Global Dialogue on Nanotechnology and the Poor: Opportunities and Risks NANOTECHNOLOGY, & COMMODITIES development 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  INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2  COMMODITIES AND DEVELOPMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4 [2.1] COMMODITIES, COMMODITY DEPENDENCE, AND POVERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4 & [2.2] TECHNOLOGICAL ADVANCEMENT AND COMMODITY-DEPENDENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 DEVELOPMENT  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  NANOTECHNOLOGY, COMMODITIES AND DEVELOPMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 [4.1] OPPORTUNITIES AND RISKS OF NANOTECHNOLOGY FOR COMMODITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15 EXPORTING DEVELOPING COUNTRIES [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  CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38 APPENDIX 1: MATRIX OF TECHNOLOGIES AND CROSS-CUTTING ISSUES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39 1 1 NANOTECHNOLOGY COMMODOTIES,  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 DEVELOPMENT 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. 1 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). 2 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. 3 Detailed information regarding the GDNP is available at: http://www.merid.org/nano. 4 Thomas F. O'Herron, ed., Terms of Trade: The Language of International Trade Policy, Law and Diplomacy (Washington, DC: International Advisory Services Group, 1999). 5 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). 6 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). 7 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). 8 Michael W. Holman et al., “The Nanotech Report, 4th Edition,” (New York: Lux Research, 2006). 9 Kshitij Aditeya Singh, “Intellectual Property in the Nanotechnology Economy,” (Stirling, Scotland: Institute of Nanotechnology, 2007). 10 Vicki Colvin, “Responsible Nanotechnology: Looking Beyond the Good News,” EurekAlert! InContext, (November 2002). 2 2 NANOTECHNOLOGY COMMODOTIES, Many developing countries are investing significant sums in  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  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  Catalyze actions that could proactively address potential DEVELOPMENT 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 11 Donald C. Maclurcan, “Nanotechnology and Developing Countries, Part 2: What Realities?,” AZoNano - Online Journal of Nanotechnology (2005). 12 Meridian Institute’s paper “Commodities, Development, and Technology” is available online at: http://www.merid.org/nano/commoditiesworkshop. 13 Meridian Institute’s Nanotechnology and Commodities Database is available online at http://www.merid.org/nano/commoditiesworkshop. 3 3 NANOTECHNOLOGY COMMODOTIES,  Commodities and Development 14 [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, DEVELOPMENT 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 14 This section provides a summary of the more detailed information provided in Meridian Institute’s paper “Commodities, Development, and Technology.” 15 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). 16 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). 17 South Centre, “Problems and Policy Challenges Faced by Commodity-Dependent Developing Countries (CDDCs).” 18 UNCTAD, “Trends in World Commodity Trade, Enhancing Africa's Competitiveness, and Generating Commodity Gains”. 19 South Centre, “Problems and Policy Challenges Faced by Commodity-Dependent Developing Countries (CDDCs).” 20 Ibid. 21 Asfaha, “Remunerating Commodity Producers in Developing Countries: Regulating Concentration in Commodity Markets.” 22 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. (http://stats.oecd.org/glossary/detail.asp?ID=940) 23 Joe Guinan, “The Commodity Problem,” German Marshall Fund, http://www.gmfus.org/trade/commentary/article.cfm?id=6. 4 4 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, DEVELOPMENT 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; Technology.” • 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 24 Common Fund for Commodities, “Overview of the Situation of Commodities in Developing Countries”. 25 Nanae Yabuki and Takamasa Akiyama, “Is Commodity-Dependence Pessimism Justified? Critical Factors and Government Policies That Characterize Dynamic Commodity,” (Washington, DC: World Bank, 1996). 26 Charles Cooper, “Technology, Manufactured Exports and Competitiveness” (paper presented at the Global Forum on Industry, New Delhi, India, October 16-18 1995). 27 Calestous Juma and Lee Yee-Cheong, “Innovation: Applying Knowledge in Development,” (UN Task Force on Science,Technology, and Innovation, 2005). 