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									Global Dialogue on Nanotechnology
    and the Poor: Opportunities and Risks



                                                   Background Paper for the
                                                  International Workshop on
                                                   Nanotechnology ,
                                                       Commodities ,
                                                   and Development

                                                       29 - 31 May 2007
     Meridian Institute
            Connecting People to Solve Problems    Rio de Janeiro, Brazil
                                                                                                                                                                                                    NANOTECHNOLOGY COMMODOTIES,
table of contents
[1]    INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
[2]    COMMODITIES AND DEVELOPMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
       [2.1]     COMMODITIES, COMMODITY DEPENDENCE, AND POVERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

       [2.2]     TECHNOLOGICAL ADVANCEMENT AND COMMODITY-DEPENDENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

[3]    NANOTECHNOLOGY AND DEVELOPMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
       [3.1]     STATUS OF NANOTECHNOLOGY ACTIVITY IN DEVELOPING COUNTRIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
       [3.2]     NANOTECHNOLOGY AND DEVELOPING COUNTRIES – CHALLENGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
       [3.3]     NANOTECHNOLOGY AND DEVELOPING COUNTRIES – OPPORTUNITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
[4]    NANOTECHNOLOGY, COMMODITIES AND DEVELOPMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
       [4.1]     OPPORTUNITIES AND RISKS OF NANOTECHNOLOGY FOR COMMODITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
       [4.2]     AGRICULTURAL COMMODITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
                 [4.2.1] Agricultural Commodities and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
                 [4.2.2] Nanotechnology and Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
       [4.3]     MINING, MINERAL, AND NON-FUEL EXTRACTIVE INDUSTRIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
                 [4.3.1] Mining and Mineral Industries and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
                 [4.3.2] Nanotechnology and Metal, Mineral, and Non-Fuel Extractive Industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
       [4.4]     FIBER,TEXTILES, AND APPAREL INDUSTRIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
                 [4.4.1] Fiber,Textiles, and Apparel Industries and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
                 [4.4.2] Nanotechnology and Fiber,Textiles, and Apparel Industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
       [4.5]     RUBBER, PLASTIC, AND COMPOSITE MATERIALS INDUSTRIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
                 [4.5.1] Rubber, Plastic, and Composite Materials and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
                 [4.5.2] Nanotechnology and Rubber, Plastic, and Composite Materials Industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
[5]    CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
APPENDIX 1: MATRIX OF TECHNOLOGIES AND CROSS-CUTTING ISSUES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39

                                                                                                                                                                                       NANOTECHNOLOGY COMMODOTIES,
[1] Introduction
                                                                                                 Programme’s Human Development Index. Reliance on a narrow
Nanotechnology applications are being developed that could impact                                range of commodities for revenue can be risky for countries and
global markets for agricultural, mineral, and other non-fuel                                     producers because internationally traded commodities have shown
commodities.1 Several authors report that applications of                                        long-term price declines and sharp short-term price fluctuations and
nanotechnology could, for instance, impact global demand or open                                 have been associated with declining terms of trade, greater debt
new markets for commodities. Such developments could have                                        insecurity, and challenges with macroeconomic planning and
potentially far reaching socio-economic and other effects in                                     sustainable economic and human development planning.

developed and developing countries.2

                                                                                                 Among many other factors, science and technology may have a role
Meridian Institute is organizing the “International Workshop on                                  to play in helping commodity dependent developing countries
Nanotechnology, Commodities, and Development” (Commodities                                       address some of their challenges; the development of indigenous
Workshop) to explore the linkages between various types of                                       technological capacity has often been considered a key determinant
nanotechnology applications, commodities, and commodity markets,                                 of economic growth and poverty reduction by enhancing the ability
as well as related opportunities and risks for commodity producers,                              to produce higher value products and improve efficiency of
workers, consumers, and governments in developing countries.This                                 commodity production. However, people also point to previous
paper is intended as background information for the Commodities                                  introductions of new technologies that have had negative
Workshop, which is a component of Meridian Institute’s Global                                    consequences for commodity producers.
Dialogue on Nanotechnology and the Poor: Opportunities and
Risks (GDNP).3                                                                                   Perceived by many as the next “transformative technology,” like
                                                                                                 electricity or the Internet, nanotechnology encompasses a broad
The term “commodities” often refers to “undifferentiated, widely                                 range of tools, techniques, and applications that manipulate or
traded raw materials and agricultural products that are traded                                   incorporate materials at the nanoscale (a nanometer is one billionth
principally on the basis of price.”4 Ninety-five of the 141 developing                           of a meter) in order to yield novel properties that do not exist at
countries derive at least 50 percent of their export earnings from                               the larger scale. Nanotechnologies are being developed for and
commodities.5 In 2003, fifty-four of those countries depended on                                 applied to production and products across a range of sectors and
non-fuel commodities for more than half of their export earnings                                 industries (e.g., water, energy, medicine, agriculture, mining, textiles)
(e.g., copper and zinc account for 61 per cent of Zambia’s export                                and are creating a range of potential opportunities and risks for
earnings; cotton makes up 72.7 per cent of Mali’s earnings).6 The                                developing countries.
United Nations Conference on Trade and Development (UNCTAD)
estimates that a total of two billion people—a third of the global                               Both the public and private sectors in developed and developing
population—are employed in commodity production, with half                                       countries are investing heavily in nanotechnology research and
specifically employed in agricultural production.7                                               development.The collective public and private sector investment
                                                                                                 in 2005 was approximately USD10 billion, up 10% from 2004.8
Although the use of natural resources and production of                                          In addition, the number of patents on nanotechnology-related
commodities may contribute to economic development and                                           inventions (including those from developing country researchers),9
enhanced public welfare, many of the developing countries that are                               scientific literature citations (now up to 12,000 publications per
highly dependent on commodity exports as a primary source of                                     year),10 and nanotechnology-based products reaching the market
revenue also appear low on the United Nations Development                                        are skyrocketing globally.

     Given the complexity of the issues addressed in this paper, this paper will focus primarily on agricultural, textile, mineral, and other non-fuel commodities. In the near future,
     Meridian Institute plans to compile information separately on nanotechnology, energy, and development, which will include discussion of issues related to energy commodities (e.g.,
     oil and natural gas).
     See, for instance, ETC Group. “The Potential Impact of Nano-Scale Technologies on Commodity Markets:The Implications for Commodity Dependent Developing Countries.” In
     Trade-Related Agenda, Development, and Equity (T.R.A.D.E.): South Centre, 2005.
     Detailed information regarding the GDNP is available at:
     Thomas F. O'Herron, ed., Terms of Trade: The Language of International Trade Policy, Law and Diplomacy (Washington, DC: International Advisory Services Group, 1999).
     South Centre, “Problems and Policy Challenges Faced by Commodity-Dependent Developing Countries (CDDCs),” in Trade-Related Agenda, Development and Equity (T.R.A.D.E.)
     Analysis Series (Geneva: 2005).
     Olivier Matringe, “Commodities at a Glance: Definitions and Importance of Commodities for Developing Countries” (paper presented at the University of Dar-es-Salaam Study
     Tour, Geneva, April 18-27 2006).
     UNCTAD, “Trends in World Commodity Trade, Enhancing Africa's Competitiveness, and Generating Commodity Gains” (paper presented at the African Union Extraordinary
     Conference of Ministers of Trade on African Commodities, Arusha,Tanzania, November 21-24, 2005).
     Michael W. Holman et al., “The Nanotech Report, 4th Edition,” (New York: Lux Research, 2006).
     Kshitij Aditeya Singh, “Intellectual Property in the Nanotechnology Economy,” (Stirling, Scotland: Institute of Nanotechnology, 2007).
     Vicki Colvin, “Responsible Nanotechnology: Looking Beyond the Good News,” EurekAlert! InContext, (November 2002).

                                                                                                                                                                     NANOTECHNOLOGY COMMODOTIES,
Many developing countries are investing significant sums in                                   [1] Examine nanotechnology applications that are effecting or
nanotechnology research and development. In particular, Brazil,                                   may effect agricultural, mining and mineral, and other
China, India, and South Africa have been noted for their significant                              commodity markets;
investments in nanotechnology research and development and the                                [2] Identify mechanisms to anticipate, measure, analyze, and
development of national nanotechnology strategies. Other                                          address the impact of nanotechnology applications on
developing countries are investing in nanotechnology as well. A                                   commodity-dependent developing countries; and

study in 2005 found that 19 developing countries were engaged                                 [3] Catalyze actions that could proactively address potential

in nanotechnology activities on a national level. An additional 12                                opportunities and risks associated with shifting commodity
developing countries demonstrated either individual or group                                      markets resulting from nanotechnology research and
research in nanotechnology, including one Least Developed Country                                 development.
(LDC), and thirteen more developing countries expressed interest in
engaging in nanotechnology research, including three LDCs.11                                  This paper is intended to introduce the broad range of complex
                                                                                              and inter-related issues relevant to the topics of the Commodities
Some people have identified nanotechnology as a promising area                                Workshop in an accessible and digestible manner. Descriptions of
of technological advancement and innovation for commodity                                     issues are presented concisely, but without oversimplification.
dependent developing countries and developing countries in general
because it may enable new or improved materials, products, and                                The paper is divided into the following sections:
processes that are more efficient, effective, and/or inexpensive than
those currently available. Additionally, nanotechnology may increase                          •    Section 2 provides a brief introduction to issues at the
production capacity by enabling manufacturing processes that have                                  intersection of commodity dependence, development, and
modest capital, land, labor, energy, and material requirements or be                               technology, including a brief overview of the potential role of
used to add value to existing export commodities and goods,                                        science and technology in addressing development
potentially enabling developing countries to engage in a number                                    challenges in commodity-dependent developing countries.
of new markets for novel nano-enhanced materials and
production processes.                                                                         More detailed information regarding these issues is provided in
                                                                                              a supplemental background paper, “Commodities, Development,
Other people have expressed concern that the same characteristics                             and Technology.”12
that make nanotechnology potentially suitable for developing
countries also raise the possibility that it could displace commodities,                      •    Section 3 provides general information regarding
labor, and industries and worsen the overall position of developing                                nanotechnology in developing countries and the
countries. A growing number of institutions have also expressed                                    opportunities and challenges nanotechnology offers for
concerns that nanoscale materials could pose unknown risks,                                        developing countries in general and, in particular, for
including risks to human health and the environment, which might be                                commodity-dependent developing countries.
particularly difficult for developing countries to identify and manage.
                                                                                              •    Section 4 provides descriptions of commodity markets that
Despite a significant amount of activity in relevant topic areas, there                            are important to many developing countries (e.g.,
are few programs that work comprehensively on the linkages                                         agriculture, mining and minerals, textiles, and rubber and
between commodities production, development, and emerging                                          composites), an overview of nanotechnology applications
technologies, such as nanotechnology. Efforts to assist commodity-                                 relevant to those sectors, and specific examples of relevant
dependent developing                                                                               nanotechnology applications.

Given these issues and the differing perspectives, Meridian is                                More detailed information and additional examples of
organizing the Commodities Workshop. The goals of the                                         nanotechnology applications relevant to commodities are available
Workshop are to:                                                                              online through Meridian Institute’s Nanotechnology and
                                                                                              Commodities Database.13

     Donald C. Maclurcan, “Nanotechnology and Developing Countries, Part 2: What Realities?,” AZoNano - Online Journal of Nanotechnology (2005).
     Meridian Institute’s paper “Commodities, Development, and Technology” is available online at:
     Meridian Institute’s Nanotechnology and Commodities Database is available online at

                                                                                                                                                                                       NANOTECHNOLOGY COMMODOTIES,
[2]                    Commodities
                       and Development

[2.1] Commodities, Commodity                                                                    among the poorest segments of the population. In most cases, these
Dependence, and Poverty                                                                         people are entirely reliant on their commodity production activities
                                                                                                as their source of income.19

Commodities are raw materials (e.g., agricultural products, metals,

                                                                                                Due to the undifferentiated and global nature of commodities,
minerals) and primary-level products (e.g., textiles, plastics, building
                                                                                                commodity-producing countries face several persistent challenges
materials) that are traded in bulk quantities in international markets.
                                                                                                in international markets, including long-term declining commodity
Commodities are distinct from other traded goods in that they
                                                                                                prices, declining terms of trade, and short-term price volatility.
rarely vary in terms of quality and, therefore, are typically traded
solely on the basis of price. Consequently, commodity markets tend
                                                                                                Real commodity prices have declined an average of 3 percent
toward strong competition and downward pressure on prices.This
                                                                                                annually since the late 1970s. Data from the World Bank indicates
homogeneity also means that shocks to the supply or demand for
                                                                                                that real prices for agricultural commodities and metal and mineral
a commodity affect prices for all producers, exposing them to high
                                                                                                commodities declined 47 percent and 35 percent respectively
income risk.15
                                                                                                between 1980 and 2002. Conversely, prices for manufactured
                                                                                                goods have increased relative to commodity prices during the
A country’s level of commodity dependence is generally measured
                                                                                                same period, resulting in a deterioration of terms of trade for
by the share of export earnings of the top one to three export
                                                                                                countries that export commodities and import manufactured
commodities in Gross Domestic Product (GDP), total exports,
                                                                                                goods. Commodity price instability has generally increased over
and/or government revenues, as well as by the percentage of people
                                                                                                the last decade; commodities are uniquely vulnerable to short-
engaged in commodity production. Commodity-dependent countries
                                                                                                and medium-term price fluctuations because their price cycles are
rely on commodities for a significant share of their export earnings
                                                                                                typically asymmetrical, meaning periods of commodity price rises
and employment.They also derive a substantial share of their
                                                                                                tend to be shorter than periods of price declines. 20
government revenue from commodity consumption and tariffs
and taxes on commodity exports.
                                                                                                Commodity dependence poses a number of challenges for
                                                                                                developing countries that often use their export earnings from
Commodities remain a significant driver of economic activity in
                                                                                                trading commodities on international markets to finance their human
95 out of the 141 developing countries that continue to rely on
                                                                                                development efforts. First, developing countries most often specialize
commodity exports for more than half of their export earnings.16
                                                                                                in the least profitable parts of the global production chain and in
Some 37 of the 42 countries categorized by the World Bank and
                                                                                                markets facing long-term declines in prices and erratic price
the International Monetary Fund (IMF) as Heavily-Indebted Poor
                                                                                                instability. Second, even though there has been a significant increase
Countries (HIPCs) are currently dependent on commodities for
                                                                                                in international trade since the 1960s, many developing countries’
more than half of their export earnings, with 15 of them depending
                                                                                                exports have not kept up with exports from the developed world
on commodity export earnings for more than 90 percent of their
                                                                                                and, consequently, account for a shrinking share of world trade.21
total export revenues.17
                                                                                                Additionally, commodities have lost a significant portion of their
                                                                                                purchasing power against manufactured goods, which represents a
UNCTAD estimates that a total of two billion people—a third of
                                                                                                significant decline in the terms of trade for commodity exporting
the global population—are employed in commodity production,
                                                                                                countries. Also, declining commodity and farm-gate prices22 have
with half specifically employed in agricultural production.18 Within
                                                                                                decreased the power of workers employed in agricultural and
developing countries, primary commodity producers are often
                                                                                                mining sectors to bargain for higher wages. 23

     This section provides a summary of the more detailed information provided in Meridian Institute’s paper “Commodities, Development, and Technology.”
     Samuel G. Asfaha, “Remunerating Commodity Producers in Developing Countries: Regulating Concentration in Commodity Markets,” in Trade-Related Agenda, Development and
     Equity (T.R.A.D.E.) Analysis Series (Geneva: South Centre, 2005).
     Common Fund for Commodities, “Overview of the Situation of Commodities in Developing Countries” (paper presented at the Eleventh Meeting of the Intergovernmental
     Follow-Up and Coordination Committee on Economic Cooperation Among Developing Countries, Havana, Cuba, March 21-23 2005).
     South Centre, “Problems and Policy Challenges Faced by Commodity-Dependent Developing Countries (CDDCs).”
     UNCTAD, “Trends in World Commodity Trade, Enhancing Africa's Competitiveness, and Generating Commodity Gains”.
     South Centre, “Problems and Policy Challenges Faced by Commodity-Dependent Developing Countries (CDDCs).”
     Asfaha, “Remunerating Commodity Producers in Developing Countries: Regulating Concentration in Commodity Markets.”
     A basic price with the “farm gate” as the pricing point, that is, the price of the product available at the farm, excluding any separately billed transport or delivery charge.
     Joe Guinan, “The Commodity Problem,” German Marshall Fund,

                                                                                                                                                                       NANOTECHNOLOGY COMMODOTIES,
To further complicate matters, many commodity-dependent                                    Development, and Technology.”

                                                                                           [2.2] Technological Advancement and
developing countries (CDDCs) are now also net food importers.
LDCs have increased the share of their export earnings spent on
food imports from 43 percent in the 1970s to 54 percent in 2001.24                         Commodity-Dependence
Such reliance on food imports can have serious implications for
these countries’ food security when combined with the deteriorating
                                                                                           In recent years, a number of reports have focused on the near- and
terms of trade that they are also facing.

                                                                                           long-term positive and negative implications of science, technology,

                                                                                           and innovation for CDDCs. Given the Commodity Workshop’s
Some reports suggest that developing countries can reduce their
                                                                                           focus on the linkages between nanotechnology, commodities, and
exposure to and manage commodity risks such as price declines
                                                                                           development, the following sections address, specifically, the role of
and price volatility, using a number of strategies including, but not
                                                                                           science and technology in CDDCs’ efforts to address the challenges
limited to:
                                                                                           they face. As described below, these countries face a range of
• Diversification of export products;
                                                                                           potential opportunities and challenges associated with accessing and
• Market-based risk management mechanisms such as
                                                                                           applying technological advances in order to help reduce their
      catastrophe and weather insurance, future and option
                                                                                           commodity-dependence and economic vulnerability. More detailed
      contracts, long-term sales contracts, and others;
                                                                                           descriptions of the linkages between commodity markets,
• Government risk management schemes such as official
                                                                                           development, and technology are provided in Meridian Institute’s
      foreign exchange reserves, price stabilization funds,
                                                                                           Supplemental Paper entitled “Commodities, Development, and
      marketing boards, or buffer stocks;
• Government policies such as price floors, subsidies, and
      other support programs; and
                                                                                           Opportunities for CDDCs associated with technological
• International commodity agreements and other strategies
                                                                                           advancement may include, but are not limited to:
      to control international supply of commodities.
                                                                                           •    Manufactured Export Growth and Value-Chain Movement –
These reports also indicate that all of these strategies can be
                                                                                                Some people contend that the success that some CDDCs,
challenging for developing countries to use. Consequently,
                                                                                                such as Chile, Indonesia, Malaysia, and Thailand, have had with
international organizations (e.g., UNCTAD, World Bank, IMF,
                                                                                                increasing their commodity export earnings and GDPs in the
Common Fund for Commodities, and the European Community)
                                                                                                midst of declining prices is related to their success in
are developing new and strengthened approaches to help
                                                                                                harnessing technologies for expanding their export markets to
developing countries manage their vulnerability to commodity
                                                                                                include non-traditional, high-growth commodities, including
price risks. In addition to risk management mechanisms, these
                                                                                                value-added and processed goods, and for increasing their
approaches often include complementary elements such as
                                                                                                productivity in traditional commodities production.25
education, technical assistance, and frameworks for implementing
risk management strategies.
                                                                                           •    Wage and Capital Growth – Those developing countries
                                                                                                that have experienced the greatest growth in productivity
In addition to the efforts of international organizations, various
                                                                                                due to technological advancement have also had the highest
international commodity organizations (e.g., International Grains
                                                                                                growth in real earnings per worker while maintaining stable
Council, International Natural Rubber Organization) have developed
                                                                                                labor and capital levels.Those countries maintaining more
and implemented commodity agreements to protect buyers and
                                                                                                traditional manufactured export sectors, on the other hand,
sellers from price shocks. International commodity trading and
                                                                                                have typically seen a decrease in real wages as they attempt
processing companies, investment banks, and commodity futures
                                                                                                to exploit low labor costs to maintain competitiveness
merchants, too, offer various commodity risk management
                                                                                                against more advanced countries.26
mechanisms, though the availability of these tools for developing
countries continues to be very limited.
                                                                                           •    Access to Global Trade and Markets – The global rise in
                                                                                                mobility, connectivity, and interdependence as a consequence
A more detailed description of the history and trends in
                                                                                                of globalization has resulted in a number of factors that have
international commodity markets, their impact on international
                                                                                                increased the importance of technological advancement in
development, and mechanisms for addressing commodity risks is
                                                                                                developing countries for providing access to global trade
provided in Meridian Institute’s paper entitled “Commodities,
                                                                                                groups and markets.27

     Common Fund for Commodities, “Overview of the Situation of Commodities in Developing Countries”.
     Nanae Yabuki and Takamasa Akiyama, “Is Commodity-Dependence Pessimism Justified? Critical Factors and Government Policies That Characterize Dynamic Commodity,”
     (Washington, DC: World Bank, 1996).
     Charles Cooper, “Technology, Manufactured Exports and Competitiveness” (paper presented at the Global Forum on Industry, New Delhi, India, October 16-18 1995).
     Calestous Juma and Lee Yee-Cheong, “Innovation: Applying Knowledge in Development,” (UN Task Force on Science,Technology, and Innovation, 2005).

