〈日本知財学会誌〉Vol.5 No.2 ― 2008 : 65 ― 71

〈自由論題〉The Challenges and Issues with Nanotechnology
at the Product Development Stage
Tetsuya Kirihata（Associate Prof., Kyoto University, and Visiting Associate Prof.,
Nara Institute of Science and Technology）

Many experts predict nanotechnology-related businesses to become one of the leading new industries in Japan. There
are several reasons as to why nanotechnology is attracting such attention in Japan. For one, nanotechnology is afundamental technology and as such has a big influence on the existing industry and society. Furthermore, in the fields
of fundamental nanotechnology research, Japan is seen as having an international comparative advantage.
In this paper, to examine the challenges and issues of nanotechnology commercialization in detail, I classify theprocess for commercialization into three stages : basic research stage, product development stage and commercialization
stage. The challenges and issues at the product development stage of nanotechnology are discussed based on aquestionnaire survey with nanotechnology businesses. This paper reveals that “funding”, “external collaboration”, and“extracting visions and conceptualizing market needs” are the main challenges at the product development stage of
nanotechnology business.
Finally, I conclude the paper with policy recommendations regarding the commercialization of nanotechnology,
especially in terms of “funding” and “external collaboration”.

Nanotechnology, Commercialization, Product Development Stage, Financing,
External Cooperation, Extracting Visions, Conceptualizing Market Needs■ KEYWORDS

years. For example, in the U.S., the expenditure in

1. Introduction

R&D was 102.4 million dollars in 1997 andincreased to 293 million dollars by 2000. Also, in

Nanotechnology

1

is expected to trigger

that same time period, nanotechnology-related

explosive growth in many new industries in

expenditure in the EU increased from 114.4

Japan. As a trigger for new industry, there are

million dollars to 210.5 million dollars and fromthree broad reasons as to why nanotechnology

0.935 million to 189.9 million dollars in Japan

receives such great attention in Japan. First,（OECD, 2003 : 44―45）. Secondly, Japan recognizes

nanotechnology is a fundamental technology thatthe existence of an international comparative

will have a great impact on industries and society

advantage in basic research sectors. In Japan, ain the next generation. For this reason, over 30

number of scientific papers dealing with the topic

countries

implemented

of nanotechnology ranks second in the world, onlyhavealready

programs.

after the U.S.（OECD, 2003 : 44）. Finally, theGovernment R&D fundings have dramaticallygaining of regional economic power by East-Asian

increased in many countries over the recent

countries such as China and Korea makes

nanotechnology-related

R&D＊

本論文は，日本知財学会誌編集委員会による複数の匿名レフェリーの査読を経たものである．

ISSN 1349 ― 421X
蘓 2008 IPAJ All rights reserved.

Japanese manufacturing sector have to evolve anddevelop production capabilities that strongly65

〈日本知財学会誌〉Vol.5 No.2 ― 2008

enhance its value creation. Japan once had therisks and learn from experience. Inoue, Nihei andgreatest market share in the world for many

Hunabiki（ 2003） argues that the Japanese

products such as TVs and VCRs, however, thesemanufacturing industry experiences a severe

advantages have recently shifted to the East-difficulties in the product development stage andAsian countries. As a consequence, theraises several causal factors that have beendevelopment of value added products in which

recognized by the companies in which they

nanotechnology is utilized is important in helping

researched. These include issues with “extracting

Japan’s manufacturers receive greater recognition

visions and conceptualizing market needs,”

and outdistance other East-Asian countries.

“human resources,” and “Intra-organizational
linkage”. Based on an interview survey of 20

2. Classification of thecompanies in Switzerland which have introduced

Commercialization Process

nanotechnology to their products, Bucher,
Birkenmeier, Brodbeck, and Escher（2003 : 162）

Although there are a number of ways to lookargued that to create success in nanotechnology

into the commercialization process, this paper

product development stage, the assessment andclassifies it into three stages : basic research,

repeated introduction of new technology,

product development, and commercialization. In

participation

the basic research stage, basic science is turned

implementation of an interdisciplinary team for

into technologies symbolized by patents and otherthe project are essential to success.

intellectual

properties.

