subcommittee now stands in order i want to welcome everybody to the first hearing of the technology and innovation subcommittee it's only fitting that with the subcommittee focus on technology competitiveness and innovation at our first hearing is on the national institute of standards and technology nest for over one hundred years and this has done outstanding work to promote public welfare and to support industrial growth from setting standards for uniform pipe threads on fire hydrants to time measurements that make electronic financial transactions and the global positioning system or g has always been responsive to industries and the public's needs in this development of uniform pipe thread standards for fire hydrants was one of nests first success stories three years after this creation a fire in baltimore largely destroyed the city because when adjacent fire companies within a hundred mile radius came to the assistance of baltimore they found that their hoses and the fire hydrants in baltimore didn't have a uniform standard and didn't work together nist solve that problem over time however when i mention this to my colleagues most don't recognize that name as a federal agency perhaps the manufacturing extension program or m e p perhaps the advanced technology program have a little visibility in the congress and among my constituents when i meet with industry representatives while their technical staff may know about us frequently the business executives and line folks do not during the next two years i hope to educate my colleagues in congress and the broader public about the great importance of nest i know that dr jeffrey shares this goal as well now on to the issue at hand the administration's fiscal year two thousand and eight budget requests for nist i'm glad that the ministration has recognized the of at least a portion of miss work as outlined in the american competitiveness competitiveness initiative congress and the prior administration have long been supportive of the nist lab programs during the past fifteen years nests lab budget has increased by one hundred thirty percent when president clinton took office than this lab budget was one hundred sixty three million dollars eight years later it was three hundred thirteen million dollars in addition congress has also provided more than three hundred ten million dollars for the cunt construction of new lab facilities there are few federal agencies that have grown so rapidly over the past decade the science and technology committee has always been nests strongest supporter i'm concerned that this administration follows a strategy of paying for increases in the lab programs and construction by cutting funding for the m e p and proposing repeatedly to eliminate a t p both of these programs are six successful public private partnerships which have contributed greatly to american innovation and competitiveness i hope that we can break this cycle where every year the administration proposes either eliminating or cutting these two programs and then congress has to restore the funding this his hat not had an authorization for all of its programs since one thousand nine hundred two and i intend to break this cycle also i want to move a completeness authorization bill through congress i'm hoping that the administration will work with me on this effort we need to move on an authorization bill which sets nest on a path to broadly support innovation and competitiveness in the united states and with our friends and competitors around the world we are in a global race for economic competitiveness and we can't afford to stand idly by and watch our economy burn to the ground as happened to baltimore one hundred years ago and i would like to recognize the ranking member of the subcommittee the gentleman from georgia dr gray gingrey for his opening remarks and i thank you chairman good morning i'm very excited for a subcommittee first hearing of one hundred tenth congress and i want to thank my friend for morgan mr wu for organizing this hearing and look forward to work with him over the next two years on technology and innovation  almost every federal agency and united states industry sector uses the standards measurements and certification services that nist laboratories provides the breath of nist application straight from guidelines to the accuracy and reliability of electronic voting machines to research into the cause of the building and structural failures and to make in health care information technology interoperability a reality and a health care delivery system a must do in my opinion to deliver the kind of radical reforms needed to improve the quality and lower the cost of living of delivering health care in this country the future of many cutting edge technologies also depends on the research and technical and expertise of nist laboratories emerging fields such as nano technology and bioengineering will not become the two industries in markets without the existence of scientifically based and just for a measurement and standards beginning last year the president recognize the importance the important role that miss plays in our nation's economic security and started nest on a path to double its core research and facilities budget b seventeen i fully support the president's american competitiveness foundation initiative and the office of science and department of energy i look forward to hearing more details today about the role miss will play in the president's american competitiveness initiative and i am interested to hear the administration's rationale and requesting only thirty six million dollars for the manufacturing extension partnership  program the n e p program help small and medium size united states manufacturers optimize their operations and remain competitive in the global economy and it is critical program that is worthy of taxpayer dollar pleased to have my cryan president and c e o of tug technologies a company that i that is located in my district in marietta georgia with us today to discuss the importance of the  has vast experience with a variety of n e p programs in different states of this great country and has some exciting success stories to share with the subcommittee i thank all the witnesses for taking the time to be here today i only please keep his family and friends in your thoughts and prayers and mr chairman i yield back the balance of my time and i thank you thank you mr gingrey and it's my understanding that the deadline for timeline for meeting  downstairs floor my friend charlie is in about twelve minutes and i just want to recognize that many of us are going many of us would like to be there have a very distinguished panel of witnesses and i want to thank them for taking the time travelling the distance whether it's twenty five hundred miles or a dangerous twelve miles to go to capitol hill and in this subcommittee at least the dangerous part of the journey is over you will find a friendly environment and inquiring friendly environment before we begin i'd like to make a short introduction each of the panelists of the mr ryan who has already been very well introduced by mr gingrey first dr bill jeffrey has been the director of nest for the past year and a half or so before that he was at the white house office of science and technology policy the defense at vance research projects agency and he started his career at the defense airborne reconnaissance office since coming to nest dr jeffrey has been their strongest advocate within this administration dr stan williams of the hewlett packard corporation is a senior h fellow and founding director of the quantum research group i've never been able to find anything there maybe you can tell me what i've been missing dr williams is an expert in nanotechnology and quantum computing he has been awarded the julia springer award for applied physics the fine and prize in nanotechnology the dry things teacher scholar award a sloan foundation fellowship and was named by the scienti by scientific american as one of the fifty top technology leaders mr michael boyd us is the founding general partner of x seed capital a seed focused early stage venture fund that plus your youth must be where the x comes from he has taught at u c berkeley and is the author of three books on high tech issues  his company has relied upon the service as of the oregon manufacturing stench in partnership with the m e p center in oregon and dr green gingrey has