Nanotechnology Flourishes in Japan
October 6, 2003

By Ketaki Sood, Larta Research Economist

One of the most promising discoveries in the field of nanotechnology has been that of carbon nanotubes, which, simply put, are extremely thin (the diameter of a carbon nanotube is approximately 10,000 times smaller than a human hair) hollow cylinders made of carbon atoms. Carbon nanotubes possess unique properties; they are strong and resilient yet lightweight, with good thermal conductivity. These unique properties have enabled the possible use of carbon nanotubes in nano-electronic and nano-mechanical devices, among several other applications.

Carbon nanotubes were first discovered in Japan back in 1991, by Sumio Iijima, a leading researcher in the field of nanotechnology in research laboratories at Japanese corporation NEC. Since this landmark discovery, Japan has emerged as one of the leaders in nanotechnology R&D.

Despite a rigid regulatory environment, changes in Japan's venture business policy and culture have helped nurture emerging technologies like nanotechnology. Since 2000, researchers and professors from national labs have been allowed to take positions in private corporations. Furthermore, since 2001, government laboratories have become independent entities. Japan has also ramped up its technology transfer efforts by creating policies to foster closer ties between academia and industry. As a result, there have been an increasing number of spin-offs from universities.

Although Japan trailed behind the U.S in both IT and biotech, it is taking every measure to capitalize on the nanotechnology revolution. Japan budgeted $750 million for nanotechnology research in 2002, up from $135 million in 1998. The next few years could see government funding for nanotechnology research in Japan reach $50 billion or more.

Source: CMP Cientifica

In addition to government sponsored R&D in the field, large Japanese corporations and universities have dedicated millions of dollars to nanotechnology research. Hitachi, Sony, Toray, Mitsubishi, Fujitsu, and Mitsui are among the Japanese corporations with nanotechnology initiatives. Corporate spending on nanotechnology research was estimated to have reached a mammoth $1 billion in 2002. As a result, one can expect a slew of nano-enhanced products to hit markets. Mitsubishi plans to come out with nano enhanced energy-saving flat panel technology for computer displays and televisions. At Fujitsu, research is being conducted to build circuits using nanotubes.

Mass-producing and commercializing nano products and applications have long been considered the biggest challenges facing the nanotechnology industry. However, Japan has shown relative success in this area, driving nano products and applications to the market at an impressive rate.

Consider Japan's production of nanotubes. In 2001, worldwide output of nanotubes stood at approximately one ton per year. Mitsui, which has positioned nanotechnology as a top priority among IT and biotechnology, is expected to ramp up production of multiwall nanotubes to a massive ten tons per month.

Mitsubishi, which began producing fullerenes (a fullerene is a pure carbon molecule composed of at least 60 atoms of carbon) in May 2003, is aiming to mass-produce the material at its Kurosaki facility in northern Kyushu, which has a production capacity of 40 tons per year. The reduction in costs as a result of mass-production is expected to catalyze the process of developing applications for fullerene.

Japan views the development of nanotechnology as the key to restoring its economy, according to a report by the Journal of Japanese Trade & Industry. But the country faces stiff competition from the U.S. and Europe, both of which who have increased their R&D budget for nanotechnology. Government funding for nanotechnology in the U.S. increased 9.5% to $847 million, up from $774 million in 2003. Following closely is the United Kingdom, which recently announced $150 million in funding for nanotechnology research over the next six years. Japan, however, has thrived in the nano materials and nanoscale fabrication sectors, driving products to the market at a faster rate than the U.S. The country however, lags behind the U.S. in nanobiology and electronics.

Japan's growing interest in furthering nanotechnology comes as no surprise. The potential impact of nanotechnology and resulting revenues are enormous. Japan stands to gain a lot by nurturing its nanotechnology industry. On the other hand, Japan's continued efforts at mass-producing nano materials will benefit the nanotechnology industry as a whole. Mass-production will lead to reduced costs, which translates into more products and applications. Nanotechnology research has become a global trend and this is testament to the promise and the potential benefits that governments, corporations and investors worldwide see in the advancement of the science.

Japan Meets the Nano Republic III
On October 16th, Larta and JETRO U.S. - Japan Hi Tech Partnership 2003 will bring together business and research leaders from Japan and California to explore nanotechnology research and business opportunities. The event will spotlight successful nanotech commercialization in Japan and features pitches by Japanese companies seeking U.S. partners and investors.

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