                                                                                                                                                                        NANOTECHNOLOGY COMMODOTIES,
Internal and external challenges to adopting technological advances                             •    Overspecialization – Some people contend that leveraging
and developing profitable innovations may include, but are not be                                    technology to expand exports to include non-traditional,
limited to:                                                                                          high-growth commodities and processed products and
                                                                                                     increasing productivity in traditional commodities is critical
•       Knowledge, Workforce, and Capacity – The capacity of a                                       to reducing developing countries’ dependence on
        developing country to successfully use imported technology                                   commodities. Others, however, contend that technology and
        depends significantly on the existence of an indigenous                                      innovation continue to be the cause, and not the cure, to

        technological capacity and related strategies for acquiring,                                 the problem of commodity-dependence and the relative

        learning, and distributing new technologies. Many developing                                 deterioration in the position of developing countries.
        countries lack the necessary skilled workforce to engage in                                  According to this view, technology can actually lead
        the development of profitable innovations. Additionally, some                                countries to decrease the diversity of their markets in order
        people contend that technological development requires the                                   to capture economies of scale.31
        ability to network with researchers and companies in other
        countries because many emerging technologies require                                    Technological Advancement – The Potential
        multiple components and multiple areas of expertise.28                                  Opportunities and Risks for Disruption
                                                                                                Speculation on the potential for technological advances and
•       Intellectual Property Rights (IPRs) – IPRs could present                                innovation to disrupt existing commodity markets is complex and
        both opportunities and challenges for developing countries.                             varies greatly depending on the commodity, technology, and country
        Some argue that IPRs stimulate invention and new                                        in question. Generally speaking, technological advances can displace
        technologies that increase production, promote investment,                              demand for commodity exports by enabling cheap, localized, or
        facilitate technology transfer and improve the availability of                          unrestricted production of that commodity or the production of
        useful products (e.g., trademarks to “brand” and capture                                substitutes with comparable or better performance at competitive
        more of the value of distinct, high quality products).They                              prices. Conversely, technological advances can increase demand for
        also argue that existing IPRs can be used to capture value                              commodity exports by creating new products and production
        of distinct products from developing countries. Others                                  methods that use a particular commodity as an input.
        argue that IPRs do little to stimulate invention in countries
        that lack human and technical capacity, and that they are                               Some people say that the rapid pace of technological development
        ineffective at stimulating research to benefit poor people                              and adoption creates significant disruptive risks to the economies of
        because the poor will not be able to afford the products.                               CDDCs, especially considering the difficulty these countries have
        They feel that IPRs limit the option of technological                                   adjusting to market shocks.
        learning through imitation and allow foreign firms to drive
        out domestic competition by obtaining patent protection                                 Technology proponents counter that where technology may be
        and to service the market through imports, rather than                                  disruptive to traditional markets or displace existing producers and
        domestic manufacture.29                                                                 products, it will also create and drive significant macroeconomic
                                                                                                growth by enabling poorer, less-skilled populations to undertake
•       Opening Investment Capital – Many developing countries                                  activities previously restricted to a small group of rich specialists.32
        face challenges in providing the economic, regulatory, and                              Some proponents also say that emerging technologies do not pose a
        governance environment needed to sustain technological                                  disruptive risk because they take decades, not years, to implement in
        development, which has made the acquisition of investment                               markets and that consumer tastes tend to change slowly. Some risk
        capital for technology difficult. Investors are reluctant to                            analysts have further posited that technological change will be very
        invest in technology and innovation in developing countries                             predictable because so many groups are engaging in technology
        if there is an unfavorable business environment, but also                               forecasting in anticipation of “the next big thing.”33
        because the productivity of and returns on these
        investments are likely to be lower than in developed                                    One theory regarding disruptive technologies, most prominently put
        countries, especially because the addition of money will not                            forth by economist Clayton Christensen, argues that the actual rate
        necessarily increase capacity constraints such as lack of                               of technological innovation almost always outpaces the ability or
        facilities and scientists.30                                                            willingness of consumers to benefit from any product or process

     Avinash Persaud, “The Knowledge Gap,” Foreign Affairs 80, no. 2 (2001).
     Commission on Intellectual Property Rights, “Integrating Intellectual Property Rights and Development Policy,” (London: 2002).
     Juma and Yee-Cheong, “Innovation: Applying Knowledge in Development.”
     Friends of the Earth International, “Trade and Specialisation,”
     Clayton Christensen,Thomas Craig, and Stuart Hart, “The Great Disruption,” Foreign Affairs 80, no. 2 (2001).
     Michael Mainelli, “Beyond the Technology Frontier,” European Business Forum, no. 16 (2004).

                                                                                                                                                               NANOTECHNOLOGY COMMODOTIES,
improvements enabled by the innovation. Additionally, most disruptive                    The indigenous development and deployment of technologies to
technologies and products appear on the market as a cheaper but less                     help achieve development goals could play an important role in
reliable alternative to an existing product and are subsequently ignored                 addressing the challenges associated with commodity dependence.
by consumers and rejected by suppliers. As a consequence, most                           Some authors have argued that developing countries will not be
disruptive technologies under-perform against existing products and                      able to catch up with developed countries simply on the basis of
processes when they first emerge and eventually settle in a niche                        domestic resource mobilization or increasing the share of exports.
market for less discriminating consumers. As the quality of the                          Nor will increased net resource flows be sufficient in the absence

technology or product improves over time, however, more consumers                        of the ability to appropriate the competitive gains from the d

adopt it until it eventually redefines the market.34                                     omestic generation of new technologies and new products.These
                                                                                         authors fear that, unless countries develop robust science and
Such bottom-up disruptions present two opportunities for                                 technology capacity, the technology gap will widen as developing
developing countries. First, it provides a potential route through                       countries are reduced to the production of manufactured goods
which they can enter a market currently dominated by developed                           whose prices increasingly behave as those of primary commodities,
countries or large companies. Second, as Christensen argues, rather                      with declining terms of trade relative to knowledge-based goods
than introducing these technologies in developed-world applications,                     of developed countries. 37
where they would compete with established technologies,
companies will introduce them in products for the billions of                            The successful application of science and technology for
untapped customers in developing countries, with hopes of later                          development will require that developing countries address a broad
expanding to mainstream markets.35 Some people caution that the                          range of issues. Participants in Meridian Institute’s Global Dialogue on
latter scenario could expose people in developing countries to                           Nanotechnology and the Poor: Opportunities and Risks (GDNP)38
potential unknown risks (e.g., environmental or health risks)                            have identified a range of cross-cutting issues that should be
associated with these new products, which could be particularly                          considered when technologies are developed and deployed, While
harmful to people who lack the systems and capacity to evaluate                          these issues may be generally applicable to technologies, the unique
and manage such risks.                                                                   characteristics of nanotechnology may result in different
                                                                                         considerations regarding each cross-cutting issue, which could, in
However, even if opportunities related to technology are identified                      turn, require new and different strategies for addressing these issues.
and potential risks are appropriately evaluated and managed, there is                    These issues may include, but are not limited to:
still a risk that only small minorities of people will benefit from its
opportunities, while large majorities, mainly in the developing world,                   •    Product research and development
will not. Some academics have argued that many previous technology                       •    Environment, human health, and safety risks
introductions and revolutions, including the industrial revolution, have                 •    Socio-economic issues
benefited the rich while further marginalizing the poor. Some                            •    Ethics
organizations argue that, based on current trends, key technologies will                 •    Intellectual property rights and access
further concentrate economic power in the hands of multinational                         •    Public participation and engagement
corporations and that the poor are unlikely to benefit from a                            •    Governance
technology that is outside their control. Furthermore, these                             •    Capacity building
organizations state that the poor and marginalized are seldom in a                       •    International collaboration and cooperation
position to foresee or adjust quickly to abrupt economic changes. 36                     •    Scalability, delivery, and sustainability

Technological Advancement – The Broader Context                                          Descriptions of these issues and how they might apply to different
Addressing the problems of commodity dependent countries will                            sectors and classes of nanotechnologies within a sector are provided
require multi-faceted, coordinated approaches aimed at reducing                          in Appendix 1. Appendix 1 also includes an example of how the
commodity dependence, enhancing the viability of commodity                               matrix was used to evaluate one of the technologies that was
sectors, and increasing the participation of developing country                          provided as an example during Meridian Institute’s International
producers in segments of the value chain that yield higher returns.                      Workshop on Nanotechnology, Water, and Development. 39
These strategies may include capacity building, education and
training, institution building, improving governance structures,
improving infrastructure, improving access to information and
resources, and applying science and technology.

     Nicholas G. Carr, “Top-Down Disruption,” Strategy and Business, no. 39 (2004).
     Christensen, Craig, and Hart, “The Great Disruption.”
     ETC Group, “Down on the Farm:The Impact of Nano-Scale Technologies on Food and Agriculture,” (Ottawa: 2004).
     Oscar H. Farfan, “Understanding and Escaping Commodity-Dependency: A Global Value Chain Perspective,” (Washington, DC:The World Bank Group, 2005).
     More information about the GDNP, including background papers and materials from meetings, is available at: http//
     More information about the Water Workshop is available at:

                                                                                                                                                               NANOTECHNOLOGY COMMODOTIES,
[3] Nanotechnology
    and Development

Perceived by many as the next “transformative technology,” like                           Proponents and critics alike generally agree that the true

electricity or the Internet, nanotechnology encompasses a broad                           transformative potential of nanotechnology, be it positive or
range of tools, techniques, and applications that manipulate or                           negative, stems from its capacity as a “platform technology,”
incorporate materials at the nanoscale (a nanometer is one billionth                      revolutionizing production and products across a range of sectors
of a meter) in order to yield novel properties that do not exist at                       and industries including manufacturing, health-care, energy
larger scales.                                                                            production, agriculture, environmental remediation, building
                                                                                          materials, and defense. Additionally, its convergence with other
These novel properties may enable new or improved materials,                              technologies, including biotechnology, communication and
products, and processes that are more efficient, effective, and                           information technologies, cognitive science, and others, may
inexpensive than those currently available. For example,                                  increase the magnitude of this transformative ability.
nanomaterials are being developed that provide greater strength,
durability, and flexibility than steel, but are also lighter-weight and less              The following three sections outline the current status of developing
expensive. Additionally, nanotechnology may significantly increase                        countries’ activities in nanotechnology and some of the potential
production capacity by enabling manufacturing processes that create                       opportunities and risks they may face in terms of participation and
less pollution and have modest capital, land, labor, energy, and                          competitiveness. A fourth section discusses the potential implications
material requirements.                                                                    of nanotechnology for commodity markets and CDDCs in terms of
                                                                                          supply and demand for specific types of commodities and primary
For these reasons, many people have identified nanotechnology as a                        goods.

                                                                                          [3.1] Status of Nanotechnology Activity in
promising area of technological advancement and innovation for
CDDCs and developing countries in general. Conversely, others have
said the very characteristics of nanotechnology that make it                              Developing Countries
potentially suitable for developing countries also raise the possibility
that it could displace commodities, labor, and industries and worsen
                                                                                          A study published in 2005, indicates that a large number of
the overall position of developing countries.
                                                                                          developing countries are engaged in nanotechnology research and
                                                                                          development.The study found that 19 developing countries were
Both the public and private sectors in developed and developing
                                                                                          engaged in nanotechnology activities on a national level. An
countries are investing heavily in nanotechnology research and
                                                                                          additional 12 developing countries demonstrated either individual or
development. More than 20 countries, including developing countries
                                                                                          group research in nanotechnology, including one LDC and thirteen
such as China, South Africa, Brazil, and India, have national
                                                                                          more developing countries expressed interest in engaging in
nanotechnology programs, and many more are developing or
                                                                                          nanotechnology research, including three LDCs (see table 3-1). 43
expanding nanotechnology research and development capacity.The
collective public and private sector investment in 2005 was
approximately USD10 billion, up 10% compared to 2004. 40 In
addition, the number of patents on nanotechnology-related
inventions (including those from developing country researchers),41
scientific literature citations (now up to 12,000 publications per
year),42 and nanotechnology-based products reaching the market are
skyrocketing globally.

     Holman et al., “The Nanotech Report, 4th Edition.”
     Singh, “Intellectual Property in the Nanotechnology Economy.”
     Colvin, “Responsible Nanotechnology: Looking Beyond the Good News.”
     Maclurcan, “Nanotechnology and Developing Countries, Part 2: What Realities?.”

Table 3-1: Nanotechnology Activities in Developing Countries                                               44

                                  Cross-Cutting Issues                                 Cross-Cutting Issues
                                                 LCD                                                                   Developing Countries

     National Activity or                                                              Argentina; Armenia; Brazil; Chile; China; Cost Rica; Egypt; Georgia; India; Iran;
     Funding                                                                           Mexico; Malaysia; Philippines; Serbia & Montenegro; South Africa,Thailand,Turkey;

     Individual or Group                            Bangladesh                         Botswana; Columbia; Croatia; Cuba; Indonesia; Jordan; Kazakhstan; Moldova;
     Research                                                                          Pakistan; Uzbekistan;Venezuela

     Country Interest                                                                  Albania; Bosnia and Herzegovina; Ecuador; Ghana; Kenya; Lebanon; Macedonia; Sri
                                          Afghanistan; Senegal;Tanzania                Lanka; Swaziland; Zimbabwe

In particular, Brazil, China, India, and South Africa have often been                          In addition, there are almost daily reports about North-South and
noted for their significant investments in nanotechnology research and                         South-South research collaborations. For instance, the European Union
development, and the development of national nanotechnology                                    encourages collaboration between researchers from Europe and
strategies. For instance, China invested USD230 million during 2000-                           developing countries through its Framework Programmes and
2004, Brazil invested USD25m during 2004-2007, India invested                                  researchers from India, South Africa, and Brazil met in April 2007 to
USD22.8m during 2002-2007, and South Africa invested USD28m                                    discuss potential areas for trilateral collaboration in the field of
during 2006-2008. Each of these countries has seen growing numbers                             nanotechnology.45 The number of nanotechnology publications by
of public and private investments in research, infrastructure, and                             developing country scientists further illustrates these levels of
human resources.                                                                               developing country nanotechnology research activities (see table 3-2).

Other countries are also taking a proactive approach. For instance,
Thailand has developed a national nanotechnology roadmap and
Malaysia has six existing research centers engaging in nanotechnology
research. In 2003, at least six groups were working on nanotechnology
in the Philippines.

Table 3-2: Science Citation Index (SCI) Listed Publications in Nanotechnology (January-August 2004)46

                                             Cross-Cutting Issues
                                                  Country                               Cross-Cutting Issues

                  1                                   China                                       3,621
                  2                                    USA                                        3,182
                  3                                   Japan                                       3,010
                  4                                 Germany                                       2,075
                  5                                  France                                       1,330
                  6                               South Korea                                     1,263
                  7                              United Kingdom                                    941
                  8                                   Russia                                       856
                  9                                     Italy                                      758
                 10                                    India                                       647

      “Collaboration in Nanotechnology with Brazil, SA Mooted,” Nanotechnology and Development News,
      Mohamed H.A. Hassan, “International Cooperation on Science and Technology for Sustainable Well-Being,” in American Association for the Advancement of Science Annual Meeting
      (San Francisco, CA: 2007).

                                                                                                                                                                                 NANOTECHNOLOGY COMMODOTIES,
[3.2] Nanotechnology and Developing
Countries – Challenges
                                                                                            Developing countries may also lack the necessary
                                                                                            human capital and trained workforce to participate in
                                                                                            interdisciplinary nanotechnology research and
While many of the challenges developing countries                                           development and may find that those nanotechnologists
face with nanotechnology are the same as or similar                                         they do have are leaving for higher wages in
to the challenges of technological advancement in                                           developed countries or other developing countries

general nanotechnology may present a number of                                              with greater income potentials.50

unique obstacles for developing countries.
                                                                                            Intellectual Property Rights
International, Interdisciplinary, and Private-Public Collaboration                          Nanotechnology-related patents have skyrocketed
More so than other areas of technological                                                   in the last few years. According to data from Lux
advancement, nanotechnology requires a high degree                                          Research, international patent activity grew 31
of interdisciplinary and cross-sector collaboration within                                  percent in 2006 to 10,105 patents from the 14
and between academic researchers and industry.                                              countries included in the study, with the U.S. holding
Applications of nanotechnology draw on virtually all                                        6,801 of these patents.51 Patents and intellectual
disciplines in engineering and the natural sciences,                                        property rights will be a key factor in determining
including physics, chemistry, biology, materials                                            which nanotechnologies are developed, who controls
sciences, instrumentation, metrology, and others. As                                        existing and emerging markets, and who can
nanotechnology progresses from discovery to potential                                       access nanotechnology products and processes
applications, it will require a number of tools for                                         and at what price.
visualization, characterization, and fabrication, as well
as methods for reproducing and controlling properties,                                      IP ownership is an especially salient issue for
scalability, and cost. These tools and techniques, too,                                     nanotechnology because of its wide applicability as a
are typically rooted in multiple disciplines.47                                             platform across many industries and sectors. Patent
                                                                                            claims are being filed not only for nanotechnology-
Despite progress in developing countries with strong                                        based materials, products, and processes, but also for
research capacities, many developing countries                                              nanotechnology “building blocks” such as nanotubes,
continue to lack the infrastructure to access                                               quantum dots, and dendrimers, as well as for devices,
international research and development networks and,                                        tools, and methods for characterizing, controlling, and
also, lack linkages between the public sector research                                      incorporating nanoscale matter. There has also been
community and industry.                                                                     an increase in the number of patents filed on

Infrastructure, Human Capital, and Brain Drain
                                                                                            nanoscale versions of natural materials such as
                                                                                            plants.52 These trends have raised a number of
Many developing countries lack the necessary                                                concerns that developing countries could be shut out
equipment for nanotechnology research and                                                   of markets for nanotechnology development and use
development.48 The cost of establishing nanotechnology                                      by royalties and licensing fees.
institutes is difficult to determine and may depend on
the nature of the specific research and development                                         The degree to which some of these patents are on
activity (e.g., studying less sophisticated nano-powders                                    foundational materials, tools, and methods that enable
or working with highly complex quantum computers).                                          the development of later innovations will significantly
Estimates for establishing nanotechnology institutes                                        influence whether developing countries can participate
range from USD5 million to “about $50,000.”49                                               in nanotechnology research and development in the
                                                                                            first place. Also, patents on fundamental
     National Nanotechnology Infrastructure Network (NNIN) and Indian Institute of Science (IISc), “Nanotechnology: Issues in Interdisciplinary Research and Education” (paper
     presented at the Joint US-India Workshop: Nanotechnology: Issues in Interdisciplinary Research and Education, Bangalore, India, August 11-13 2004).
     Noela Invernizzi and Guillermo Foladori, “Nanotechnology and the Developing World: Will Nanotechnology Overcome Poverty or Widen Disparitites?,” Nanotechnology Law and
     Business 2, no. 3 (2005).
     Maclurcan, “Nanotechnology and Developing Countries, Part 2: What Realities?.”
     Invernizzi and Foladori, “Nanotechnology and the Developing World: Will Nanotechnology Overcome Poverty or Widen Disparitites?.”
     Lux Research, “Top Nations in Nanotech See Their Lead Erode,”

     Singh, “Intellectual Property in the Nanotechnology Economy.”
                                                                                                                                                                                      NANOTECHNOLOGY COMMODOTIES,
nanotechnology “building blocks” can give the owners                                         inequities between developed and developing
of those patents power across all the industries with                                        countries, as well as create new distortions in
applications based on that nanoparticle and                                                  international trade, power relations, and relative
nanomaterial. IBM provides an example for both of                                            wealth through the so-called “nano-divide.”57 Among
these possibilities. Currently, IBM holds more than                                          their claims is that the potential for nanotechnology
2,000 nanotechnology-related patents, including a                                            to enable cheaper, simpler, and more accessible

claim on the atomic force microscope, a tool which is                                        products and processes is insufficient to overwhelm

necessary to see matter at the nanoscale.53 IBM also                                         the socio-economic and political factors underlying
holds a number of key patents on nanotubes. Given                                            the gap between developed and developing countries.
the far-reaching applicability of nanotubes in materials,                                    In a report on nanotechnology and the “treadmill of
pharmaceuticals, energy production, textiles,                                                production,”58 sociologist Kenneth A. Gould writes:
electronics, and many others, IBM could potentially
exert market power in the computing industry as well                                               Increases in ‘material abundance’ in recent
as a number of other industries.54                                                                 decades have been accompanied by dramatic
                                                                                                   increases in global inequality, ecological
Additionally, patents on nanoscale formulations of                                                 damage, and poverty. Inequality, ecological
natural materials can threaten ownership of resources                                              disorganization, and poverty are political-
that have thus far been excluded from patentability. For                                           economic problems that cannot be solved
example, South Korea’s Pacific Corporation has been                                                through science and technology. Given the
granted a European patent on a nanoscale formulation                                               social structural basis of control of science and
of red ginseng for use in cosmetics. Similarly, a                                                  technology, it is more realistic to expect that
Chinese research institution currently holds over 900                                              each round of technological innovation will
exclusive patents on nanoscale formulations of                                                     serve the interests of those who control the
traditional Chinese medicinal herbs.55                                                             process and result in greater inequality,
                                                                                                   ecological disorganization, and poverty.59
Conversely, IPRs can also be used as a tool to protect an
invention and create an incentive for commercialization. In                                  Nanotechnology is likely to take significantly more time
a recent example, researchers from the Indian Institute                                      to research and develop than to be introduced and
of Technology, Madras (IITM) and Eureka Forbes, Ltd.                                         absorbed into the market. Much of nanotechnology
in India, announced that they will soon be releasing a                                       innovation is originating in countries with advanced
new water purification system that uses nanotechnology.                                      research capacity, and these countries are able to
The filter uses technology developed and patented by                                         make early investments and influence the direction of
IITM and is licensed to Eureka Forbes Ltd.. Eureka                                           research and development toward those opportunities
Forbes will use the technology to manufacture and                                            most valuable for them. Additionally, it takes significant
distribute cheap water filters that remove pesticides                                        capacity on the parts of governments, companies, and
from drinking water.56                                                                       workers to alter their structures, services, and skills or
                                                                                             develop new ones to meet emerging needs with
The Nano-Divide                                                                              relatively ample foresight. Developing countries that
Some organizations say that nanotechnology, given its                                        lack this capacity may be unable to detect new
current trajectory, can potentially widen existing                                           innovations as they emerge, especially if they are