5 5 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 DEVELOPMENT 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 28 Avinash Persaud, “The Knowledge Gap,” Foreign Affairs 80, no. 2 (2001). 29 Commission on Intellectual Property Rights, “Integrating Intellectual Property Rights and Development Policy,” (London: 2002). 30 Juma and Yee-Cheong, “Innovation: Applying Knowledge in Development.” 31 Friends of the Earth International, “Trade and Specialisation,” http://www.foei.org/trade/activistguide/special.htm. 32 Clayton Christensen,Thomas Craig, and Stuart Hart, “The Great Disruption,” Foreign Affairs 80, no. 2 (2001). 33 Michael Mainelli, “Beyond the Technology Frontier,” European Business Forum, no. 16 (2004). 6 6 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 DEVELOPMENT 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. 34 Nicholas G. Carr, “Top-Down Disruption,” Strategy and Business, no. 39 (2004). 35 Christensen, Craig, and Hart, “The Great Disruption.” 36 ETC Group, “Down on the Farm:The Impact of Nano-Scale Technologies on Food and Agriculture,” (Ottawa: 2004). 37 Oscar H. Farfan, “Understanding and Escaping Commodity-Dependency: A Global Value Chain Perspective,” (Washington, DC:The World Bank Group, 2005). 38 More information about the GDNP, including background papers and materials from meetings, is available at: http//:www.merid.org/nano. 39 More information about the Water Workshop is available at: http://www.merid.org/nano/waterworkshop. 7 NANOTECHNOLOGY COMMODOTIES,  Nanotechnology and Development & Perceived by many as the next “transformative technology,” like Proponents and critics alike generally agree that the true DEVELOPMENT 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. 40 Holman et al., “The Nanotech Report, 4th Edition.” 41 Singh, “Intellectual Property in the Nanotechnology Economy.” 42 Colvin, “Responsible Nanotechnology: Looking Beyond the Good News.” 43 Maclurcan, “Nanotechnology and Developing Countries, Part 2: What Realities?.” 8 8 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; Uruguay;Vietnam 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 Publications 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 44 Ibid. 45 “Collaboration in Nanotechnology with Brazil, SA Mooted,” Nanotechnology and Development News, http://www.merid.org/NDN/display.php?ArticleID=965. 46 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). 9 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 DEVELOPMENT 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 47 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). 48 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). 49 Maclurcan, “Nanotechnology and Developing Countries, Part 2: What Realities?.” 50 Invernizzi and Foladori, “Nanotechnology and the Developing World: Will Nanotechnology Overcome Poverty or Widen Disparitites?.” 51 Lux Research, “Top Nations in Nanotech See Their Lead Erode,” http://www.rfglobalnet.com/content/news/article.asp?DocID=%7B08E5A6C8-6A4D-4BE2-ACFE- F74DDF6578C3%7D&Bucket=Current+Headlines&VNETCOOKIE=NO. 10 52 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 DEVELOPMENT 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 53 Jim Thomas, “Nanowatch: Who Will Prove to Be the Monsanto of Nanotech?,” The Econologist June (2004). 54 “Nanotechnology Is Godzilla,” Corporate Watch Newsletter, no. 19 (2004), http://archive.corporatewatch.org/newsletter/issue19/part3.htm. 55 Singh, “Intellectual Property in the Nanotechnology Economy.” 56 “World's First Nano-Material Based Water Filter,” Nanotechnology and Development News, http://www.merid.org/NDN/display.php?ArticleID=968. 57 Georgia Miller and Rye Senjen, “The Disruptive Social Impacts of Nanotechnology,” (Friends of the Earth, 2006). 58 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. 59 Kenneth A. Gould, “The Treadmill of Production:The Case of Nanotechnology” (paper presented at the Development, Governance, and Nature Conference, Ithaca, NY, 11 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 DEVELOPMENT 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 60 “Nanotechnology Is Godzilla.” 61 Mohamed H.A. Hassan, “Small Things and Big Changes in the Developing World,” Science 309, no. 5731 (2005). 62 Miller and Senjen, “The Disruptive Social Impacts of Nanotechnology.” 63 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). 64 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. 12 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 DEVELOPMENT 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 65 See, for instance, International Risk Governance Council (IRGC). “White Paper on Nanotechnology Risk Governance.” Geneva, 2006. 66 See, for instance, DuPont and Environmental Defense’s collaborative Nano Risk Framework, http://nanoriskframework.com/ 67 “Safety Experts Ill-Equipped to Handle Nanotechnology in Workplace,” ScienceDaily, http://www.sciencedaily.com/releases/2006/12/061228131311.htm. 68 Hassan, “Small Things and Big Changes in the Developing World.” 