already introduced mr ryan and  we have a five minute period for a statement and if you could please summarize and point out the highlights or lowlights or both of your written testimony  jeffrey let us begin with you thank you chairman were ranking member gingrey and then as the subcommittee i am pleased to present the president's two thousand and eight budget request for next this is a strong budget that will further enhance our ability to support the measurements and standards needs of us industry and academia missed has a long history of being at the forefront of new innovations through our measurements and standards in two thousand and three the national academy of engineering identified the greatest engineering achievements of the twentieth century mr measurements and standards were integral to the successful development and adoption of virtually every one nineteen retrospective studies of economic impact show that on average missed labs generated a benefit to cost ratio before the four to one to the us economy the high rate of return results from the fact that new measurements were standards benefit entire industries or sectors of the economy as opposed to individual companies for example mr researchers recently developed new measurement techniques that cut up to eighty percent of the cost and time time for industry to develop advanced materials as one industry scientist put it nist scientists are reawakening a major element of creativity that analytical science almost last missed also operates world class use of facilities last year approximately two thousand researchers from sixty different industries leveraged than the center for neutron research or the  national academy of sciences report describes the n c n r s capability to image an operating fuel cell as a considerable achievement and one of the most significant analytical advances in the fuel cell realized in decades industry scientists that stated that the research before and at the end c n r has allowed them to jump five years ahead in fuel cell development to prepare for the future nest is working with industry to identify critical measurement barriers to innovation evaluating its physical infrastructure forming new and strengthening existing partnerships and updating the ways it stimulates the knowledge transfer from its labs to industry and academia increased funding provided to the budget request will directly support innovative advances in broad sectors of the economy as well as improve the safety and quality of life for citizens for example the research initiatives will speed the development and foster the adoption of nanotechnology products and provide the physical measurements to ensure their safety accelerate the revolutionary economic potential in exploiting th unique properties of the quantum world provide confidence and reduce uncertainty in measurements supporting global climate change models reduce the risk to communities as they encroach on hurricane prone coasts and fire prone wild land urban interface regions and then hence the safety of new and existing structures from the catastrophic impact of earthquakes to meet the demands ever for measurements at ever smaller scales at faster rates and with more accuracy requires x more laboratory and use of facilities the budget request therefore includes capacity and capability improvements at both our boulder campus and the n c in or the budget request for m e p is identical to last year's request and is a reduction the fifty eight point three million dollars from the f y two thousand and six and acted i recognize the difference in priority between the administration  congress regarding the federal funding level for the m e p program one thing that you can be certain of regardless of the final preparations missed will execute the program in the most effective manner possible to support the nation's small manufacturers no funds for a t p r requested in the president's awake budget the two thousand and six inactive budget was consistent with the faith out of the program the two thousand and seven joint resolution however included funding for a t p and i understand it was approved by the senate last night and assuming it's signed by the president this will initiate a new competition in two thousand and eight and summary recent nest measurements and standards research have enabled innovations now imbedded in the i pod body armor saving the lives of domestic law enforcement officers and our servicemen and women overseas and diagnostic screening devices for cancer patients making their treatment more targeted and accurate results of missed research can be found in virtually every manufacturing and service industry for more than a century mr research has been critical to our nation's competitiveness the increased funding requested finished will directly support innovations in broad sectors of the economy that will quite literally define the twenty first century thank you and i would be happy to answer any chairman and representative gingrey i thank you for this opportunity to testify before you today on behalf of astra the alliance for science and technology research in america benjamin franklin often called the first american was also the first american scientist he understood that science was not just a past time to demonstrate wealth or satisfy curiosity but rather a force that could generate wealth and be utilized for the public good perform careful experiments to characterize electrical phenomena he was the first to understand the nature of electrical conduction and utilized his knowledge to invent the lightning rod which was one of the most important technical advances of his day thus franklin created the distinctly american paradigm for technological innovation if you measure something that has never been quantified before you can discover something that has never been known before which enables you to invent something which has never existed before he said an investment in knowledge always pays the best interest over a period of nearly two centuries american technological innovation has been the primary source of our wealth in this country astra was founded in two thousand to work on behalf of and provide in more effective voice for industry academe and professional associations involved in the technology enterprise our members represent i'm going to line constituency of more than two point four million scientists and engineers in the united states who work every day to build a stronger america the focus of today's testimony is missed and i gratefully acknowledge the extensive nist is to promote us you know of a sion and industrial competitiveness by advancing the trial a g standards and technology to enhance economic security and improve our quality of life as a government agency it does so objective without favor or advantage to any preferred technology or enterprise unfortunately the essential role in this place in enabling the competitiveness of american industry has often been under recognized among other activities in this develops  improves measurement technologies supplies critical reference standards used across industries to calibrate their products and services and from my point most importantly provides verified and reliable technical data to the scientific this scientists act as a critical check on the often conflicting and confusing claims coming out of various research labs i consider these activities to be the core of the nist mission and the keystone for technological innovation before we can discover and invent today we must measure with extraordinary precision and trust the results i compliment nest on your extensive its efforts to understand and respond to the needs of industry and on the quality of its oversight programs however it is my observation that the scientific staff at nist are now overwhelmed by the responsibilities the number of new program areas that have been added to this portfolio has really exceeded their funding increases this mission creep has stretched the staff and slowed their ability to reach to respond in some cases it has taken several years to complete q measurements which can make them less valuable in an era of rapid technological change in order to respond to new opportunities missed scientists often have to compete for grant funding from other federal agencies while such activities can meet important governmental needs the need for such activities should be an exception astra strongly