   Jim Thomas, “Nanowatch: Who Will Prove to Be the Monsanto of Nanotech?,” The Econologist June (2004).
   “Nanotechnology Is Godzilla,” Corporate Watch Newsletter, no. 19 (2004),
   Singh, “Intellectual Property in the Nanotechnology Economy.”
   “World's First Nano-Material Based Water Filter,” Nanotechnology and Development News,
   Georgia Miller and Rye Senjen, “The Disruptive Social Impacts of Nanotechnology,” (Friends of the Earth, 2006).
   The Treadmill of Production refers to a theory on human-environment conflict in which corporations adopt newer, more capital-intensive, but less labor-intensive technologies to
   drive their profits and promote growth.
The resulting increase in production creates stress on natural resources and results in a paradox: the pursuit of economic expansion causes environmental degradation that disrupts
economic growth.
   Kenneth A. Gould, “The Treadmill of Production:The Case of Nanotechnology” (paper presented at the Development, Governance, and Nature Conference, Ithaca, NY,

   April 4 2005).
                                                                                                                                                                                 NANOTECHNOLOGY COMMODOTIES,
uninvolved in global research networks. Consequently,                                       generators, and medicines.62
they risk being caught off guard once the fruits of
nanotechnology have reached the market and unable                                           Nanotechnology, Risk Governance, and Trade
to adapt to new product, service, and labor                                                 Although advances in nanotechnology may bring
requirements.60                                                                             benefits to society, many people also raise concerns
                                                                                            about potential environmental and human health and

A nano-divide may also emerge between developing                                            safety risks of nanoscale materials. Several

countries based on the differences in the investments                                       fundamental aspects of nanoscale materials are
and capabilities of more scientifically and technological                                   causing concern that these particles could be harmful
proficient countries such as Brazil, China, India, and                                      to people or the environment. For instance, a growing
South Africa, and other lesser developed countries. To                                      body of research suggests that nanoparticles may be
a large extent, investments and capacity for                                                able to readily penetrate cells of various types,
nanotechnology development in a developing country                                          although the effects of the nanoparticles themselves
is linked to the degree to which the country has                                            on cells remain unclear. These studies also
incorporated science and technology as a key                                                demonstrate the complexity of assessing the potential
component of their overall economic development                                             toxicity of nanoparticles. Toxicity may, for instance,
policy over the last two decades. For example, China,                                       depend on the type, shape, size, surface area, and
currently the third largest research and development                                        surface chemistry of the nanoparticles, as well as the
investor in the world, has increased the budget of its                                      catalysts used in developing the nanoparticles and the
National Natural Science Foundation from USD10                                              types (e.g., dermal, digestive, inhalation) and amounts
million in 1986 to USD300 million in 2003 and is                                            of exposure. In addition, many of these studies are still
investing USD240 million between 2003 and 2007 in                                           preliminary, and additional work will be needed to
nanoscience and nanotechnology, with its local                                              translate in vitro results to living systems.63
governments expected to contribute an additional
USD360 million. India, Brazil, and South Africa,                                            Despite the growing body of information, many
similarly, devote a significant portion of their GDPs to                                    uncertainties about nanoparticle risks remain. In the
science and technology, and are investing USD25                                             meantime, nanoscience and technology are continuing
million, USD23 million, and USD6 million respectively                                       to progress rapidly, and new applications are being
in nanotechnology over the next few years.61                                                commercialized on a daily basis. In light of this
                                                                                            combination of factors, civil society organizations and
A nano-divide may also emerge within each                                                   businesses alike are calling on governments to
nanotechnology-proficient developing country as the                                         increase their efforts to provide support for research on
wealth, education, and skill levels of those employed in                                    the potential risks of nanotechnology. Governments are
nanotechnology diverge from those who remain in                                             asked to set risk research priorities and to develop and
traditional sectors or find their products or labor                                         sufficiently fund an internationally-coordinated risk
displaced by new products and processes. This gap                                           research plan for nanotechnology.64
can potentially grow larger if the disparity in purchasing
power between the two groups leaves the poorer                                              In addition to the need for risk research, governments,
population unable to afford new nano-enhanced                                               companies, civil society organizations and others are
products for production and human development, such                                         debating the need for regulation of nanotechnology.
as nano-fertilizers and pesticides, water filters, energy                                   Several initiatives are exploring risk governance

     “Nanotechnology Is Godzilla.”
     Mohamed H.A. Hassan, “Small Things and Big Changes in the Developing World,” Science 309, no. 5731 (2005).
     Miller and Senjen, “The Disruptive Social Impacts of Nanotechnology.”
     National Nanotechnology Coordination Office (NNCO), “Environmental, Health, and Safety Research Needs for Engineered Nanoscale Materials,” (Washington, DC: Nanoscale
     Science, Engineering, and Technology Subcommittee, Committee on Technology, National Science and Technology Council, 2006).
     See, for instance, Council for Science and Technology (CST). “Nanosciences and Nanotechnologies: A Review of Government’s Progress on Its Policy Commitments.” London: UK
     Government, 2007, or Maynard, Andrew D. “Nanotechnology: A Research Strategy for Addressing Risk.” Woodrow Wilson International Center for Scholars Project on Emerging
     Nanotechnologies, 2006.

                                                                                                                                                         NANOTECHNOLOGY COMMODOTIES,
frameworks that would create comprehensive                                                   investment in existing technologies is insufficient to
systems for lifecycle assessment and management                                              help developing countries compete in science and
of nanotechnology.65 And, several approaches have                                            technology presently, and that focusing on the newest
also recently been released for risk management by                                           innovations is critical.68
organizations developing and handling nanoscale
materials.66 Almost all governments, however, are                                            As a “platform technology,” nanotechnologies may

relying on existing regulations to oversee and control                                       enable new or improved solutions to a broad range of

the risks of nanotechnology. Many countries are                                              development problems that have been challenging to
currently debating whether existing regulations                                              solve with conventional technologies. For developing
are sufficient to control the potential risks of                                             countries, these solutions may include more efficient,
nanotechnology, or whether a new and specific                                                effective, and inexpensive water purification devices,
legal framework is needed.                                                                   energy sources, medical diagnostic tests, drug delivery
                                                                                             systems, durable building materials, and other
Uncertainty about nanotechnology's potential impacts                                         products. Additionally, nanotechnology may
and regulatory uncertainty could impede the estimated                                        significantly increase developing countries’ production
USD2.6 trillion in nanotechnology-based manufactured                                         capacities by enabling manufacturing processes that
goods expected to reach the global market by 2014.67                                         generate less pollution and have modest capital, land,
Risks and perceived risks, if not understood properly,                                       labor, energy, and material requirements.

                                                                                             The Unique Suitability of Nanotechnology for
may cause public concern. Regional differences in

                                                                                             Developing Countries
regulatory regimes, public acceptance, and concepts
of nanotechnology (e.g., process or product-
determined) may create challenges for international                                          Birgit R. Burgi and T. Pradeep argue that several
trade in products containing nanoscale materials or                                          aspects of nanotechnology differentiate it from past
developed with nano-enabled processes. This                                                  technological advances that have transformed
uncertainty may also raise questions about how to                                            manufacturing and make it uniquely suitable for
ensure that consumers are being supplied with goods                                          bridging the gap between developed and developing
that are safe to use – “safe” by the standards they                                          countries. Burgi and Pradeep characterize the
consider appropriate.                                                                        technologies emerging from the Industrial Revolution,
                                                                                             such as mechanization, and the Digital Revolution,
[3.3] Nanotechnology and Developing                                                          such as information and communication technology
Countries – Opportunities                                                                    and biotechnology, as “designed for large-scale
                                                                                             production which was capital and energy-intensive, in
Some people contend that nanotechnology may be the                                           need of large manufacturing infrastructures and
first emerging area of science and technology that                                           competing in global markets.” The goal of
presents significant opportunities for developing                                            nanotechnology, on the other hand, is to enable more
countries to develop, engage, and compete in cutting-                                        cost-effective, efficient, sustainable, and less input and
edge innovations, especially in the context of the                                           energy-intensive production processes. They say:
increasing number of developing countries that are
adopting more sophisticated national science and                                                  Techniques related to nanobiotechnology
technology policies as part of their economic                                                     do not require large investments and
development strategies. These groups argue that                                                   infrastructure and can therefore be developed

     See, for instance, International Risk Governance Council (IRGC). “White Paper on Nanotechnology Risk Governance.” Geneva, 2006.
     See, for instance, DuPont and Environmental Defense’s collaborative Nano Risk Framework,
     “Safety Experts Ill-Equipped to Handle Nanotechnology in Workplace,” ScienceDaily,
     Hassan, “Small Things and Big Changes in the Developing World.”

                                                                                                                                                            NANOTECHNOLOGY COMMODOTIES,
        on the site of application itself. The green and                                         Development”), developing countries can potentially
        cost-effective solution to nanomaterials                                                 engage a number of these new markets in order to
        manufacturing is one example that proves that                                            gain new areas of competitive advantage.
        with the necessary knowledge and skills,
        nanotechnology can be developed and                                                      With demand from research institutes and companies
        diffused in the developing world.                                                        for nanomaterials and nanoparticles surging,

                                                                                                 developing counties may find opportunities in

Burgi and Pradeep also contend that as a                                                         nanomaterials production. A number of nanomaterial
complementary and platform technology, nanotechnology                                            production processes have relatively low capital,
can be applied to add value to any area of competency                                            energy, and skilled-labor requirements, and many
regardless of the area’s present stage of technological                                          require large amounts of unskilled labor. Due to its
development. In other words, the application of                                                  nascence, production of nanomaterials does not
nanotechnology tools in a sector or country is not                                               require the same economies of scale as conventional
dependent on the existence or pervasiveness of other                                             materials and manufactured goods.70
technologies in that sector. Similarly, nanotechnology
may be used to complement those technological                                                    Additionally, the flexibility of nanomaterials production
competencies that do exist in developing countries by, for                                       can allow developing countries to simultaneously
example, enabling the use of conventional machinery to                                           capture a broad market and target a single or multiple
produce a novel nanomaterial or, conversely, creating a                                          niche markets. One example comes from QinetiqNano
new nano-enabled production process that uses                                                    Materials Limited (QNL), a nanomaterials producer in
traditional inputs.69                                                                            the UK that uses a novel production method that can
                                                                                                 quickly and easily switch production from one
Emerging Markets for Nanomaterials                                                               nanomaterial to another, as well as scale production
As previously noted, nanotechnology is likely to not                                             from kilograms to tons, depending on market
only affect product markets, but also to create new                                              conditions or customers’ requests. This flexibility
markets for novel nano-enhanced materials and                                                    provides insulation from changes in demand and price
production processes, as well as engineered                                                      not only for nanomaterials, but also for products made
nanoscale structures (e.g., nanotubes, fullerenes,                                               from those materials. When licensed to another
quantum dots, dendrimers), nanoscale particles (e.g.,                                            manufacturer to produce a particular material, the
metal and organic nanoparticles), and devices, tools,                                            secondary manufacturer can also use the production
and methods for characterizing, controlling, and                                                 system to create other materials as auxiliary
incorporating nanoscale matter. In addition to using                                             businesses. The QNL method has been described as
nanotechnology to add value to their existing export                                             creating the possibility for nanomaterials production to
commodities and goods (see examples provided in                                                  serve as a new “cottage industry,” especially in
Section 4 “Nanotechnology, Commodities, and                                                      developing countries.71

     Birgit R. Burgi and T. Pradeep, “Societal Implications of Nanoscience and Nanotechnology in Developing Countries,” Current Science 90, no. 5 (2006).
     George Coupe, “Shape of Things to Come,” Manufacturing Engineer October/November (2004).

                                                                                                                                                                     NANOTECHNOLOGY COMMODOTIES,
[4] Nanotechnology,
    Commodities and

                                                                                                                                                                     & DEVELOPMENT
[4.1] Opportunities and Risks of                                                            The potential risks include but are not limited to:
Nanotechnology for Commodity                                                                [1] Decline in global demand for export commodities and
Exporting Developing Countries
                                                                                                primary products due to new nanomaterials and nano-
                                                                                                enabled products that can function as substitutes with equal
                                                                                                or better performance at comparable costs;
The following sections provide general descriptions of raw
commodities and primary products (agriculture; metals and mineral;                          [2] Decline in global demand for export commodities due to
textile products; and rubber, plastic, and composite materials) that                            nanotechnologies that increase potency from smaller
are critical for many developing countries and the range                                        quantities of commodity materials or that enhance the
nanotechnology applications relevant to those sectors. These                                    longevity of commodity materials;
sections also discuss some of the potential opportunities and risks of                      [3] Increase in global supply of export commodities and/or loss
nanotechnology-based products and processes for developing                                      of comparative advantages due to nanotechnology-based
countries dependent on exports of these commodities and primary                                 production processes that enable cheaper, localized, and/or
products, including the potential market effects of these                                       unrestricted production of those commodities.
                                                                                            The following sections describe specific nanotechnology applications
The net effects of nanotechnology on supply and demand markets                              that may present potential opportunities and risks for specific
for commodities and primary goods are difficult to predict and will                         commodity sectors. More detailed information on these
likely vary for different commodities, technologies, and countries.                         applications, as well as additional examples of applications are
Developing countries involved in the commodity sectors described                            available through Meridian’s online Nanotechnology and
in the following sections, however, face a number of common                                 Commodities Database.72
potential opportunities and risks related to the emergence of new
nanotechnology-based materials, products, and processes.
                                                                                            [4.2] Agricultural Commodities
These potential opportunities include, but are not limited to:
                                                                                            Long-term trends and short-term shocks on agricultural commodity
[1] Low-risk options for moving up the value-chain by enhancing
                                                                                            markets have a direct impact on the prices of food and clothing and
    export commodities and primary products with
                                                                                            on the economic well-being of households, communities and entire
    nanotechnology additives, coatings, or processes;
                                                                                            nations that depend on these commodity exports. An estimated 2.5
[2] More energy, input, and/or labor efficient or otherwise
                                                                                            billion people in the developing world depend on agriculture for their
    improved commodity and primary product production
                                                                                            livelihoods. For many of them, the sale of agricultural commodities or
                                                                                            employment in producing and processing commodities for export
[3] New markets for nanotechnology-based materials and
                                                                                            represent their only sources of cash income.73
    products that use export commodities as feedstocks;
[4] New and wider industrial and commercial markets for
                                                                                            Agricultural commodities include, for instance, cereals, oil crops,
    export commodities and primary products.
                                                                                            horticultural products, fibers and raw materials, tropical beverages and

     Meridian Institute’s Nanotechnology and Commodities Database is available online at:
     Common Fund for Commodities, “Overview of the Situation of Commodities in Developing Countries”.

                                                                                                                                                                         NANOTECHNOLOGY COMMODOTIES,
sugar, and dairy products (in this paper, fibers and rubber are covered                        countries. During the 1990s imports of basic foodstuffs by
in sections 4.4 and 4.5, respectively). Many recent technological                              developing countries increased at a rate of 5.6 percent a year; this
changes in agriculture have focused on improving the efficiency of crop                        tendency is projected to continue in coming years.75 With a growing
production, food processing, food safety, environmental consequences                           number of CDDCs relying on food imports to feed their
of food production, storage, and distribution.                                                 populations, import price variability, export price declines, and
                                                                                               deteriorating terms of trade can challenge balance of payments and
Agriculture has seen advances resulting from scientific breakthroughs                          risk food insecurity.

and applications, some of which have caused considerable

controversy. In particular, application of biotechnology for genetic                           For developing countries dependent on agricultural commodity export
modification of crops has been the topic of heated societal debate                             earnings, price variability can have a significant effect on government
(see Supplemental Paper, “Commodities, Development, and                                        revenue, macroeconomic planning, sustainability of development plans,
Technology” for more details).The agrifood sector will likely drive                            and the provision of public services. Price variability also has large
further technological innovation, for instance in the form of the                              effects on employment and income levels of farmers and others
convergence of nanotechnology and biotechnology, resulting from                                involved in agricultural production. These countries also face
demand for nutraceuticals and new pharmaceutical products.                                     deteriorating terms of trade, with the average price of agricultural
                                                                                               commodities sold by LDCs declining by nearly 70 percent relative to
Agricultural commodities are among the riskiest commodities for                                the price of manufactured products purchased from developed
producers, because they are vulnerable to a variety of unpredictable                           countries between 1961 and 2001. One study has found that
and uncontrollable factors that can affect yields and quality. Before                          productivity in agriculture has increased 20 percent faster than
ever reaching the market, agricultural crops are subject to diseases                           productivity in manufacturing worldwide, and more than 100 percent
and fungal pathogens, pest infestations, weeds, and a wide range of                            faster in developing countries than in developed countries, driving the
inclement weather conditions, all of which can destroy entire                                  price of agricultural commodities down relative to manufactures.76
harvests. Additionally, agricultural crops require precisely timed
planting and cultivation, as well as precisely administered fertilization                      Long-term agricultural price declines are one of the most challenging
and when available irrigation, which are all variable depending on                             commodity problems to resolve. Because of the relative difficulty of
environmental conditions. Given the importance of and the risks                                countering agricultural price declines with market interventions and
inherent in agricultural production, agriculture is often the target of                        compensation plans, developing countries may ultimately find that their
technological advancement and innovations, including those in the                              best option is to diversify their production to include more non-
field of nanotechnology.                                                                       traditional agricultural commodities or value-added agricultural products.

[4.2.1] Agricultural Commodities and
                                                                                               Even still, these countries may face significant barriers to entry in these
                                                                                               value-added markets, for example, in the form of oligopolistic
Development                                                                                    incumbents, capital and labor requirements, and tariff escalation.77
                                                                                               The benefits and risks of market liberalization have been different for
                                                                                               countries dependent on agricultural commodities. Though
Over 50 developing countries, including most of the LDCs, are
                                                                                               liberalization has improved market access for some agricultural
dependent on three or fewer agricultural commodities, most often
                                                                                               products, tropical and raw agricultural commodities have
tropical goods, for 20 to 90 percent of their foreign export earnings
                                                                                               experienced limited gains because tariff levels for such less-
(see Table 4-1I).74 Even more so than other commodity groups,
                                                                                               processed goods have always been typically low. As a result, there
agricultural commodities demonstrate a high degree of price
                                                                                               has been renewed discussion about reviving supply control
variability and a tendency toward long-term price declines. In
                                                                                               mechanisms, such as those found in pre-liberalization international
addition, there is a trend towards increasing food imports by poor

     FAO, “The State of Agricultural Commodity Markets,” (Rome, Italy:The Food and Agriculture Organization of the United Nations (FAO), 2004).
     FAO, “Subsidies, Food Imports and Tariffs Key Issues for Developing Countries,” (Rome, Italy),
     FAO, “The State of Agricultural Commodity Markets.”
     UNCTAD, “Trends in World Commodity Trade, Enhancing Africa's Competitiveness, and Generating Commodity Gains”.