2

In

the

of

top

management,

andproduct

development stage, prospective technologies

3. Methodology

derived from basic research are further developed
and a product prototype is produced. Finally, in

For this paper, I conducted a questionnaire

the commercialization stage, the sale of the newly-

survey regarding challenges and issues in thedeveloped product is expanded so as to create a

product development stage of nanotechnology

sustainable new market. 3 There are various

commercialization, mainly with those who

difficulties

inparticipated in the Osaka Science and Technology

commercializing nanotechnology, as is the caseCenter’s Kansai Nanotechnology Promotion

with all new technology.

Conference. The questionnaires were sent at the

that

must

be

overcome

This paper focuses on the product development

beginning of December 2003 and collected at thestage. With regard to this phase, Day andbeginning of January 2004. A total of 329

Schoemaker（2000）discussed the significance inquestionnaires were sent out with 132 valid

high technology commercialization. Day andresponses received. Among valid responses, 88

Schoemaker（2000 : 52）remarked that thecompanies indicated that they have been working

product development stage provides the biggest

on nanotechnology commercialization. Regarding

challenge for management and went on to state

the company type, 54 were listed companies

that the success of the product development stage

whereas 34 were unlisted companies. The

requires continuing support from seniorquestions were identical to those conducted bymanagement, creation of new ventures from

Inoue et al.（2003）, which were sent to 3,626

ongoing business activities, organizational andmanufacturing listed companies（491 listed

strategic flexibility, as well as willingness to takecompanies responded）. This paper’s contribution

66

The Challenges and Issues with Nanotechnology at the Product Development Stageis, as a consequent, a provision of comparative
research of challenges and issues at the product

Table1：Challenges of nanotechnology commercialization at the product development
stage

development stage between nanotechnology andNanotechnology

the whole manufacturing industry in Japan.

4. Results
4.1. The challenges and Issues at the ProductDevelopment StageIn reply to the question “How much difficulty
are you having in the production development
stage?”, 50.0 percent answered “facing somedifficulties”, 12.5 percent answered “facing a fairnumber of issues and challenges”, and 5.7 percent
answered “facing a significant number ofdifficulties”. The results show that nearly 70
percent of companies revealed some difficulties inInoue et al.

All

ListedNon-Listed（2003）

EVC

58.3

66.7

42.9

65.0

FUN

41.7

46.2

33.3

22.0

HRE

35.0

25.6

52.4

46.0

ECN

28.3

15.4

52.4

9.0

CCE

23.3

25.6

19.0

30.0

IOL

16.7

20.5

9.5

37.0

MON

10.0

7.7

14.3

10.0

OTS

6.7

10.3

0.0

6.0

Remarks：
1）Figures show percentage of respondents who responded toward the challenges of nanotechnology commercialization at the
product development stage2）Multiple answers allowed
3）EVC＝Extracting visions and conceptualizing market needs,
FUN＝funding, HRE＝human resource, ECN＝external collaboration, CCE＝corporate culture, IOL＝Intra-organizational linkage,
MON＝motivation, OTS＝others

the product development stage.
The survey further asked companies who facesome, a fair number of, or a significant number ofchallenge faced by nanotechnology-relateddifficulties how they would classify the causes ofcompanies.

such difficulties. “Extracting visions andconceptualizing market needs” was the highest

