The number of active nanotechnology companies in Finland increased from 61 in 2004 to 202 in 2008. Nanotechnology has positively impacted key Finnish industries and the sector size exceeded 300 million euros in 2008, with over 60% from exports. However, companies face challenges in funding shortages, limited manpower, and intellectual property issues as most have deep research pipelines. While the sector continues growing, the global economic downturn is expected to adversely affect it.

1. FinNano
Nanotechnology in Finnish Industry
2008 – Survey Results
Juho-Kusti Kajander
Pekka Koponen
Spinverse Consulting

2. Summary
FinNano
The number of active companies in the Finnish nanotechnology sector has
increased to 202 from 61 in 2004
In addition to over 200 technology companies, the sector growth has created new business
opportunities for numerous service companies
65 companies had commercial products or processes in 2008 (27 in 2004)
Nanotechnology has had a significant positive impact on economic
development in the key clusters of the Finnish industry
Nanotechnology sector size in Finland exceeded 300 Meur in 2008, up by 25 % from 2006.
Exports accounted for over 60% of total company revenues in the sector.
The industry employs approximately 2 900 professionals (300-400 in 2004)
Private investments in nanotechnology exceeded 65 Meur as industrial investments reached
56,6 Meur and Venture Capital 9,5 Meur
While the sector growth continues, companies are facing main challenges in
shortage of funding and manpower, and intellectual property rights(IPR)
issues
Most industries have a deep pipeline of R&D, to be realised in 1.5-3.5 years
Especially SMEs seeking internationalisation find availability of risk finance and qualified
manpower, and IPR problems as main challenges to company development

3. Agenda
FinNano
Methodology and Data
Industry Analysis
Predictions

4. Nanotechnology in Finnish Industry 2008 -
technology survey received a large number of
FinNano responses
2008 survey received 123 responses
Response rate was 40,3 %
Number of responses increased by 32,2 % from 2006
Number of Companies/Respondents
350
300
Number of Companies
250
200
150
100
50
0
2004 2006 2008
Companies Identified Responses

5. Survey results were added to Tekes data, and
information from the previous survey
FinNano
113 Companies reported nanotechnology activities in
the 2008 survey
26 Companies are involved in the FinNano program
but did not respond to the survey
63 Companies were found to be active during the
2006 survey, and are still active now
202 TOTAL

6. Agenda
FinNano
Methodology and data
Industry Analysis
Predictions

7. Nanotechnology is used in all sectors of
Finnish industry
FinNano
Renewal of industry clusters and production
Energy Metal Forest Health,
ICT Construction
Environment Mech.eng. Cluster well-being
Nanotechnology materials and processes
Nanstructured and functional materials, coatings and devices
Production and scalability
Instruments and Tools
Infrastructure, measurement methods, equipment
Safety and Standardisation
Safe and sustainable development
Benefits to society and environment

8. The number of technology companies active in
nanotechnology has increased from 61 to 202
FinNano The increase has taken place especially in the commercial and
product development stage. In 2008, 65 companies had commercial
products in the market.
The development has been seen across company size
Number of Finnish Companies Active in Nanotechnology, 2004-2008
2008
2006
2004
0 50 100 150 200 250
Number of Companies
Vision Research Product Development Commercial Product

9. All key clusters in the Finnish economy have
nanotechnology companies
FinNano
Number of Nanotechnology Companies by Industry 2004-2008
60
Chemicals and Materials
50 Health and Well-Being
Number of Companies
ICT
40
Tools and Instruments
30
Forest Cluster
20 Energy and Environment
Metals and Mechanical
10 Engineering
Construction
0
2004 2006 2008

10. The needs of the growing nanotechnology sector
have created new business opportunities for
FinNano service companies
The survey identified 31 service companies that are active in nanotechnology
by helping the Finnish nanotechnology sector in e.g. business development,
fundraising and product development
Nanotechnology sector needs have created both new companies with a strong
focus on nanotechnology driven services and new business for existing service
companies
Finnish Service Companies Active in Nanotechnology
16
14
12
Number o Companies
10
8
6
4
2
0
Technical Management Private Equity Legal Services Other
Consulting Consulting