                                                                                                                                                                                            nanotechnology, water, & development
                                   Table 4-1 Examples of Shares of Agricultural Commodities in Total
                                   Exports of Developing Countries, 1997-199978

                                              Country                         Cross-Cutting Issues
                                                                                  Commodities                               Cross-Cutting Issues

                                               Burundi                    Coffee, green; tea; sugar refined                              89
                                               Ethiopia                    Coffee; dry-salted sheepskin;                                 70
                                                                             crude organic materials.79
                                              Malawi                         Tobacco leaves; tea; sugar                                  70
                                             Uganda                     Coffee, grean; tea; crude org. mat                               63
                                           Guinea-Bissau                    Cashew nuts; cotton; palm                                    51
                                              Tonga                      Pumpkins; crude org. mat.; vanilla                              61
                                             Rwanda                  Coffee, green; tea; skins, wet-salted goats                         68
                                             Vanuatu                   Copra; veg. prod. fresh or dried; beef                            66
                                              Kiribati                                Copra80                                            42
                                             Paraguay                   Soybeans; cake of soya; cotton lint                              53
                                             Grenada                    Nutmeg; cocoa beans; wheat flour                                 49
                                            St Vincent                     Bananas; flour of wheat; rice                                 68
                                           Côte d’Ivoire             Cocoa beans; coffee, green; cocoa paste                             46
                                               Cuba                            Sugar; cigars; tobacco                                    43
                                               Mali                          Cotton lint; cattle; sheep                                  44
                                            Dominica                   Bananas; plantains; oil (of coconuts)                             31
                                              Kenya                     Tea; coffee, green; crude org. mat.                              44
                                              Belize                       Sugar; bananas; orange juice                                  51
                                              Ghana                  Cocoa beans; cocoa butter; pineapples                               28
                                             Ecuador                      Bananas; crude org. mat.; coffee                               29
                                             Guyana                            Sugar; rice; beverages                                    40
                                            Guatemala                          Coffee; sugar; bananas                                    40
                                             Panama                            Bananas; sugar; coffee                                    29
                                            Honduras                  Coffee, green; bananas; cigars cheroots                            30
                                            Costa Rica                Bananas; coffee, green; crude org. mat.                            40

     Commodity dependence expressed as the percentage share in total merchandise exports. Source: FAO. “Dependence on Single Agricultural Commodity Exports in Developing
     Countries: Magnitude and Trends.” Rome, 2002.
     Crude organic materials include: bulbs, tubers, tuberous roots, corms, crowns and rhizomes; live plants, cuttings and slips; mushroom spawn; cut flowers and flower buds; foliage,
     branches and grasses, mosses and lichens; plants and parts used primarily in perfumes, pharmaceuticals, insecticides, fungicides, or for similar purposes; seaweeds and other algae;
     vegetable saps and extracts; materials used for plaiting, stuffing or padding; materials used primarily in brooms or brushes; and materials used primarily in dyeing and tanning.
     Copra is the dried meat, or kernel, of the coconut.

                                                                                                                                                                            nanotechnology, water, & development
commodity agreements (ICAs), particularly for coffee and rubber.                           transportation infrastructure, and distribution systems can hinder the
These mechanisms, however, also face a number of coordination and                          availability and affordability of agricultural inputs and delay the timely
enforcement challenges and are at risk to free-riding.81                                   delivery of high-value agricultural products.83

Agriculture and Technology                                                                 Additionally, financial, legal, and political policies, including domestic
Science, technology, and innovation are widely regarded among                              agricultural policies such as subsidies, can distort the prices and costs
critical factors fueling agricultural productivity changes and,                            of production and reduce farmers’ incentive for investing in
subsequently, economic growth and development during the 20th                              agricultural technology. Countries that lack natural resources or that
century. Agricultural technologies, which include improved crop                            have environments unsuitable for growing crops may be limited in
varieties (e.g., drought tolerant or pest resistant varieties), soil fertility             their choice of appropriate technologies.84
replenishment, integrated pest management, and irrigation, may, as
part of broader strategies to improve livelihoods, contribute to                           A number of groups have raised concerns that agricultural
increased crop yields and farmer incomes, and sustainability through                       technologies can further consolidate the market power of
improved, water, nutrient, disease, and pest management. Agricultural                      multinational processing, distribution, and retailing companies,
science and technology in the coming decades will continue to seek                         especially if farmers in developing countries have limited
improvements in these areas and, through convergences with other                           opportunities to participate in research and development of new
emerging fields, pursue advances in improving the versatility and                          technologies.85 These groups have raised related concerns about the
sustainability of farming and in developing agricultural products with                     availability, accessibility, risks, and benefits of new technologies to
specific desirable characteristics.                                                        poor farmers in developing countries.

A number of studies using a variety of measurements have identified                        [4.2.2] Nanotechnology and Agriculture
public investments in agricultural research as one of the most
effective forms of public investment in terms of delivering social                         Several developing countries are investing strategically and
returns such as higher crop yields, higher income levels, and fewer                        conducting research in nanotechnology applications for agriculture.
hungry people.82 As a result of public and private investment in                           For instance, India, Brazil, and South Africa have initiated a tri-lateral
agricultural research in some countries, farmers have been able to                         collaborative nanotechnology research program through their
improve the productivity and diversity of their products, enabling                         Departments of Science and Technology focusing on areas of
them to participate in local and global trade for these goods in a                         national interest common to all three countries, including energy
variety of markets (e.g., mung bean and wheat crop rotation in                             materials, advanced materials, health, water treatment, agriculture,
Pakistan). Other countries, however, have lacked the financial, legal,                     and environment.86 The Iranian Agricultural Ministry is planning to
and political institutions needed to support investment for local                          send scientists to the United Kingdom for nanotechnology training
agricultural science and technology development or for transfer and                        while the United Kingdom sends experts to Iran to train 20 ministry
adoption of technologies from other countries and have, therefore,                         staff members.87 In 2006, the Brazilian government inaugurated a
seen lower productivity and income growth and higher levels of                             federally-owned laboratory exclusively for nanotechnology research
food insecurity.                                                                           in agriculture.The National Laboratory for Agricultural
                                                                                           Nanotechnology (LNNA) is run by EMBRAPA, the Brazilian
In addition to limitations due to inadequate knowledge, workforce,                         agricultural research corporation.88
and capacity, intellectual property rights barriers, and difficulties
opening investment capital (see Supplemental Paper, “Commodities,                          These research activities are driven by the expectation that
Development, and Technology for more details), developing countries                        nanotechnology will help improve the productivity, affordability,
face a number of challenges to investing in and adopting agricultural                      predictability, and quality of agricultural production, as well as the
technologies and innovations. While the fast developments in the                           ability to store and track the distribution of agricultural products.
agricultural sector have created opportunities for improved                                More specifically, nanotechnology applications are expected to
productivity and income, there are constraints that can hamper the                         improve agricultural productivity by increasing crop yields, decreasing
ability of farmers, especially poor and marginal farmers, to take full                     crop losses and post-harvest losses, increasing the acreage available
advantage of these opportunities. Inadequate public utilities,                             for farming, reducing energy and water demands, and improving the
     FAO, “Recent Developments in Agricultural Commodity Markets” (paper presented at the Meeting of the Committee on Commodity Problems, Rome, Italy, April 11-13 2005).
     David G.Victor and C. Ford Runge, “Farming the Genetic Frontier,” Foreign Affairs 81, no. 3 (2002).
     US Department of Agriculture, “21st Century Agriculture: A Critical Role for Science and Technology,” (2003).
     ETC Group, “Down on the Farm:The Impact of Nano-Scale Technologies on Food and Agriculture.”
     T.V. Padma, “India, Brazil and South Africa Discuss Joint Research,” SciDev.Net,
     “Uk to Train 20 Iranians in Nanotechnology,” Nanotechnology and Development News,
     “Brazil Govt to Open New Agricultural Nanotech Laboratory,” Nanotechnology and Development News,

                                                                                                                                                                        nanotechnology, water, & development
effectiveness of fertilizers pest control and other inputs.These                             Nanotechnology for Precision Farming
technologies can also potentially enable the use of land previously                          Nanotechnology may enable new monitoring and control devices
unsuitable for agricultural production and create opportunities for                          that provide farmers with detailed information that can improve
new value-added products, such as functional foods, based on                                 their ability to determine the best times for planting and harvesting
agricultural commodities.89 The following sections describe some                             crops, as well as the levels of fertilizers, pesticides, herbicides, and
specific examples of these applications and speculate as to the                              other treatments that need to be administered given specific
potential opportunities and risks they may pose for developing                               environmental conditions. Such precision farming technologies
countries (see table 4-2).                                                                   could increase agricultural production by increasing crop yields,

                                 Table 4-2: Potential Applications of Nanotechnology for Agriculture

                                              Cross-Cutting Issues
                                          Nanotechnology Applications                                  Cross-Cutting Commodities
                                                                                               Potential Implications forIssues

                                              Nano-based food additives                                 Value-Chain Movement

                                     Nanosensors; nano-pesticides and fertilizers;                       Improved Production
                                      nano-based smart delivery systems; nano-
                                        based packaging; nanotechnologies for
                                            development of new acreage

                                          Biofuels and biodegradable plastics                         New Markets as Feedstocks

                                               Healthcare and medicine;                        New Industrial and Commercial Markets
                                            functional foods; nutraceuticals

                                              Functional food substitutes                                  Reduced Demand

                                          Nanotechnologies for development                                  Increased Supply
                                                  of new acreage

while reducing input requirements. For example, researchers in India                         There are a number of nanotechnology applications that can
are developing nanosensors that can be spread across farms to                                potentially improve the predictability of agricultural conditions and
monitor soil quality, moisture levels, and plant health indicators.90 A                      minimize the effects of factors such as disease, drought, and pests.
number of vineyards in the U.S. have begun using similar technology                          Plant and animal diseases can take days, weeks, or months to detect
already. Pickberry Vineyards in California has partnered with                                through visible symptoms and, by that time, the infection may be too
Accenture, a U.S. sensor technology company, to install a number of                          far along to treat and may be sufficiently widespread as to require
wireless sensors throughout the vineyard to monitor soil quality,                            the destruction of entire fields. Nanotechnology may enable devices
moisture, temperature, and other conditions.91 Another U.S.                                  that can provide early and rapid detection of the presence of plant
company, Crossbow Technologies, has developed similar sensors for                            pathogens, early symptoms of infection, nutrient deficiencies, and
irrigation management, frost detection, harvest time indication, water                       other plant health problems, allowing farmers to treat or destroy sick
quality monitoring, and administration of pesticides. These                                  plants before the disease can spread, thereby reducing crop losses.93
companies and others are now working to develop nanoscale
versions of these sensors that can scattered to cover more and                               Nanotechnology may also lead to “smart” systems that combine
larger areas of land.92                                                                      monitoring with treatment delivery to enable the detection of

     US Department of Agriculture, “Nanoscale Science and Engineering for Agriculture and Food Systems,” ed. Corinne Johnson Rutzke (2003).
     Gregory J. Millman, “Virtual Vineyard,” Outlook, no. 3 (2004).
     ETC Group, “Down on the Farm:The Impact of Nano-Scale Technologies on Food and Agriculture.”

                                                                                                                                                                          NANOTECHNOLOGY COMMODOTIES,
diseases and the automatic release of targeted treatments. Smart                        storage of fresh foods and/or prevent microbial contamination of
systems can also be used to deliver fertilizers, pesticides, probiotics,                stored food.The financial outlook for nanotechnology enabled
and nutrients to plants in a time-controlled, preprogrammed, or                         packaging was set to stand at 1.1 billion USD in 2006 and is
remotely regulated fashion. They can also monitor the effects of                        predicted to increase to 3.7 billion USD by 2010.100
these treatments on the plant, soil, and other parts of the
environment.94 The ability to deliver agricultural chemicals and                        The limitations to storing perishable agricultural products for any
treatments in such a controlled and precise manner can also                             significant length of time is one of the critical factors explaining why

reduce the levels of waste and pollution associated with the                            farmers, more so than other commodity producers, are unable to

use of these products.95                                                                counter price declines and fluctuations by expanding or contracting
                                                                                        the amount of production that is sent to international markets. The
There are a number of nanotechnology-based agricultural chemical                        inability to store crops also makes it difficult for farmers to maintain
products currently available on the market or in near-market stages                     crop reserves to trade in the event of crop failure. New and
of development. German chemicals manufacturer BASF has                                  improved methods of food packaging and storage enabled by
developed a pesticide formulation containing nanoparticular                             nanotechnology can potentially create wider and more efficient
ingredients, which is said to be more stable, to dissolve more easily                   distribution of agricultural products from developing countries.
in water, and to optimize the desired effect of the pesticide.96 U.S.
company NaturalNano is researching and developing naturally-                            Researchers from the Norwegian Institute of Technology have
occurring nanotubes harvested from halloysite clay as a delivery                        developed a nanotechnology-based film that blocks gases such as
vehicles for pesticides and other agricultural chemicals that require                   carbon dioxide, oxygen, and ethylene that shorten the shelf life of
controlled release.97 Additionally, nanoporous materials such as                        foods and also allow those gases existing between the film and the
zeolites can be used to improve the stability of agricultural chemical                  food to be transported out. U.S. candy manufacturer Mars has
suspensions, as well as aid slow release and controlled absorption.98                   patented and tested nanoscale films made from silicon oxide and
                                                                                        titanium oxide that can eliminate bacteria and increase the shelf life
Many of these same nanotechnology applications can potentially also                     of some foods, even after their packaging has been opened.101
be used to bring new land into production, including land that is                       Similar packaging films containing silver are being developed and are
currently unsuitable or challenging to use for agriculture.                             indicated to prevent the growth of bacteria, fungi, mold, and algae on
Researchers from the University of Stavanger in Norway have                             fruits and vegetables stored within them. Researchers from the
developed a nanoporous membrane made from organic waste                                 Institute of Food Research in the U.K. have developed a
materials, such as seaweed, fish bones, and manure, that can prevent                    biodegradable film for use in South Africa’s fruit and nut export
water loss from soil and plant roots and regulate soil temperature in                   sector. The film is made with kafirin, a protein found in sorghum, and
regions that are excessively arid, hot, or cold. Tests performed on                     can significantly extend the shelf life of fruit, nuts, and other foods.102
the membrane in the desert soils of Nigeria indicated that the
technology reduced the need for irrigation by 30 to 50 percent.                         Nanotechnology for Functional Foods
Different pigments can also be added to the membranes to increase                       Nanotechnology research and development is also being extensively
or decrease sun reflection, depending on whether the soil requires                      undertaken in the area of functional foods. This includes
heating or cooling.99 Such applications can help developing countries                   nanomaterials for the enhanced taste, color, and texture of foods, as
that are unable to grow agricultural crops to diversify their export                    well as nano-encapsulated vitamins and nutrients for the enrichment
portfolios to include such commodities but can also pose risks for                      of foods.The market for functional food and drinks is expected to
developing countries that are currently exporting agriculture                           grow at 4.4% annually, driven by consumers' increasing acceptance of
commodities to countries that are unable to grow them domestically.                     functional foods and a desire to self-medicate.The market was
                                                                                        worth USD26.4bn in Europe and the US in 2005.103
Nanotechnology for Packaging and Distribution
One of the fastest areas of nanotechnology growth is in food                            The multi-national company Unilever is researching and developing
packaging. A number of organizations are developing                                     nanoparticle emulsions that can potentially reduce the fat content of
nanocomposite packaging materials that enable the preservation and                      ice cream from 15 percent to one percent without changing the

    US Department of Agriculture, “Nanoscale Science and Engineering for Agriculture and Food Systems.”
    Tiju Joseph and Mark Morrison, “Nanotechnology in Food and Agriculture,” (Nanoforum, 2006).
    ETC Group, “Down on the Farm:The Impact of Nano-Scale Technologies on Food and Agriculture.”
    Michael Kanellos, “Future Nanotech Tools Made from Clay,” CNET News,
    Erin B. Court, Abdallah S. Daar, and Deepa L. Persad, “Tiny Technologies for the Global Good,” Nanotoday May (2005).
    Jane Wu, “'Waste Membrane' Could Help Crops Conserve Water,” SciDev.Net,
    Joseph and Morrison, “Nanotechnology in Food and Agriculture.”
    Alex Reston, “Welcome to the World of Nano Foods,” Guardian Unlimited,,,1971266,00.html.
    “Spotlight On...Developing Countries,” Biotechnology and Biological Sciences Research Council,

                                                                                                                                                                   NANOTECHNOLOGY COMMODOTIES,
flavor or texture.104 BASF currently markets synthetic nanoscale                           Nanotechnology for Traceable Foods
carotenoids, a food additive that naturally occurs in carrots and                          A number of factors in recent years have contributed to an
tomatoes and can create an orange color in produce such as fruit                           increased demand for the traceability of foods throughout
juices and margarine.The nanoscale formulation also allows the                             production, processing, and distribution. Uncertainties and
carotenoids to be more easily taken up by the body and enhances                            disagreements over genetically modified organisms have resulted in
their shelf life.105 Nanoscale silicon dioxide is also commercially                        national laws and international trade rules and agreements that bar
available as a food additive to foods from caking. For example, Mars                       certain agricultural products from being grown, traded, or sold.

uses such additives to prevent cookies from becoming stale and                             Additionally, emphasis on homeland security and concerns about

cereals from becoming soggy.106                                                            foodborne pathogens in the U.S. and in other countries has also
                                                                                           resulted in increased demand for traceable foods.
The food industry is also using nanoparticles to encapsulate active
ingredients, vitamins, and nutrients so that they can be more easily                       Developing countries that are unable to provide detailed
diffused in foods and delivered to the body. Aquanova, a German                            information about their agricultural exports may face challenges
solubilisate (liquid substances) technologies company, is marketing                        if import markets require such information. A number of systems
a solution containing nanoparticles that is intended to help food                          have been developed to provide consumers with information
manufacturers easily add antioxidants into food and beverage                               about the origin of agricultural products and the practices used to
products.The product, which is sold under the name Novasol CT,                             produce those products. These systems, however, have largely been
is a clear, ready-to-use, water and fat soluble solution.The                               prohibitively expensive because of the number of inspectors they
nanoparticles, called micelles, carry the antioxidants. Micelles can                       requires to be hired to monitor information at production, storage,
also be used to introduce vitamins A, C, and E and Q10 to food                             and distribution points.109
and beverages. Aquanova says that Novasol CT does not chemically
modify substances it is used in and ensures mechanical, thermal, and                       Nanotechnology-based monitoring applications such as sensors and
pH stability.107 Other researchers have indicated that the milk                            packaging materials can potentially be used to detect the presence
proteins called alpha-lactalbumin may have unique properties that                          of pathogens, chemicals, and other contaminants in food.
make it suitable for use in nanoencapsulation.These proteins, which                        Additionally, nanoscale tagging devices can be used to record and
are the only known food protein nanotubes, are said to display good                        retrieve information about the origin and movement of agricultural
stability and to withstand pasteurization and freeze-drying, making                        exports, as well as the process they have undergone. These types of
them potentially suitable for encapsulating molecules such as vitamins                     applications, if accessible to developing country producers, might
or enzymes. 108                                                                            help these producers meet food safety, food quality, and other
                                                                                           standards set by prospective buyers.
Functional foods pose both opportunities and risks for developing
countries that export agricultural and food products. On the one                           Agricultural Inputs for Nanotechnology
hand, nano-additives can provide an opportunity for developing                             A number of nanotechnology applications are being developed that
countries to add-value to their agricultural and food exports, helping                     use agricultural products as inputs, potentially creating new markets
them move up the value chain and access new markets. On the                                for developing countries that produce agricultural commodities.
other hand, however, functional foods can create alternatives to                           Efforts to develop nanotechnology products and applications that
agricultural ingredients exported by developing countries, such as                         use agricultural inputs are largely driven by growing demand for
those currently used by the food processing industry as food                               environmentally-friendly and sustainable production and products.
additives or as sources of vitamins and nutrients. Functional foods
can also potentially provide consumers with alternative food choices                       A researcher from Oregon State University in the U.S. has
that have similar or superior properties.                                                  developed a small chemical reactor that can convert vegetable oil
                                                                                           directly into biodiesel for use in vehicles.The device pumps vegetable
                                                                                           oil and alcohol through nanoscale channels and converts it into

      “The 20 Billion Dollar Question,” Food Navigator,
      Reston, “Welcome to the World of Nano Foods.”
      ETC Group, “Down on the Farm:The Impact of Nano-Scale Technologies on Food and Agriculture.”
      Reston, “Welcome to the World of Nano Foods.”
      “Aquanova Creates Nanotech Antioxidant System,” Nanotechnology and Development News,
      “Milk Protein Nanotubes Offer Encapsulation Potential,” Nanotechnology and Development News,
      “Nanoscale Science and Engineering for Agriculture and Food Systems,” ed. Corinne Johnson Rutzke (U.S. Department of Agriculture, 2003).