recommends that miss missions and programs including the newly created nist a center for now scale science and technology the a t p and the n e p and the m e p should be adequately funded and supported by congress and the administration under the doubling initiat these programs are sound investments with high potential returns for american taxpayers we should resist the temptation of adding new responsibilities especially unfunded ones in two thousand and eight in the future until we can be certain that the current emissions will be adequately served an important issue to realize here is that during the next five years you know amount of scientific information that we will accumulate will double in other words we will learn as much about and understand and utilize that's not attracting high or continuous stream of world class researchers in order to carry out its mission through you know about prizes awarded to this staff in the past years demonstrate the quality of the current staff and have brought over recognition to nist however in my view the current climate in this is strained with the technical staff having to work harder and longer to accomplish less budget doubling should be accomplished in a manner that the research supports in infrastructure is improved to make the current staff to remain technologically and economically competitive nanotechnology i think is an ideal area of focus because of the tremendous potential of house economic rewards and the acute demands it places on the  key to american technological innovation and competitiveness but they more than ever exquisite measurement is necessary for discovering invention i thank you for this opportunity to speak to you today on these important issues thank you dr  it's chairman distinguished members of congress and staff members for reasons i've described in a moment i created accede to third class on the sorely neglected part of early stage capital markets the so called seed stage which is typically the first money raised by entrepreneurs to start a new business to begin to transition an idea rudimentary technology out of the laboratory toward the commercial marketplace i am typically pitched by my typical investment involves two entrepreneurs and ten power point slides and not much else i also want to call the committee attention to several other parts of my background because they are relevant to my testimony today prior to entering the venture capital industry i spent a little over half a decade as a startup entrepreneur and for over a decade studying doing and now investing in high risk early technological innovation as i've been asked to comment on the a t p program i would also call the committee's attention to the fact that i currently serve on the outside ext industry advisory committee to a t p and then i previously served on the national academies steering committee on government industry partnerships which issued two very detailed analyses reports on the eighty nine and then again in two thousand and one i have three simple points to make i make them briefly and they all lead to one conclusion first significant changes over the last fifteen years in early stage capital markets in the us create in my view an urgent need for the a t p to be continued and for it to be substantially funded so that it can run new competitions the most significant change in those markets is this as the venture capital has grown and mature the bulk of that industry has moved away from seed stage investing to invest later in the lifecycle of a startup when large amounts of capital can be efficiently deployed to permit companies to expand later at the point at which companies already have products developed typically and they actually have initial  sales that drift away from an early stage funding that's created a paradox there's plenty of capital available to expand company operations but there is too little capital available at the riskiest moment in the startups life at the very beginning when only an idea a concept or a rudimentary technology exists and needs to be transitioned out of the lab across the so called valley of death into toward the commercial marketplace very few organized financing mechanisms of sufficient scale exist to address that problem that frankly is why rex seed capital exists and that frankly is also a t p s historical sweet spot and there's plenty of room for both of us that leads to my next point why a t p a t p is quite likely the most intensively studied rigorously scrutinized and carefully assessed u technology program of the last fifty years at least as the national academies reviews concluded a t p is an extremely well run program that works and works well several of its program features notably its rigorous peer reviewed work free merit based competitions its emphasis on cost sharing its rigorous self assessment and it measured return on investment set the standard to which other federal technology programs ought to aspire which leads to my third point as the committee knows as a nation we face a series of major challenges to which continued innovation is the best response these include the need to move to carbon neutral alternative sources alternative energy technologies to maintain energy security for this country escalating health care costs driven by an aging population one increasingly prone to chronic long term illnesses like diabetes the competitive rise as technological challengers of china india and other advanced economies and not least the concomitant a reversion of u s technological leadership in a number of significant areas in addressing these challenges why reinvent the wheel leverage a program that historically has helped to produce significant innovation and that works and works well use a t p that leads to my conclusion i  result of their those arguments i recommend that congress should reauthorize the a t p program provide sufficient funding for a t p to run several competitions both general and specific competitions focused in areas of acute like the search for quietly neutral alternative energy technologies and picking up on your opening remarks mr chairman also i believe the committee should consider ways that a t p might be stable e and predictably funded over a long enough time frame perhaps a decade to have a significant impact over time thank you very much thank you very much mr boyce like to thank all the panelists to this point we're not quite as entertaining as a three ring circus but we keep at least two evenings going at any given time so we do have floor action going on i have another committee in which i understand there will be a vote sometime in the next five or ten minutes so if you notice a little shuffling up here it is not out of disrespect for you but out of concern for adequately discharging our different duties and with that  good start what i want to talk to you about is the success we've had with our local m e p in oregon when i used the term all map because that's the the acronym and then briefly go through some of the  details of the implementation that's excessed story a very good success story and then conclude with some observations of the funding and what what i think it will do to our local chapter and and project what i think it will do  partner and we clearly found that to be the group that met our needs and i'll speak a little more about that later but the thing that's the timeline what i'd like to show you now in a few minutes is just examples of the engagement work it's a lot of detail i just want to give you an example of the quality of the work that the the organization provides they again these consultants are very tactical and also very strategic they gave us a lot of customized solutions and i'm just going to work through these there's a lot of generalized training that is shared among all of the all of the clients of  the point that they were teaching us how to fish as opposed to giving us a fish these tools are broadly adopted now within our within our site in oregon as well as we're spreading into some of our other sites in the company again achieved as you can see up here these details may not mean much but they were extremely significant to our company that represents about half of the company being trained in two years again part of what that brought to us was the ability to develop people with ongoing skills and raise their capability so that we could continue to make these improvements long after  completed some