FinNano

Nanotechnology in Finnish IndustryNanotechnology in Finnish Industry

2008 2008 –– Survey ResultsSurvey Results

Juho-Kusti Kajander

Pekka KoponenSpinverse Consulting

FinNano

SummarySummary

� The number of active companies in the Finnish nanotechnology sector has increased to 202 from 61 in 2004

� In addition to over 200 technology companies, the sector growth has created new business

opportunities for numerous service companies

� 65 companies had commercial products or processes in 2008 (27 in 2004)

� Nanotechnology has had a significant positive impact on economicdevelopment in the key clusters of the Finnish industry

� Nanotechnology sector size in Finland exceeded 300 Meur in 2008, up by 25 % from 2006.

Exports accounted for over 60% of total company revenues in the sector.

� The industry employs approximately 2 900 professionals (300-400 in 2004)

� Private investments in nanotechnology exceeded 65 Meur as industrial investments reached 56,6 Meur and Venture Capital 9,5 Meur

� While the sector growth continues, companies are facing main challenges in shortage of funding and manpower, and intellectual property rights(IPR) issues

� Most industries have a deep pipeline of R&D, to be realised in 1.5-3.5 years

� Especially SMEs seeking internationalisation find availability of risk finance and qualified manpower, and IPR problems as main challenges to company development

FinNano

AgendaAgenda

� Methodology and Data

� Industry Analysis

� Predictions

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Nanotechnology in Finnish Industry 2008 Nanotechnology in Finnish Industry 2008 --

technology survey received a large number of technology survey received a large number of

responsesresponses

� 2008 survey received 123 responses

� Response rate was 40,3 %

� Number of responses increased by 32,2 % from 2006

Number of Companies/Respondents

0

50

100

150

200

250

300

350

2004 2006 2008

Nu

mb

er

of

Co

mp

an

ies

Companies Identified Responses

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Survey results were added to Tekes data, and Survey results were added to Tekes data, and

information from the previous surveyinformation from the previous survey

113 Companies reported nanotechnology activities in the 2008 survey

26 Companies are involved in the FinNano program but did not respond to the survey

63 Companies were found to be active during the 2006 survey, and are still active now

202 TOTAL

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AgendaAgenda

� Methodology and data

� Industry Analysis

� Predictions

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Nanotechnology is used in all sectors of Nanotechnology is used in all sectors of

Finnish industryFinnish industry

Benefits to society and environment

Renewal of industry clusters and production

EnergyEnvironment

MetalMech.eng.

ForestCluster

Health,

well-beingICT Construction

Safety and StandardisationSafe and sustainable development

Instruments and ToolsInfrastructure, measurement methods, equipment

Nanotechnology materials and processesNanstructured and functional materials, coatings and devices

Production and scalability

FinNano

The number of technology companies active in The number of technology companies active in

nanotechnology has increased from 61 to 202nanotechnology has increased from 61 to 202

Number of Finnish Companies Active in Nanotechnology, 2004-2008

0 50 100 150 200 250

2004

2006

2008

Number of Companies

Vision Research Product Development Commercial Product

� The increase has taken place especially in the commercial and product development stage. In 2008, 65 companies had commercial products in the market.

� The development has been seen across company size

FinNano

All key clusters in the Finnish economy have All key clusters in the Finnish economy have

nanotechnology companiesnanotechnology companies

Number of Nanotechnology Companies by Industry 2004-2008

0

10

20

30

40

50

60

2004 2006 2008

Nu

mb

er

of

Co

mp

an

ies

Chemicals and Materials

Health and Well-Being

ICT

Tools and Instruments

Forest Cluster

Energy and Environment

Metals and Mechanical

Engineering

Construction

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The needs of the growing nanotechnology sector The needs of the growing nanotechnology sector

have created new business opportunities for have created new business opportunities for

service companiesservice companies

Finnish Service Companies Active in Nanotechnology

0

2

4

6

8

10

12

14

16

Technical

Consulting

Management

Consulting

Private Equity Legal Services Other

Num

ber

o C

om

panie

s

� The survey identified 31 service companies that are active in nanotechnology

by helping the Finnish nanotechnology sector in e.g. business development, fundraising and product development

� Nanotechnology sector needs have created both new companies with a strong focus on nanotechnology driven services and new business for existing service companies

FinNano

In 2008, industrial investments in nanotechnology In 2008, industrial investments in nanotechnology

exceeded 56 MEUR and focused on Chemicals and exceeded 56 MEUR and focused on Chemicals and