                                                                                                                                                                            NANOTECHNOLOGY COMMODOTIES,
biodiesel.This device could help farmers convert some of their crops                       The majority of world exports of ores and metals originate in
into fuel for commercial and industrial markets, as well as for use in                     developing countries, and the trend in recent years has been
their own agricultural equipment, reducing costs associated with                           toward even more exports from developing countries and fewer
purchasing petroleum-based fuels and distribution costs associated                         from developed countries. Between 1999 and 2002, world exports
with need for tanker truck fuel delivery. 110                                              of ores and metals originating from developed countries fell from
                                                                                           34.5 percent to 29.5 percent, while exports from developing
Researchers from Iowa State University in the U.S. are developing a                        countries grew from 64.9 percent to 69.4 percent. World exports

method for reinforcing plastics made from corn and soy proteins by                         of most minerals and metal processed products have mostly been

using nanoclays.The technology is anticipated to decrease the                              dominated by developed countries, though major developing
amount of feedstock materials needed to make biodegradable                                 country exporters also exist for all categories of minerals and
plastics while concurrently enhancing the plastics' properties.These                       metal products. 113
plastics could be used in disposable wrappings for bales of hay, pots
for plants, and food industry packaging. 111                                               Mining and mineral commodities produced in developing countries
                                                                                           differ from agricultural and other commodities in a number of ways.
Pakistani researchers are involved in a collaborative project with the                     First, mining operations are generally state run or run by
University of Illinois at Urbana-Champaign in the U.S. to develop                          multinational corporations and follow “boom-and-bust” cycles.
nanotechnology-based cancer therapies using medicinal plants native                        Second, mining and mineral extraction are capital-intensive processes
to the Indo-Pakistan subcontinent.The Pakistani researchers have                           that utilize little labor, especially unskilled labor. Additionally, mining
indicated that such nanomedicine technology creates significant                            and extraction activities tend to be geographically concentrated and
opportunities for Pakistan's medicinal plant industry because of this                      create concentrated areas of wealth that generally do not spread to
and other potential applications, including pharmaceutical compound                        other segments of the economy.These activities also produce
screening, molecular diagnostics, label-free microarrays, environmental                    environmental and social problems, detailed further in the following
detection, and others. Pakistan in one of the eight leading exporters                      sections that typically disproportionately affect the poorer parts of
of medicinal plants and has the third highest cancer rate of the                           the population. 114

                                                                                           [4.3.1] Mining and Mineral Industries and
thirteen South-Central Asian countries. Additionally, more than 70
percent of the population in developing countries reportedly relies
on complementary and alternative systems of medicine and could                             Development
benefit from research and development and associated capacity-
                                                                                           There are developing countries from all regions of the world that
building that could enhance international markets for such systems.112
                                                                                           are dependent on mining and minerals for a significant portion of

[4.3] Mining, Mineral, and Non-Fuel
                                                                                           their export earnings, a large number of which are classified by the

Extractive Industries
                                                                                           World Bank as Highly Indebted Poor Countries (HIPCs) and many
                                                                                           are ranked low on the UNDP’s Human Development Index
                                                                                           (HDI). According to 1995 statistics from Oxfam, 12 of the 25
Mined metals and minerals are intermediate inputs for a diverse                            most mineral-dependent countries are also HIPCs (see tables 4-3
range of products and equipment across multiple industries, including                      and 4-4). 115
electronics, telecom, computers, motor vehicles, aircrafts, chemical
refining and processing, building materials, consumer products, and
many others. Developing countries that mine metals and minerals
are mostly involved in the extraction of raw metals and minerals and
the production and export of intermediate products such as metal
sheets, while semi-manufactured products such as wires and
transistors, as well as finished goods are mostly produced by
developed countries.

      “Tiny Reactor Boost Biodiesel Production,” Nanotechnology and Development News,
      “Scientists Improve Plastics Made from Soy,” Nanotechnology and Development News,
      “Illinois and Pakistani Researchers Team for Nanotechnology Cancer Cures,” Nanotechnology and Development News,
      South Centre, “Policy Challenges for Developing Countries in Large Scale Mining,” (Geneva: 2005).
      Michael Ross, “Extractive Sectors and the Poor,” (Washington, DC: Oxfam America, 2001).

                                                                                                                                                                                  NANOTECHNOLOGY COMMODOTIES,
                               Table 4-3: Summary Table of Countries Most Dependent on
                               Mineral Commodities116

                                                                        Cross-Cutting Issues                      Mineral
                                                                                                                  Cross-   Development
                                         Country                            Commodities
                                                                                                                Dependence Index Rank
                                                                                                                 Cutting     Cutting

                                         Botswana                   Diamonds, copper and nickel                      35.1              122
                                       Sierra Leone*           Diamonds, rutile (titanium dioxide), gold,            28.9              174
                                                                         bauxite, and platinum
                                         Zambia*                  Copper, cobalt, coal and emeralds                  26.1              153
                                   United Arab Emirates           Chrome, copper, iron and uranium                   18.2               45
                                        Mauritania*                            Iron ore                              18.4              147
                                          Bahrain                       Aluminum, iron ore                           16.4               41
                                    Papua New Guinea                      Gold and copper                            14.1              133
                                         Liberia*                       Diamonds, iron ore                           12.5              127

                               Table 4-4: Additional examples of countries dependent on
                               mineral commodities117

                                                                                       g                            Human Development
                                                                                  Dependence                           Index Rank

                                          Niger*                                       12.2                                   173
                                           Chile                                       11.9                                    38
                                         Guinea                                        11.8                                   162
                                   Congo, Dem. Rep.                                     7.0                                   152
                                          Jordan                                        6.3                                    92
                                         Bolivia*                                       5.8                                   114
                                           Togo*                                        5.1                                   145
                                 Central African Republic                               4.8                                   166
                                            Peru                                        4.7                                    80
                                         Ghana*                                         4.6                                   129
                                         Bulgaria                                       4.0                                    60
                                         Angola*                                        3.6                                   160
                                       Zimbabwe                                         3.4                                   130
                                          Iceland                                       3.1                                     5
                                       Kazakhstan                                       2.6                                    73
                                         Norway                                         2.5                                     2
                                         Australia                                      2.4                                     4

    Mineral Dependence is the ratio of non-fuel mineral exports to GDP.The countries marked with an “*” are considered Highly Indebted Poor Countries. Non-italicized countries
    are considered developing countries. Source: Ross, Michael. “Extractive Sectors and the Poor.” Washington, DC: Oxfam America, 2001.

                                                                                                                                                                         NANOTECHNOLOGY COMMODOTIES,
In a 2001 report, Oxfam indicated that it has found a negative                                 Because of their larger technological and financial resources, as well
relationship between mineral-dependence and HDI ranking, as well                               as their logistical and marketing capacities, MNCs are generally able
as a positive relationship between mineral-dependence and the                                  to achieve higher levels of efficiency and greater economies of scale
portion of the population living in poverty.There are a number of                              than developing countries and domestic firms.To further reduce
factors that may contribute to these observed trends. First,                                   structural operation costs, MNCs have increasingly utilized mergers
extractive activities within a country tend to be geographically                               and acquisitions in the last five years, creating greater concentration
concentrated in areas where the sole source of employment and                                  in the mining sector. For example, 53 percent of the world’s copper

income is mining. As a result, fluctuations in price and demand, the                           mine production is currently controlled by ten companies, 75

closing of mines, large increases in the employable population, and                            percent of the world’s zircon production is controlled by four
other changes can result in a large number of people losing their                              companies, and three companies control 80 percent of the world’s
jobs and sources of income, creating strain on other resources and                             iron production.These companies have also become increasingly
government funds. Additionally, increased demand for metals and                                vertically integrated, typically involving themselves with multiple
mineral inputs stemming from industrialization and growth in other                             metal and mineral commodities and participating in multiple stages
industries over the last century and, in particular, the last few                              of the value-chain.They also often integrate those sectors that
decades has led many developing countries to expand extraction                                 provide inputs for their activities. For example, aluminum producers
activities, displacing large segments of populations living on metal and                       such as Alcoa and BHP Billiton are involved in building dams in
mineral-rich land and cutting off access to other resources.                                   Brazil to produce low-cost energy for their operations.121
Developing countries have and continue to have difficulties with
developing policies to mitigate the effects of these changes because                           A large number of mines in developing countries are owned by or
they are often financially constrained and lack social services and                            receive significant levels of direct investment from MNCs. Forty
other infrastructure.118                                                                       countries receive 95 percent of FDI available to developing countries
                                                                                               for mining. Latin American countries including Peru, Brazil, Mexico,
Mineral-dependent states also reportedly have much higher levels of                            Chile, and Argentina are among the countries that attract the most
income inequality within their population. According to Oxfam, “The                            investments, as are South Africa, China, and Papua New Guinea.
more the states rely on mineral exports, the smaller the share of                              Though a number of African countries have metal and mineral
income that accrues to the poorest twenty percent.” According to                               resources, they seldom attract FDI because of their greater levels of
The World Development Report, such income inequality limits the                                political and economic instability, lack of skilled workforce, and limited
potential for growth to reduce poverty by as much as a half.119                                policy guidelines for foreign ownership.122

Market Concentration and Investments in Metal and Mineral                                      Developing countries that serve as metal and mineral suppliers to
Extractive Industries                                                                          MNCs can sometimes benefit from technology and skill transfer and
Multinational corporations (MNCs) have become increasingly                                     investment. For example, Latin American countries, especially Bolivia,
important in large-scale extractive industries because of the large                            Ecuador, Chile, and Peru, have secured long-term investments from
barriers to entry associated with the high fixed-costs, capital-intensity,                     MNCs which some say has helped them to improve their
and technology requirements for exploration and operation of                                   technological capacity, diversify their exports, and increase their
mining and mineral resources.The initial costs of exploration,                                 exports of value-added products. As a result, many developing
including engineering studies, drilling equipment, and mine                                    countries have implemented incentives to attract MNC investments
development, are often sufficiently unaffordable for developing                                such as special tax rates, elimination of import duties, extensive land
countries and small companies, especially considering the sunk                                 and water use grants, and others. Some say that even with these
nature of these costs and the lack of guarantees that the exploration                          incentives, it is difficult for developing countries to become suppliers
will reveal exploitable or profitable resources. Other large fixed-costs                       to MNCs who increasingly demand low-cost, high-quality, and timely
are associated with necessary infrastructure such as railways and                              delivered supplies and, as a result, may choose to get their inputs
ports, production inputs such as energy, and research and                                      from other MNCs.123
development and technological knowledge necessary for improving
efficiency, reducing waste and emissions, and exploring prospective
new source areas.120

      Ross, “Extractive Sectors and the Poor.”
      South Centre, “Policy Challenges for Developing Countries in Large Scale Mining.”

                                                                                                                                                                                   NANOTECHNOLOGY COMMODOTIES,
[4.3.2] Nanotechnology and Metal, Mineral,                                                          potentially preserve demand for metals that might otherwise
and Non-Fuel Extractive Industries                                                                  be replaced with cheaper or recycled materials. In fact, in its
                                                                                                    2006 Annual Report, the World Gold Council predicts that
                                                                                                    nanotechnology will result in a significant overall increase in
Changes in industrial production, products, regulations, and other
                                                                                                    demand for gold, even though it may reduce the quantity of
factors have contributed to an ongoing evolution in the use of
                                                                                                    gold use in each product.125
metals by industry, creating both new opportunities and

uncertainties. Many of these evolutionary uses are based on
                                                                                                    The following sections describe some specific examples of

developing applications of nanotechnology in existing and new
                                                                                                    nanotechnology applications relevant to metal and mineral
markets. Nanoscale metals and minerals have unique properties that
                                                                                                    commodities and speculate as to the potential opportunities and
do not exist at the bulk scale, making them useful for new products
                                                                                                    risks they may pose for developing countries (see table 4-2).
and processes in the chemicals, electronics, biomedical, automotive,
energy, and other industries. Accordingly, growing demand from these
industries is creating new markets for the production of nanoscale
metals and minerals. Conversely, advancements in non-metal
nanomaterials, such as carbon nanotubes, that have similar or
superior properties to existing metal and mineral may result in the
                                                                                                  Table 4-5 Potential Applications of Nanotechnology
replacement of metal and mineral inputs with these new                                            for Metal and Mining Sectors

Public and private research groups in developed and developing                                                Cross-Cutting Issues                    Potential Implications for
                                                                                                                                                       Cross-Cutting Issues
countries have begun working to maximize their potential                                                   Nanotechnology Applications
opportunities and mitigate their potential risks associated with the
emergence of nanoscale metal materials. For example, South Africa’s                                 Silver, titanium, and other metal nanoparticle     Value-Chain Movement
national mineral research organization, Mintek, and international gold                                    coatings for antimicrobial properties.
producer AngloGold Ashanti launched Project AuTEK in 2000 to
research and develop new industrial applications for gold to ensure                                    Phytomining and microbial methods of             Improved Production;
the stability and profitability of the nation’s large gold industry. Much                                   metal nanoparticle production.                Increased Supply
of AuTEK’s work has been focused on applications of gold
                                                                                                    Nanocatalysts for emissions control systems,         New Industrial and
nanoparticles. For instance, AuTEK has built a gold catalyst
                                                                                                        environmental remediation, fuel cells,          Commercial Markets
production facility with the capacity to produce large quantities
                                                                                                         chemical processing; and petroleum
of gold nanocatalysts for a variety of industrial applications in                                      production. Nanoparticles for circuitry,
hopes of increasing demand for South African gold.124                                                    semiconductors, optics, electronics,
                                                                                                       sensors, and other electronic devices.
While metals are already widely used in a number of industrial                                       Nanoparticles for biomedical diagnostics,
applications, the high prices of these metals, especially precious                                            treatments, and coatings.
metals like platinum, gold, and silver, has been a limiting factor in
some instances. For example, demand in the electronics industry                                       Nanoscale metal oxides for personal care           New Industrial and
for smaller and less expensive microchips and circuit boards has                                        products, water treatment, and energy           Commercial Markets
generated interest in new technologies that reduce the amount                                                        production.
of precious metals used in these applications, as well as technologies
that enable the recycling and reuse of discarded metal parts. Because                                    Substitute materials such as carbon             Reduced Demand
                                                                                                            nanotubes and quantum dots.
they have significantly higher surface areas than bulk metals, metal
nanoparticles can reduce the amount of metal needed in many
industrial applications while simultaneously offering novel or
enhanced properties. Consequently, metal nanoparticles can

      Richard Holliday, “Evolving Industrial Uses of Gold,” in Rand Refinery Limited: Annual Report (Germiston, South Africa: Rand Refinery, 2006).

                                                                                                                                                                               NANOTECHNOLOGY COMMODOTIES,
Nanocatalysts                                                                             sulfur oxides from air at room temperature more effectively than
Some of the most promising uses of metal nanoparticles are in                             conventional air-purification systems that use photocatalysts,
various industrial and environmental applications of catalysts.The                        adsorbent materials such as activated charcoal, or ozonolysis.131
growing use of platinum and palladium nanocatalysts in a number
and range of products, largely driven by the cost reduction of                            Rising energy prices have spurred interest in nanocatalysts. A
using smaller quantities of these precious metals, has resulted in                        number of organizations are researching the potential for
increased demand for large volumes of platinum and palladium,                             nanocatalysts to reduce the high cost of precious metal catalysts

averaging about 200 tons per year.126 Increasingly stringent                              needed for fuel cell technology, a factor that many consider a

emissions requirements and growing demand for “green” production                          significant barrier to the commercialization of fuel cells. 132 The oil
processes and alternative energy sources have also generated                              industry may also increase its demand for nanocatalysts for use in
increased demand for gold, platinum, and other nanocatalysts,                             extracting and refining oil from new sources, especially if oil prices
which are key inputs in air purification, pollution control, and                          rise to levels that make exploration and refinement of difficult to
fuel cell technologies. 127                                                               access and more expensive oils profitable. For example, Chevron is
                                                                                          developing nanocatalysts that could increase the profitability of
The automotive industry is interested in the use of metal                                 extracting oil from Canada’s tar sands and refining heavier oils.133
nanocatalysts for automobile emission control systems because it can                      Chevron also has a spin-off company called MolecularDiamond
potentially reduce the currently high temperature requirements for                        Technologies, which has successfully harvested diamondoid
catalysis of emissions.The emission control devices typically take the                    nanoparticles that can be used in the oil refining process.134
form of exhaust treatments for gas and diesel powered                                     Elsewhere in the energy industry, U.S. synthetic fuel manufacturer
automobiles.128 For example, Nanostellar, a U.S. company that                             Headwaters, Inc. is collaborating with Shenhua Group, the largest
develops engineered nanomaterials for emissions control, offers,                          coal company in China, to build a pilot plant in China that will use
Nanostellar's NS Gold™, a diesel oxidation catalyst (DOC) made                            nanocatalysts to purify coal into liquid coal, significantly increasing its
with a tri-metal formulation of gold, platinum, and palladium that                        potential uses as an energy source.135
reportedly provides 15 to 40 percent greater catalytic activity at
equal precious-metal cost than pure-platinum and platinum-palladium                       Metal nanocatalysts are also used in bulk production of many
catalysts.129 Automobile manufacturers including Toyota, Ford, General                    chemicals and chemical products. Chemical companies like Dow and
Motors, and others are also researching and developing metal                              BP use gold and palladium nanoparticles in the production on vinyl
nanocatalysts for use in emission control systems.                                        acetate monomer, a key feedstock material for paints and adhesives.
                                                                                          Since first introduced, this application has resulted in a several ton
Nanocatalysts are also being used in a number of pollution control                        increase in demand for gold. 136 Arco Chemical Technology has filed a
and treatment applications. Rice University in the U.S. has developed                     U.S. patent for its method of direct production of hydrogen peroxide
gold-palladium nanoparticle for the catalysis of trichloroethene                          using gold nanocatalysts.137
(TCE), a commonly used industrial chemical, in groundwater. While
the effectiveness of bulk palladium catalysts for TCE remediation is                      Nanoscale Metal Oxides
well documented, its use has been limited by the high cost of                             The global market for nanoscale oxides of metals such as titanium,
palladium. Rice reports that the gold-palladium nanocatalysts                             zinc, iron, and aluminum is growing very rapidly and becoming an
disintegrate TCE 100 times faster than bulk palladium catalysts,                          increasingly large portion of the total market for metal oxides.
reducing the needed quantity and net cost of the application. 130                         Demand for nanoscale metal oxides grew from USD88 million in
Nanotechnology-based water treatment technologies have also been                          2000 to USD140 million in 2002 and is projected to reach
developed that contain other metals and minerals, including silver,                       USD11,500 million by 2020. 138 Nanoscale metal oxides have a broad
bauxite, alumina, iron, titania, and others.Toyota Central Research                       range of industrial and commercial applications. Titanium dioxide
and Development Laboratories in Japan has developed a new air                             and zinc oxide, for example, are widely used in a variety of
purification system made with a porous manganese oxide                                    cosmetics, toothpastes, sunscreens, and other personal care products
nanomaterial embedded with gold nanoparticles that is reported                            to improve skin penetration, sun protection, clear application, and
to remove volatile organic compounds (VOCs) and nitrogen- and                             other properties.139

    Christopher W. Corti, “Going Green,” in Rand Refinery Limited: Annual Report 2006 (Germinston, South Africa: Rand Refinery, 2006).
    Christopher W. Corti, Richard J. Holliday, and David T.Thompson, “Developing New Industrial Applications for Gold: Gold Nanotechnology,” Gold Bulletin 35, no. 4 (2002).
    “Gold Nanoparticle Catalyst Reduces Diesel Emissions,” Nanowerk,
    Holliday, “Evolving Industrial Uses of Gold.”
    “Nanotechnology Air Purification System,” Nanowerk,
    “Gold, Copper Nanoparticles Take Center Stage in the Search for Hydrogen Production Catalysts “ Science Daily,
    “Nanotech of the North,” Nanotechnology and Development News,
    “Chevron Unit with Stanford in Nanotech,” Nanotechnology and Development News,
    Jack Uldrich, “A Cautionary Tale: Nanotechnology and the Changing Face of the Electric Utility Industry,” Management Quarterly 47, no. 2 (2006).
    Holliday, “Evolving Industrial Uses of Gold.”

