Slippery Math Behind Nanotech Market Estimates

The commercial potential of nanotechnology is casually discussed by market analysts and journalists -- including me -- who toss around trillion-dollar figures without thinking deeply about where they come from or how they're derived. Such numbers provide an easy way to convey how important we think nanotech is going to be, but don't always hold up to the sort of rigorous analysis that Michael Berger gives to one recent report:

Then the report goes on to estimate the "Global Nanotechnology Market" by 2015 as $1.5 trillion excluding semiconductors and $2.95 trillion including semiconductors

Somewhere in the text of the Cientifica report is this key sentence: "It should be noted that this is not the total value of nanotechnologies included in products, but the total value of the products. Thus a tenth of a gram of nanomaterials costing 10 cents may be included in a drug costing $100 per dose."

Just to be clear here: this means that the nanotechnology market size, as compiled by Cientifica and others, includes the $100 for the entire drug dose, not it's actual 10 cents nanomaterial ingredient. In this example they are therefore expanding their definition of "market" by a factor of 1,000 simply by including the entire product's value, not just the nanotechnology component in it. This methodology is then consequently applied to all industry sectors.

If you were to research the U.S. market size for, say, color pigments, i.e. various organic and inorganic particles such as carbon black or iron oxide, you would come up with a figure of about $2 billion to $3
billion per year. This is the actual value of pigments sold. Color pigments are used for a myriad of products such as paints and coatings, printing inks, plastics, ceramics, glass and minerals, textiles and leather, toner, cosmetics and toiletries, paper and paperboard.

Now, if all these pigments were nanoparticles, the nanotechnology analysts would tell us that the market size of "color pigment-enabled products" was many hundreds of billions of dollars....

Debunking the trillion dollar nanotechnology market size hype [Nanowerk]

Image: Andrew Magill