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Nanotech companies investing in risk assessment in the early product development stages stand to reap higher returns.
October 6th, 2008
Investing in risk assessment
Between hurricanes, elections and the nation's economic crisis, Congress' plate has been full this fall, and reauthorization of the National Nanotechnology Initiative, which passed the House by a large margin in June, will be postponed until next summer at the soonest.
This may come as a relief to some nanotechnologists, as an essential piece of this legislation (H.R. 5940) concerns product safety precautions that will eventually require nanotechnology companies working with federal agencies such as the Defense Department to supply detailed risk analyses for their products and processes. States such as California and municipalities such as Cambridge, Massachusetts, are also taking steps to monitor nanomaterials, in response to increased public concern over their environmental safety.
Of course, the FDA and EPA will require nanotechnology companies to perform risk analysis before going to market. From a public relations standpoint, however, it makes sense to take this step well before it is mandated.
Positioning your company as proactive in the safety arena can open doors and gain goodwill among investors, policymakers, the press and the general public.
Most important are potential investors who may be concerned over the development of novel nanoparticles. For example, according to Nature, California-based venture-capital firm Draper Fisher Jurvetson has said it doesn't invest in areas with an unspecified regulatory regime because it simply is not worth the risk.1 With this audience, it's clear that technologists with the most comprehensive risk-assessment data will have an advantage in the fierce competition for funding.
Local officials are usually sympathetic to prospective community investments, but they're also increasingly sensitive to product risks, as evidenced by the actions taken in Cambridge. And in tight economic times, local interest is moving from R&D to commercialization, and companies that can promise the easiest path through federal approval and into the marketplace are most likely to receive community support.
Technologists also should not underestimate the environmental and workforce communities' interest in the effects of product development. Companies that suspect any risk in the vetting process should work to gain the trust of these passionate and capable influencers early on. An early demonstration of your company's commitment to addressing product safety concerns can help cement relationships with community leaders that will prove essential down the road. By contrast, keeping your cards close to the vest may nurture a deep distrust that becomes virtually impossible to overcome, even if your product passes to commercialization with flying colors.
The same should be said of the media. I've come across a number of clients and other business leaders who believe that reporters and publications are naturally inclined to assume the worst about companies, so they are shy to speak with them about their work. Yet I've found this attitude to be rare. Most reporters and editors I've worked with are excited by new technologies and are willing to provide supportive coverage when the company is open and honest about their successes and challenges.
Finally, those all-important potential customers watching your research and progress are also assessing their risk in the market should they use your technology. In this volatile market, companies are no longer looking to subsidize research but want to know how, and how quickly, your technology can affect their bottom line.
Early risk assessment demonstrates a willingness to address tough issues before precious time and money are wasted and prepares a smoother path through the regulatory process and toward commercialization.
1 "Nanotech's Big Issue," Nature, Vol. 443|14 September 2006, p. 137