    Corti, Holliday, and Thompson, “Developing New Industrial Applications
    for Gold: Gold Nanotechnology.”
    The Freedonia Group, “Nanomaterials - Industry Study,” (2003).
    “The New Nano-Cosmetics,” Nightly Business Report,
                                                                                                                                                                  NANOTECHNOLOGY COMMODOTIES,
Nanoscale metal oxides, in particular titanium dioxide and iron                          Medical and Other Applications
oxide, are also being used as catalysts for water treatment and                          Metal nanoparticles also have applications in medical screening and
environmental remediation. For example, researchers from Rice                            disease treatment. One recent report indicates that 130 nanotech-
University in the U.S. have developed a method for removing                              based drugs and drug delivery systems and 125 diagnostic test and
arsenic from drinking water using magnetic iron oxide                                    medical devices were in preclinical, clinical, or commercial stages of
nanoparticles.140 Rice researchers have also developed a method for                      development in 2006, up 68 percent from the previous year.These
producing nanocrystalline titanium dioxide for use as a photocatalyst                    treatments and devices include a number of metal nanoparticle-

to degrade groundwater and other environmental contaminants. 141                         based viricides, coatings, and detection devices. 146

Photocatalytic metal oxide nanoparticles are being used in energy                        Gold nanoparticles have generated a lot of interest in medical
research. For example, researchers from the Nanomaterials                                communities for use as targeted drug delivery vehicles and for a
Research Center at Massey University in New Zealand have                                 variety of other disease treatments. For example, Scientists from
developed dye-sensitive solar cells that are made with titanium                          the Gene Therapy Center at the University of Alabama (UAB) in
dioxide and can reportedly generate electricity at 10 percent of the                     the U.S. have used viral vectors to carry gold nanoparticles to
cost of conventional silicon solar cells. 142 Additionally, scientists at the            locations in tumor cells that allow for the combination of two types
University of Nevada, Reno in the U.S. have developed titanium                           of treatment: heating the tumor using the gold nanoparticles and
dioxide nanotubes that produce hydrogen by splitting water with                          killing the tumor using gene therapy.The researchers indicate that
solar light.This new method is reportedly more efficient than current                    this approach may be more effective than using virus-based drug
techniques and the nanotubes are inexpensively produced.The                              delivery methods alone.147 Researchers at the University of Chile
hydrogen can subsequently be stored in nanoporous titanium and                           have conducted experiments showing that gold nanoparticles
carbon nanotube structures.143                                                           combined with very weak microwaves may be able to dissolve
                                                                                         abnormal protein clumps that are associated with Alzheimer's
Electronics                                                                              disease and other degenerative diseases.The researchers say that
Gold nanoparticles have a number of properties, including stability,                     this therapy has the potential to be adapted to treat more diseases
biocompatibility, and resistance to oxidation, that make them                            than drugs because it works thermally instead of chemically.148
attractive for application in circuitry, semiconductors, optics,                         Other groups are also researching the use of gold nanoparticles for
electronics, sensors, and other devices. Some predict that gold                          medical imaging and a variety of cancer treatments.Though research
nanoparticles may replace silicon in the circuit industry because they                   and development in this sector is up, the World Gold Council
are better electron conductors, are more resistant to oxidation, and                     predicts that biomedical applications of gold are unlikely to
enable “bottom-up” assembly of potentially useful structures.144                         contribute significantly to demand for gold because of the limited
                                                                                         quantities required.149
Advances in nanotechnology can potentially also replace some
applications of metals in electronics. Because of their superior                         The medical sector is currently also using silver nanoparticles, most
conductivity, carbon nanotubes are increasingly researched as an                         often because of their anti-bacterial properties, in applications such
alternative to copper wiring. Some people have raised the concern                        as surgical scrubs, bedding, burn dressings, surgical instruments, and
that copper producing developing countries like Peru, Bolivia, Chile,                    hand sanitizers. Coating products containing silver nanoparticles are
Zambia, and others, many of which are currently expanding their                          also available for use on hospital walls and surfaces. For example,
copper mining activities, may lose some of their critical markets to                     Australian company Nanovations Pty Ltd. has developed Bioni
new nanotechnology-based alternatives, especially if the pace of                         Hygienic, a nanotechnology-based antibacterial and antimicrobial wall
production efficiency improvements for these nanomaterials                               coating for hospitals that can reportedly kill microorganisms, fungal
outstrips the slow pace of mine development. 145                                         spores, and bacteria.150

    “Rice Researchers Use Nanotechnology to Purify Drinking Water,”
    Meridian Institute, “Nanotechnology, Water, and Development Workshop Summary,” (2007).
    “Using Nanotechnology to Develop a Better Solar Cell,” Nanotechnology and Development News,
    “Titanium Dioxide Nanotube Arrays for Generating Hydrogen by Splitting Water Using Solar Light,” Nanotechnology and Development News,
    Michael B. Cortie, “The Weird World of Nanoscale Gold,” Gold Bulletin 37, no. 1 (2004).
    Thomas, “Nanotechnology Is Godzilla.”
    “Nanomedicine, Device, and Diagnostic Report,” (NanoBiotech News, 2006)
    “Combining Gold Nanoparticles with Viruses for a Combined Thermal/Gene Cancer Therapy,” Nanotechnology and Development News,
    “Gold Nano V. Alzheimer's,” Nanotechnology and Development News,
    Holliday, “Evolving Industrial Uses of Gold.”
    “Nanotechnology Coating Is Battling Hospital Superbugs,” Nanotechnology and Development News,

                                                                                                                                                               NANOTECHNOLOGY COMMODOTIES,
Silver nanoparticles and nanocoatings are also already being used in                    A number of recent studies have also documented the ability of
a variety of consumer products. As with other applications, silver                      microbial cells to extract and accumulate metals.This process is
nanoparticles can accomplish the same effects as bulk silver but with                   currently used in some biotechnology processes, and now several
less material because of their higher surface area and greater efficacy.                research groups are also using microbial cells to synthesize metal
Several apparel manufactures have marketed collections of odor-                         nanoparticles with control over the particles’ size, shape, and
resistant clothing that incorporate silver nanoparticles. Silver                        composition. Successful microbial production using different bacteria
nanoparticles are also found in commercial food storage containers                      and yeasts has been reported for magnetic nanoparticles, silver

and packaging materials to increase the shelf life and inhibit bacterial                nanoparticles, and palladium nanoparticles. Mintek in South Africa

growth. Consumer products retailer the Sharper Image carries a line                     has tested a variety of bacterial, fungal, and yeast organisms isolated
of food containers under the brand FresherLonger that reportedly                        from soil and metal-rich dump samples for their ability to accumulate
keep food fresh three to four times longer than traditional                             and reduce gold ions into nanoparticles. Mintek researchers report
containers.151 Other consumer products containing silver                                promising results using the yeast P. jadinii and two of the fungi tested.
nanoparticles and nanocoatings that are currently available in                          The researchers also found that the size of nanoparticles can be
consumer markets include household cleaning products, detergents,                       controlled to some extent by varying conditions such as
kitchen counters, and mops and brooms. In addition, Korea’s                             temperature and pH. 156

                                                                                        [4.4] Fiber, Textiles, and Apparel Industries
Samsung Electronics offers a line of SilverIon washing machines and
refrigerators that claim to eliminate germs and odor. 152

Nano-Metal and Mineral Production                                                       A large number of developing countries depend on fiber, textiles, and
Metal nanoparticles are typically chemically synthesized through the                    apparel industries for a large portion of their total export earnings
use of chemical reductants and solvents or through electrochemical,                     as well as for critical employment opportunities for their millions of
sonochemical, or photochemical processes. 153 In recent years, a                        low-skilled and unskilled workers.
number of facilities have opened that are dedicated exclusively to
the bulk production of metal nanoparticles and nanopowders,                             Though the fiber, textiles, and apparel industries are often grouped
reducing the cost of these nano-metals as well as their production                      together because of their mutual dependence in supply chains, they
technology. Nanotechnology may also enable the synthesis of metals                      are, in fact, three separate industries with unique characteristics and
and minerals that are currently only available in natural forms.There                   different levels of developing country involvement.The fiber industry
are now some nanotechnology companies that can manufacture                              refers to the production of natural and synthetic fibers used by the
2-carat diamonds that are molecularly identical to natural diamonds                     textile industry to produce cloth, which is then used by the apparel
for less than USD100 per diamond by manipulating and arranging                          industry to make clothing. Developing countries are mostly involved
carbon atoms.154                                                                        in natural fiber production and apparel manufacturing, while textiles
                                                                                        manufacturing is mostly concentrated in developed countries.
A number of alternative methods for the production of metal
nanoparticles have also emerged in recent years, some of which may                      [4.4.1] Fiber, Textiles, and Apparel
                                                                                        Industries and Development
be especially promising for developing countries with depleted mining
fields or limited technological capacity. Phytomining, a process through

                                                                                        Fiber Industry
which plants are used to extract metals from ore, has been shown to
be successful in a number of field trials in India, Australia, New
Zealand, South Africa, and Brazil. Phytomining involves planting specific               Most natural fibers are agricultural commodities such as cotton, jute,
crops near gold deposits and treating the surrounding soil with a                       abaca, hemp, flax, and sisal, on which many developing countries
special chemical that enables the plants to take up gold, which can                     depend. Cotton constitutes approximately 40 percent of the global
then be recovered from the plants’ biomass. Studies of phytomining in                   fiber market, valued at an estimated USD30 billion in 2005.There
the Kolar Gold Fields in India, which have been closed since 2000 due                   are 350 million people worldwide estimated to be directly involved
to low productivity and profitability, have yielded 40 to 100 milligrams                in cotton production either through farming, transportation, ginning,
of gold accumulation per kilogram of biomass. 155                                       baling, or storage.157 Though the U.S., China, India, Pakistan, and
                                                                                        Uzbekistan constitute about 75 percent of global cotton production,

    “Container Uses Nanoparticles to Extend Shelf Life,” Nanotechnology and Development News,
    “Use of Silver Nanoparticles Rapidly Expanding in the Consumer and Medical Markets, According to Bourne Research,” Nanotechnology and Development News,
    Shouan Dong et al., “Photochemical Synthesis of Gold by Sunlight Radiation Using Seeding Approach,” Gold Bulletin 37, no. 3 (2004).
    Uldrich, “A Cautionary Tale: Nanotechnology and the Changing Face of the Electric Utility Industry.”
    “Plants Yield Gold,” World Gold Council,
    Mariekie Gericke and Anthony Pinches, “Microbial Production of Gold Nanoparticles “ Gold Bulletin 39, no. 1 (2006).
    Asfaha, “Remunerating Commodity Producers in Developing Countries: Regulating Concentration in Commodity Markets.”

                                                                                                                                                                                       NANOTECHNOLOGY COMMODOTIES,
a number of developing countries, including Burkina Faso, Benin, Mali,                      developed countries, with the important exceptions of India,
Tajikistan, Cote D’Ivoire, and Kazakhstan, rely on cotton as a major                        China, and a few other Asian countries. A number of developing
source of export earnings (see Table 4-6).158 More specifically, cotton                     countries, however, have significantly increased their involvement in
production is the main source of income for 10 million people in                            textile production. Between 1999 and 2000, Malaysia and Mexico
West and Central Africa and accounted for 79 percent of Mali’s                              increased their textile exports by 270 percent and 261 percent,
exports, 65 percent of Benin’s exports, and 56 percent of Chad’s                            respectively. Indonesia,Turkey, China, and India also significantly
exports between 1999 and 2000. 159 Also, of the 20 million cotton                           increased the size of their textile industries.166 For example, the

farmers in the world, 99 percent live in developing countries. 160                          textiles industry in India employed 32 million people in 2006,

                                                                                            making it the nation’s biggest employer after agriculture. India
Table 4-6: Examples of shares of cotton fibers in                                           exported 62 percent of its textiles to Europe in 2005, and, in
total exports of developing countries, 1997-1999161                                         the same year, U.S. textile imports from India were valued at
                                                                                            USD11.1 billion. 167

                                                                                            Though global population growth and higher income levels in
        Country                Cross-Cutting Issues
                                   Commodities                      Cross-Cutti
                                                                   Dependence162            developing countries are expected to sustain continued growth in
                                                                                            global demand for textiles, the industry is also anticipated to
      Burkina Faso                  Cotton lint                            39               undergo some significant changes. For one, the textile industry has
         Chad                       Cotton lint                            37               become increasingly competitive with the elimination of textile
         Benin                 Cotton lint; cotton seed                    33               import quotas in 2005 and is expected to become even more
          Mali                      Cotton lint                            30               competitive in coming years as China’s accession to the WTO,
         Togo                       Cotton lint                            23               combined with its ability to inexpensively produce large quantities of
        Somalia                  Cotton lint; cotton                       23               textiles, places pressure on the textile markets everywhere else,
                                                                                            including in Europe and North America.168 Additionally, demand for
Developing countries also produce other natural fibers such as wool                         textiles has been and will likely continue to shift toward value-added
and silk.Though wool and silk only constitute 2.5 percent and 0.2                           and high-quality textile applications. As a result, innovation in the
percent of the world fiber market, respectively, they are both                              textile industry has been moving away from improving productivity
multibillion dollar markets for trade.163 Raw silk and silk yarn are                        and aesthetics toward creating new fabrics and products with
mostly produced in Asian countries. As one of the most labor-                               improved quality, functionality, and applications in other sectors, such
intensive segments of the Indian economy, silk production employs                           as healthcare and environmental remediation. 169
an estimated 6 million Indian workers.164
                                                                                            Apparel Industry
Synthetic fibers constituted nearly two-thirds of global fiber                              Almost all developing countries, especially the LDCs, produce and
consumption in 2005, with demand for synthetic fibers growing                               export apparel (see Table 4-7). Because it is highly labor-intensive,
twice as fast as demand for cotton. This asymmetry in growth has                            the apparel industry is a critical source of employment in these
been raising concerns that natural fiber producers and their products                       countries, particularly for women and unskilled workers who
could face future market displacement and price declines.                                   otherwise would be unemployed.170 In 2005, India’s apparel sector
                                                                                            generated USD8 billion worth of exports and accounted for more
Textiles Industry                                                                           than 10 million jobs. Also, in 2003, seven countries relied on apparel
Textile production involves spinning and weaving fibers into cloth                          exports for more than half their total merchandise exports, including
and different types of fabrics.Textile production is usually automated                      Bangladesh (78 percent), Cambodia (73 percent), Macao (72
and capital-intensive with moderate requirements for skilled and                            percent), El Salvador (60 percent), Mauritius (57 percent), and Sri
semi-skilled labor. 165 Consequently, textiles are mostly produced in                       Lanka (50 percent). 171

    M. Rafiq Chaudhry, “Cotton Research: World Situation” (paper presented at the 50th Anniversary of the National Cotton Project, Sáenz Peña, Chaco, Argentina, September 18 2006).
    Foreign Agriculture Service, “European Commission Adopts Action Plan to Help Developing Countries Fight Agriculutral Commodity Dependency and Support the Development
    of the Cotton Sector in Africa,” (US Department of Agriculture, 2004).
    Jim Thomas, “Atomising Third World Economies,” The Ecologist October (2004).
    Commodity Dependence expressed as the percentage share in total merchandise exports. Source: FAO. “Dependence on Single Agricultural Commodity Exports in Developing
    Countries: Magnitude and Trends.” Rome, 2002.
    Dependence is expressed as the percentage share in total merchandise exports. “Cotton lint” is cotton separated from the seed, using a process called “ginning.”
    Thomas, “Atomising Third World Economies.”
    “Silk in World Markets,” Textiles & Clothing,
    Hildegunn Kyvik Nordas, “The Global Textile and Clothing Industry Post the Agreement of Textiles and Clothing,” (Geneva: World Trade Organization, 2004).
    Richard P. Appelbaum, “Assessing the Impact of the Phasing-out of the Agreement on Textiles and Clothing on Apparel Exports on the Least Developed and Developing
    Countries,” (Santa Barbara, CA: Institute for Social, Behavioral, and Economic Research Center for Global Studies, 2.
    “EU's Leapfrog May Rip India's Textile Fabric,” The Economic Times, India, August 4 2006.
    “Acelon Keeps up with Market through Continuous Innovation,” China Post, July 29 2006.
    N. Fianti, L. Kaounides, and N. Stingelin-Stutzmann, “Managing Disruptive Technology in the Textile Industry,” Materials Technology 21, no. 1 (2006).
    Nordas, “The Global Textile and Clothing Industry Post the Agreement of

    Textiles and Clothing.”
    Appelbaum, “Assessing the Impact of the Phasing-out of the Agreement on Textiles
    and Clothing on Apparel Exports on the Least Developed and Developing Countries.”
                                                                                                                                                                          NANOTECHNOLOGY COMMODOTIES,
                            Table 4-7 Largest Apparel Exporters Excluding the EU, US, and
                            Canada (Million dollars and percentage) 172

                                      Country                 Cross-Cutting
                                                               Value (1990)                 Value (1990)        Cross-Cutting Issues
                                                                                                                    Share of Total
                                                                  Issues                                             World Value

                                                                                                                                                                          &   DEVELOPMENT
                                       China                       $9,669                      $9,669                      26.0%
                                   Hong Kong                       $15,406                     $15,406                     17.5%
                                      Mexico                        $587                        $587                        6.2%
                                       Turkey                      $3,331                      $3,331                       4.7%
                                        India                      $2,530                      $2,530                       4.3%
                                  Korea, Rep. of                   $7,879                      $7,879                       3.6%
                                     Indonesia                     $1,646                      $1,646                       3.4%
                                    Bangladesh                      $643                        $643                        3.1%
                                      Thailand                     $2,817                      $2,817                       2.7%
                                   Taipei, China                   $3,987                      $3,987                       2.2%
                                Dominican Republic                  $782                        $782                        2.1%
                                     Sri Lanka                      $638                        $638                        2.0%
                                    Philippines                    $1,733                      $1,733                       1.8%
                                     Morocco                        $722                        $722                        1.7%
                                      Romania                       $363                        $363                        1.7%
                                      Malaysia                     $1,315                      $1,315                       1.6%
                                       Tunisia                     $1,126                      $1,126                       1.6%
                                      Pakistan                     $1,014                      $1,014                       1.5%
                                       Poland                       $384                        $384                        1.4%
                                  Macao, China                     $1,111                      $1,111                       1.3%
                                    Singapore                      $1,588                      $1,588                       1.3%
                                    El Salvador                     $184                        $184                        1.2%

China has also emerged as a significant exporter of apparel to                           apparel production without much investment, even in poor
markets in which it has a high market share. LDCs, however,                              countries, though most technological improvements result only in
generally export apparel to markets in which they have a relatively                      greater efficiency while maintaining the labor-intensity of the process.
low market share. As a result, LDCs have typically not been able to                      Some countries like Bangladesh, Sri Lanka, and Mauritius, however,
develop diversified clothing industries and, instead, have continued to                  have been able to use technological advancement in this sector as
produce low-quality or undifferentiated, commodity-type products                         the starting point for industrialization and, as a result, have
such as T-shirts, uniforms, underwear, etc. For example, Sub-Saharan                     experienced high growth in product output in apparel.174
African countries export most of their apparel to the U.S. under the
African Growth and Opportunity Act, but their share of the U.S.                          This low investment barrier can be problematic for developing
market was about 2.2 percent in 2004. Additionally, 77 percent of                        countries in terms of maintaining foreign sources of investment.
African apparel exported to the U.S. is composed of plain knit shirts                    While a large number of foreign and multinational manufactures
and pants, indicating their highly undiversified market.173                              have invested in developing countries to shorten their supply chains
                                                                                         and avoid quotas, the low cost of capital investments makes it easy
Production technology in the apparel sector has not changed                              for these investors to discontinue these operations once they are no
significantly in the last century.The process of cutting fabric and                      longer profitable or, as in the case of recently lifted quotas, there is
sewing it into clothing mostly requires labor and simple machinery                       no longer any advantage to remaining in that location.175
like sewing machines. Modern technology can be introduced to

    Matthias Knappe, "Trade in Textiles and Clothing (T&C) and Dynamic Products: A Special Look at LDCs" (paper presented at the UNCTAD Intergovernmental Expert Meeting on
    Dynamic and New Sectors of World Trade, Geneva, February 9 2005).
    Nordas, "The Global Textile and Clothing Industry Post the Agreement of Textiles and Clothing."
    Knappe, "Trade in Textiles and Clothing (T&C) and Dynamic Products: A Special Look at LDCs".

                                                                                                                                                                                 NANOTECHNOLOGY COMMODOTIES,
In recent years, apparel manufacturing has increasingly become                              synthesize high-performance fibers with superior mechanical
concentrated in a number of large multinational companies that                              properties such as strength, toughness, durability, conductivity, etc.
outsource primary production and then brand, price, distribute, and                         These nanofibers can be used to make improved fabrics for apparel,
sell the final products. Since the 1990s, clothing consumers have                           carpeting, furniture, and other conventional textile markets or to
become increasingly value-driven, wanting higher quality products for                       make products for new markets, such as electronic fabrics for
lower prices. Studies indicate that 70 percent of consumers know                            actuation and energy storage, materials for tissue engineering, filter
what type of apparel they want to purchase and will forgo                                   media, or wound dressings. Nanotechnology fabric finishing involves

purchasing products that do not meet their needs.                                           using a nanotechnology treatment on a conventional natural or

                                                                                            synthetic textile substrate to improve the textile’s durability, strength,
To meet these needs, apparel manufacturers have been adopting                               water-resistance, or other properties.These treatments can be
strategies that reduce time to market and increase the number of                            added using deposition, polymerization, and other technologies or
collections they introduce each season, while concurrently reducing                         applied in the form of coatings to the surface of materials during the
inventory levels and improving the timeliness of product delivery. In                       finishing stages of the value-chain.178
order to do this, these manufacturers are attempting to move away
from long supply chains and complex logistics associated with                               Early entry in research, development, and commercialization may be
globally outsourced production. Many of them are now attempting                             a significant factor in determining which countries steer the direction
to move the location of their inputs closer together by either                              of and benefit from nanotechnology applications for textiles. Much of
increasing their level of vertical integration or by switching to                           this early work is currently taking place in the U.S. and EU where
suppliers that are closer to home.This type of behavior is typical of                       governments and manufacturers are hoping to bolster the
commodity industries where finished products’ components are                                competitiveness of their textile products against losses they have
outsourced to many different suppliers until consumers begin                                incurred to countries like China and India. For example, the
demanding new products, at which point reintegration of the                                 European textiles and garment industry has launched the European
production chain may become necessary. As a result, many                                    Technology Platform program to improve the long-term
developing countries face the erosion of export markets for their                           competitiveness of its products.The program is focusing on
typically lower quality apparel products.176                                                leveraging technology and innovation, including nanotechnology, to

[4.4.2] Nanotechnology and Fiber, Textiles,
                                                                                            move the industry away from commodity production toward the
                                                                                            manufacturing of specialized and value-added products.179
and Apparel Industries
                                                                                            China, India, and a number of other developing countries have also
                                                                                            initiated public and private nanotextiles research and development
Nanotechnology can enable both the creation of new fibers and
                                                                                            programs both domestically and through international collaborations.
textile materials and the enhancement of existing natural and
                                                                                            For example, as the biggest source of export earnings in 2002, the
synthetic fibers and materials. In order to meet the growing demand
                                                                                            textile industry is one of few traditional industries included in
for value-added products and maintain competitive in the global
                                                                                            Taiwan’s 2008 National Development Plan.Taiwan’s Ministry of
marketplace, a significant number of fiber, textile, and apparel
                                                                                            Economic Affairs is providing funding to the Taiwan Textile Federation
manufacturers in both developed and developing countries are
                                                                                            (TTF), China Textile Institute (CTI), and the Industrial Technology
turning to nanotechnology to deliver products with enhanced
                                                                                            Research Institute (ITRI) to develop higher-value textile products,
functionality to existing and new markets.The global market for
                                                                                            including nanotechnology-based textile products for applications like
nanotechnology-based textiles was worth USD2.6 billion in 2004,
                                                                                            disaster relief and medicine. While Taiwan’s government wants to
and is expected to reach USD13.6 billion by 2007 and USD115
                                                                                            maintain the high labor requirements of their textile industry, which
billion by 2012.177
                                                                                            provides them with a significant comparative advantage, it also wants
                                                                                            to broaden the application of textiles through inter-industry
In fiber and textile manufacturing, nanotechnology can generally take
                                                                                            cooperation with the medical, transportation, construction, and other
two forms – fiber and yarn production and treatments for fabric
                                                                                            manufacturing industries.180
finishing. Nanotechnology applications for fiber and yarn production
involve using nanoscale materials, such as carbon nanotubes, to

    Fianti, Kaounides, and Stingelin-Stutzmann, “Managing Disruptive Technology in the Textile Industry.”
    Cientifica, “Nanotechnologies in the Textile Market,” (London: Cientifica, 2004).
    Kumar Vikram Singh et al., “Applications and Future of Nanotechnology in Textiles” (paper presented at the Beltwide Cotton Conferences, San Antonio,TX, January 3-6 2006).
    Fianti, Kaounides, and Stingelin-Stutzmann, “Managing Disruptive Technology in the Textile Industry.”
    “Textile Industry Generates Highest Export Proceedings for Taiwan,” China Post, November 4 2002.

