Seven New Technologies That Change Every Thing FORGET ABOUT SCIENCE-FICTION FANTASIES. THESE INNOVATIONS ARE ALREADY HERE, AND THEY'RE ABOUT TO HATCH SOME OF TOMORROW'S BIGGEST BUSINESS OPPORTUNITIES.
By G. Pascal Zachary; Om Malik; David Pescovitz; Matthew Maier

(Business 2.0) – What makes a technology insanely great? Miraculous inventions come along all the time, yet precious few are destined for greatness. Personal helicopters? Laser discs? Microsoft's Bob? They all were touted as tomorrow's technologies, they all seemed dashingly clever, and they all amounted to nothing.

In hindsight, this is obvious. But in the present tense, it's notoriously difficult to identify the great technologies of the future that are actually here today. "Breakthroughs are disruptive for a reason," says Alex Pang, research director at the Institute for the Future in Menlo Park, Calif. "They sneak up on us even when we try to prepare for them."

That's certainly what happened in 1990, when Tim Berners-Lee wrote the first Web browser. Today we all know that his invention created a new medium, sparked a historic stock market boom, and provided a platform for businesses with $100 billion in revenues this year alone. Yet it wasn't until 1993 that the New York Times first took notice of the World Wide Web, mentioning it in passing as a tool that "makes available physicists' research from many locations."

To really succeed--to truly change the world--a technology needs to disrupt an existing industry or create a new market. It needs to solve a critical problem, or perform a task better and more cheaply, or create new business opportunities where none existed before. The most profound new technologies manage to do all of those things. Thomas Edison changed everything when he introduced his dynamo in 1881. Henry Ford did it when he perfected the assembly line. And Steve Jobs did it when he helped create the original "insanely great" Macintosh. Edison commercialized electricity, Ford made automobiles affordable, Jobs made computing accessible, and life has never been the same for any of us since.

We set out to look for cutting-edge innovations that could appear on tomorrow's lists of great technologies. Ideas that are merely cool didn't make the cut; we searched for emerging technologies that are inherently disruptive. We decided to pass on inventions that exist only as fanciful ideas; our candidates have working prototypes and products in the pipeline. We also insisted on a clear pathway to commercialization, an obvious customer base, and the use of a technology that poses a clear threat to existing industries. Since all of our finds are in early stages of development, we then asked an artist to visualize how they might look as products a few years down the road.

All this culminated in our list of seven promising innovations, spanning fields as diverse as renewable energy, diagnostic medicine, manufacturing, and consumer electronics. Will all of them really change the world? It's certainly clear that each has the potential for greatness. And to ignore them would be, in a word, insane.

1 --ENERGY-- Plastic Power NEW PHOTOVOLTAICS WILL PROVIDE AN EFFICIENT AND FLEXIBLE WAY TO GENERATE ELECTRICITY FROM VIRTUALLY ANY SURFACE EXPOSED TO THE SUN.

Solar power: How long has that little paradigm shift been just around the corner? Even after decades of development, silicon-based solar cells are expensive to manufacture, awkward to install, and relatively inefficient, converting just 12 to 15 percent of the rays they collect into electricity--which explains why it costs 22 cents to produce a kilowatt-hour of electricity using today's solar technology, compared with 4 cents at a coal-fired plant.

The good news is that next-generation technology will finally make solar power competitive. The new photovoltaics use tiny solar cells embedded in thin sheets of plastic to create an energy-producing material that is cheap, efficient, and versatile. One startup, Massachusetts-based Konarka Technologies, has developed a process that coats strips of plastic film with titanium dioxide and light-absorbing dye. Power is produced when light hits the dye and the electrons in the titanium dioxide get revved up. Konarka expects to deliver its first commercial solar cells, designed for use with consumer electronics like laptops, by year's end.

The big names in power generation are also taking a look at plastic solar. Siemens has developed technology that melds nanoscale buckminsterfullerene molecules with conductive plastic polymers. General Electric, meanwhile, is adapting organic light-emitting diodes for use as light collectors in plastic solar cells.

Such technology will make it possible to convert almost any material into an energy collector. Solar mats could be woven into briefcase walls to recharge mobile devices. Solar panels integrated into automobile bodies could power electric motors. Roofing tiles coated with photovoltaic material could transform every home into a self-sufficient powerhouse. The stakes are sky-high: The $220 billion power industry has long resisted change, thanks to the advantages afforded by ownership of electric plants and distribution networks. If plastic solar cells enable more and more of us to live comfortably "off the grid," the industry won't be able to fend off change forever. -- D.P.