Materials, Forest and ICTMaterials, Forest and ICT

2008 Industry Investments in Nanotechnology in Finland (1000eur)

14900

9700

9600

8300

6800

37002800 700

Chemicals and Materials Forest Cluster ICT

Health and Well-being Energy and Environment Tools and Instruments

Metals and Mech. Eng. Construction

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Private investments in nanotechnology Private investments in nanotechnology

exceeded public funding in 2008exceeded public funding in 2008

Investments in Nanotechnology in Finland, 2006-2008*

0

20

40

60

80

100

120

2006 2008

Meu

r

Venture Capital

Industrial Investments

Public Funding

� Overall investments in nanotechnology in Finland reached 104 Meur

in 2008; public funding 38 Meur, industrial investments 56 Meur and venture capital 9,5 Meur

� During 2006-2008, overall investments grew by 33,6 %

*Source for public funding figures: Tekes

FinNano

� Global nanotechnology figures are typically estimated with the

following methodology. First, the percentage of products

incorporating nanotechnology is estimated. Second, this figure is

multiplied by total revenues.

� Nanotechnology in Finnish Industry 2008 used also data from

primary sources. Directly reported data was combined with an

estimate of company nanotechnology intensity and product

pipeline analysis.

Economic measurement for emerging technologies is a complex and debated task due to their multi-industry impact

FinNano

Finnish nanotechnology sector size exceeded 300 Finnish nanotechnology sector size exceeded 300

MeurMeur in 2008, up by 25 % from 2006in 2008, up by 25 % from 2006

Market figures in 2008

•Sector size: 317 Meur

•Share of exports: 60,4%

•Employment: ca. 2900 professionals

•On average, the companies expect the market to grow by 67,4 % by 2010

Nanotechnology Sector in Finland 2006-2008

0

50

100

150

200

250

300

350

2006 2008

Chemicals and Mat erials Energy and Environment

Healt h and Well-being ICT

Forest Product s Tools and Inst rument s

Const ruct ion Met als- and Mechanical Engineering

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Finland is wellFinland is well--aligned with key global aligned with key global

trendstrends

Global Trend 2006-2008 Finland

•Nanotech funding increases, lead by Corporate Spending, though VC Dips √√√√•Materials sector sees the most revenue, followed by ICT; life

sciences, and energy lag √√√√

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Funding, qualified manpower and IPR problems Funding, qualified manpower and IPR problems

are key challenges for the sectorare key challenges for the sector’’s strong growths strong growth

� ”What have you found to be the main challenges when commercialising nanotechnology?”

0 5 10 15 20 25

Lack of Standards

Lack of Applications in the Area

Lack of Customer/Consumer Acceptance

Lack of Suppliers in the Area

Difficulties in Achieving Reliable Mass Production

Problems with Intellectual Property Rights

Shortages of Qualified Manpower

Shortages of Funding

Number of respondents naming this as main challenge

FinNano

The Finnish nanotechnology sector needs The Finnish nanotechnology sector needs

funding for international growthfunding for international growth

Need for External Funds 2009-2011

0

10

20

30

40

50

60

Risk Finance Public Funding Private Investments Debt

Meu

r

� Nanotechnology sector is looking for 86 Meur of external funds in the next two years mainly from VCs and public sector to take products to international markets

� Top 4 nanotechnology sector future needs are all in international growth

� Funding is an issue especially for SMEs and growth companies

� Funding availability for nanotechnology sector’s future growth raises concerns – the need for venture capital is double to the average annual supply of 13,4 Meur (2002-2008)

FinNano

The sector is likely to be experiencing the funding gap between seed stage public and later stage private venture capital.

Seed Start up Early growth Expansion

Amount of capital available

Lack of professionaland large enough VCfunds supporting ideas with a

global dimensionPublic money for seedGovernment is very active in small seed stage investments (< 500 kEur). Very limited private VC & angel activity

Private VC is focused in more mature companies VC funds that are large enough for multi million Euro investments are focused on more mature stages. Very few larger investments are made in companies below 2 million of annual revenue.

Majority of

Finnish

Companies

in Nanotechnology

FinNano

There is reasonable evidence of a skills There is reasonable evidence of a skills

shortage in nanotechnologyshortage in nanotechnology

Have you found it to be easy or difficult to recruit skilled

people in areas connected to nanotechnology?