                                                                                                                                                                      NANOTECHNOLOGY COMMODOTIES,
It is still too early to determine the net effects of nanotechnology on                     Nano-Tex’s business model has been described as a complete
demand for fibers, textiles, and apparel from developing countries.                         departure from the traditional models used in the textiles industry
Synthetic nanofibers and nanotextiles can potentially displace natural                      and as more similar to models used by software companies. Instead
fibers and textiles produced in developing countries. Conversely,                           of operating its own mills, Nano-Tex licenses its technology to other
nanotechnology treatments could increase demand for natural fibers                          mill operators. In 2006, Nano-Tex had licensed its technology to
and textiles exports by enabling their use in new applications and                          over 20 mills worldwide182 Nano-Tex’s flagship technology, Nano-
markets, as well as provide developing countries with opportunities                         Touch, involves wrapping synthetic fibers with a cotton-like material,

to export more value-added textile products. Additionally,                                  thereby combining the superior strength, durability, colorfastness,

nanotechnology innovations in other industries could improve the                            and wrinkle-resistance of synthetic fabrics with the desired look
efficiency, productivity, and cost-effectiveness of machinery used for                      and feel of cotton. Nano-Touch has raised apprehensions among
manufacturing textile products.                                                             many groups that are concerned that cotton production, as well as
                                                                                            cotton textile and apparel exports, from developing countries will
The following sections describe some specific examples of                                   be displaced by synthetic materials that offer all of the benefits
nanotechnology applications relevant to the fiber, textiles, and                            and none of the drawbacks of cotton fabrics.These groups have
apparel industries and speculate as to the potential opportunities                          grown more concerned as apparel made with Nano-Tex technology
and risks they may pose for developing countries (see table 4-8).                           and carrying the Nano-Tex brand have begun to be sold by major
                                                                                            U.S. retailers.183
Table 4-8 Potential Applications of Nanotechnology
for Fiber, Textiles, and Apparel                                                            India’s Yash Management & Satellite Ltd. is researching the use of
                                                                                            carbyne, a linear chain of carbon atoms with alternating single and
                                                                                            triple bonds, to create fabric with greater strength and toughness
                                                                                            than commercial rayon and nylon. Unlike conventional fabrics that
           Cross-Cutting Issues                       Potential Implications for
                                                       Cross-Cutting Issues                 are made from natural and synthetic fibers that are separated, spun
        Nanotechnology Applications
                                                                                            into yarn, and woven together, carbyne fibers can be crosslinked
                                                                                            together.The high degree of uniformity in carbyne yarn reportedly
        Nanocoatings and treatments for                Value-Chain Movement
              performance fabrics.
                                                                                            could result in 100 percent efficiency in converting yarns to fabrics,
                                                                                            eliminating the need for fiber separation by allowing individual fibers
Nanotechnology-based improvements for sewing             Improved Production                to be connected end to end continuously. Also, the fibers could still
   machines and other production equipment                                                  be woven together through conventional methods and used to
                        .                                                                   make fabrics with the same look and feel as conventional fabrics.184

                                                                                            Nanotechnology Textile Treatments
Nanofibers for environmental remediation filters.         New Industrial and
  Thermally and electrically conductive materials        Commercial Markets
       for military and medical applications.                                               U-Right, an apparel company based in Hong Kong, offers a collection
                                                                                            of NanoEco clothing that uses a nano-coating called Texcote
      Synthetic fiber and textile substitutes.            Reduced Demand                    developed by Swedish researchers.Texcote is marketed as providing
                                                                                            stain and water resistance properties to conventional fabrics and is
                                                                                            said to be produced through an environmentally-friendly process. In
Synthetic Nanotexiles                                                                       2003, U-Right had a production capacity of about 200,000 nano-
Burlington Industries, the U.S. largest textiles manufacturer, has                          treated articles of apparel a month and, in response to growing
partnered with a start-up company called Nano-Tex to produce a                              demand, began construction on a new plant with a production
series of nano-based treatment technologies that add the desirable                          capacity of 2 million articles per month. Six months after introducing
properties of cotton such as comfort and breathability to synthetic                         the NanoEco line, U-Right’s profits increased 98.2 percent, and it
fibers that provide superior durability, strength, and performance. In                      generated a turnover of USD6.8 million, more than 16 times the
1999, Burlington reported USD31 million in losses and filed for                             amount from the previous year. U-Right also reports that the
bankruptcy protection after incurring almost USD1 billion in debt.                          NanoEco collection has been well received by consumers, pointing
Between its filing and 2002, Burlington reported an additional                              to the nearly four-fold increase in sales between the first and second
USD81 million in losses and closed a number of its mills. Since                             halves of the year185 In addition to NanoEco, U-Right also uses the
partnering with Nano-Tex, Burlington has turned a profit and, in                            Texcote technology to process textile products for other
2002, estimated that it could generate USD2 billion in sales in the                         manufacturers and licenses the technology to various partners.The
U.S. alone.181                                                                              company is now pursuing applications of the same technology for

    Katrina C. Arabe, “Textiles: Saving the Apparel Industry,” Industrial Market Trends, September 5 2002.
    Fianti, Kaounides, and Stingelin-Stutzmann, “Managing Disruptive Technology in the Textile Industry.”
    Alessandro Zago, “Nanomaterials: Disrupting the Thermal Management and Textiles Industries,” Nanotechnology Law and Business 2, no. 1 (2005).
    “Nanotechnology Weaves Big Garment Profits,” Financial Times, December 31 2003.
    Fianti, Kaounides, and Stingelin-Stutzmann, “Managing Disruptive Technology in the Textile Industry.”

                                                                                                                                                                    NANOTECHNOLOGY COMMODOTIES,
shoes, household products, furniture, fabric toys, and other non-                           additional products, “Aloe Vera Merino” and “Aqua Merino,” in 2006,
apparel products, as well as researching nanotechnology applications                        though both products were originally slated for commercialization in
for paper, glass, tiles, and paint.186                                                      2009. Aloe Vera Merino garments a treated with microcapsules of
                                                                                            aloe vera that are released during wearing. Aqua Merino garments
Thailand’s Innotech Textile Co. has launched a collection of nano-                          are treated with a finishing that enhances the hydrophilic properties
enhanced water, stain, and wrinkle resistant T-shirts under the brand                       of the fabric, allowing wool to be worn in warm weather.190
i-Tex. Innotech originally developed the T-shirts for sale to high-end
                                                                                            Nanotextiles Applications for New Products and Markets

markets, but it now reports that their production efficiency and the

demand for the product have both grown sufficiently to make the                             A number of textile manufacturers from around the world
introduction of lower-end products, as well as underwear and socks,                         have developed nanotechnology processes and products with
profitable. Innotech has also partnered with Chulalongkorn                                  applications across different industries. For example, Elmarco, a
University’s Institute of Metallurgy and Material Science to develop                        textile company in the Czech Republic, has developed machinery
anti-microbial apparel products containing silver nanoparticles. 187                        for industrial-scale production of nanofibers that can be used for
                                                                                            treating groundwater.191
U.S. company NanoHorizons, Inc. and its partner company Carolina
Cotton Works, a U.S. cotton products manufacturer, have marketed a                          Thailand’s Textile Industry Development Institute (TIDI), University of
line of SmartSilver anti-odor and anti-microbial nanotechnology                             Chiang Mai, and the National Nanotechnology Centre are
treatments for cotton, polyester, nylon, rayon, and wool. SmartSilver                       developing a fabric embedded with zinc oxide nanoparticles for use
is applied to fabrics using conventional fabric and garment dye                             in anti-bacterial surgical gowns.Thailand will soon begin globally
processes and, reportedly, does not compromise the fabrics’ intrinsic                       exporting the surgical scrubs.The Textile Industry Development
properties. A line of SmartSilver products was most recently                                Institute is also going to license the technology to other
introduced for wool, which, due to its natural oils, has remained a                         manufactures for commercial production.192
challenge for other anti-odor treatment.188
                                                                                            U.S. company Konarka Technologies Inc., in collaboration with Ecole
Australian Wool Innovation (AWI), a research organization                                   Polytechnique Federale de Lausanne in Switzerland, has developed
supported by Australian farmers, has developed a line of easy-care                          photovoltaic fibers based on dye-sensitized solar cell technology that
merino wool products that are treated with nanotechnology-based                             can be woven into fabrics, such as canvas and nylon used for tents,
finishes that prevent the growth of bacteria on the material, protect                       to create fabric-form power supplies.193 There are also a number of
it from damage due to moths, and contribute a range of                                      projects taking place around the world to develop nanotechnology-
functionalities including quicker drying, breathability, and stain and                      based fabrics with improved strength and thermal and electrical
odor resistance. AWI developed the line of products to boost                                conductivity. Such nanotextiles could have profitable niche markets,
demand for wool, which fell from accounting for 5.2 percent of                              for example, in the military and healthcare industries. In fact, the U.S.
global fiber production in 1990 to 2.1 percent in 2004 despite a 30                         military market for nanotextiles is anticipated to reach USD520
percent drop in price.This decline in demand for wool may be                                million in 2008. Large investments from the military and industries
attributed to the increasing popularity of non-wool sportswear,                             such as healthcare speed up the rate at which production of
temperature-controlled environments, and synthetic fibers and                               nanotextiles achieves economies of scale and spreads into the
materials such as fleece that can provide the warmth and durability                         broader, less specialized markets.194
of wool but are also lightweight and soft.189
                                                                                            Nanotechnology Applications for Textiles Equipment
AWI’s nanotechnology finishing treatments include fluorocarbon and                          Nanotechnology may offer new solutions for sewing machine
nanoparticle finish that adds stain resistance properties to merino                         manufacturers who are continually working to reduce friction
wool, “Spectrum Merino,” which enables multi-tonal dying of                                 between moving machine parts while also eliminating the use of
garments with shorter lead time, and “Ultra-Light Merino,” which                            oil-based lubricants that can stain garments and increase
reduces the weight of garments by 30 percent through the addition                           maintenance costs. Most manufacturers currently use titanium nitride
of a water-soluble plastic filler fiber that is washed out during                           coated sewing needles produced with Physical Vapor Deposition
finishing. Leveraging the success of these products, AWI released two                       (PVD) technology that offer superior hardness and durability and

    “Nanotechnology Weaves Big Garment Profits.”
    “Innotech Launches More Nano Shirt Lines,” Bangkok Post, September 20 2006.
    Lux Research, “Top Nations in Nanotech See Their Lead Erode.”
    Miller and Senjen, “The Disruptive Social Impacts of Nanotechnology.”
    Eppie Lee, “Latest Functionalities for Merino Wool,” (Adsale, 2006).
    Burgi and Pradeep, “Societal Implications of Nanoscience and Nanotechnology in Developing Countries.”
    “Thailand to Produce Anti-Bacterial Surgical Gowns,” Thai Press Reports, May 17 2006.
    Rebecca Lipchitz, “Bolts of Fabric for Konarka,” The Sun, February 18 2005.
    Fianti, Kaounides, and Stingelin-Stutzmann, “Managing Disruptive Technology in the Textile Industry.”

                                                                                                                                                                          NANOTECHNOLOGY COMMODOTIES,
easier penetration of multiple fabric layers. Diamond Carboride                                 [4.5.1] Rubber, Plastic, and Composite
needles introduced by German needle manufacturer Schmetz in                                     Materials and Development
2000 offer similar properties, but these needles are black in color,
                                                                                                Rubber, plastic, and composite materials (hereafter also referred to
interfering with operators’ ability to see and thread the needles.
                                                                                                only as “materials”) are early links in the value-chain and, usually,
                                                                                                comprise the first stage where any competitive differentiation takes
Manufacturers are now researching and developing nanoplating
                                                                                                place. Consequently, they are often subject to commoditization by
technology, which can enable the same properties and better

                                                                                                product manufacturers while, simultaneously, being dependent on
performance than PVD and does not change the color of the

                                                                                                commodity inputs like minerals, metals, and natural rubber. For
needle. Nanotechnology-based lubricants, because of their high
                                                                                                materials producers, this value-chain position can increase the
surface area and superior heat dissipation, may also provide
                                                                                                magnitude with which they experience some of the global trends
alternatives to or enhancements for conventional lubricating oils.
                                                                                                found across commodity markets.197
Nanotechnology coatings for irons and ironing tables may reduce
friction and improve the performance of ironing and pressing, which
                                                                                                More so than other early value-chain goods, rubber, plastic, and
are the two most common garment finishing processes. Additionally,
                                                                                                composite materials are versatile and have applications in a broad
nanotechnology finishes for sewing thread may reduce the friction
                                                                                                range of industries and products. This versatility creates both
between the thread and fabric as well as the thread and needle eye
                                                                                                benefits and problems for materials producers. On the one hand,
during the sewing processes, improving the quality of garments.
                                                                                                they have many options for selling their materials, reducing their
                                                                                                exposure to risks associated with consumer-end demand and price
A large number of nanotechnology innovations for sewing machines
                                                                                                fluctuations. On the other hand, they face a significant amount of
and components may emerge from China, which currently produces
                                                                                                cross-industry competition from different materials from tangential
60 percent of the world’s sewing machine and a large number of
                                                                                                markets. Material producers can also face strong competition from
public and private nanotechnology research centers working on such
                                                                                                different grades of the same material, for instance, if a competitor is
potential applications.195 The beneficiaries of these nanotechnologies
                                                                                                able to reduce the cost of a high-quality material or improve the
may be textile and apparel producers in developing countries, who,
                                                                                                quality of a cheaper material. As a result of this high degree of
depending on the technologies’ costs and resulting productivity
                                                                                                competition, materials producers typically experience strong
increases, may be able to improve their output efficiencies and
                                                                                                downward pressure on prices, especially when new applications or
reduce their production costs.
                                                                                                markets emerge that can use a variety of materials to meet their

[4.5] Rubber, Plastic, and Composite
                                                                                                needs. 198

Materials Industries                                                                            Materials are also unique in that final product consumers typically
                                                                                                either cannot or do not care to differentiate between them. In
Rubber, plastic, and composite materials are some of the most                                   other words, materials are part of a much longer value chain than
ubiquitous primary goods and are used in virtually all sectors and                              other commodities, undergoing several stages of processing and
industries. Natural rubber production is highly concentrated, with                              value addition before reaching the final consumers who seldom can
Thailand, Indonesia,Vietnam, and Malaysia accounting for 80 percent                             or want to identify the type of plastic or composite from which the
of global exports. Natural rubber export earnings comprise a large                              product they have purchased is made. Product manufacturers,
portion of these countries’ total agricultural export revenues and are                          accordingly, are not limited by consumer sensitivities to the quality or
a critical source of income for millions of people employed in natural                          source of materials and have the flexibility to change their material
rubber production.196                                                                           inputs according to factors such as availability and cost.
                                                                                                Consequently, the imbalance in bargaining power between primary
Several developing countries also produce primary plastics (i.e.,                               producers and secondary producers can be much larger for
polyethylene, polypropylene, PVC) and basic plastic products (i.e.,                             materials than for other commodity groups.199
pipes, films, bottles) that contribute a increasingly significant portion
of their export earnings. As with apparel, plastics and plastic product                         Technology and Rubber, Plastic, and Composite Materials
production have been adopted by many developing countries such                                  Technology and innovation also play a very different role in materials
as South Africa, Sri Lanka, Indonesia, Cambodia, and India to                                   production. For one, materials producers are typically limited in their
introduce and initiate manufacturing, industrialization, and                                    ability to change their materials through innovation because the
technology transfer.                                                                            properties of the products made with these materials are mutually

      Prabir Jana, “Nanotechnology's New Potential in Apparel Machinery,” Just-Style.
      FAO, “Agricultural Commodities: Profiles and Relevant Wto Negotiating Issues,” (Rome: 2002).
      Christopher Scott Musso, “Beating the System : Accelerating Commercialization of New Materials” (Massachusetts Institute of Technology, 2005).

                                                                                                                                                                              NANOTECHNOLOGY COMMODOTIES,
dependent on the properties of the materials’ raw inputs, including                   Table 4-9 Potential Applications of Nanotechnology
feedstock chemicals and fillers, and the technological processes, such                for Rubber, Plastic, and Composite Materials
as production methods and secondary treatments, used by
products manufacturers. If a new material requires significant
changes to the processes and technologies used at higher levels of
the value chain, it may not be adopted by product manufacturers.                                  Cross-Cutting Issues                      Potential Implications for
                                                                                                                                             Cross-Cutting Issues
                                                                                               Nanotechnology Applications
Also, what innovation does occur in materials markets is often                                                                                   Commodities

focused on the development of new, less expensive materials that

                                                                                          Nano-additives and fillers for materials with      Value-Chain Movement
can be seamlessly substituted by product manufactures.200
                                                                                              improved vulcanization and physical,
                                                                                               thermal, and electrical properties.
Materials producers in developing countries have fewer opportunities
for technology transfer and investments than do other commodity                             Nanotechnology-based improvements                 Improved Production
producers. This is largely because most research and development for                          for sewing machines and other
materials technology in developed countries is undertaken by                                      production equipment.
governments or universities and not by private industry, which is
typically put off by its uncertain gains. Also, the estimated lab-to-                        Nano-enhanced materials with novel                New Industrial and
market time for materials is 20 years, which, when combined with the                       thermal, magnetic, or electircal properties        Commercial Markets
uncertainty of returns, is a large barrier to investment. 201                                 for use in electronics, environmental
                                                                                                 remediation, and other industries.
Opportunities in materials innovation are typically described in two                           Nano-based biodegradable plastics.
ways. The first is the aforementioned development of superior or
                                                                                             Nanoclays, aero-gels, and engineered               Reduced Demand
cheaper substitute materials. The second is the context of
                                                                                              nanocomposite substitute materials.
Christensen’s theory of disruptive technologies, described in Part I                         Reduction in demand due to improved
of this paper, in which a new material is initially adopted by a niche                         life of nano-enhanced materials.
market and, over time, is able to achieve sufficient gains in
performance and cost effectiveness to infiltrate mainstream markets.
(see Supplemental Paper ”Commodities, Development, and                                    Nanotechnology and Rubber
Technology” for more details).                                                            Regular rubber products are typically made with composites of

[4.5.2] Nanotechnology and Rubber,
                                                                                          natural rubber and filler materials that enable rubber vulcanization.
                                                                                          Rubber is also compounded with other materials for application in
Plastic, and Composite Materials Industries                                               products that require elasticity. Black rubber products are usually
                                                                                          made with carbon black filler, while light-colored rubber products are
                                                                                          made with silica powders, which can be relatively expensive and
Nanotechnology can provide rubber, plastic, and composite material
                                                                                          have a long curing time. 202
producers in developed and developing countries with low-risk
opportunities to move up the value-chain by enhancing commodity
                                                                                          Nanoparticular clays such as micro, talc, kaolin, and montmorillonite
plastics and rubber with nanotechnology additives or processes.
                                                                                          can provide a cheaper source of silica and, when used as natural
Additionally, nanotechnology can enable the development of new
                                                                                          rubber fillers, have been shown to produce mechanical properties
materials that can replace natural rubber and commodity plastics
                                                                                          comparable to conventional silica and carbon black.203 Carbon
that are currently used.
                                                                                          nanotubes have also generated a lot of interest as fillers for high-
                                                                                          performance rubber composites because of their enhanced
The following sections describe some specific examples of
                                                                                          mechanical, electrical, and thermal properties. Carbon nanotubes are
nanotechnology applications relevant to the rubber, plastic, and
                                                                                          also thought to be applicable for the recycling of rubber
composite materials sector and speculate as to the potential
                                                                                          products.204 Nanocrystalline structures called zeolites have also
opportunities and risks they may pose for developing countries
                                                                                          been shown to function well as fillers.205 Many zeolites occur
(see table 4-9).
                                                                                          naturally as minerals and are extensively mined in many parts of the

    Rathanawan Magaraphan, Woothichai Thajjaroen, and Ratree Lim-Ochakun, “Structure and Properties of Natural Rubber and Modified Montmorillonite Nanocomposites,” Rubber
    Chemistry and Technology 76, no. 2 (2003).
    Toru Noguchi et al., “Carbon Nanotubes as Fillers,” Nippon Gomu Kyokaishi 78, no. 6 (2005).
    Zhengcai Pu and James E. Mark, “Some Attempts to Force Poly(Dimethylsiloxane) Chains through Zeolite Cavities to Improve Elastomer Reinforcement,” Rubber Chemistry and
    Technology 72, no. 1 (1999).

