The future of Alberta's technology industry lies in the power of the atom, but only cash will unlock it
By Omar Mouallem | September 1, 2011
In March, I drove to Calgary for the second Alberta Nanotech Showcase, an event organized by the Provincial organization nanoAlberta to build industry relationships and introduce inventions to potential investors. I almost didn’t make it, as the roads were slick and, even before I left the house, AM radio was sternly warning me against driving on the QE II in those conditions.
I crawled through the first 30 kilometres of traffic and then white-knuckled it to the conference, while taking in the scenery – cars in ditches.
I arrived late and at the tail end of a presentation by Margaret L. Blohm of General Electric Global Research. It was difficult to keep up with Blohm’s talk. I was left stranded with her use of the term “superhydrophobicity,” and felt somewhat mocked when she said, “It’s so simple, it’s elegant.”
But then, to illustrate this and the technology she was leading at GE, she played a video of a water droplet falling in slow motion onto a surface coated with carbon nanotubes, cylindrical structures of carbon molecules engineered to have desirable properties. In this case, the desired property was to make that droplet bounce like a tot on a trampoline.
Why is ricocheting water important? Because ice is water, and if we can coat the QE II with these “adhesive-rejection” nanotubes, black ice would be history and winter driving would be significantly safer. But scientists don’t yet have that ability – and, the day after the showcase ended, icy roads resulted in 161 crashes around Calgary.
It’s possibilities like this that persuaded Canada to set up the National Institute for Nanotechnology (NINT), a 200,000-square-foot, $60-million facility on the northwest corner of the University of Alberta campus.
Nanotechnology isn’t new. Nature has used it in many things. Cabbage leaves are covered in tiny hairs that cause water to bead and roll off, removing dirt in the process. Humans too have unknowingly used this technology with stained glass cathedral windows by mixing gold chloride and molten glass, which absorbs light and results in red-tinted gold spheres. What is relatively new, however, is the understanding of matter at a nano scale. The 14th-century artisans who stained that glass didn’t know the extent of their alchemy. Scientists today do.
As a field, nanotechnology began in the 1980s when IBM found a way to scan images at a nanometre (a billionth of a metre) and, because it could see atoms, it could manipulate atoms. If you’re reading this with scratch-resistant glasses on, your lenses are coated with silicate nanoparticles. Your glasses are one of over 1,000 every-day products enhanced by nanotechnology.
When we talk about seeing atoms, we’re actually talking about feeling them with microscopic tips and mapping their textures. So, it’s more like Braille than photography. But now that we can see what we see, anything seems possible, from designing iPods that recharge by body movement to immortality, as controversial science philosopher Ray Kurzweil would have you believe.
“It’s a whole new world once you get down to the atomic level,” said nanoAlberta Director Dan Djukich in an interview at the offices of Alberta Innovates-Technology Futures, the provincial corporation. Technology Futures is one of Alberta’s four public research and innovation corporations, and it has the role of helping move local discoveries from the three other arms to the invisible hand. “An academic will find something new and novel, and that’s great, but how do you make it relevant to society? That’s where the challenge is,” he said.
“The possibilities are breathtaking,” said Jacques Magnan, CEO of Alberta Innovates- Health Solutions, which focuses on support for quality health research and innovation. “We know the physical body pretty well, but the brain is still a big black box of connections that are not that well understood. … All of this begs for nanotechnology solutions, nanodevices, nanobots, nanodelivery systems, nanoparticles – this is the final frontier of medical sciences.”
From 1997 to 2005, global investment in nanotechnology research and development grew by 10 times to $4.1 billion. The last inventory of nanotechnology consumer products was taken in March, and it showed a growth from 212 to 1,317 products in the last five years. It’s estimated that in four years, nano-enhanced products – from pills to window cleaner – will amount to $1 trillion of the global economy. By 2020, Canada wants to have 10 per cent of that (Alberta, two per cent) and be a leader in this market behind only the U.S., Japan, Germany and China.
The first step, taken 10 years ago now, was to set up the NINT, a four-way partnership between the National Research Council, Ottawa, the Province and the U of A. It was long overdue because, although the science is young, today’s technologies tend to have startling growth spurts, like teenage girls – only they don’t stop growing.
For Canada to catch up it would be, and continues to be, difficult. From 2000 to 2003, 79 per cent of nanotechnology patents were registered in the U.S., and Canada didn’t even rank among the top 10 countries with the most patents.