13 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 DEVELOPMENT 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 69 Birgit R. Burgi and T. Pradeep, “Societal Implications of Nanoscience and Nanotechnology in Developing Countries,” Current Science 90, no. 5 (2006). 70 George Coupe, “Shape of Things to Come,” Manufacturing Engineer October/November (2004). 71 Ibid. 14 NANOTECHNOLOGY COMMODOTIES,  Nanotechnology, Commodities and Development & DEVELOPMENT [4.1] Opportunities and Risks of The potential risks include but are not limited to: Nanotechnology for Commodity  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;  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  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. nanotechnologies. 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  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  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 methods; employment in producing and processing commodities for export  New markets for nanotechnology-based materials and represent their only sources of cash income.73 products that use export commodities as feedstocks;  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 72 Meridian Institute’s Nanotechnology and Commodities Database is available online at: http://www.merid.org/nano/commoditiesworkshop. 73 Common Fund for Commodities, “Overview of the Situation of Commodities in Developing Countries”. 15 15 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 DEVELOPMENT 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 74 FAO, “The State of Agricultural Commodity Markets,” (Rome, Italy:The Food and Agriculture Organization of the United Nations (FAO), 2004). 75 FAO, “Subsidies, Food Imports and Tariffs Key Issues for Developing Countries,” (Rome, Italy), http://www.fao.org/english/newsroom/focus/2003/wto2.htm. 76 FAO, “The State of Agricultural Commodity Markets.” 77 UNCTAD, “Trends in World Commodity Trade, Enhancing Africa's Competitiveness, and Generating Commodity Gains”. 16 16 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 Dependence 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 78 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. 79 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. 80 Copra is the dried meat, or kernel, of the coconut. 17 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 81 FAO, “Recent Developments in Agricultural Commodity Markets” (paper presented at the Meeting of the Committee on Commodity Problems, Rome, Italy, April 11-13 2005). 82 David G.Victor and C. Ford Runge, “Farming the Genetic Frontier,” Foreign Affairs 81, no. 3 (2002). 83 US Department of Agriculture, “21st Century Agriculture: A Critical Role for Science and Technology,” (2003). 84 Ibid. 85 ETC Group, “Down on the Farm:The Impact of Nano-Scale Technologies on Food and Agriculture.” 86 T.V. Padma, “India, Brazil and South Africa Discuss Joint Research,” SciDev.Net, http://www.scidev.net/News/index.cfm?fuseaction=readNews&itemid=1693&language=1. 87 “Uk to Train 20 Iranians in Nanotechnology,” Nanotechnology and Development News, http://www.merid.org/NDN/display.php?ArticleID=68. 88 “Brazil Govt to Open New Agricultural Nanotech Laboratory,” Nanotechnology and Development News, http://www.merid.org/NDN/display.php?ArticleID=307. 18 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 89 US Department of Agriculture, “Nanoscale Science and Engineering for Agriculture and Food Systems,” ed. Corinne Johnson Rutzke (2003). 90 Ibid. 91 Gregory J. Millman, “Virtual Vineyard,” Outlook, no. 3 (2004). 92 ETC Group, “Down on the Farm:The Impact of Nano-Scale Technologies on Food and Agriculture.” 19 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 DEVELOPMENT 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 93 US Department of Agriculture, “Nanoscale Science and Engineering for Agriculture and Food Systems.” 94 Ibid. 95 Tiju Joseph and Mark Morrison, “Nanotechnology in Food and Agriculture,” (Nanoforum, 2006). 96 ETC Group, “Down on the Farm:The Impact of Nano-Scale Technologies on Food and Agriculture.” 97 Michael Kanellos, “Future Nanotech Tools Made from Clay,” CNET News, http://news.zdnet.com/2100-9596_22-5914034.html?tag=zdfd.newsfeed. 98 Erin B. Court, Abdallah S. Daar, and Deepa L. Persad, “Tiny Technologies for the Global Good,” Nanotoday May (2005). 99 Jane Wu, “'Waste Membrane' Could Help Crops Conserve Water,” SciDev.Net, http://www.scidev.net/content/news/eng/waste-membrane-could-help-crops-conserve-water.cfm. 100 Joseph and Morrison, “Nanotechnology in Food and Agriculture.” 