of the results that we experienced as you can see up here a significant labor savings plenty of reductions and these are very typical results you'll see from an m e p engagement additionally the company was facing some pressures to consolidate a wide variety of sites and we ended up choosing or again as one of the sites to consolidate into as a result of these  made so not only are we more competitive extremely but we are competitive internally i want to make a couple of closing comments when i say why choose an element why did we decide to  are measured on the clients results gives them a focus that is very much in the interest of the client i don't know how i'll say that any some more simply again you can see again  i'm also on the board of our own that philip i can tell you from personal experience if they were faced with this funding reduction that's in the proposal from the administration it would lead to a drastic reduction and services i think they would reduce the ability to markets and their clients it will have a direct impact on the industry i would you know any any company you know facing out a significant loss of revenues that this would represent would take similar action i firmly believe that the funding level should be restored and hopefully with with reason expanded thank you very much i'll take any questions thank you a pleasure to have the opportunity to address the health science subcommittee relative to my comments i will share with you a long focus on the emmy p and the role it plays in helping american companies to describe and deploy a lean methods i'm currently c e o and president of tug technologies in marietta ga as dr green mentioned telcos such manufactures ground support equipment for domestic and international airlines as well as the us armed forces if you look at the whim of the renderer next time your plane stops at the gate you'll likely see the tug baggage tractor and you'll certainly see the loaders that are also manufactured by toxicology i've had the unique opportunity over the last several years to work with five of the state and p's inclusive of course of the state of georgia but i've spent thirty eight years in automotive industrial companies i would say to you i've learned how to learn to boat people and it's about learning but doing my thoughts to share with you specifically focused on the last thirteen years and as an american i believe that we in this country can be globally competitive by deploying lean methods to our manufacturing base in e p has played a put in a supporting role to enhance american productivity now on record for eighteen years back in eighty two back in one thousand nine hundred two i presented at a conference in brazil as a member of g senior management team that time i used a flag to does it in a talk to the point of order comes before progress in the written words on the flag in brazil actually say order make progress so now i think it's significant to understand what that means the associated task of the m v p continues to ramp up in ninety one results of the us government supported productivity study of japan was done in the book that came from that was called the machine that changed the world machine is the total production system in this designation in a book written by one that can jones that captures the japanese work on productivity in the automotive industry primarily at the opportunity to work with doom or mac during the time i worked for united technologies and he subsequently in ninety six published a book lean thinking and in his book he talks about a five step process which i'll show you on the slides to find the value of what you perfect balance of value value stream floor pro and professionally i do however list some actions that are important to consider and what i've done here is try to align those actions from that book in line with what the steps are they've identified as shown on this slide and i show you the m e p interface that's appropriate to helping companies convert themselves through lean power to deployment processes will significantly m e p has as a role in this process steps to success yes in any company a sense of learning from one might be some additional actions there's a basic learning from them i can jones when they looked at the toyota production system is that we understood man material in machine  we in america didn't have the in player puzzle put together and this is a depiction of the total production system going one slide one picture and what they're done here is identify puzzle pieces that frankly i believe we hadn't yet put together in this country  how do we learn to learn how to be take the learning from the us to deploy change in this country important quote from the ultimate scientist in my mind albert einstein i've been referring to this for many years and the questions i ask in this is can we learn to change our minds can we understand the differences we face can we be globally competitive can we stay at the same level of thinking we were at when we created the significant problems we're trying to fix and it said that the definition of  one who expects different results while doing the same things when did the challenge of lean challenge of the m v p profile is to make people understand and learn in order to deploy lean we have an implementation standard that optimizes the efforts of independent companies and is supported by an education process that understands the fundamental tools but i'm showing you here is a depiction of the profile of implementation for any lean activities and the support of e p is critical here as well the depiction is an umbrella with leadership and i would submit to you that the national let me pee is that leadership profile that allows us to succeed but more importantly the umbrella is this congress as well the members of the new u s congress represent the support needed by the m e p to truly lead the transformation process to change on the next size i've just identified some of my experiences relative to those five different back at the study that was originally done by well mike and jones the opportunity to coordinate and learn is a two part two part process if you would the opportunity to create success is a significant amount of benefits as i show on th slide the truly m e p plays a run of support that would not have a high enough level of understanding to deploy the change process is required by that six step picture with the umbrella supporting it is one of the benefits here of some of the benefits of sheaves from doing a lean transformation supported by and b p consultants significant improvements in revenue at one company with eighty six percent well operating income increased one hundred twenty eight percent again north american company competing globally improving inventory significantly improving the operational income of the companies by four hundred five hundred and five hundred fifty basis points of improved operational income  customer lead times and develop flawless launches as well but i ask you to think about a process consider that it has three versions at least what you think it is secondly what it actually is and then third here is what it should be proper value stream mapping and understand and you can imagine the efficiency improvements from that step one two and three consider a moment that henry ford at the rush complex in detroit delivered a car to each customer in a four day cycle from raw material to finish vehicle and he did that one hundred fourteen most people don't know that he wrote a book called today and tomorrow in one hundred thirty six that describes his lean process from some twenty two years earlier indeed develop the total production system from his studies of henry ford's methods one other important point toyota never had to change their bad habits since after the war they could start from the basics in one thousand nine hundred eighty seven the challenge in america stand today is that we have a change we have to change people from their habits of the past to the global changes and challenges will need to have in the future people do make the difference in japan they call it this body the j u s unify japanese scientists and engineers so they talk about people we talk about basically the focus of a nice then i s t is science and technology a subject matter very importantly but here's a quote from jack welch of general electric which challenges us all to go for the quantum leap