PLASTIC SOLAR CELLS

WHAT CHANGES Broader use of solar power means less pollution--and less dependence on established utilities and Mideast oil.

WHO WINS Utility consumers, developing nations

WHO LOSES Regional electric utilities, coal producers, OPEC

THE PLAYERS General Electric, Konarka Technologies, Nanosys, Nanosolar, Siemens

2 --MANUFACTURING-- A Factory in Every Home AN ADAPTATION OF INK-JET TECHNOLOGY CAN BE USED TO "PRINT" MECHANICAL PARTS AND ELECTRONIC DEVICES.

Ever since Adam Smith first described the workings of his pin factory, manufacturing businesses have focused on three goals: mass production, centralized assembly, and labor specialization. Printable mechatronics has the potential to offer consumers far greater product variety, while eliminating the need for factories altogether--a change that would revolutionize the $1.4 trillion manufacturing sector, which accounts for roughly a sixth of the U.S. economy.

Teams at Cornell University, MIT, and the University of California at Berkeley have been quietly developing processes that adapt ink-jet printing technology to build ready-to-use products, complete with working circuitry, switches, and movable parts.

Consider the classic problem of the lost TV remote control: Armed with a set of digital blueprints downloaded from the Internet, a home mechatronic printer could squirt out a replacement remote--one layer at a time--using cartridges filled with polymer and other specialized materials. "You'd pay for the plans, not the product," says UC Berkeley professor John Canny, who leads a team of researchers working in the field.

Though scientists playfully refer to mechatronic printing systems as Santa Claus machines, their potential is no joke. Plastic Logic, a London-based firm that makes electronic gear out of plastic, is hoping to make computer display screens using the technology, and NASA engineers envision using mechatronic printers to create spare parts for astronauts en route to Mars. -- M.M.

PRINTABLE MECHATRONICS

WHAT CHANGES Mass customization becomes routine as manufacturing is decentralized.

WHO WINS Product designers, ink-jet technology companies, CAD software vendors

WHO LOSES Die makers, manufacturers with inflexible assembly-line factories

THE PLAYERS Bell Labs, Cornell, MIT, NASA, Plastic Logic, Stratasys, UC Berkeley, Xerox PARC, Z Corp.

3 --PHARMACEUTICALS-- Brain Boosters NEW MEDICINES WILL IMPROVE HUMAN MEMORY OR REVERSE DISEASES SUCH AS ALZHEIMER'S.

Anyone who has ever spent a late night cramming for a final exam has probably fantasized about popping a pill that would quickly burn vast amounts of data into the memory banks. The company that invents such a memory pill will earn billions--while also rewriting the rules of senior citizen health care. The fight against Alzheimer's is providing a focus for the research effort. The disease afflicts an estimated 4.5 million Americans and will strike millions more as the baby boom generation ages. Last year alone, the care and treatment of Alzheimer's patients consumed over $100 billion. "With the graying of America, smart drugs could become some of the industry's biggest sellers," says Harry Tracy, publisher of "NeuroInvestment," a biotech newsletter.

Therapies in development for Alzheimer's target the buildup of plaques in the brain that are thought to reduce mental acuity. Techniques to enhance memory are more diverse, but most rely on compounds that seem to improve the performance of neural connections in the brain.

The private sector is pouring billions into research and development, and dozens of companies are testing more than 120 Alzheimer's-related compounds. Human clinical trials of one promising therapy, Alzhemed, from Canadian pharmaceutical firm Neurochem, began this June. Big pharmaceutical companies like Eli Lilly and Novartis are also working in the field, while other industry giants are said to be watching the upstarts closely.

A separate crop of companies is developing memory-enhancing drugs for healthy people. Pennsylvania-based Cephalon has sold $750 million worth of its Provigil, an alertness drug that's been approved as a remedy for narcolepsy and other sleep disorders. Drugs with other properties are on the way. With everyone from truck drivers to software coders clamoring for a safe, effective boost, demand for memory and alertness drugs will be huge--a fact no one in the industry ever forgets. -- G.P.Z.

MEMORY DRUGS

WHAT CHANGES As the use of pharmaceuticals that "customize" intelligence becomes routine, memory drugs outsell even erectile-dysfunction remedies.

WHO WINS Biopharma companies, health-care funders, people with degenerative brain illnesses, students

WHO LOSES Nursing homes, the assisted-care industry

THE PLAYERS Cephalon, Cortex, Eli Lilly, Memory Pharmaceuticals, Neurochem, Novartis, Saegis

4 --CONSUMER DEVICES-- Terabytes to Go TINY NEXT-GENERATION HARD DRIVES WILL OFFER VAST STORAGE CAPACITY AND LOW POWER CONSUMPTION.

