Global Value Chains

The globalization of knowledge, technology, and capital is rapidly changing the way companies compete in the market. Competition in the field of nanotechnology is not among companies, but among global supply chains and business networks. High-tech companies—especially those in the nanotechnology sector—increasingly develop competitive advantages through intellectual property, open innovation approaches and global exploitation of technology.

The “globalization of innovation” is driving the global value chains in the field of nanotechnology. A value chain can be understood as a series of activities that leads [Page 291]to the creation of a product. Products pass through all activities of the chain in order, and at each activity the product gains some value. Also the gross margins generally increase with every step of the value chain. The chain of activities gives the products more added value than the sum of added values of all activities. The general structure of nanotechnology value chains reaches from nanotools via nanomaterials and nanointermediates to nanoenabled products.

In the case of nanotechnology, and due to the fact that newer technologies are far more influenced by globalization, the value chains are extending to global value chains. Inter-company processes and specific design rules that used to be an advantage for big companies are losing importance and are being replaced by common international standards and methods. The size of a company is not a key factor anymore—what matters more is the company's access to resources, wherever they may be located.

Nanotechnology is not a single technology, it is actually a cluster of different technologies that have one thing in common: they are influenced or controlled by structures of matter at the nanoscale. It is unlikely that nanomaterials will dramatically alter the nature of a product or lead to a new product if an entire value chain from nanomaterial to end product has to be developed, since the time to market would probably be too long or the return on investment too low. Success is most likely in areas where suitably tailored nanomaterials can be integrated seamlessly into an existing value chain, while simultaneously preserving the benefits of the nanoengi-neered property.

Problems in the nanotechnology sector arise mainly in companies that still cling to conventional thinking patterns. The “sell what you have” and the “go-it-alone” strategies are only partly effective in markets that are based on innovation-based global value chains. The focus of most nanotechnology companies has primarily been on materials phenomena and incremental improvements to existing markets. The results are low-value chain nanoproducts that are not contributing attractive gross margins, thereby making sales volume the vital ingredient for profitable operations. However, realizing high sales volume from low-value chain offerings is arduous, dependent in most instances on the marketing efforts of other companies who may have different priorities. A company with offerings higher on the nanotech value chain has a higher gross margin per unit and is less dependent on sales volume of other companies. Ergo, nanotech companies need to productize their way up the nanotechnology value chain to gain higher gross margin.

The challenge for the coming years will be the setup of value chains with a high margin nanotechnology share. This requires an accelerated transition of the advances in nanoscience into commercial applications. To achieve this, a proper nanomanufacturing infrastructure will be needed. It is most likely that such an infrastructure will only be established when it is catalyzed at a global level. The speed of establishment of such a nanomanufacturing infrastructure will determine the impact of nanotechnology on our future life.

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