Sales of products incorporating emerging nanotechnology will rise from less than 0.1 percent of global manufacturing output today to 15 percent in 2014, totaling $2.6 trillion. This value will approach the size of the information technology and telecom industries combined, and will be 10 times larger than biotechnology revenues, according to a new report by Lux Research Inc. (New York). However, sales of basic nanomaterials, such as carbon nanotubes and quantum dots, will total only $13 billion in 2014. "Nanotechnology's economic impact will arise from how these fundamental building blocks are used, not from sales of the materials themselves," says Matthew Nordan, Lux vice president of research.

Nordan refutes the popular misconception that nanotechnology is an industry or a sector. Rather, he insists that "nanotechnology is a set of tools and processes for manipulating matter that can be applied to virtually any manufactured good." He urges manufacturers to "focus on how nanotechnology is being exploited across industry value chains, from basic materials to intermediate products to final goods." By 2014, Nordan predicts that 4 percent of general manufactured goods, 50 percent of electronics and IT products, and 16 percent of goods in healthcare and life sciences will incorporate emerging nanotechnology.

Nanotechnology's growth will occur in three phases:

• In the first phase, ending this year, nanotechnology is being incorporated selectively into high-end products. In 2004, revenues from products incorporating nanotechnology will total $13 billion, $8.5 billion of which lies in automotive and aerospace applications.
• Through 2009, commercial breakthroughs will unlock markets for nanotechnology innovations, with revenues rising to $292 billion. Electronics and IT applications will dominate as microprocessors and memory chips built using new nanoscale processes come to market.
• From 2010 onward, nanotechnology will become commonplace in manufactured goods, with revenues rising to $2.6 trillion in 2014. Healthcare and life sciences applications will become significant in this period as nano-enabled pharmaceuticals and medical devices emerge from lengthy human trials.

Nordan claims that the widespread use of nanotechnology in mainstream products will have profound ripple effects. For instance, he predicts that 10 million manufacturing jobs worldwide in 2014-11 percent of total manufacturing jobs--will involve building products that incorporate emerging nanotechnology. In addition, nanotechnology will shift market shares and introduce unconventional competitors. "For example, silicon nanowire display printing technologies could cut capital requirements for flat-screen display plants by an order of magnitude, tempting fleet-footed manufacturers like Dell Inc. (Round Rock, TX) to enter the market," says Nordan. "Supply chains will simplify as highly functional materials eliminate steps in manufacturing processes, negatively impacting subassembly manufacturers and transportation companies while making value-added taxes more productive for governments than sales taxes.

"Nanotechnology's increasing relevance creates clear mandates for business and government leaders," adds Nordan. "Corporations need to develop an explicit nanotechnology strategy. Investors should focus on nanotechnology applications in the middle of industry supply chains where profit potential is highest, and consider laying nanotech as a long-term secular trend. Public sector leaders should focus on fostering nanotechnology demand, not just supply, and establish informed regulation to address health and safety issues."