Moore's Law, Schmoore's Law. Over the last six years, hard-disc manufacturers have doubled the capacity of their drives every single year, whipping the chip industry's standard of doubling every 18 months. Five years ago, 250-gigabyte drives were out of reach for most computer users; today they sell for about $250. Good thing too--the popularity of digital music and photography means that the market for consumer storage devices is expected to grow from $1.4 billion in 2003 to $4.3 billion in 2008. "Can you ever have too many closets?" asks Amy Dalphy, manager of Toshiba's disc-drive manufacturing business. "Hard-drive space is similar--you never have enough."

Recently, however, hard-disc capacity increases have slowed to roughly 40 percent. The problem? Today's technologies are simply running out of room.

Enter an obscure technology called perpendicular magnetic recording. Today's hard drives store bits of data horizontally, like stalks of freshly cut corn. PMR stores them vertically, like cornstalks standing in a field. With perpendicular storage, each bit occupies less space on the surface of the disc, so more data can be stuffed into a smaller area. In addition, because the data is more densely packed, the read-write heads don't shuttle around as much, so PMR drives draw less power from overworked batteries.

PMR drives are 18 months from initial production, and the first models will be used in top-of-the-line corporate storage systems. But it's easy to foresee what this means for the future of gadgetry: As storage drives add capacity and shrink in size, more and more mobile phones and PDAs will come equipped with hard drives. And once the price of a 2GB drive drops below $80, PMR drives could start to give flash memory cards (now found in most digital cameras) a run for their money. Within two years, look for 2GB mobile-phone hard drives that sell for less than $100. Music lovers may be able to carry more than 4,000 albums on a 200GB iPod. And by the summer of 2010, it should be possible to buy a portable media device that comes with a full terabyte of storage--enough to store the entire Disney animation library and a few seasons of SpongeBob SquarePants, with room left over for a month's worth of music. -- O.M.

PERPENDICULAR MAGNETIC STORAGE

WHAT CHANGES Hard drives proliferate. Gigabyte-level storage makes it possible to carry thousands of songs or photos on a drive no bigger than a quarter.

WHO WINS Hard-drive manufacturers, consumer electronics firms

WHO LOSES Flash memory makers

THE PLAYERS Fujitsu, Hitachi, Maxtora, Seagate, Toshiba

5 --HEALTH CARE-- DIY Tests for Deadly Bugs "LAB ON A CHIP" PROCEDURES WILL QUICKLY AND INEXPENSIVELY DIAGNOSE DISEASE OR DETECT BIOWEAPONS.

It's 2006, and the guy next to you on the flight from Hong Kong is drenched in sweat and coughing violently. With a new strain of avian flu ravaging China, he's making a lot of people nervous. That's when a flight attendant reaches into a diagnostic kit and politely asks the sick flier to put a plastic stick in his mouth. She places the stick in a device the size of a thick credit card, and two minutes later, after a green LED begins to glow, she reassures her passengers: Breathe easy. It's not the fatal flu.

Today, only specialized labs can perform the tests required to identify viral diseases or pathogens. The tests can take days or weeks to complete, and they can cost hundreds of dollars apiece. Worldwide spending on diagnostic tests tops $20 billion a year. Microfluidic tests can eliminate many of these lab procedures while vastly speeding diagnoses.

Microfluidics is the science of moving fluids through tiny channels the thickness of a human hair. In microfluidic tests, blood, saliva, or urine samples are analyzed after coming into contact with tiny amounts of a chemical reagent.

The first microfluidic test kits are already on the market, with sales of $300 million projected for this year. So far, the government is the biggest buyer. The U.S. Postal Service is installing microfluidics-based detection systems created by defense giant Northrop Grumman and Silicon Valley upstart Cepheid that will sniff for anthrax at major mail-processing centers. Maryland-based Akonni Biosystems offers an instant tuberculosis test and is working on a SARS test that could be ready in two years.

As the size and cost of microfluidic tools drop, tests are likely to be sold in drugstores--creating a market that could reach $10 billion by 2010. As Akonni CEO Charles Daitch predicts, "Tests that are now performed by technicians will be done in the future by almost anyone." -- G.P.Z.

MICROFLUIDIC TESTING

WHAT CHANGES Medical diagnoses can be delivered right away, instead of requiring weeks for expensive lab tests.