can we do it by reducing m e p funding i don't think so he paused to look at this picture of the workers on the left talking to the engineer we need to help the worker here so he can understand and also be empowered today he is not the servant in this picture on the left the term plays on a writer learning safety glasses so obviously they must be production workers they need a different set of tools not just better pails but the right tools so they can avoid the dilemma of the rand in the first place in summary m e p has been a strong contributor to the need in this country stimulate change they have been a need to continue as a catalyst for that change they provide a country wide network the government must continue to support enterprise small and medium sized businesses need this kind of help even more we must remember that the market is global and other countries are getting better too m e p provides education not just training and not are good ideas of originate in america our congress has a responsibility to provide solutions not just observe the funding m e p five times in five states they are the solution we should expand not retract their support of the m e p m e p is that synergy it's a two thousand and seven budget is reduced from one hundred nine million to forty nine million not only are past efforts of the a m a m e p compromised but it would show that that leadership umbrella i showed you referring to it earlier has been closed by our own congress your constituents need your support your challenges are as our representatives to this congress are to find synergies that allow americans to prosper you know an ongoing expanding global market i submit that m e p is that synergy thank because you anticipate some reduction in funding for from congress i'd like to understand from as best as possible how much this recall petition will  money but you know when you wave action for the whole flock of turkeys it gets everybody upset and nobody gets back to feed and then go one more tricky for a while so i'd  like to understand why you're doing this what the estimated cost is and get a sense for how much this is going to upset the whole flock of very hard working folks the intent is certainly not to upset the flock the in terms of the actual cost i will have to take that for the record i don't have the numbers in front of me and so i'd be happy to answer in writing on the cost in terms of the rationales to do this at this point of reconstitution would take about five to six months if the budget reduction did occur and we were to start that after the final appropriations by the time we completed that competition would be out of money if we all centers at the same spend rate so with the competition around one is a more efficient way of trying to get through to try to extract where there may be some savings in the program where there may be slightly different business models to address that we would actually have to get in position of just cutting every single center by the same percentage which would probably create much more destruction and in the bigger system thank you dr jeffrey but given that congress there's some room to inquire as to why this path is being pursued because if we need to i suspect that we might put that prohibition back in the appropriations bill and i'd like to get a sense from m word again i'm speaking as a board member of the affiliate in oregon the the organization as it is now is extremely lean i've been to their offices they camp out in  end of a it's anything but plush the staff is fairly efficient and very lean i really don't know where they would find additional savings i think it would be a distraction for that business take away already limited resources look for new business or to market to other clients i really think it would be a disaster i can't say it strongly reich you have a thing that i mentioned earlier in my talk that m e p represents energy one of the things that i would i believe we do well enough in our country in the manufacturing sector is identify the is actually twenty four seconds over you know if i do not have an opportunity to return to this particular topic i would like the witnesses especially dr jeffrey and mr mary mr ryan to comment one hopes unlikely at this point by having them be absorbed by increasing charges to small and medium sized manufacturers and what the effect of this would be on services and  uptake of services from the current client base or customer base if you will so that the makeup of government funds through additional charges in fees and with that first of all i'd smith would like to be recognized first for  ryan i believe you talked about empowering workers and affording workers the tools and do you feel our vat our existing channels of empowering  sufficient what suggestions might you have for perhaps a change in paradigm or whatever the case might be to empower workers my testimony i make comments about presentation is an umbrella chart as i call it with six significant steps in sequence in the second step and that sequence is empowerment of the people that the first step is product cell structure you have to be in a appropriate structural physical manner in a manufacturing facility in order for people to be empowered otherwise management just pushes the problem an employee and frustrates them even more so my point is that the discipline for that six step sequence starting with the products the structure to the six step standardization to the distinction of that is this is a people get empowered once you create the structure that they can be an add what i call intellectual capital to the process there's a huge opportunity that comes from  transformation and again the opportunity for productivity in this country amongst the people in small and medium sized businesses is what will make us better as production management of large subsystems and vehicles and products for the associated market served to the people empowerment needs that first step and the m v p understands that sequence and frankly if you just go hire a consultant in the local state and not the n d p support what you'll find is unique there but the apple absolute application of that learning is still missing and the linkage of the n e p and my experience with five states not all fifty yet maybe a little long enough to do that in less five states that linkage is common and so i'm sharing with you that it isn't just a consulting activity m e p it's a common linkage of how things are done in the philosophy will get us there if we take it down a notch or two or three or and half as worse as a proposal says in the news that we've built up over eighteen years unfortunately and that would be a travesty and i do believe that congress needs to support the people in the people need to understand the profile of lean thank you thank you and also i have dr jeffrey how does nest evaluate new projects and novel fields of research in a potential economic benefits explicitly considered when determining priorities research priorities and you perform a formal needs assessment with involvement from the extra a community thank you for the initiatives our mission statement is to support the economic security and quality of life americans and so every new initiative we put forward goes through a rigorous internal process includes inputs generally from industry it includes looking at what the kinds of impacts will be often doing prospective studies have large areas to them so often there's best technical judgement involved nanotechnology is great example where there's been a number of studies that have indicated that nanotechnology in the next ten years may be anywhere from a one to two not have trillion dollar global enterprise and a lot of the issues there have to do with the measurements characterisations which seems very eloquently described in his testimony in addition we reach out to the private sector probably more than any other part of the federal s and t enterprise to really try to get an idea of what the potential measurement barriers to innovation are in fact we just completed our first assessment of what we call the u s measurement system which actually looked at over one hundred sixty industry technical roadmaps had over a thousand people from the private sector participating within this scientist to try to identify where there are current measurement barriers to innovation and so we just catalog that just literally release a report