4.2. Funding（58.3 percent）, followed by “funding”（41.7

In response to the question, “Is R&D

percent）, “human resource”（35.0 percent）, andexpenditure, as a percentage of total investment,“external collaboration（28.3 percent）”. It is

higher for nanotechnology-based businesses thanremarkable that “funding” and “external

other businesses?”, the total percentage ofcollaboration” are recognized as one of the major

companies answering “very high” or “slightly

challenges. With regard to “funding”, the wholehigh” was 40 percent, exceeding those answering

manufacturing industry marked approximately“slightly low” and “very low” by 10 percent. There

twice as high the percentage as the result by

is a tendency for the percentage of R&D

Inoue et al.（2003）, and “external collaboration”

expenditures in nanotechnology-based businesses

marked 3 times higher. When focusing only on

to exceed that in other businesses.

listed companies, “funding” and “external

Regarding the source of capitalization for R&D

collaboration” indicates approximately twice thewith nanotechnology, 62.5 percent or the majority

percentage of those by Inoue et al.（2003）. I willof the respondents replied “funding from thelater discuss about “funding” and “external

government or municipalities”, while “funding

collaboration” which are both peculiar tofrom own businesses not directly connected tonanotechnology business, and also about

nanotechnology businesses” came second with 56.8

“extracting visions and conceptualizing market

percent,

needs” which is recognized as the highest

nanotechnology business itself” at 31.8 percent.

followedby“sales

from

the

67

〈日本知財学会誌〉Vol.5 No.2 ― 2008

Table2：Collaboration and the necessity of collaboration with other industries
Nanotechnology

Inoue et al.

All

ListedNon-Listed（2003）

Relationship

55.7

61.2

47.1

36.0

Necessity2）

79.6

87.0

67.7

69.0

1）

Table3：Collaboration and necessity of collaboration with universities and institutions
Nanotechnology

Inoue et al.

All

ListedNon-Listed（2003）

Relationship

83.0

87.0

76.5

62.0

Necessity2）

87.5

90.8

82.4

83.0

1）

Remarks：
1）Figures show percentage of respondents who answered already have relationship or making up relationship with regard
to the relationship with other industries
2）Figures show percentage of respondents who answered very
necessary or fairly necessary with regard to the necessity ofcollaboration with other industries

Remarks：
1）Figures show percentage of respondents who answered already have relationship or making up relationship with regard
to the relationship with universities and institutions
2）Figures show percentage of respondents who answered very
necessary or fairly necessary with regard to the necessity ofcollaboration with universities and institutions“Research expenditure from business partners”

results by Inoue et al.（2003）, it shows thatand “revenue from patent and license sales” eachcompanies

took

commercialization are more enthusiastic in

12.5

percent.

It

seems

that

the

nanotechnology business itself is unable to coverengaging

innanotechnology

collaborating with other industries.

the cost of R&D and commercialization. A highexpectation of subvention from the government
and local municipalities is characterized. Thistendency is probably due to the expensive
equipment

neededfornanotechnology

commercialization.

4.3.2. Collaboration with Universities andInstitutions

More than 80 percent of the companies
answered “already have relationship” or “making
up relationship” regarding relationship with
universities and institutions. Also more than 80

4.3. External Collaboration

This section discusses collaboration with otherpercent responded “very necessary” or “fairly
necessary”

regardingthenecessityofindustries and collaboration with universities andcollaboration with universities and institutions.

institutions regarding “external collaboration”.

Compared to the results by Inoue et al.（2003）, it
shows that companies engaging in nanotechnology

4.3.1. Collaboration with Other Industries

Regarding relationship with other industries,

commercialization are also more enthusiastic incollaborating with universities and institutions.

four alternatives were given for respondents tochoose from, namely, “already have relationship”,“making up relationship”, “not making up

4.4. Extracting Visions and Conceptualizing
Market Needs

relationship”, and “won’t have relationship”. More

Extracting visions and conceptualizing market

than half of the companies replied “already haveneeds are recognized as the most critical

relationship” or “making up relationship”. Aside

challenges to nanotechnology business at thefrom this, four choices were provided in response

production development stage. The following

to the necessity of collaboration with othersections discuss “top-down management” inindustries which were “very necessary”, “fairly

relation to extracting visions and “describing

necessary”, “not very necessary”, and “not at all

market needs” in relation to conceptualizing

necessary”. Almost 80 percent replied “verymarket needs.

necessary” or “fairly necessary”. Compared to the68The Challenges and Issues with Nanotechnology at the Product Development Stage

Table4：Implementation and necessity of topdown Management

Table5：Implementation and necessity of describing the market needs

Nanotechnology

Inoue et al.