WHO WINS Biopharma companies, insurance providers, people exposed to disease agents

WHO LOSES Centralized testing laboratories, makers of test equipment

THE PLAYERS Akonni Biosystems, Cepheid, MicroFluidic Systems, Micronics, Northrop Grumman

6 --TELECOM-- Extra-Broad Broadband INTEGRATED OPTICAL CHIPS WILL MAKE IT MUCH CHEAPER TO BUILD HIGH-SPEED NETWORKS.

Broadband Internet connections are a fixture in 50 percent of American homes, but the infrastructure used to provide those links--clunky coaxial cables or aging copper telephone wires--remains primitive. Running fiber directly to the home would provide faster, more reliable service, but that's expensive: nearly $1,300 per household.

Micro-optical chips promise to end the tyranny of tiny pipes by slashing the cost of building high-speed networks. Micro-opticals are integrated optical circuits that combine the functions of several discrete optical components onto a single chip--an innovation that will alter the economics of the telecommunications industry by making it much cheaper to distribute very large quantities of data.

Optical components that sell for hundreds of thousands of dollars will be reduced in size and sold for 90 percent less. "Micro-opticals will bring PC-style economics to telecom networks," says Hemant Bheda, president and CEO of Parama Networks, a Santa Clara, Calif., firm that has developed a $5,000 chip to replace the $50,000 add/drop multiplexers used to manipulate optical data streams. Says Michael Howard of Infonetics Research, "This is a disruptive technology."

The first micro-opticals can already be found in high-end transmission systems sold by Infinera, while Parama is selling its products to Movaz Networks, an Atlanta-based equipment maker. Though the market for micro-opticals should be worth billions by the end of the decade, the technology will always remain hidden from consumer view. But it will hardly go unnoticed, particularly if, within 10 years, downloading high-definition movies at home becomes as routine as watching ESPN on cable today. -- O.M.

MICRO-OPTICALS

WHAT CHANGES Network economics make ultrahigh-speed broadband as cheap as mobile-phone services are today.

WHO WINS Wholesale Internet access providers, local phone companies, operators of cable systems

WHO LOSES Optical component manufacturers

THE PLAYERS Galazar, Infinera, Parama Networks, PMC Sierra

7 --WIRELESS-- A Revolution in Roaming NEW SOFTWARE WILL ENABLE MOBILE DEVICES AND TWO-WAY RADIOS TO ACCESS ANY TYPE OF WIRELESS NETWORK.

The world of wireless communications is a tower of Babel. Cell phones, Wi-Fi base stations, military radios, and public safety networks can operate only on the frequency bands burned into the hardware at the factory. Most of the time, this is merely a nuisance; it's why American CDMA phones don't work in Europe and many European GSM phones are useless in Japan. Yet it can also be deadly, as rescue teams learned on 9/11 when police and firefighters were unable to coordinate evacuation efforts because their radios were incompatible.

To eliminate this rigidity, startups such as Sandbridge Technologies and Vanu are putting the finishing touches on a technology to replace radio hardware with software that can be programmed to communicate over a broad range of frequencies, bandwidths, and transmission standards. Want to drive cross-country while maintaining a persistent Internet connection? Software radio will make that possible by taking advantage of any available communications network, from analog cellular and 3G to Wi-Fi and Wi-Max.

Software radios "solve the problem of multiple standards and interoperability," says Allan Margulies of the Software Defined Radio Forum, an industry group that's hammering out standards for the technology in collaboration with more than 100 companies, including Intel, Motorola, and Qualcomm.

There are still bugs to work out: Today's software radios require heavy-duty chips, they suck up lots of power, and they're expensive. Nevertheless, the Pentagon spends almost $15 billion on communications each year, and the defense market is already jump-starting demand for software radio gear. In July, General Dynamics won a $1 billion order to build software radios that will allow Army soldiers, Navy sailors, and Air Force pilots to exchange information in the heat of battle. Consumers will have to wait a bit longer, of course. But in five years, software radios will be a $31 billion business, and you should be able to buy a phone that will work on any mobile network, anywhere you travel. -- O.M.

SOFTWARE RADIO

WHAT CHANGES Wireless communication tools become vastly more convenient and versatile.

WHO WINS U.S armed forces, rescue personnel, wireless handset chipmakers, telecommunications companies, travelers

WHO LOSES Single-function chipmakers, companies that support proprietary wireless standards

THE PLAYERS ARM Holdings, General Dynamics, QuickSilver, Sandbridge Technologies, Texas Instruments, Vanu

G. Pascal Zachary, Om Malik, and Matthew Maier are Business 2.0 staff writers. David Pescovitz is writer-in-residence at the University of California at Berkeley College of Engineering.