0 10 20 30 40 50

Very Easy

Very Difficult

% of respondents

2008

2006

� 53 % of respondents found recruitment to be ’difficult’

or ’very difficult’ – up by 10 % from 2006

� Skills shortage is the most burning issue for Tools and

Instruments and medium-sized companies

FinNano

IP problems are the main challenges in IP problems are the main challenges in

universityuniversity--industry coindustry co--operationoperation

� Patents and trade secrets are the most common methods to protect intellectual property in the Finnish nanotechnology sector

� In effect, companies find IPR issues as a challenge especially in industry co-operation

Main Challenges in University-Industry Co-operation

0 5 10 15 20 25 30 35

Basic Orientation of Research

Communication Problems

Lack or Underdevelopment of Production

Technologies

Challenges in Identifying Commercial

Opportunities

Issues Related to Ownership of Intellectual

Property

Number of respondents naming this as a very important factor

FinNano

A comprehensive product pipeline analysis was A comprehensive product pipeline analysis was

conducted for all industriesconducted for all industries

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Chemicals and Materials Technology PipelineChemicals and Materials Technology Pipeline

UV-TiO2 nanoparticle retention systems (Sacht Leben)Nanoparticle dispersions for papercoating applications(Basf-Ciba)Nano-diamond materials(Carbodeon)UHP Metal salts Organic metal precursors(Puraliq)Protective and decorative coatings (DIARC Tech.)Heat-resistant oven coatings(Finnester Oy)…

•Functionalnanocomposites•Nano-diamondmaterials for industrial applications•Carbon nitridematerials

•Improved catalyst materials•Anti-graffitticoatings•Ultrapure metal salts•Electrically conductive compounds•Non-combustible ceramic binder•Intelligent surfacesolutions

Coatings

•Fire retardant coatings•Functional paints and coatings

•Hybrid coatings

•Colour coated sheet metal products

•Plastic film surfaces

Materials•Fire resistance composite

•Carbon nitride materials for thin films

and coatings

•Catalytic materials with nanoscaleactive sites

•Precursors for nanotechnology

production

•carbon based nanomaterials

•Nanocomposites in packaging materials

Nanoparticles•Metal-based nanoparticles

•Organic nanoparticle dispersions forpaper coating applications

•Nanoparticle binder and sizing

products

•Ceramic powders

Research Product Development Commercial

FinNano

Carbon nanotube enhanced composite Carbon nanotube enhanced composite

material improves windmill performancematerial improves windmill performance

� Improved windmill performance at very low wind speeds due to the low blade weight of only 50-60 % of the weight of traditional blades

� The Finnish manufacturer of nanotechnology windmill blades, Eagle Windpower Ltd, is a globally leading developer and manufacturer of high technology windmills in the 2-500kW range

� The innovation originated from

Jyväskylä University

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DesinfinatorDesinfinator uses nanotechnology for air uses nanotechnology for air

cleaningcleaning

� Desinfinator Ltd has created an award-winning air cleaning system, which was introduced to the market 9/2008

� Nanotechnology is used to make coating for radical generation. This has proven to be a very efficient method in getting rid of impurities and smells from the air.

� Markets have already been opened in Europe, Russia, and Middle-East

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Helsinki University spinHelsinki University spin--off offers off offers

advanced measurement of indoor airadvanced measurement of indoor air

MeasurementMeasurementModellingModelling

SolutionsSolutions

Process optimisation and indoor airProcess optimisation and indoor air

Helsinki Aerosol Consulting -Business Model

� Helsinki Aerosol Consulting Ltd is a spinoff from the University of Helsinki, Department of Atmospheric Sciences

� The company focuses on serving the needs of the rapidly developing nanotechnology sector by offering advanced aerosol measurement and modelling services for processes and indoor air

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LedLed--lighting manufacturer lighting manufacturer OptoGaNOptoGaN was was

acquired by Russian investorsacquired by Russian investors

� With its cutting edge technology, OptoGaN enables new generation of Solid State Lamps which feature bulb-like brightness, bulb-like cost, high energy efficiency and environmental safety

� Founded 2004 in Finland by two Russian physicists, OptoGaN operates its extensive R&D in Micronova, Espoo, Finland and starting since 2006 a full pilot line in Dortmund, Germany

� In 2007 OptoGaN has raised €5M in capital from Nordic Venture Fund, Via Venture Partners, VNT Management Oy and Finnish Industry Investment

� In 2008 OptoGaN’s Finnish and German operations have become part of the OptoGaN Group, a joint venture established by Onexim Group, the Russian Corporation of Nanotechnologies (RUSNANO), and the Ural Optical and Mechanical Plant (UOMP)

� Target investment for the new company is over 40 MEUR

FinNano

SummarySummary

� The number of active companies in the Finnish nanotechnology sector has increased to 202 from 61 in 2004� In addition to over 200 technology companies, the sector growth has created new business

opportunities for numerous service companies

� 65 companies had commercial products or processes in 2008 (27 in 2004)

� Nanotechnology has had a significant positive impact on economicdevelopment in the key clusters of the Finnish industry� Nanotechnology sector size in Finland exceeded 300 Meur in 2008, up by 25 % from 2006.

Exports accounted for over 60% of total company revenues in the sector.