and now using that as also part of our strategic planning to identify and prioritize our investments little bit about the dance technology program if i may i'd understand from mr burrus that he feels that is an important program and i understand that the administration  feels otherwise did ministration wants to well see no need for it i could you please explain that disparity is there a particular need now as mr b role and you know it gets down to whether or not the early see should be whether there's other policy mechanisms that may be able to help turn the tide that mr morris described of the private sector investing in the really see whether direct federal investment is necessary and they basically get down to the source offical issue but really isn't so much an issue as to the effectiveness but as my understanding of what you're saying is if it's not broken bright i mean you're saying that the program is working well but that but now you're saying that somehow it's not the role of government to be a part of a program that's working well there are a lot of effective programs that we can have different levels of priority for the federal government and you know clearly we're in a position where there are tight federal budgets and we the prioritize what our investments are going to be based upon not just merit but also where we can make the biggest difference as a federal government and that's what gets folded into the calculus let me give mr gorst a chance if you'd like to add something i would only say that not only is it an appropriate role for the federal government it's a historically consistent well established role for the federal government over at least the last century and a half if not longer since the moral act the creation may not seven hundred but a few of the concrete examples of some of the barriers first and then just tell me whether or not there's a consensus on which barriers are to be a priority for an s to address that last printing say yes or no and with and but give me just some examples where we'll have it in the record that when he wants our yes thank you specifically in this area of nanotechnology we are now getting into the realm where our electronic devices on circuits are just a few atoms fake and they're starting to get to tens of atoms wide and in the not too distant future literally a single atomic single electronic device will be made up of a handful of  atoms the metro your requirements for for for first of all measuring the size of the device and then identifying which atoms are in the device and where they are within the device are absolutely daunting and yet they're absolutely crucial for being able to understand the operation and being able to and being able to design future types of devices so it's this issue of literally counting and identifying individual atoms in a three dimensional structure which is the you know when we can get to that point the the amount of  progress that we're going to be able to make will be really stunning so i would say that that for me is a key and critical issue also and another one is literally metering light particles photons one at a time  our at the stage where we're generating and detecting single photons and we're using those single photons to carry important information and that is another issue which is key and critical to to the to the issue  gamut from several of the measurements that dr williams described down to some of the more near term needs of today's auto industry information technology and others and i'll have a copy  thank you for sure to give me one now today and i've been studying and i'm going to taking a test on it or something just released it on mondays are and i was going to ask if there's a consensus on which barrier should be a priority for ne draft but they're probably prioritized in your article aaron and one of the things that we're doing sir is that we're taking these and we're now doing well called deep dives trying to identify whether or not there are some systemic issues as opposed to seven hundred twenty three separate ones that would be the ones to really focus on and one of the unique aspects of what this study did was it identified measurement barriers to innovation that may not fall just within this purview and so we're reaching out to industry to universities to other government agencies so that we can get a more comprehensive tax on these issues where we're at the point now where we're starting to look at the systemic issues to see if there are systemic issues which would then lead to that p thank you for that but dr jeffrey i'm talking to over the past several years this committee been active in promoting nationwide transition to electronic health records that we think and we're working in several different areas one is working with private sector and stance of them an organization to try to get some coherence and compatibility on some of the standards for inner operability systems were also work in supporting some of the contracts that h h s has are providing some technical underpinning to that and also looking at some of the validation mechanisms that will come into play so it was sort of tied in with  s throughout sort of before and to and again i thank you my time and i understand we can write letters and make inquiries and i will answer them i have a follow up to that but my time's up now you know back thank you s program this is a program as we all know as a state federal partnership and i'm curious since there's been this continued annual process where the administrations advocated reductions in the n d p pageant if the administration  ever consulted with the states and their funding agencies about your intent and how the program would operate under the budget cut it is my understand adding that at least in my state of utah the m e p center has not been consulted on this budget proposal and i think that many state agencies would likely simply reduce their share of matching funds with the federal sheriff's cup but you have an understanding of how states would react to these proposed cuts in terms of their outreach obviously one signers having them understand what the implications would be and having them start thinking about what the right approach would be to me moving forward but this is as you point out this i believe is the fifth  year seesaw and so there's we said it's a complete shock to the centers but we are working with them now and before any kind of a competition would occur to make sure they would be understands what the ground rules are what we're looking fo and how to maintain the most effective process for the small manufacturers that are out there we ask as i understand it one of the justification from all m b for the budget cut in  program was that almost twenty percent of the m e p clients are manufacturing firms that have more than two hundred fifty employees and that these firms would be able to make up the funding difference due to their size is this an indication  administration now considers manufacturers with more than two hundred fifty employees is outside the traditional federal definition of a small business point being like the s b a defines small businesses having less than five hundred employees i'm not sure about the specific on the reference you're making but we adopted the s b a definition for what small minded so that we're consistent with that so the five hundred people under the m e p program well then we do have a disagreement here and we'll follow up in written form and show you the o m b document that says they defined it as if you're over to fifty you don't need m e p anymore and be happy to share that with you because i'm curious what evidence the administration is using to say that clients with more than two hundred fifty employees suddenly don't need m e p i think it would be a helpful exchange to have  because quite frankly i think you know this the average manufacturing size in this country is about thirty three employees and one more question on on m e p there are sands under the proposed budget how list is going to decide which centers will remain operational assuming there will be a smaller system overall yes so one of the things that we discussed was that there would be every competition that would basically have the centers come back with a plan for how they would be able to  things that i think is very important to maintain is that there is an important role for the federal government in the n e