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The convergence of biotechnology, information technologies, and nanotechnologies is happening in
Silicon Valley in ways that are transforming existing firms and spawning new firms from our existing
industry base. The concentration of companies in Silicon Valley is significant, spans many cities,
and includes firms in each major convergence field. In fact, the broader Bay Area offers one of the
largest concentrations of convergence companies and research assets in the world. There are well over
one hundred convergence companies distributed throughout the region.
Major advances in biotechnology are converging with information technologies to create new opportunities in the emerging fields of bioinformatics, biomaterials, and biochips. The commercialization of nanotechnology holds the potential to revolutionize chip and computer manufacturing while creating a new foundation for further developments in information and biotechnology.
Changes driving opportunities
- The mapping of the human genome was an historical milestone that required new tools at intersection of bio- and information technology. Using sophisticated computational methods has opened the door to entirely new medical products and services. Years of significant investments by the National Institutes of Health are now beginning to pay off in commercial applications. The market for biotechnology products was $16 billion in 1996 and is estimated to double to $32 billion by 2006.
- At the same time, nanotechnologies are being recognized as a foundation for both advances in bio and info technologies. Nanotechnology refers to the manipulation of matter at the atomic and molecular scale (where the objects are 0.1 to 100 nanometers in size, hence the term). Nanotechnology is a multi-disciplinary field that borrows from physics, engineering, molecular biology, and chemistry. It has been pursued very actively in university, government and commercial laboratories worldwide for more than 15 years and yielded a set of building block materials, tools, and techniques that are being applied in a variety of industries including bioscience (as tools for drug discovery and delivery), information technologies (as a next generation to microprocessors and self-assembly) and materials (as new carbon fibers and high performance composites).
Where the opportunities are
The convergence of bioscience and information technology will extend well beyond pharmaceuticals and medical devices to include biochips, bioinformatics, and biomaterials. Both established and newer Valley companies are players in these emerging fields.
- Biochips: The continued miniaturization of integrated circuits requires working at the molecular level. Palo Alto-based Genencor is teaming with Dow Chemicals to build biochips, including biological optical switches using a new technique: silicon biotechnology. Affymetrix bought an old National Semiconductor manufacturing facility in Santa Clara to create biochips that place hybrid bits of DNA on computer chips instead of transistors. Affymetrix has emerged as a clear leader, with 60% of a growing $400 million biochip market. It serves as a leading example of a “bridge” company by connecting Valley strengths in info- and bio-technology.
- Bioinformatics: The key tool for the commercial application of genomics is information technologies that speed up the process of discovery and product development. As venture capitalist Sam Colella has commented in Fast Company, “recent breakthroughs in genomics have unleashed an abundance of raw data. Those findings need to be crunched in order for drug companies to develop better leads for new types of medicine. We have moved beyond just identifying genes. The next phase can be personalized medicine.” Applied Biosystems based in Foster City provided the computational tools for the private sector Celera Genomics team that help map the human genome. Nanogen is using bioinformatics to bridge the gap between research and clinical settings by enabling on-the-spot analysis of genetic samples. Sun Microsystems and IBM have teamed up with 40 life-science organizations to form the I3C to help accelerate the development of genomics and protein research. Oracle has launched a $185 million collaboration in bioscience projects with Hitachi and Myriad Genetics.
- Biomaterials: Biotechnology holds the promise of creating new materials for applications in manufacturing and agriculture, including new fibers such as Dupont’s 3GT fiber based on bacteria, new polymers such as magneto-optics used for optical computers, and smart materials such as time-released seeds developed by Silicon Valley-based Landec.
Examples of Convergence
Established and emerging companies in Silicon Valley are also making significant commitments to innovation in nanotechnology. Nanotechnology should be viewed as an “enabling technology” or a set of tools that can transform existing industries in Silicon Valley (such as semiconductors and computing) as well as help spawn new industries (such as biochips and bioinformatics).
- Computer companies with large research labs such as IBM and HP have developed substantial nano programs. IBM researchers have already successfully created carbon nanotube transistors that substantially outperform advanced silicon devices.
- Hewlett-Packard researchers have patented a potential breakthrough in their quest to develop computer circuits made merely of individual molecules. HP hopes to refine the process to create microchips as powerful as the next generation of silicon-based chips – but 1,000 times smaller and much less expensive. That advance and others in the burgeoning field of nanotechnology could make computers small enough to be worn, embedded in materials, or perhaps even injected.
- Intel recently announced a breakthrough in the design of chips that will enable the development of cheaper and faster microprocessors based on nano-level technology with more than 1 billion transistors compared to 125 million in Intel’s latest Pentium 4 chip, the P4 extreme edition.
- Agilent develops microarrays and other tools used for research in genomics and has pioneered breakthrough technologies in microfluidics to support research in the study of proteins (proteomics).
- Applied Materials is building “nanochips,” tiny computer chips to power mobile devices. Applied expects that high-speed wireless networks will drive demand for such chips.
- Nanogram in Fremont is an example of a leading company developing the core process technology enabling the manufacture of nanoscale optical, electronic and energy storage applications.