The first five years of the NINT was spent collecting technology infrastructure and brainpower, while readying itself for the opening of its nanotechnology building in Edmonton, one of the world’s largest. (It was the largest of its kind in Canada until the Waterloo Institute for Nanotechnology opened this year.)
The first floor has rooms for manufactured microscopes that appear to be inside a refrigerator, which makes the one understandable button, “bake,” perplexing. Other, larger microscopes are being developed at the NINT, and look like steampunk machines with big, austere pipes and gears, and the occasional tin foil wrapping. The foundations for the microscopy lab go deep into the ground and are isolated from the foundation of the main building to prevent neighbouring vibrations from disturbing sensitive tests.
The NINT’s primary focus is on academic research and service testing, though the fourth floor incubates a handful of start-ups with affordable lab and office space.
The most obvious corporate presence is Hitachi, which develops microscopes for nanotechnology applications in a connected (but differently elevated) wing. It’s also the reason for all the Japanese signage.
Already, this partnership has made Edmonton a world leader in microscopy. This summer, Hitachi announced it was ready to sell some of its products developed at the NINT and, last year, Robert Wolkow, one of the institute’s two principal scientists, made the Guinness World Records for inventing an electronic microscope tip the size of an atom. It’s an insurmountable record, since the microscope tip can’t get any sharper than an atom, but when I sat with Wolkow at the Nanotech Showcase, he couldn’t be bothered to remember the exact title of the record. (It’s the world’s smallest man-made object, by the way.) He was just so excited by the science, that he’d rather show me what it does than tell me what it won.
“It sounds outrageously self-indulgent, but it should be in the Museum of Modern Art,” he said while opening his laptop screen.
Wolkow didn’t speak as headily as other scientists I’ve met. He lovingly emphasized the “t” in “atom” every time he said it. When he recalled the first time he “saw” an atom, he was rapt in the memory, and he became just as eager to show me one too, with a video he made using his invention. “You’re one of fewer than a hundred people on Earth who have ever seen this.”
What I saw was a bumpy charcoal canvas. “Each little white bump is an a-tom,” he explained. One by one, each atom flickered and disappeared like a city-wide blackout, until there was a single white speck on grey. “So that atom turns out to sit there very stably. You can look at that atom for days and days and days, and it will just stay there.”
His enthusiasm enveloped me and I was fixated by it. It was modernly beautiful, yes, but insignificant without the atoms around it to form molecules, to form the universe. What was missing with the atom is missing with the NINT – a surrounding cluster to make Alberta’s nanotechnology industry whole.
One of the most vocal advocates for building a local technology cluster is Nancy Fares, president and CEO of Micralyne, an Edmonton manufacturer of nano and micro semiconductors. Fares says the company is worth $50 million. Close to 30 years ago, Micralyne began in a research lab at the U of A and transitioned into a global corporation. Fares, who previously worked in the U.S. for Texas Instruments, believes that if Alberta wants to be a world leader in this science, it needs more companies like hers, not the 10-person start-ups that make up most of the scene. And she believes companies like hers need to have $300 million valuations. When she refers to the local industry, she doesn’t call it an industry. She calls it a community, as in: “I think the local community is not well-aligned on moving forward.”
At the Nanotechnology showcase, Fares woke up the room with a talk about building a technology cluster. She was provocative in expressing her doubts that the community could ever achieve the province’s nanotechnology goal of $20 billion by 2020 in economic impact (meaning everything from business to employment to homes owned by employees). Fares’s most generous estimate of today’s impact is $800 million, so even with 25-per-cent aggressive growth, year after year, “we’re not going to get there.” But, she told her colleagues and counterparts, “there’s nothing better than a goal to force us to think about growth.”
In an interview months later she explained, “My call to action was for for-profit companies like mine. I want to establish an alliance in the industry, to agree to the goal. But what the goal is is irrelevant, what is relevant is it’s significantly upwards.”
Another upward challenge is making Alberta a national leader in the technology. According to a 2007 Statistics Canada study, Alberta was economically fourth in the country for nanotechnology activity, hosting only 14 per cent of the companies and making only 12 per cent of revenues.