101 Alex Reston, “Welcome to the World of Nano Foods,” Guardian Unlimited, http://observer.guardian.co.uk/foodmonthly/futureoffood/story/0,,1971266,00.html. 102 “Spotlight On...Developing Countries,” Biotechnology and Biological Sciences Research Council, http://www.bbrsc.ac.uk/science/spotlight/developing_countries.html. 20 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 DEVELOPMENT 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 103 “The 20 Billion Dollar Question,” Food Navigator, http://www.foodnavigator.com/news/ng.asp?id=44474-the-billion-dollar. 104 Reston, “Welcome to the World of Nano Foods.” 105 ETC Group, “Down on the Farm:The Impact of Nano-Scale Technologies on Food and Agriculture.” 106 Reston, “Welcome to the World of Nano Foods.” 107 “Aquanova Creates Nanotech Antioxidant System,” Nanotechnology and Development News, http://www.merid.org/NDN/display.php?ArticleID=107. 108 “Milk Protein Nanotubes Offer Encapsulation Potential,” Nanotechnology and Development News, http://www.merid.org/NDN/display.php?ArticleID=686. 109 “Nanoscale Science and Engineering for Agriculture and Food Systems,” ed. Corinne Johnson Rutzke (U.S. Department of Agriculture, 2003). 21 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 DEVELOPMENT 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. 110 “Tiny Reactor Boost Biodiesel Production,” Nanotechnology and Development News, http://www.merid.org/NDN/display.php?ArticleID=319. 111 “Scientists Improve Plastics Made from Soy,” Nanotechnology and Development News, http://www.merid.org/NDN/display.php?ArticleID=708. 112 “Illinois and Pakistani Researchers Team for Nanotechnology Cancer Cures,” Nanotechnology and Development News, http://www.merid.org/NDN/display.php?ArticleID=848. 113 South Centre, “Policy Challenges for Developing Countries in Large Scale Mining,” (Geneva: 2005). 114 Ibid. 115 Michael Ross, “Extractive Sectors and the Poor,” (Washington, DC: Oxfam America, 2001). 22 NANOTECHNOLOGY COMMODOTIES, Table 4-3: Summary Table of Countries Most Dependent on Mineral Commodities116 Human Cross-Cutting Issues Mineral Cross- Development Cross- Country Commodities Dependence Index Rank Cutting Cutting &DEVELOPMENT 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 Mineral g Human Development Country 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 4 116 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. 117 Ibid. 23 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 DEVELOPMENT 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.120 118 Ross, “Extractive Sectors and the Poor.” 119 Ibid. 120 South Centre, “Policy Challenges for Developing Countries in Large Scale Mining.” 121 Ibid. 122 Ibid. 123 Ibid. 24 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 DEVELOPMENT 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 nanomaterials. 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 Commodities 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 124 Richard Holliday, “Evolving Industrial Uses of Gold,” in Rand Refinery Limited: Annual Report (Germiston, South Africa: Rand Refinery, 2006). 125 Ibid. 25 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 DEVELOPMENT 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.139 126 Ibid. 127 Christopher W. Corti, “Going Green,” in Rand Refinery Limited: Annual Report 2006 (Germinston, South Africa: Rand Refinery, 2006). 128 Christopher W. Corti, Richard J. Holliday, and David T.Thompson, “Developing New Industrial Applications for Gold: Gold Nanotechnology,” Gold Bulletin 35, no. 4 (2002). 129 “Gold Nanoparticle Catalyst Reduces Diesel Emissions,” Nanowerk, http://www.nanowerk.com/news/newsid=1793.php. 130 Holliday, “Evolving Industrial Uses of Gold.” 131 “Nanotechnology Air Purification System,” Nanowerk, http://www.nanowerk.com/news/newsid=1710.php. 132 “Gold, Copper Nanoparticles Take Center Stage in the Search for Hydrogen Production Catalysts “ Science Daily, http://www.sciencedaily.com/releases/2007/03/070328111145.htm 133 “Nanotech of the North,” Nanotechnology and Development News, http://www.merid.org/NDN/display.php?ArticleID=220. 134 “Chevron Unit with Stanford in Nanotech,” Nanotechnology and Development News, http://www.merid.org/NDN/display.php?ArticleID=529. 135 Jack Uldrich, “A Cautionary Tale: Nanotechnology and the Changing Face of the Electric Utility Industry,” Management Quarterly 47, no. 2 (2006). 136 Holliday, “Evolving Industrial Uses of Gold.” 26 137 Corti, Holliday, and Thompson, “Developing New Industrial Applications for Gold: Gold Nanotechnology.” 138 The Freedonia Group, “Nanomaterials - Industry Study,” (2003). 139 “The New Nano-Cosmetics,” Nightly Business Report, http://www.pbs.org/nbr/site/onair/transcripts/060921b/. 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 DEVELOPMENT 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.150 140 “Rice Researchers Use Nanotechnology to Purify Drinking Water,” http://www.merid.org/NDN/display.php?ArticleID=732. 