Swiss successes lead to more government money for nanotech

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ZURICH, Switzerland, Oct. 4, 2002 — Self-cleaning windows, tools to feel the nanorealm, a real-time holographic 3-D imaging system and superfabrics that resist cold and dirt are just some of the results three years into a joint university and industrial nanotechnology research program in Switzerland.

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Progress has been so encouraging that the government, via the Commission for Technology and Information (KTIStartup), just allocated the program, called TopNano21, another $6.75 million.

Added to the $37 million already budgeted, TopNano will have had at its disposal a total of $43.75 million over a four-year period.

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Karl Hohener, TopNano’s project manager, announced the news this week at an annual meeting for program participants. He said that more than 200 projects have been funded over the past three years, involving more than 150 Swiss firms.

Along with major international firms based in Switzerland, such as Sulzer Innotec, Unaxis, Serono, Dow Europe, Siemens, ABB, Nortel and Nestle, a large number of midsize firms are participating.

“The biggest surprise has been the response from the SMEs (small and midsize firms). They are quicker to see the potential than large firms,” Hohener said.

More than a half dozen startups have emerged to commercialize a breakthrough or innovation enabled via the program, including NanoFeel (Carrouges), Concentris (Basel), Nanolight International Ltd. (British Virgin Islands), Mecartex (Losone), Nanosurf AG (Liestal), VHF Technologies (Le Locle), Tissupor and GreatCell Solar SA (Yverdon les Bains). They will deliver a wide range of products from add-on devices for atomic force microscopes to inexpensive, indoor photovoltaic cells.

Not all the research results go to Swiss spinoff companies. Foreign firms are also participating, including BioCure Inc. (Norcross, Ga.), a spinoff of Ciba Vision that has licensed nanocontainer technology from the team of University of Basel researcher Wolfgang Meier.

“For those who think nanotechnology is four or 10 years away from commercialization, this program should be an eye-opener,” said Berndt Samsinger, a venture capital fund manager at Capital Stage in Zurich.

Further nanotechnology funding is planned after 2003, but it will be a new program, with a new budget forecast to be $27 million, according to Hohener. Another $2 million a year over a four-year period is going to basic research in nanotechnology subjects, funded through the National Research Program, dubbed NFP47.

Behind this very commercial approach to research lies the notion that the almost $50 million is a small price to pay to give the economy a boost. It is driven by what the Swiss see as a giant missed opportunity, or two. There are a number of people who believe that had industry and government been more alert, key technologies invented here — such as a key liquid crystal display discovery and the scanning tunneling microscope — could have benefited the economy here.

Lots of startups, little venture money

Despite all the spinoff activity going on here, there is no fast and furious venture capital deal flow. The volume of investment in Swiss high tech firms is about the same this year as last. The low venture activity is not related to a lack of capital available, experts say.

“Some of the nanotech products are ready for marketing but compared to the huge potential there is still a very limited number of application-oriented companies,” Samsinger said.

There is plenty of venture money around. There are funds, such as that being launched by Capital Stage, plus enough budding nanotechnology experts to help fund managers make strategic decisions about which startups to invest in.

One reason for low deal flow is that some of the startups are very early stage. Founders are not clear yet on how to commercialize their intellectual property. Investors need to see some real structure and accomplishments before they will invest. There is also the dispersed nature of the some of the markets for these products. Makers of tools for nano-microscopy find the very large market players in the microscopy field today are established in the United States and Japan.

Despite such difficulties, there are at least 10 nanotechnology related companies raising capital at the moment, but negotiations are tough, according to Hohener.

That has more to do with the personality of the entrepreneur. Many of the founders do not want to have to outsiders influencing the direction of the company. There is a strong independent streak, even rebelliousness among some of the research community here. Such traits are essential to be a pioneer and company founder. It underlies the inventiveness that the Swiss are known for. But it sometimes makes striking a deal between financier and technology entrepreneur a bit more challenging.

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