Santa Clara University

The Flow of Technology

What Business and Government Can Learn from One Case

 

It has been used to build stronger, lighter golf clubs; to develop safer surgical instruments; and to create scratch-resistant and self-cleaning automobile paints and corrosion-resistant sealants.

It is nanotechnology, the research and development of materials and products that have a size of between 1 and 100 nanometers. A nanometer is a millionth of a millimeter, or roughly the width of a human hair that has been divided 100,000 times.

Assistant Professor Jennifer Woolley

The growth and development of a technology with such a broad range of applications in many different industries is a long and complex story. Understanding that story better could help entrepreneurs make smarter business decisions and aid policy makers in creating a climate that would spur the growth of the technology. Jennifer Woolley, assistant professor of management at the Leavey School of Business, has taken a comprehensive look at the development of nanotechnology and reached some conclusions.

“A few researchers have looked at the development of industries in this way,” she says, “but there hasn’t been much research that looks at the emergence of a technology across multiple industries. I’m really trying to peel away the layers.”

Five years ago, Woolley began collecting data for a working paper currently titled “Technology Emergence Through Entrepreneurship Across Multiple Industries.” Going back to the first stirrings of nanotechnology in 1959, she compiled a master list of firms founded to commercialize it.

This enabled her to trace patterns of entrepreneurial activity and determine some of the factors involved in founding a new nanotechnology business. A key conclusion is that the progress of technology development is something like a river, and there needs to be a critical flow of development upstream before the technology can move downstream in an ever-widening channel.

“Emerging technology needs a certain degree of infrastructure in place,” she says. “It needs core industries to support entrepreneurial activity or there won’t be downstream commercial applications.”

In a different context, the computer chip industry would be an example of a core, upstream industry that makes possible such downstream applications as cell phones, computers, automobiles and video games.

Woolley finds that as a nascent technology emerges, entrepreneurship based on it will occur in upstream industries first, and that the more such upstream ventures there are, the more downstream industries will follow. In essence, the founding of new companies in upstream industries acts as a preliminary signal to entrepreneurs considering downstream applications.

Her study of how nanotechnology has developed could be applied to other technological efforts, such as stem cell research or efforts to develop “green” energy technology. Based on how nanotechnology has developed, good public policy would be to focus on getting the infrastructure in place, and to encourage both academic and commercial research to accomplish that.

Another point that Woolley makes is that nanotechnology has evolved in different ways in different countries — Japan, the United States, and the United Kingdom have all taken different approaches — and there will likely be differences in the ways future new technologies develop in different places. As an example of cultural differences, she compares two nanotechnology conferences she attended in the U.S. and Japan. In the U.S., the conference had a strong American representation and was also heavily populated by people and exhibitors from around the world. In Japan, the United States was hardly a factor.

“There were 50,000 people at the conference and a thousand exhibitors, but only three or four U.S. companies were represented,” she says. “In smaller countries, people in the technology business want to work with other countries. In the U.S., they try to stay within the U.S.”

 
 
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