11. In 2008, industrial investments in nanotechnology
exceeded 56 MEUR and focused on Chemicals and
Materials, Forest and ICT
FinNano
2008 Industry Investments in Nanotechnology in Finland (1000eur)
2800 700
3700 14900
6800
8300
9700
9600
Chemicals and Materials Forest Cluster ICT
Health and Well-being Energy and Environment Tools and Instruments
Metals and Mech. Eng. Construction

12. Private investments in nanotechnology
exceeded public funding in 2008
FinNano Overall investments in nanotechnology in Finland reached 104 Meur
in 2008; public funding 38 Meur, industrial investments 56 Meur and
venture capital 9,5 Meur
During 2006-2008, overall investments grew by 33,6 %
Investments in Nanotechnology in Finland, 2006-2008*
120
100
80
Venture Capital
Industrial Investments
Meur
60
Public Funding
40
20
0
2006 2008
*Source for public funding figures: Tekes

13. Economic measurement for emerging technologies
is a complex and debated task due to their multi-
FinNano industry impact
Global nanotechnology figures are typically estimated with the
following methodology. First, the percentage of products
incorporating nanotechnology is estimated. Second, this figure is
multiplied by total revenues.
Nanotechnology in Finnish Industry 2008 used also data from
primary sources. Directly reported data was combined with an
estimate of company nanotechnology intensity and product
pipeline analysis.

14. Finnish nanotechnology sector size exceeded 300
Meur in 2008, up by 25 % from 2006
FinNano Nanotechnology Sector in Finland 2006-2008
350
Market figures in 2008
300 •Sector size: 317 Meur
250
•Share of exports: 60,4%
•Employment: ca. 2900
200 professionals
•On average, the
150
companies expect the
market to grow by 67,4 %
100 by 2010
50
0
2006 2008
Chemicals and Mat er ials Ener gy and Envir onment
Healt h and Well- being ICT
For est Pr oduct s Tools and Inst r ument s
Const r uct ion Met als- and Mechanical Engineer ing

15. Finland is well-aligned with key global
trends
FinNano
Global Trend 2006-2008 Finland
√
•Nanotech funding increases,
lead by Corporate Spending,
√
though VC Dips
•Materials sector sees the most
revenue, followed by ICT; life
sciences, and energy lag

16. Funding, qualified manpower and IPR problems
are key challenges for the sector’s strong growth
FinNano ”What have you found to be the main challenges when commercialising
nanotechnology?”
Shortages of Funding
Shortages of Qualified Manpower
Problems with Intellectual Property Rights
Difficulties in Achieving Reliable Mass Production
Lack of Suppliers in the Area
Lack of Customer/Consumer Acceptance
Lack of Applications in the Area
Lack of Standards
0 5 10 15 20 25
Number of respondents naming this as main challenge

17. The Finnish nanotechnology sector needs
funding for international growth
FinNano Nanotechnology sector is looking for 86 Meur of external funds in the next two years
mainly from VCs and public sector to take products to international markets
Top 4 nanotechnology sector future needs are all in international growth
Funding is an issue especially for SMEs and growth companies
Funding availability for nanotechnology sector’s future growth raises concerns – the
need for venture capital is double to the average annual supply of 13,4 Meur (2002-2008)
Need for External Funds 2009-2011
60
50
40
Meur
30
20
10
0
Risk Finance Public Funding Private Investments Debt

18. The sector is likely to be experiencing the funding
gap between seed stage public and later stage private
venture capital.
FinNano
Majority of
Finnish
Companies
Amount of capital available
in Nanotechnology
Lack of professional
and large enough VC
funds supporting
ideas with a
Public money for seed Private VC is focused in more mature
global dimension
Government is very companies
active in small seed stage VC funds that are large enough for multi million
investments (< 500 kEur). Euro investments are focused on more mature
Very limited private VC & stages. Very few larger investments are made in
angel activity companies below 2 million of annual revenue.
Seed Start up Early growth Expansion

19. There is reasonable evidence of a skills
shortage in nanotechnology
FinNano 53 % of respondents found recruitment to be ’difficult’
or ’very difficult’ – up by 10 % from 2006
Skills shortage is the most burning issue for Tools and
Instruments and medium-sized companies
Have you found it to be easy or difficult to recruit skilled
people in areas connected to nanotechnology?
Very Difficult
2008
2006
Very Easy
0 10 20 30 40 50
% of respondents