p program and i think is very important we understand that there's really three absolutely critical core missions that the federal government needs to maintain one is they have to be a driver for producing the new kinds of products services that can they get propagated throughout the network things like lean manufacturing some of the other concepts that we talk by two witnesses second it has to maintain the quality of each of the centers in each beast essentially them brother organization to ensure that an absolute standard of quality is maintained and third basically have to have enough skin in the game so that the focus that stay on the small manufacturers and doesn't just go to those customers that might be what centers my gravitate to without the federal pressure and this is three really critical pieces that we need to be able to maintain within that think we can do that within that budget but back to jeffrey i don't think anyone's going to disagree with those three factors is what needs to be maintained but it seems like the proposed budget cut runs completely counter to the desire to maintain these pursue these three factors and i i suspect there's a bipartisan group on this committee who disagrees with this proposed budget cut mr chairman i yield back the balance my talk thank you very much dr determine how we do technology transfer and knowledge transfer as a said and learning about america to come here to this discussion first dr jeffrey i'm very pleased you're heading adding to it things such as m e p a t p in other words great ways to directly assist the manufacturing in this country i know you you mentioned earlier that administration has some find out who the little man in the basement of the white house is that holds that view and i have yet to locate him but yet the attitude there is of that nature i  the objective of that review to be to change in my p m e p for idiot logical reasons rather than pragmatic reasons and i'm very concerned about any attempts to change it and that's why the congress has operated originally even though it was not that bad but i think it could be improved m e p can be improved as well but it has to have the right motivation i'm not here castigating you or and particularly demonstration i'm very concerned about those aerial logs who simply think it is improper for the federal government to be working with industry in the way it does and that i objected strongly because other countries are trying to find out how we do it because we do it so well so it's actually idiotic to an area if you're logical grounds try to kill a program that's helping industry helping our nation helping our economy and i appreciate a special report  coming from me that the quotation from dr williams is quoting benjamin franklin who should be the patron saint of all industry and political leaders in this country which he said an investment  knowledge always pays the best interest just yesterday i testified before the house budget committee on with congressman rush holt my fellow physicist and he made the point to about investments that there is no expenditure of money that we make in the federal budget project that has a greater return than investment in science and technology there's no question that so we have to continue with that and i say if you want to review p and modify it just on the basis of making a good program better god bless you and we'll be happy to work with you and help you but i would resist any impetus to do it on the basis of the of some people in the administration that somehow this is something the government should not be doing and that we have to restructure it because it's maybe a logical choice i'm not negative on the administration i appreciate what they've done appreciate the president he's a good man a very good conversations with him about these issues and frankly he is in tune with what i'm trying to do so whoever is saying that he had ministration core those problems i don't thank you very much sir and obviously one point i want to make sure does not get lost on this is that you know obviously we stand by and i personally stand by to work with you and anyone else on this committee to try to improve any program for i'm not going to call that person and mr burris we're going to get to you then surely but i'm going to get this off my chest first and dr jeffrey i love you like a brother you have been terrific this is not directed at you  let's consider you a conduit a conduit from this and the pennsylvania avenue to what dr ellis has referred to as the feller in the basement that he hasn't been able to find that philosopher i mean dr jeffrey you must be embarrassed to be here because you are a scientist and you just told us you just told us that a t p is a fine program and is doing great things now if we were back  hundred fifty years with that philosopher in the white house be opposed to public libraries and we'd be counting on andrew carnegie if we were back in the time it abraham lincoln and they were debates when he was in the state legislature in illinois should the public be involved in building roads or canals or should that be a private enterprise nearly a hundred years ago is that object legitimate role for the federal government to ban child labor or to begin to work toward a forty hour work week there were nine old man across the street who felt it was not an appropriate wall and it wasn't until court packing a while later mixing my history a little bit but it's just those nine all men up enough that they started letting some of that legislation live rather than stomping it out overexerting court now moving it to a more relevant period space exploration there is a very legitimate role for the private sector in low orbit space space exploration but there are some folks who are thinking that nasa could be replaced in deep space exploration and quite frankly i just don't think the numbers crunch now that are privatizing the marine corps they aren't called contractors and i don't know how many of them there are because i don't know anybody's ever gotten count but we are reducing our troop numbers and we are outsourcing the marine corps at some point at some point a la syfy hits the hard wall of reality and i apologize to you for laying your ears back a little bit about this but it's not directed dr jeffrey because you are in a very uncomfortable spot of you know scientists represent a bunch of philosophers down the other end of the street just carry that message back and tell me what they say over a beer sometime mr burrus the administration asserts that there's plenty of venture capital funds and you say there isn't could you expand a little bit further on your comments about where venture capital has gone and why they're investing shall we say a more mature technologies and not perhaps in seed round and bridging the valley of death we commit large amounts of capital that they have at their disposal when they can assess with some degree of specificity at least three kinds of risks that venture investors look at technology  you know is this something that's in all possible from a scientific standpoint can be achieved appropriate price performance points to have an impact market risk is there a growing market into which this new technological innovation has some hope of doing so innovative startup not in a large stablish business that already has well established distribution channels is the market large enough to generate the kind of return that venture capitalists look for an execution risk is this assess those kinds of risks it's really the point of time when you need to have a leap of faith and believe that if you do a little work and begin to transition and idea fledgling technology  rudimentary bit of science out of the lab and toward the commercial marketplace that you can begin to get your hands around technology risk sales risk for market risk and execution risk sufficiently to then convince yourselves it's worth committing a large amount of capital say five to seven million dollars in an early stage round of investment that you can really kind of return by committing that capital that you need term to satisfy as event investors who give you the money that you use to invest your limited partners and so the bulk of the industry has gotten so large that it's moved away from being willing to take those kinds of leaps  faith they have a lot of capital they need to commit they can't committed in the small