- Nanosys in Palo Alto is a small venture funded developer of nanotechnology-enabled systems that include applications of nano dots, rods and wires.
- Gilead Sciences is a Foster City bio company that develops therapeutics for life threatening diseases including cancer. It is selling a drug delivery mechanism using lipid spheres of 100 nanometers in diameter that encase an anti-cancer drug. While primarily a bio company, Gilead Sciences is an example of the emerging use of nanotechnology in the bioscience.
Small Times magazine has identified Silicon Valley as having the highest concentration of research and industry capabilities in the nanotechnology field. This includes not only research strength at UC Berkeley, Stanford, NASA Ames and Livermore National Labs, but at least 50 nanotechnology companies. Small Times noted that “Silicon Valley has had four decades to develop a technology-focused infrastructure, academic agenda, talent pool, and culture of innovation.”
Market Potential
The market potential of these converging technologies is substantial. Based on an analysis of existing estimates, McKinsey has shown that the cumulative market for converging info-, bio-, and nano-technologies could top $1 trillion in about a decade (see figure below). Why will this be the case? As Stan Williams of HP Laboratories explains, the convergence of these three technologies will drive a revolution in how people live and work:
We are actually watching the birth of three great new technologies, all simultaneously. Bio is the utilization of chemistry in life to not only understand living organisms but to manufacture all types of things that we have in our environment. Info is the harvesting, storage, and transmission of information in all sorts of ways that we want about our environment. And nano is the control of matter at the scale where basic material properties are determined.
All three of these areas are completing the transition from applied science into technology right now. And during the next 20 years, all three of these are going to see exponential types of increases, or we’ll see factors of 10,000 improvements in the capabilities of each of these.
Any one of these areas by itself would be classified as an industrial revolution. But having all three of them progressing simultaneously, sometimes competing with each other, but very often interacting and reinforcing each other, is going to be completely beyond anything we’ve ever experienced.
Huge Market Potential for
Converging Technologies
The broader region already has by far the largest concentration of public bioscience firms of any region in the United States – almost double the number of firms in the next two regions combined (New England and San Diego). With Silicon Valley’s existing strength in information technologies and the broader Bay Area strength in bioscience, including NIH-funded bio research at UC San Francisco, Stanford, UC Berkeley, and the national labs, the region would seem well-positioned to participate in this next wave of innovation. According to the Bay Area Bioscience Center:
- Assuming 60,000 direct private and public sector jobs and a multiplier of 2 to reflect employees
of the area’s financial institutions, venture capitalists, public relations, publishing, construction,
legal, accounting and management firms which provide services to the life sciences industry and research
institutions, results in an estimated 120,000 employees in Northern California alone.
The following map provides a regional “snapshot” of the dynamic, ever-changing companies and centers of research whose work is at the converging edge of bio, info and nano technologies.
- Convergence is already a reality in Silicon Valley. The concentration of companies in Silicon Valley is significant, spans many cities, and includes firms in each major convergence field.
- Convergence is a Bay Area phenomenon. The broader region offers one of the largest concentrations of convergence companies and research assets in the world. There are well over one hundred convergence companies distributed throughout the region.
Convergence infrastructure
Silicon Valley provides a special habitat for innovation and entrepreneurship. It consists of dense, flexible networks and relationships among entrepreneurs, venture capitalists, university researchers, lawyers, consultants, highly skilled employees, and others who know how to translate ideas into new commercial products and services fast enough to stay on the edge of the innovation curve. These complex networks continually connect people to good ideas and test the changing market, always searching for the next innovation.
New interdisciplinary research facilities developed through Stanford, UCSF, UC Berkeley, and NASA-Ames are being established to augment this existing research capacity.
- Stanford Bio-X Center connects Schools of Medicine, Sciences and Engineering around the use of computational tools in molecular, cellular, tissue and organ research. The catalyst is the new Clark Center, which will act as glue. Designed by Norman Foster, this new building will serve as the hub for 275 interdisciplinary researchers.
- UCSF QB3 is a new $100 million science and technology center in Mission Bay. It is based
on a 2-to-1 state-private sector match that connected over $760 million in 3 research labs that transferred
to the Mission Bay in 2003. QB3’s focus is on personal genomics mapping, computational imaging, protein
engineering and bio-nanotechnology.
More information: http://www.qb3.org/ - UC Berkeley Center for Information Technology Research in the Interest of Society (CITRIS) is a
science and technology center that focuses on the application of IT in several fields, including
bio-engineering and bio-informatics. A number of Silicon Valley firms, including HP, SUN, Agilent, Intel
and IBM, have joined CITRIS as industry partners and donated over $170 million to the Center.
More information: http://www.citris.berkeley.edu/ - NASA Ames Research Center is planning to expand significantly on its foundation of nanotechnology research activities–including carbon nanotubes (important to nanoelectronics devices, computers, and sensors), computational nanotechnology (key to modeling and simulation), and biosensors (including collaboration with the National Cancer Institute to develop an nanoelectronic-based biopsy sampler).
Many of the leading companies in the “cross-over” fields are already working in this region.