20. IP problems are the main challenges in
university-industry co-operation
FinNano Patents and trade secrets are the most common methods to protect
intellectual property in the Finnish nanotechnology sector
In effect, companies find IPR issues as a challenge especially in
industry co-operation
Main Challenges in University-Industry Co-operation
Issues Related to Ownership of Intellectual
Property
Challenges in Identifying Commercial
Opportunities
Lack or Underdevelopment of Production
Technologies
Communication Problems
Basic Orientation of Research
0 5 10 15 20 25 30 35
Number of respondents naming this as a very important factor

21. A comprehensive product pipeline analysis was
conducted for all industries
FinNano

22. Chemicals and Materials Technology Pipeline
FinNano Research Product Development Commercial
Coatings •Functional UV-TiO2
•Fire retardant coatings nanocomposites nanoparticle
•Functional paints and coatings
•Nano-diamond retention systems
•Hybrid coatings
•Colour coated sheet metal products materials for (Sacht Leben)
•Plastic film surfaces industrial Nanoparticle
applications dispersions for paper
Materials •Carbon nitride coating applications
•Fire resistance composite materials (Basf-Ciba)
•Carbon nitride materials for thin films
•Improved catalyst Nano-diamond
and coatings
•Catalytic materials with nanoscale materials materials
active sites •Anti-graffitti (Carbodeon)
•Precursors for nanotechnology coatings UHP Metal salts
production •Ultrapure metal Organic metal
•carbon based nanomaterials salts precursors(Puraliq)
•Nanocomposites in packaging
•Electrically Protective and
materials
conductive decorative coatings
Nanoparticles compounds (DIARC Tech.)
•Metal-based nanoparticles •Non-combustible Heat-resistant oven
•Organic nanoparticle dispersions for ceramic binder coatings
paper coating applications •Intelligent surface (Finnester Oy)
•Nanoparticle binder and sizing
solutions …
products
•Ceramic powders

23. Carbon nanotube enhanced composite
material improves windmill performance
FinNano
Improved windmill performance at very
low wind speeds due to the low blade
weight of only 50-60 % of the weight of
traditional blades
The Finnish manufacturer of
nanotechnology windmill blades, Eagle
Windpower Ltd, is a globally leading
developer and manufacturer of high
technology windmills in the 2-500kW
range
The innovation originated from
Jyväskylä University

24. Desinfinator uses nanotechnology for air
cleaning
FinNano
Desinfinator Ltd has created an award-
winning air cleaning system, which was
introduced to the market 9/2008
Nanotechnology is used to make coating
for radical generation. This has proven to
be a very efficient method in getting rid of
impurities and smells from the air.
Markets have already been opened in
Europe, Russia, and Middle-East

25. Helsinki University spin-off offers
advanced measurement of indoor air
FinNano
Helsinki Aerosol Consulting Ltd is a Helsinki Aerosol Consulting -
Business Model
spinoff from the University of Helsinki,
Department of Atmospheric Sciences
Solutions
The company focuses on serving the
needs of the rapidly developing
nanotechnology sector by offering
advanced aerosol measurement and Process optimisation and indoor air
modelling services for processes and
indoor air Modelling Measurement

26. Led-lighting manufacturer OptoGaN was
acquired by Russian investors
FinNano
With its cutting edge technology, OptoGaN enables
new generation of Solid State Lamps which feature
bulb-like brightness, bulb-like cost, high energy
efficiency and environmental safety
Founded 2004 in Finland by two Russian physicists,
OptoGaN operates its extensive R&D in Micronova,
Espoo, Finland and starting since 2006 a full pilot line
in Dortmund, Germany
In 2007 OptoGaN has raised €5M in capital from
Nordic Venture Fund, Via Venture Partners, VNT
Management Oy and Finnish Industry Investment
In 2008 OptoGaN’s Finnish and German operations
have become part of the OptoGaN Group, a joint
venture established by Onexim Group, the Russian
Corporation of Nanotechnologies (RUSNANO), and
the Ural Optical and Mechanical Plant (UOMP)
Target investment for the new company is over 40
MEUR