increments necessary to take the first few steps mr barton suspects the problem is that it takes about the same amount of due diligence to invest a million dollars as it takes to invest eighty million dollars in some cases more or less in some cases more thank you thank you for making that point for them clear that the bulk of the industry is no longer doing very early stage stage investing there are still some venture funds that do other stage investing but the vast bulk of the money that's spent actually goes to much later stages in the startup life it's just not available for the riskiest with my real meaning mitt and have two minutes apparently there's a philosophical disagreement the other end of the street and there's a concern about picking winners and losers how would you try to address the king of winners and losers which some believe should be left to the private sector i think picking winners and losers is a profoundly misleading metaphor it's in a certain sense it's to substitute sloganeering for a thorough understanding of how risky early stage technology innovation actually works no investor neither public nor private investor picks wins and losers ultimately as the gentleman to my left and right i think will testify it's the market that picks winners and losers by which i mean of course your competitors on the one hand and your customers on the other and you know there is so investors don't pick winners  losers what they do is they plant seeds in this particular area of high risk innovation they plant technologies and in the planting of seeds there is a well defined historically you know historical tradition a well defined historically traditional role that the federal government can and should play of planting technology seeds in the areas of either private market failure or national need and that's what a t p has done that's what the federal government and other programs and it's the gets a sensual interrupt you just with my thirty last thirty seconds there are some concerns that a t p may benefit only a single company others say that the benefit is broader than funding have to work through end of it companies in a market economy such as ours in a p p s case the measured social returns of the program far outstrip the total program dollars spent over the life of the program as a whole and of course consequently far outstrip the worse than that of dollars going to any individual company the resulting social benefits in the form of jobs in the form of seeding new technology industries that come into being in the form of consumer benefits are exceptional substantial i mean i suggest the critics who take that view ask  who have been diagnosed with breast cancer through a t p funded digital mammography innovation and subsequently treated because of the only detection that a t p funded innovation and then you go ask them whether they think the benefits of the program only went to a company i want to thank you mr bryce i wanted to give you a chance to finish answering the question and dr jeffrey i just want to return for a moment again i still love you but returning to that philosopher in the basement of o and b you know every person has a right to be a luddite but at least he should be a consistent luddite now we provide plenty of funding at department of energy and other agencies that invest in private sector technology an example of the hydrogen initiative the clean coal initiative over the cia in q tel project that has been investing doing pretty much what he does and dr jeffrey if i hurt you i'd be really angry that they're letting the cia in the investment realm do things that they want to take away from you and with that i would like to turn to the gentleman from michigan terms of ranking different institutions in terms of physics in this case it's in physics based institution that looked at metrics like their ranking in terms of the publications the grad students the ability to expand into the quantum error and one of the also others i think it was the synergy in terms of the expertise maryland actually came out very well university merrill came out very well in all those these two institutions together we actually agreed that working actually crossed physics disciplines and actually could pull accelerate that field so we looked very hard at all of the various metrics that are kept by the economy kept by the science foundation and made a determination we then did put out a federal register notice to explain our intent and we only had one university other than the university of maryland that came back and in further federal government has invested to date perhaps a little bit over seven billion dollars in the national nanotechnology initiative over multi year period and the administration is requesting approximately another billion and a half investment in the national nanotechnology initiative for fiscal zero eight justification has been that all bring about the development of a whole new industrial sector but the challenge is that current federal funding is very much focused on basic research and then a check knology we have heard from the now check industry about the gap in funding between  research and having proof of concept getting to the point where it will attract venture funding in your view should the a t p program be one component of the federal nanotechnology initiative to echo mr hall one word yes thank you now we do live in a world of budgetary constraints and there's a general agreement we hear this from both ends of pennsylvania avenue about the need for a strong innovation agenda which includes significant funding creases for research and development and on my part i hope for education both cases twelve and higher education now the administration has thus far focus primarily on basic research in the competitiveness initiative should the a t p program be a significant component of the federal innovation agenda and if it's a one word answer yes why yes why you only wish the social impacts that benefit the nation when we transition something out of the lab and into the commercial marketplace  without as i've tried to indicate their image it's a major gaps in some answering for that precise part of the problem and that's a gap that i'm trying to serve but that i have to sleep by myself i'm not going to be able to feel very much of it there's clearly a role for other family institute funding mechanisms federal funding mechanisms in particular  well and maybe i should elaborate on my nanotech piece is beginning to trickle out a little many of the things i look at and consider investing in these days have a nanoscale engineering component to it i think by the row that it's probably wrong to think about nanotechnology as an emerging industry it is a technology that will be very widely applied across a very big number of industries it will transform it is already going to transform chemistry transform material science ultimately will have very significant impacts in the manufacturing industries as well facilitating that transition home that one of the best hopes for generating the kind of innovation and revival and you know continued leadership by american industry as a whole that can sustain a growing standard of living in this country in light of the challenges that we face are there any other questions  for the members present if not i just like to say that we all support we all strongly support nests and especially in this laboratories they've done well in terms of federal financial support and they've done even better in terms of their success three nobel prize prizes it's just the tip of the iceberg what we want is a balance between the laboratory enterprise and the other very important things that nist does and we would like we will says insist upon a sensible fact based set of policies in science and in economics for our economy sakes as much as we may have interesting discussions with philosophers when we get down to science and running our economy i think that it is wise to pay a he needs to fact base numbers space constraints and dr jeffrey i look forward to working with you to develop that i believe that you would want that you want to do that and i want to thank the panelists all of you all who made this journey to this wonderful frosted town today to make significant contributions to this very very important discussion i thank you all very much i want to thank all of the for common witnesses of excused and this hearing is now a