Nanotechnology

All

ListedNon-Listed（2003）All

ListedNon-Listed（2003）

Implementation

72.8

68.6

79.4

81.0

Implementation

59.1

64.8

50.0

30.0

Necessity2）

83.0

85.2

79.4

90.0

Necessity2）

92.0

92.6

91.1

90.0

1）

1）

Inoue et al.

Remarks：
1）Figures show percentage of respondents who answered very engaged and engaged only with company s direction regarding the implementation of top-down management
2）Figures show percentage of respondents who answered very necessary or fairly necessary regarding the necessity of
top-down management

Remarks：
1） Figures show percentage of respondents who answered very described , fairly described , and fifty percent described
regarding the implementation of describing market needs
2）Figures show percentage of respondents who answered very necessary or fairly necessary regarding the necessity ofdescribing market needs

4.4.1. Top-down Management and its

indicates that, regarding the implementation of

Necessity

describing market needs, this survey reveals a

To the question “to what extent top-down
management are engaged in the productslightly higher result than that of Inoue et al.
（2003）.

development stage?”, 14.8 percent answered “veryengaged”, 58 percent replied “engaged only with

5. Summary and Discussion

company’s direction”, while 14.8 percent claimed“not at all engaged”. On the other hand, to the

5.1. Summary

question “is top-down management needed forThis paper reveals that major challenges with

innovative product development?”, more than 80

nanotechnology in the product development stage

percent answered “very necessary” or “fairly

are “funding”, “external collaboration” andnecessary”. The results from this study regarding“extracting visions and conceptualizing market

both implementation and necessity of top-down

needs”.

management. are a little lower than the results by
Inoue et al.（2003）.

With regard to “funding”, a high expectation ofsubvention from the government and local
municipalities

4.4.2. Describing Market Needs and its
Necessityisthecharacteristicofnanotechnology business. Compared to the survey
conducted by Inoue et al.（2003）, regarding

Regarding the implementation of describing“external collaboration”, this research shows thatmarket needs, respondents were to choose among

companies

five choices : “very described”, “fairly described”,

commercialization are more enthusiastic in“fifty percent described”, “not very described”,

collaborating with other industries, universities

engaging

innanotechnology

and “not at all described”. To the question “do you

and institutions. Also, concerning “extracting

describe the market needs clearly and concretely

visions and conceptualizing market needs”, thein writing or charting for your own company?”,

implementation of “top-down management” is59.1 percent answered “very described”, ”fairly

lower but “describing market needs” is higher

described” and ” fifty

than the result of Inoue et al.（2003）. The

percent described”. On theother hand, more than 90 percent answered “verycompanies

necessary” or “fairly necessary” regarding thecommercialization seem to emphasize thenecessity of describing market needs. Thisdevelopment of products based on market needs

thatpursuenanotechnology

69

〈日本知財学会誌〉Vol.5 No.2 ― 2008

throughout the R&D phase. However, when it

changes over time. It is argued that there is a lackcomes to getting top management involved inof flexibility with public funding. The same lack of

extracting visions for commercialization, it seems

flexibility of public funding found in the U.S. isthat nanotechnology businesses put less emphasis

also found in Japan according to the interviewson this issue than the overall manufacturingconducted. The improvement of flexibility inbusiness.

public fundings will be a high-priority policy infostering nanotechnology-related businesses.

5.2. Discussion

In the interviews concerning nanotechnology

Within Japan, the expectation will continue toventure, there were multiple responses expressing

grow in nanotechnology commercialization. For

the desire for the improvement of partner

this reason, it is important to identify the

relations with venture capital firms that provide

challenges and issues within the nanotechnology-

investment

funds.