141 Meridian Institute, “Nanotechnology, Water, and Development Workshop Summary,” (2007). 142 “Using Nanotechnology to Develop a Better Solar Cell,” Nanotechnology and Development News, http://www.merid.org/NDN/display.php?ArticleID=960. 143 “Titanium Dioxide Nanotube Arrays for Generating Hydrogen by Splitting Water Using Solar Light,” Nanotechnology and Development News, http://www.merid.org/NDN/display.php?ArticleID=47. 144 Michael B. Cortie, “The Weird World of Nanoscale Gold,” Gold Bulletin 37, no. 1 (2004). 145 Thomas, “Nanotechnology Is Godzilla.” 146 “Nanomedicine, Device, and Diagnostic Report,” (NanoBiotech News, 2006) 147 “Combining Gold Nanoparticles with Viruses for a Combined Thermal/Gene Cancer Therapy,” Nanotechnology and Development News, http://www.merid.org/NDN/display.php?ArticleID=353. 148 “Gold Nano V. Alzheimer's,” Nanotechnology and Development News, http://www.merid.org/NDN/display.php?ArticleID=135. 149 Holliday, “Evolving Industrial Uses of Gold.” 150 “Nanotechnology Coating Is Battling Hospital Superbugs,” Nanotechnology and Development News, http://www.merid.org/NDN/display.php?ArticleID=598. . 27 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 DEVELOPMENT 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, 151 “Container Uses Nanoparticles to Extend Shelf Life,” Nanotechnology and Development News, http://www.merid.org/NDN/display.php?ArticleID=364. 152 “Use of Silver Nanoparticles Rapidly Expanding in the Consumer and Medical Markets, According to Bourne Research,” Nanotechnology and Development News, http://www.merid.org/NDN/display.php?ArticleID=308. 153 Shouan Dong et al., “Photochemical Synthesis of Gold by Sunlight Radiation Using Seeding Approach,” Gold Bulletin 37, no. 3 (2004). 154 Uldrich, “A Cautionary Tale: Nanotechnology and the Changing Face of the Electric Utility Industry.” 155 “Plants Yield Gold,” World Gold Council, http://www.gold.org/discover/news/article/2607/. 156 Mariekie Gericke and Anthony Pinches, “Microbial Production of Gold Nanoparticles “ Gold Bulletin 39, no. 1 (2006). 157 Asfaha, “Remunerating Commodity Producers in Developing Countries: Regulating Concentration in Commodity Markets.” 28 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, DEVELOPMENT 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). 171 158 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). 159 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). 160 Jim Thomas, “Atomising Third World Economies,” The Ecologist October (2004). 161 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. 162 Dependence is expressed as the percentage share in total merchandise exports. “Cotton lint” is cotton separated from the seed, using a process called “ginning.” 163 Thomas, “Atomising Third World Economies.” 164 “Silk in World Markets,” Textiles & Clothing, http://www.intracen.org/textilesandclothing/silk_in_world_markets.htm. 165 Hildegunn Kyvik Nordas, “The Global Textile and Clothing Industry Post the Agreement of Textiles and Clothing,” (Geneva: World Trade Organization, 2004). 166 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. 167 “EU's Leapfrog May Rip India's Textile Fabric,” The Economic Times, India, August 4 2006. 168 “Acelon Keeps up with Market through Continuous Innovation,” China Post, July 29 2006. 169 N. Fianti, L. Kaounides, and N. Stingelin-Stutzmann, “Managing Disruptive Technology in the Textile Industry,” Materials Technology 21, no. 1 (2006). 170 Nordas, “The Global Textile and Clothing Industry Post the Agreement of 29 Textiles and Clothing.” 171 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 172 Ibid. 173 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). 174 Nordas, "The Global Textile and Clothing Industry Post the Agreement of Textiles and Clothing." 175 Knappe, "Trade in Textiles and Clothing (T&C) and Dynamic Products: A Special Look at LDCs". 30 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 DEVELOPMENT 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 176 Fianti, Kaounides, and Stingelin-Stutzmann, “Managing Disruptive Technology in the Textile Industry.” 177 Cientifica, “Nanotechnologies in the Textile Market,” (London: Cientifica, 2004). 178 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). 179 Fianti, Kaounides, and Stingelin-Stutzmann, “Managing Disruptive Technology in the Textile Industry.” 180 “Textile Industry Generates Highest Export Proceedings for Taiwan,” China Post, November 4 2002. 31 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, DEVELOPMENT 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 Commodities 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 181 Katrina C. Arabe, “Textiles: Saving the Apparel Industry,” Industrial Market Trends, September 5 2002. 