For Alberta to succeed, Fares said, “We need to be very specific about how we execute it and who’s going to do what. Who are the industries, what products are we going to serve to these industries, and who’s going to build what?” So, why did the National Research Council choose this province for the NINT if Ontario and Quebec already had industries twice our size and if, as Fares and Magnan said, we are still coordinating our resources?
Djukich of nanoAlberta explained that, as a platform technology, nanotechnology is very useful to industries such as oil and gas, agriculture, biofuels, health and forestry – material sciences that Alberta has in abundance. A group of companies, schools and corporations collaborating on bringing new technology to the various sectors could transform the national economy. But in order to develop this cluster, Alberta has to diversify its economy beyond energy. “In Canada we have really focused on real estate, and in Alberta, oil and gas. We have a sophisticated equity market here, but not in technology,” said Djukich.
To get there, his team is, among other things, designing programs to attract capital. They’re also developing lesson plans for schools to teach to children, thus increasing the pool of future employers and innovators.
“It’s not something you do over night. It really takes time to establish.”
There have been some local inventions in health sciences using nanotechnology. In Fort Saskatchewan, Smith & Nephew is manufacturing bandages using silver nano particles to help woulds heal faster. The product, available in over 30 countries, was developed at the U of A and made Forbes‘ 2004 top 10 nanotechnology products list. SmileSonica Inc., another university partnership, is working on making root canals painless. And D-Tex, out of the University of Calgary, developed a kit to test for bacteria in food and water in five minutes.
We can obviously live with the bandages of yesteryear and, though nobody likes a root canal, the ones we have will do just fine. But D-Tex’s invention, which is about half the size of a milk crate, could save millions of lives. Why then has it still not attracted a $50 million venture capital investment to take it from prototype to manufacturing?
Because it’s Canadian, suggested venture capitalist Ann Hanham at the Nanotech Showcase.
As D-Tex founders were presenting their product to a small room of people, Hanham made herself known during question period. She introduced herself as the managing director of VC firm Burrill & Company, and a Canadian expat living in the Silicon Valley. She didn’t really have a question.
She said that if companies like D-Tex continue relying on seed financing and government funding, they’ll stay in the breadbox, and suggested they be more aggressive with attracting VCs like herself who can invest what it deserves. “Unlike the government, I’m in it for the money,” she told us.
Hanham didn’t exactly offer to write the company a cheque, but she made a wager that instantly turned the next day and a half into Dragons’ Den deluxe: “I’m prepared to move back here to set up a Canadian fund to invest $100 to $200 million in 10 to 12 companies.”
When I followed up with her in July she said the fund, which Burrill hopes to close at the end of 2011, will be more like $200 to $300 million for 15 to 20 companies. Two companies in particular caught her eye at the showcase. She wouldn’t say which companies, but did say if the fund is a go, she’d like to implant two offices, one in Montreal to focus on healthcare and one in Calgary, to focus on biofuels technology, which she described as “our destiny” – a destiny that will be transformed with an atomic force by breakthroughs learned at an atomic scale.
The Burrill Canada Fund proposal started because of negative trends Hanham observed in her native country. She said the lack of capital funding is not unique to Alberta, but is common across Canada. “There’s fabulous research, but it’s a tough place to raise early capital. It has this house-of-cards effect, because if you don’t have a lot of experienced entrepreneurs you don’t have the talent pool to turn the next company and the next company, and the next company after that. We call [this talent] serial entrepreneurs,” she said.
Right now, the NINT has a huge strength in frontier research, microscopy mostly, that will allow for more frontier research. But until more corporate infrastructure sprouts around it, it’ll mostly remain a place of knowledge over innovation. Recognizing this, a new strategy at the institute is to put more than half of its resources in mission-focus research, meaning stuff you can apply to products.
Wolkow doesn’t see anything wrong with this strategy, but it can’t be at the expense of cutting edge research, the kind of advances that build foundations for the future. “We [researchers at the NINT] lead the world in our understanding of some key areas and processes. And now, just luckily, we’re poised to capitalize on that,” he said. “But I do worry about the generation behind me who might not be ready to exploit their science for application. They just may not have had the years it takes to come up with fundamental ideas, and then refine them to find where they might be applied.”
But strategists like Magnan worry about the opposite. He said that Canada isn’t faring well when it comes to innovation, and although “knowledge for the sake of knowledge” is important, “the responsibility of being funded by the public is to show the value of the research and put knowledge back in the public domain.”