27. Summary
FinNano
The number of active companies in the Finnish nanotechnology sector has
increased to 202 from 61 in 2004
In addition to over 200 technology companies, the sector growth has created new business
opportunities for numerous service companies
65 companies had commercial products or processes in 2008 (27 in 2004)
Nanotechnology has had a significant positive impact on economic
development in the key clusters of the Finnish industry
Nanotechnology sector size in Finland exceeded 300 Meur in 2008, up by 25 % from 2006.
Exports accounted for over 60% of total company revenues in the sector.
The industry employs approximately 2 900 professionals (300-400 in 2004)
Private investments in nanotechnology exceeded 65 Meur as industrial investments reached
56,6 Meur and Venture Capital 9,5 Meur
While the sector growth continues, companies are facing main challenges in
shortage of funding and manpower, and intellectual property rights(IPR)
issues
Most industries have a deep pipeline of R&D, to be realised in 1.5-3.5 years
Especially SMEs seeking internationalisation find availability of risk finance and qualified
manpower, and IPR problems as main challenges to company development

28. Agenda
FinNano
Methodology and data
Analysis
Predictions

29. Global economic downturn has an adverse effect
on the Finnish nanotechnology sector
FinNano
Negative effects
Global macroeconomic downturn slows down the growth in global demand for
nanotechnology products
Liquidity problem hurts investments for future growth, especially by expanding
the funding gap in Finland
Solvency problem increases the number of bankruptcies for SMEs in
nanotechnology
Positive effects
The downturn alleviates the skill shortage problem to small extent
Acquisition of IPR and companies becomes easier as valuations decrease

30. Services, Construction, Metals and Forest are
likely to take the strongest hit
FinNano Industry Key factors for facing economic
downturn
Estimated dowturn impact on
nanotechnology industry
Tools and Instruments Several established products and Small
positive impact on skill shortage
dilemma, public sector a big customer
Energy and Environment A strongly emerging sector and Small
highly invariant to economic cycles
Health and Well-being Strong pipeline and a large number of Small
publicly funded research projects
Chemicals and Materials Several established products and Medium
positive impact on skill shortage
dilemma, strong need for risk capital
ICT Strong need for risk capital and very Medium
export driven but has a large number of
established products and publicly
funded research projects
Forest Cluster Several established companies Strong
seeking for renewal and new
opportunities
Metals and Mech. Eng. Very export driven and no established Strong
commercial products
Construction No established commercial products Strong
and the core of the industry is strongly
hit by the downturn
Services Demand for services has s high Strong
customer wealth elasticity

31. A comprehensive pipeline and R&D investment analysis
was conducted for all industries to make market
estimates..
FinNano

32. In 2013, over 250 companies in the Finnish nanotechnology
sector are estimated to have commercial products
incorporating nanotechnology
FinNano
Industry Product Estimated number of Estimated number of
development companies with companies with
pipeline average commercial products commercial products
time to market in 2010 in 2013
Chemicals and 3,6 years (2,3 in 2006) 25 (+6 from 2008) 56
Materials
Construction 3,1 years 3 (+0 from 2008) 6
Forest Cluster 2,3 years (2,7 in 2006) 11 (+7 from 2008) 18
Health and Well- 2,3 years (3,7 in 2006) 20 (+11 from 2008) 63
being
Metals and Mech. 2 years 1 (+1 from 2008) 10
Eng.
ICT 1,5 years (3,4 in 2006) 17 (+5 from 2008) 56
Energy and 1,5 years 8 (+4 from 2008) 14
Environment
Tools and 1,5 years 17 (+3 from 2008) 29
Instruments
ALL 2,4 years (3,1 in 2006) 102 (+37 from 2008) 251

33. Finnish nanotechnology sector is estimated to
reach 1.3 billion euro milestone by 2013
FinNano Finnish Nanotechnology Sector in 2013
•Sector size: 1300 Meur
•Employment: 11000-12000 professionals
Nanotechnology Sector in Finland, 2008-2013*
1400
1200
1000
800
Meur
600
400
200
0
2008 2010 2013
*A global comparison: 2008 2013
Nanotechnology sector/GDP
Source for global figures:
Finland 0,2 % 0,6 % Lux Research (2008)
Global 0,3 % 3,2 %

34. Fastest growth is expected to take place in ICT,
Health and Energy
FinNano
Nanotechnology expands into more new product categories across all sectors
Nanomaterials manufacturing becomes the province of large companies –
start-ups focus on applications
Supply shift broadens applications for nanomaterials
Nanotechnology Sector in Finland, 2008-2013
1400
1200
1000
800
Meur
600
400
200
0
2008 2010 2013
Health and Well-being Chemicals and Materials ICT
Tools and Instruments Forest Metals- and Mechanical Engineering
Energy and Environment Construction