� The industry employs approximately 2 900 professionals (300-400 in 2004)

� Private investments in nanotechnology exceeded 65 Meur as industrial investments reached 56,6 Meur and Venture Capital 9,5 Meur

� While the sector growth continues, companies are facing main challenges in shortage of funding and manpower, and intellectual property rights(IPR) issues� Most industries have a deep pipeline of R&D, to be realised in 1.5-3.5 years

� Especially SMEs seeking internationalisation find availability of risk finance and qualified manpower, and IPR problems as main challenges to company development

FinNano

AgendaAgenda

� Methodology and data

� Analysis

� Predictions

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Global economic downturn has an adverse effect Global economic downturn has an adverse effect

on the Finnish nanotechnology sectoron the Finnish nanotechnology sector

Negative effects

� Global macroeconomic downturn slows down the growth in global demand for nanotechnology products

� Liquidity problem hurts investments for future growth, especially by expanding the funding gap in Finland

� Solvency problem increases the number of bankruptcies for SMEs in nanotechnology

Positive effects

� The downturn alleviates the skill shortage problem to small extent

� Acquisition of IPR and companies becomes easier as valuations decrease

FinNano

Services, Construction, Metals and Forest are Services, Construction, Metals and Forest are

likely to take the strongest hitlikely to take the strongest hit

Industry Key factors for facing economic

downturn

Estimated dowturn impact on

nanotechnology industry

Tools and Instruments �Several established products and

positive impact on skill shortage

dilemma, public sector a big customer

Small

Energy and Environment �A strongly emerging sector and

highly invariant to economic cycles

Small

Health and Well-being �Strong pipeline and a large number of

publicly funded research projects

Small

Chemicals and Materials �Several established products and

positive impact on skill shortage

dilemma, strong need for risk capital

Medium

ICT �Strong need for risk capital and very

export driven but has a large number of

established products and publicly

funded research projects

Medium

Forest Cluster �Several established companies

seeking for renewal and new

opportunities

Strong

Metals and Mech. Eng. �Very export driven and no established

commercial products

Strong

Construction �No established commercial products

and the core of the industry is strongly

hit by the downturn

Strong

Services �Demand for services has s high

customer wealth elasticity

Strong

FinNano

A comprehensive pipeline and R&D investment analysis A comprehensive pipeline and R&D investment analysis

was conducted for all industries to make market was conducted for all industries to make market

estimates..estimates..

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In 2013, over 250 companies in the Finnish nanotechnology In 2013, over 250 companies in the Finnish nanotechnology

sector are estimated to have commercial products sector are estimated to have commercial products

incorporating nanotechnologyincorporating nanotechnology

Industry Product development

pipeline average time to market

Estimated number of companies with

commercial products in 2010

Estimated number of companies with

commercial products in 2013

Chemicals and Materials

3,6 years (2,3 in 2006) 25 (+6 from 2008) 56

Construction 3,1 years 3 (+0 from 2008) 6

Forest Cluster 2,3 years (2,7 in 2006) 11 (+7 from 2008) 18

Health and Well-being

2,3 years (3,7 in 2006) 20 (+11 from 2008) 63

Metals and Mech. Eng.

2 years 1 (+1 from 2008) 10

ICT 1,5 years (3,4 in 2006) 17 (+5 from 2008) 56

Energy and Environment

1,5 years 8 (+4 from 2008) 14

Tools and Instruments

1,5 years 17 (+3 from 2008) 29

ALL 2,4 years (3,1 in 2006) 102 (+37 from 2008) 251

FinNano

Finnish nanotechnology sector is estimated to Finnish nanotechnology sector is estimated to

reach 1.3 billion euro milestone by 2013reach 1.3 billion euro milestone by 2013

Nanotechnology Sector in Finland, 2008-2013*

0

200

400

600

800

1000

1200

1400

2008 2010 2013

Meur

Finnish Nanotechnology Sector in 2013

•Sector size: 1300 Meur

•Employment: 11000-12000 professionals

*A global comparison:

Nanotechnology sector/GDP

2008 2013

Finland 0,2 % 0,6 %

Global 0,3 % 3,2 %

Source for global figures:

Lux Research (2008)

FinNano

Fastest growth is expected to take place in ICT, Fastest growth is expected to take place in ICT,

Health and EnergyHealth and Energy

Nanotechnology Sector in Finland, 2008-2013

0

200

400

600

800

1000

1200

1400

2008 2010 2013

Me

ur

Health and Well-being Chemicals and Materials ICT

Tools and Instruments Forest Metals- and Mechanical Engineering

Energy and Environment Construction

�Nanotechnology expands into more new product categories across all sectors

�Nanomaterials manufacturing becomes the province of large companies –

start-ups focus on applications

�Supply shift broadens applications for nanomaterials