                                                                                                                                                                           NANOTECHNOLOGY COMMODOTIES,
world. Others are synthetically made from silicon-aluminum                                applications like medical gloves.212 Additionally, CSIRO claims to have
solutions, coal fly ash, or other materials.                                              produced what a synthetic rubber from resilin, an elastic protein that
                                                                                          aids flight in insects, with 97 percent resilience that significantly
Zinc oxide is currently often added to rubber compounds, such as                          outperforms synthetic high-resilience rubber made with
those used in tires, to reduce vulcanization time and improve                             polybutadiene and elastin, which have 80 percent and 90 percent
rubber’s properties. Soluble zinc compounds can be toxic to aquatic                       resilience, respectively. 213
organisms and can be released into the environment during rubber

production and recycling, as well as through landfill leaching after                      NaturalNano, Inc., a U.S. company specializing in clay-based

disposal. Zinc oxide can also enter the environment during wear of                        nanocomposite materials, has developed a turn-key nanocomposite
tires. These environmental risks, as well as legislation, such as the                     additive called Pleximer that is said to enable stronger, lighter, and
EU’s ecolabeling requirements for tires, have created demand for                          cheaper polymer composite materials. Pleximer is made from
rubber productions with reduced zinc oxide content. Researchers                           halloysite, a naturally-occurring clay that is composed of nanotubular
from The Unviersiyt of Twente and TNO Industrial Technology, both                         particles, and can be used with standard equipment, eliminating the
in the Netherlands, have demonstrated that zinc-clay nanofillers can                      need for additional capital investments. NaturalNano has
be used to provide comparable curing and physical properties as                           demonstrated manufacturing-scale production of Pleximer and plans
conventional zinc oxide, while reducing zinc concentrations in rubber                     to offer it commercially in late 2007 for automotive, aerospace,
products by a factor of 10 to 20.206                                                      sporting equipment, and electronics applications.214

A number of companies are researching and developing                                      Although nano-fillers may reduce the overall quantity of fillers
nanotechnology-based additives for specific applications of rubber.                       needed to make natural rubber products, it is unlikely that in the
For example, U.S.-based NanoProducts Corporation has used                                 short-term use of these fillers will reduce the overall cost of natural
PureNano, a commercially available nanoscale silicon carbide additive,                    rubber products because nano-fillers continue to be relatively more
to produce tires with improved skid resistance and 50 percent less                        expensive than conventional fillers like carbon black. In the long-
abrasion compared with tires that have conventional or no                                 term, however, nanotechnology may have profound implications for
additives.207 Also, A U.S. start-up company called Inmat produces                         rubber exporting developing countries. For example, Malaysia, the
nanoclays that enable rubber to form better seals. Wilson tennis                          world’s second largest rubber exporter, has significantly increased its
balls have contained Inmat’s nanoclays since 2001, claiming that it                       investment in new rubber plantations in recent years hoping to
helps maintain the balls’ air pressure longer and improves their                          attract demand and profits from China’s rapidly growing car industry.
bounce rate.208                                                                           These rubber plantations can take up to ten years to grow before
                                                                                          they are ready to be sapped for rubber production. If the
Nanotechnology could also enable the use of natural rubber in new                         nanotechnology-based synthetic rubbers and plastic composites are
markets. For example, some groups are researching and developing                          able to be efficiently produced and are sufficiently affordable and
the addition of iron, nickel, and other magnetic nanoparticles to                         high-quality, they may be able to fill this and other emerging markets
natural rubber to change its electrical and magnetic properties,                          before Malaysia’s rubber industry can.215
opening the potential for it to be used in electronics, environmental
remediation, and other industries.209 Nanotechnology additives can                        Nanotechnology and Plastics and Polymer Composites
also create value-added rubber products. For instance, U.S.-based                         There are a number of factors driving the adoption of
NanoProducts Corporation has used PureNano, a commercially                                nanotechnology in developed countries’ polymer industries. First,
available nanoscale silicon carbide additive, to produce tires with                       globalization has been driving high-volume, low-tech polymer
improved skid resistance and 50 percent less abrasion compared                            manufacturing into developing regions, such as China, India, and Latin
with tires that have conventional or no additives.210                                     America, where there is an abundance of cheap labor and rapidly
                                                                                          growing demand markets for all products, in comparison with
Many groups are researching nanoclays and aero-gels as alternatives                       developed countries where demand markets are growing slowly.
to rubber.211 Nano-gels and nano-clays are being developed to                             Additionally, socio-political factors, specifically conflict between the
reduce that amount of rubber needed in car tires and extend their                         U.S. and the oil producing nations of the Middle East, are
life. These materials can also be used as a substitute for rubber in                      drivingdemand for new sources of chemical and energy inputs for

    Geert Heideman, Jacques W.M. Noordermeer, and Rabin N. Datta, “Zinc Loaded Clay as Activator in Sulfur Vulcanization: A New Route for Zinc Oxide Reduction in Rubber
    Compounds,” Rubber Chemistry and Technology 77, no. 2 (2004).
    “Safer Tires Using Nanotechnology,”,
    Jim Hurd, “While the Rest of Us Sleep through Material Change,” Nanotechnology Law and Business 1, no. 2 (2004).
    D.E. El-Nashar, S.H. Mansour, and E. Girgis, “Nickel and Iron Nano-Particles in Natural Rubber Composites,” Journal of Materials Science 41, no. 16 (2006).
    “Safer Tires Using Nanotechnology.”
    Thomas, “Nanotechnology Is Godzilla.”
    ETC Group, “Jazzing up Jasmine: Atomically Modified Rice in Asia?,”
    Phil Casey and Terry Turney, “Nanotechnology: Competitive-Edge Technology,” Chemistry in Australia April (2006).
    “Naturalnano Plan to Offer Nanocomposite Additive in Q4 2007,”,

    Thomas, “Nanotechnology Is Godzilla.”
                                                                                                                                                                              NANOTECHNOLOGY COMMODOTIES,
polymer manufacturing. These factors, combined with rising energy                              A number of nanotechnology applications can also be used to
costs and growing environmental concerns, are driving interest in                              add-value to existing commodity plastics. For example,
broader applicability of agricultural and other non-petroleum                                  nanoparticles functioning as nucleating agents can be added to
feedstocks for polymer manufacturing, as well as less energy                                   commodity plastics to create thinner, less expensive food containers,
consumptive, less wasteful, and more precise methods of                                        packaging materials with enhanced properties, or a range of other
manufacturing.216                                                                              polymer materials with improved heat resistance, strength, light
                                                                                               weight, and other properties. Nanocoatings can also be added to

Nanotechnology may have the most promise for biodegradable                                     commodity plastics to provide additional functionalities. For

polymers made with natural materials like proteins and starches.                               example, plastic bottles can be sprayed with nanocoatings to
Demand for such biodegradable nanocomposite plastics is likely to                              enhance the shelf life of beverages or to plastics for consumer
increase due to demand for greener products and due to the rising                              goods to improve sliding wear or reduce scuffing or glare. 218
price of oil. Currently, use of these polymers is limited by their
poorer performance in comparison with petroleum-based polymers.
Biodegradable nanocomposite polymers made with proteins and
clay-based nano-additives, however, have demonstrated significantly
better mechanical and thermal properties compared to traditional
biodegradable polymers. 217

      Margaret H. Baumann, "The Impact of Biotechnology and Nanotechnology on the Chemical and Plastics Industries," (Brookfield, CT: Society of Plastics Engineers, 2004).
      Casey and Turney, "Nanotechnology: Competitive-Edge Technology."

                                                                                                                                                      NANOTECHNOLOGY COMMODOTIES,
[5] Conclusion
Ninety-five of the 141 developing countries derive at least 50                  This paper is intended to introduce the complex and inter-related
percent of their export earnings from commodities. A total of two               issues relevant to the topics of the Commodities Workshop in an
billion people—a third of the global population—are employed in                 accessible and digestible manner.The discussions at the Commodities
commodity production, half on which are specifically employed in                Workshop will be grounded in an understanding of the range of
agricultural production. Although the use of natural resources and              nanotechnology applications relevant to commodities, including
production of commodities may contribute to economic                            convergence of nanotechnology and other technologies. Special
development and enhanced public welfare, many developing                        emphasis will be placed on applications likely to affect demand for

countries that are highly dependent on commodity exports face                   agricultural, mineral, and other non-fuel commodities.

several persistent challenges in international markets, including long-
term declining commodity prices, declining terms of trade, and                  Building on this understanding, the participants in the Commodities
short-term price volatility.                                                    Workshop will be asked to identify mechanisms and strategies to
                                                                                help developing countries anticipate and address changes in demand
Among many other factors, science and technology may have a role                for commodities. Discussions will assess the robustness and
to play in helping CDDCs address some of their challenges; the                  applicability of existing mechanisms and include the identification of
development of indigenous technological capacity has often been                 gaps and the possible need for new mechanisms. Based on these
considered a key determinant of economic growth and poverty                     discussions, participants will identify specific actions and strategies
reduction by enhancing the ability to produce higher value products             that could help developing countries anticipate and adjust to changes
and improve efficiency of commodity production. However, some                   that may result from nanotechnology applications affecting demand
people also point to historic experiences in which the introduction             for agricultural, mineral, and other non-fuel commodities.
of new technologies has had negative consequences for commodity
producers.                                                                      The workshop will be structured to address the following goals:
                                                                                • Examine nanotechnology applications that are effecting or
Most recently, people have identified nanotechnology as a promising                 may effect agricultural and mineral commodity markets;
area of technological advancement and innovation for commodity                  • Identify mechanisms to anticipate, measure, analyze, and
dependent developing countries and developing countries in general                  address the impact of nanotechnology applications on
because nanotechnology applications could be used to add value to                   commodity-dependent developing countries; and
existing export commodities and goods, and because developing                   • Catalyze actions that could proactively address potential
countries could potentially engage a number of new markets for                      opportunities and risks associated with shifting commodity
novel nano-enhanced materials and production processes. Others                      markets resulting from nanotechnology research and
have expressed concern that the very characteristics of                             development.
nanotechnology that make it potentially suitable for developing
countries also raise the possibility that it could displace commodities,        A Supplemental Paper on “Commodities, Development, and
labor, and industries and worsen the position of developing                     Technology” has been developed for people interested in more
countries.                                                                      detailed information regarding: the history, trends, and key issues in
                                                                                global commodity markets and how these issues affect commodity-
This paper describes a range of issues at the intersection of                   dependent developing countries; issues at the intersection of
commodities, development, and technology, and focuses in particular             commodity dependence, development, and technology; and
on the potential opportunities and risks of nanotechnology for                  mechanisms for developing countries for anticipating and adjusting to
CDDCs.The paper describes the current market conditions and                     fluctuating demand or new markets for commodities.
dependencies, and a range of nanotechnology applications relevant
to commodities produced by agricultural producers; mining, mineral,
and non-fuel extractive industries; fiber, textiles, and apparel
industries; and rubber, plastic, and composite materials industries.

                                                                                                                                                                        NANOTECHNOLOGY COMMODOTIES,
Participants in Meridian Institute’s Global Dialogue on                                       Socio-Economic Issues – Impacts on individuals, institutions, or
Nanotechnology and the Poor: Opportunities and Risks (GDNP)                                   society resulting from a policy or project (e.g., the introduction of a
have identified a range of cross-cutting issues that should be                                product, of a market intervention) such as price changes, welfare
considered when technologies are developed and deployed. While                                changes, and employment changes.
these issues may be generally applicable to technologies, the unique
characteristics of nanotechnology may result in different                                     Ethics – A branch of philosophy concerned with evaluating human
considerations regarding each cross-cutting issue, which could, in                            action, in particular what is considered right or wrong based on

turn, require new and different strategies for addressing these issues.                       reason. In the context of nanotechnology, ethical questions have

In addition to being applicable to multiple technologies, these cross-                        focused, for instance, on applications related to human enhancement
cutting issues may be applicable in multiple sectors such as water,                           and performance, privacy questions resulting from research into
commodities, energy, and health, which are important from an                                  nanotechnology monitoring systems, and questions about possible
international development perspective.These issues may include, but                           malevolent or military uses of nanotechnologies.
are not limited to:
                                                                                              Intellectual Property Rights and Access – Intellectual
•       Product research and development                                                      property rights (IPRs) are legal protections for intellectual property
•       Environment, human health, and safety risks                                           claimed by individuals or institutions. Copyrights, patents and
•       Socio-economic issues                                                                 trademarks are common mechanisms for protecting intellectual
•       Ethics                                                                                property. IPRs are intended to spur innovation and
•       Intellectual property rights and access                                               commercialization, but may limit the ability of individuals and
•       Public participation and engagement                                                   institutions to access technology.
•       Governance
•       Capacity building                                                                     Public Participation and Engagement – Processes that affect
•       International collaboration and cooperation                                           whether and how individuals participate in societal discourse,
•       Scalability, delivery, and sustainability                                             including public information, public education, and public discussion
                                                                                              and dialogue regarding nanotechnology.
Based on discussions at GDNP meetings and consultations with
numerous individuals, Meridian Institute staff developed a matrix                             Governance – Processes, conventions, and institutions that
listing these issues. Figure 1 (below) demonstrates how these issues                          determine how power is exercised to manage resources and societal
might apply to different sectors and classes of technologies within a                         interests, how important decisions are made and conflicts resolved,
sector. Participants in the GDNP have used the matrix to help guide                           how interactions among and between the key actors in society are
and focus discussions on issues associated with specific                                      organized and structured, and how resources, skills and capabilities
nanotechnology applications or classes of technologies.                                       are developed and mobilized for reaching desired outcomes.This
                                                                                              includes risk governance (i.e., comprehensive assessment and
Meridian Institute developed the following definitions to clarify the                         management strategies to cope with risk) and governance for
distinguishing characteristics of these cross-cutting issues, while                           innovation (i.e., programs targeting nanotechnology R&D for public
recognizing that there is some overlap and important connectivity                             objectives). Using this definition, governments, governmental and
between them.                                                                                 intergovernmental institutions, as well as public and private
                                                                                              corporations, non-governmental organizations, and informal
Product Research and Development – Systematic activities to                                   associations are examples of institutions involved in governance.
increase knowledge and apply it to the (further) development of
new applications. In the context of the workshop, participants                                Capacity Building – Assistance provided to develop a certain skill
focused on assessing the maturity of specific nanotechnology                                  or competence, including policy and legal assistance, institutional
applications and the steps that would be necessary for further                                development, human resources development, and strengthening of
development.                                                                                  managerial systems.

Environmental, Human Health, and Safety Risks –                                               International Collaboration and Cooperation –
Potential harm that may arise from a material, combined with                                  Collaborative partnerships between individuals, and institutions
probability of an event (e.g., exposure). In the context of this                              from developed and developing countries at a local, national,
document, the focus is on potential risks to the environment,                                 regional level on any aspect of nanotechnology, including North-
human health or worker safety.                                                                South (i.e., developed and developing) and South-South (i.e.,
                                                                                              developing – developing)

      More information about the GDNP, including background papers and materials from meetings, is available at: http//

                                                                                                                                                                                            NANOTECHNOLOGY COMMODOTIES,
Scalability, Delivery, and Sustainability – The ability to scale-                                  Figure 1 provides an example of the matrix, and illustrates how it
up production and distribution of products so they reach large                                     might be applied to a range of sectors, technology categories, and
numbers of people (i.e., success not limited to pilot projects) and                                specific technologies. Figure 2 (below) illustrates how the cross-
the sustainability of products, which relate to numerous factors                                   cutting issues matrix can be used to examine particular
including, for example, costs, ease of use, and durability.                                        nanotechnology applications.

                                            Figure 1. Matrix of Example Technology Categories and Cross-Cutting Issues

                                                        Water                                                          Agriculture                      Minerals Textiles Energy   Health
                    Carbon Nanotube Nanofibrous   Ceramics and Nanocatalysts Magnetic        ...        Monitoring   Packaging and   Functional   ...
                     Technologies     Filters      Adsorbents                Nanoparticles               Devices        Storage        Foods

 Product research
 & development
 human health,
 & safety ricks


 property rights
 & access
 & engagement


 & cooperation
 delivery, &

                                                                                                                                                                                              NANOTECHNOLOGY COMMODOTIES,
The following figure illustrates how the matrix above was used to                                   Figure 2 focuses on a nanoparticle filter developed by the Indian
evaluate one of the technologies discussed during Meridian Institute’s                              Institute of Technology, Madras and Eureka Forbes.This filter
International Workshop on Nanotechnology, Water, and                                                contains metal nanoparticles designed to catalyze chemical
Development on 10-12 October 2006 in Chennai, India.220 Meridian                                    reactions to remove pesticides and other organic contaminants,
Institute convened the Water Workshop to address the potential                                      such as DDT, endosulfan, malathion, and chlorpyrifos from water.
opportunities and risks of nanotechnology water purification                                        The filter consists of a porous ceramic or polymer membrane
technologies for developing countries. During the workshop,                                         embedded with copper, gold, and/or silver nanoparticles.The

participants discussed several examples of nanotechnology                                           technology has been licensed to Eureka Forbes in India, which is

applications for water treatment and discussed the above-mentioned                                  taking the filters into production.
cross-cutting issues related to these technologies.

Figure 2: Example of Application of Cross-Cutting Nanotechnology Issues Matrix

                        Cross-Cutting Issues                                           Nanoparticle Filter (Indian Institute of Technology and Eureka Forbes)

                Product research & development                           No specific comments on this issue for this technology.
           Environmental, human health, & safety risks                   1. Laboratory studies have determined that the filter is effective for removing the contaminants
                                                                             of concern, in particular pesticides.
                                                                         2. Laboratory studies by certified third party labs demonstrated that no nanoparticles were
                                                                             found in the filtered water at the limits of detection of existing testing systems and current
                                                                         3. Participants asked how the spent cartridges will be disposed.221
                       Socio-economic issues                             Participants asked whether this technology should be applied up-stream and not just at the
                                                                         point of use of drinking water, for example, to prevent people bathing in pesticide contaminated
                                 Ethics                                  Some participants asked whether, given the potential benefits that would accrue to human
                                                                         health due to the successful removal of pesticides from contaminated groundwater, applications
                                                                         such as this be should pursued or whether regulatory frameworks should be set up first.
                                                                         The technology was patented by IIT and licensed to Eureka Forbes.
               Intellectual property rights & access                     Questions were raised about whether the communities and households that will receive these
                Public participation & engagement                        filters were provided an opportunity to learn about the devices and to choose whether they
                                                                         wish to make use of them above and beyond whatever “social marketing” was undertaken.
                                                                         No specific comments on this issue for this technology; see cross-cutting comments in section
                             Governance                                  above and comments directly above regarding EHS risks and Ethics.
                                                                         No specific comments on this issue for this technology; see cross-cutting comments in section
                          Capacity building                              above.
                                                                         See Next Steps section for details related to collaboration and cooperation.
            International collaboration & cooperation                    • A factory is currently under development that will produce 40,000 filters per month.
                Scalability, delivery, & sustainability                  • These filters have undergone accelerated testing and have been determined to produce
                                                                             enough drinking water for a household for one year, approximately 5,000 liters.
                                                                         • The company producing these filters is developing a video to explain use of the technology.
                                                                         • The filter is gravity driven and does not require power.
                                                                         • The filters will cost USD$2.90 and the nanomaterial costs USD$0.67.
                                                                         • The filter cartridge needs to be replaced once a year.The company producing the filters will
                                                                             replace the filter cartridge as part of its contract with users.
                                                                         • Participants discussed this technology as an example of the potential of public-private
                                                                             partnerships to develop and deploy such technologies. In conjunction, they discussed the
                                                                             need for an NGO partner to distribute and facilitate the use of the technology and the need
                                                                             for social marketing.

      Information obtained by Meridian Institute after the workshop indicates that: 1) the filter cartridges will be in the field for a year and replaced, as part of the sales agreement, by
      Eureka Forbes’ local service units; 2) plastics and useful metals from the used cartridges will be recycled; 3) the remaining balance of material will be incinerated; material remaining

      from incineration will be landfilled or used as filler (e.g., in brick manufacturing).

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