182 Fianti, Kaounides, and Stingelin-Stutzmann, “Managing Disruptive Technology in the Textile Industry.” 183 Alessandro Zago, “Nanomaterials: Disrupting the Thermal Management and Textiles Industries,” Nanotechnology Law and Business 2, no. 1 (2005). 184 “Nanotechnology Weaves Big Garment Profits,” Financial Times, December 31 2003. 185 Fianti, Kaounides, and Stingelin-Stutzmann, “Managing Disruptive Technology in the Textile Industry.” 32 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 DEVELOPMENT 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 186 “Nanotechnology Weaves Big Garment Profits.” 187 “Innotech Launches More Nano Shirt Lines,” Bangkok Post, September 20 2006. 188 Lux Research, “Top Nations in Nanotech See Their Lead Erode.” 189 Miller and Senjen, “The Disruptive Social Impacts of Nanotechnology.” 190 Eppie Lee, “Latest Functionalities for Merino Wool,” (Adsale, 2006). 191 Burgi and Pradeep, “Societal Implications of Nanoscience and Nanotechnology in Developing Countries.” 192 “Thailand to Produce Anti-Bacterial Surgical Gowns,” Thai Press Reports, May 17 2006. 193 Rebecca Lipchitz, “Bolts of Fabric for Konarka,” The Sun, February 18 2005. 194 Fianti, Kaounides, and Stingelin-Stutzmann, “Managing Disruptive Technology in the Textile Industry.” 33 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 DEVELOPMENT 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 195 Prabir Jana, “Nanotechnology's New Potential in Apparel Machinery,” Just-Style. 196 FAO, “Agricultural Commodities: Profiles and Relevant Wto Negotiating Issues,” (Rome: 2002). 197 Christopher Scott Musso, “Beating the System : Accelerating Commercialization of New Materials” (Massachusetts Institute of Technology, 2005). 198 Ibid. 199 Ibid. 34 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 DEVELOPMENT 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 200 Ibid. 201 Ibid. 202 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). 203 Ibid. 204 Toru Noguchi et al., “Carbon Nanotubes as Fillers,” Nippon Gomu Kyokaishi 78, no. 6 (2005). 205 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). 35 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 DEVELOPMENT 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 206 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). 207 “Safer Tires Using Nanotechnology,” AZoNano.com, http://www.azonano.com/details.asp?ArticleID=193. 208 Jim Hurd, “While the Rest of Us Sleep through Material Change,” Nanotechnology Law and Business 1, no. 2 (2004). 209 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). 210 “Safer Tires Using Nanotechnology.” 211 Thomas, “Nanotechnology Is Godzilla.” 212 ETC Group, “Jazzing up Jasmine: Atomically Modified Rice in Asia?,” http://online.sfsu.edu/~rone/Nanotech/atomicrice.htm. 213 Phil Casey and Terry Turney, “Nanotechnology: Competitive-Edge Technology,” Chemistry in Australia April (2006). 214 “Naturalnano Plan to Offer Nanocomposite Additive in Q4 2007,” AZoNano.com, http://www.azonano.com/news.asp?newsID=3558. 36 215 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 DEVELOPMENT 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. 217 216 Margaret H. Baumann, "The Impact of Biotechnology and Nanotechnology on the Chemical and Plastics Industries," (Brookfield, CT: Society of Plastics Engineers, 2004). 217 Casey and Turney, "Nanotechnology: Competitive-Edge Technology." 218 Ibid. 37 NANOTECHNOLOGY COMMODOTIES,  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. DEVELOPMENT 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. 38 NANOTECHNOLOGY COMMODOTIES, APPENDIX 1: MATRIX OF TECHNOLOGIES AND CROSS-CUTTING ISSUES 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 DEVELOPMENT 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) 219 More information about the GDNP, including background papers and materials from meetings, is available at: http//:www.merid.org/nano. 39 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 &DEVELOPMENT 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 Environment, human health, & safety ricks Socio-economic issues Ethics Intellectual property rights & access Public participation & engagement Governance Capacity building International collaboration & cooperation Scalability, delivery, & sustainability 40 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 DEVELOPMENT 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 standards. 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 water. 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. 220 See: http://www.merid.org/nano/waterworkshop/. 221 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 41 from incineration will be landfilled or used as filler (e.g., in brick manufacturing).
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