about the issues and steer future actions and shape the UK nano environment.