Climateer Investing: MITnews: ''Chu: New materials could be transformative"

Friday, December 2, 2011

MITnews: ''Chu: New materials could be transformative"

"Fundamentally VCs are risk adverse – they want no risk in the deal,
if we could handle risk we'd be entrepreneurs."

– Victor Westerlind, General Partner at Cleantech VC firm Rockport Capital

I've touched on the importance of materials science a few times, links here and below.
NOVA: Materials That Changed History (win a MacBook Air or iPod Touch)

I have mentioned in passing that the next secular bull market (read: expanding P/E ratios combined with earnings growth over a multiyear period) will be facilitated by some combination of advances in materials science, manufacturing technology and applied nanotechnology.

Some prognosticators are positing 2020 for the beginning of this glorius event, some 2018.
We're in the minority looking for an earlier start, say 2014-2015. In any case we have some time, we might as well spend it in the company of smart people. Here's NOVA....

And:
"Top Investment Trends For Futurists" (PXN; TINY)

John Ogg does a quick survey of some of the areas where future excess returns might arise.
I've included the sub-heads but only copied out one sector, nano-technology. The whole thing is worth a read.
The reason for highlighting nano is two-fold.

1) Since Feynman coined the word there has been a misconception among investors that there would be a nano-technology "industry". This has proven not to be the case and won't be in the future. Rather nano is a tool, an approach toward problem solving.

There will be some breakthroughs that make their discoverers instantly (after 10 years of research) wealthy but the real beneficiaries will be companies like Kyocera and 3M and Siemens. They will use the technology to do what they are already doing, just better, faster, cheaper, more.

2) In spite of the fact that there will be few pure plays we are convinced that nano combined with advances in materials science and manufacturing technology is what will spur the next secular bull market.
Some prognosticators say it will be 2020 before the next bull while we are more optimistic, looking for a 2014-2016 time-frame. Because the crystal ball gets foggy even in the short term it is impossible to forecast where the magic will land. The thing to do now is get a feel for the possibilities and spread your bets.

The entrepreneur's credo seems helpful: Fail fast, fail often, fail forward....

The headline story from MITnews, :

Citing historical examples, U.S. secretary of energy argues that the nation can still regain its manufacturing leadership

In a talk rich with historical examples, U.S. Secretary of Energy Steven Chu made a strong case Wednesday that the right policies — and concerted efforts by the nation’s engineers and scientists — could once again produce significant growth in domestic manufacturing jobs, while addressing global problems of energy supply and climate change.

In his talk at MIT, Chu delivered a history of “transformative technologies,” including the invention of artificial fertilizer and the “Green Revolution,” which together unleashed explosive growth in world food production; the creation of the automotive assembly line by Henry Ford, which made cars available to the mass market; and the invention of the transistor and integrated circuits at Bell Labs, which unleashed the digital revolution that has transformed people’s lives in countless ways.

What the United States needs now, he said, is new transformative technologies in energy, especially ones that could boost the competitiveness of renewable, carbon-free technologies.

Video: Watch the event on TechTV

In a seeming reference to recent controversy over federal loan guarantees for the solar-panel maker Solyndra, Chu pointed out that a century ago the government had invested in the development of airplane technology, providing grants to Samuel Langley to develop the first human-carrying, heavier-than-air flying machine. After two spectacular failures, Langley threw in the towel — and nine days later, the Wright brothers succeeded in making their first flight, without any government support.

“Congress was outraged,” Chu said, charging that the government shouldn’t have been “picking winners” with federal funds. “Some things never change,” he added....MORE

HT: Next Big Future who writes:
Other countries are working on better materials as well

Stronger steel and aluminum alloys and redesigning car parts to reduce weight is likely to have the most impact in reducing vehicle weight. 10% reduction in vehicle weight provides a 6-7% boost in fuel efficiency.

Mazda Motor Corporation, in collaboration with Sumitomo Metal Industries, Ltd. and Aisin Takaoka Co., Ltd., became the first automaker to successfully develop vehicle components using 1,800 MPa ultra-high tensile steel. The super-strength steel will debut in the new Mazda CX-5 crossover SUV that will commence its global launch in early 2012.

Mazda’s new production technology uses 1,800 MPa ultra-high tensile steel to fabricate bumper beams, which fit inside the front and rear bumpers and mitigate damage in the event of a collision. The bumper bars are 20% stronger and 4.8 kilograms lighter than previous versions and are a key part of Mazda’s next-generation, lightweight and highly rigid vehicle architecture.

Toray Industries, which got its start making rayon and is now the largest producer of carbon fiber. Teijin, another company that began in textiles, also presented a concept car based on carbon fiber in March this year. The two companies are beginning a major push to market carbon fiber to car companies as a serious substitute for the heavier steel-based designs of today. Even with a 200-kilogram battery, this car weighs 846 kilograms which is about half the weight of a comparable regular car....MORE