One

presidentofabased businesses, not only on the productnanotechnology venture said that “The cost ofdevelopment stage, but also on the basic research

truly

and commercialization stage. Aside from this,development will be over one billion yen.

comparative researches in high technology

However, venture capital firms in Japan have a

between nanotechnology, IT, biotechnology, andshortsighted business philosophy. They are

the likes are essential.

unwilling to provide the funds on a billion yen

innovative

nanotechnology

product

Based on the additional interviews withscale”. In this case, the public sector, namely, thecompanies which work on nanotechnology

national government and local municipalities needcommercialization, I would like to conclude thisto establish public policies to assist venture capital

paper by discussing the public support required

films that can support nanotechnology ventures.

and its effects on the direction of nanotechnology
commercialization especially regarding the“funding” and “external collaboration”.

5.2.2. Public Support for “External
Collaboration”

An executive of a nanotechnology venture
5.2.1. Public Support for “Funding”

claimed that “For product development inIn the U.S., the funding issue is recognized as ananotechnology, it is important to present

high-priority issue for the commercialization of

preproduction prototypes to other companies

new technology. For this reason, in the 1980s, tobesideseliminate the funding gap in the basic research

unexpected new applications may be foundstage, R&D assistance systems targeting medium

through this process”. It can be stated that anand small companies such as Advanced

interdisciplinary approach can be an advantage

Technology Program, and Small Businessand collaboration with different fields andInnovation Research were introduced in the U.S.

businesses are essential for innovative productHowever, it has been observed that “companies

development. Within the public sector, thethat do receive public funding for R&D should be

encouragement and prioritization of R&D projects

allowed to reroute the money to promisingwith participation from many different businesses

business other than that which was initiallyare required. Policies that prioritize the use offunded（Lerner, 2000 : 91）”. Companies must

public research facilities must be established torespond flexibly as business environmental

promote projects that contribute to partnerships

70

existing

partners.

DramaticandThe Challenges and Issues with Nanotechnology at the Product Development Stageacross various fields and businesses.

occur when high-technology based products are brought tomarket. Moore（1991 : 134 ― 135）argued that focusing

Acknowledgements
The questionnaire survey for this paper was entrusted to Osaka
Science and Technology Center ’s Kansai Nanotechnology
Promotion Conference. I would like to express my gratitude to all
those involved at the Center and Conference.
Note
1 OECD（2003）defines nanotechnology as a range of newtechnologies that aim to manipulate individual atoms andmolecules in order to create new products and processes :computers that fit on the head of a pin or structures that are
built from the bottom up, atom-by-atom. This paper follows
OECD’s definition of nanotechnology. Richard P. Feynman and
Eric K. Drexler are representatives of the scientists who
originally suggested the possibilities of nanotechnology.
Feynman, who is known as the father of nanotechnology,
defined its potential by implying the possibility of writing theentire contents of a large encyclopedia on the tip of a needle.
He also promoted the idea of finding a way to physicallysynthesize chemical substances through the use of
nanotechnology. These ideas were presented in his lecture
entitled “There’s Plenty of Room at the Bottom” at theAmerican Institute of Physics in 1959. Also, Drexler, in his
paper called “Engines of Creation” proposed the possibility ofcreating nanomachines by controlling atoms and moleculesand manipulating them in a precise controlled manner.
2 With regard to the basic research stage, Tamada, Kodama,and Genba（2003）conducted several surveys covering
Japanese patents in four fields : biotechnology,
nanotechnology, IT, and environmental technology. The
results indicated that biotechnology has the greatest
science linkage to patents, while nanotechnology, IT, andenvironmental technology follow in consequent order.
3 Moore（1991）indicated that the difficulties in thecommercialization stage, in which Moore called Chasm, canexclusively on the products quality is a major cause of the
difficulty in the commercialization stage.
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