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S. HRG. 107–1129

NANOTECHNOLOGY

HEARING

BEFORE THE

SUBCOMMITTEE ON SCIENCE, TECHNOLOGY, AND 

SPACE

OF THE

COMMITTEE ON COMMERCE, 

SCIENCE, AND TRANSPORTATION 

UNITED STATES SENATE

ONE HUNDRED SEVENTH CONGRESS

SECOND SESSION

SEPTEMBER 17, 2002

Printed for the use of the Committee on Commerce, Science, and Transportation

(

(II)

SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

ONE HUNDRED SEVENTH CONGRESS

SECOND SESSION

ERNEST F. HOLLINGS, South Carolina, Chairman 

DANIEL K. INOUYE, Hawaii 

JOHN D. ROCKEFELLER IV, West Virginia 

JOHN F. KERRY, Massachusetts 

JOHN B. BREAUX, Louisiana 

BYRON L. DORGAN, North Dakota 

RON WYDEN, Oregon 

MAX CLELAND, Georgia 

BARBARA BOXER, California 

JOHN EDWARDS, North Carolina 

JEAN CARNAHAN, Missouri 

BILL NELSON, Florida 

JOHN MCCAIN, Arizona 

TED STEVENS, Alaska 

CONRAD BURNS, Montana 

TRENT LOTT, Mississippi 

KAY BAILEY HUTCHISON, Texas 

OLYMPIA J. SNOWE, Maine 

SAM BROWNBACK, Kansas 

GORDON SMITH, Oregon 

PETER G. FITZGERALD, Illinois 

JOHN ENSIGN, Nevada 

GEORGE ALLEN, Virginia 

KEVIN D. KAYES, Democratic Staff Director 

MOSES BOYD, Democratic Chief Counsel 

JEANNE BUMPUS, Republican Staff Director and General Counsel 

SUBCOMMITTEE ON SCIENCE, TECHNOLOGY, AND SPACE

RON WYDEN, Oregon, Chairman 

JOHN D. ROCKEFELLER IV, West Virginia 

JOHN F. KERRY, Massachusetts 

BYRON L. DORGAN, North Dakota 

MAX CLELAND, Georgia 

JOHN EDWARDS, North Carolina 

JEAN CARNAHAN, Missouri 

BILL NELSON, Florida 

GEORGE ALLEN, Virginia 

TED STEVENS, Alaska 

CONRAD BURNS, Montana 

TRENT LOTT, Mississippi 

KAY BAILEY HUTCHISON, Texas 

SAM BROWNBACK, Kansas 

PETER G. FITZGERALD, Illinois 

(III)

C O N T E N T S 

Page 

Hearing held September 17, 2002 .......................................................................... 1

Statement of Senator Allen ..................................................................................... 5

Statement of Senator Wyden .................................................................................. 1

Prepared statement .......................................................................................... 3 

WITNESSES

Modzelewski, F. Mark, Executive Director, NanoBusiness Alliance ................... 11

Prepared statement .......................................................................................... 13

Russell, Hon. Richard M., Associate Director for Technology, Office of Science 

and Technology Policy .......................................................................................... 7

Prepared statement .......................................................................................... 9

Stupp, Samuel I., Ph.D., Chairman of the Committee for the Review of 

the National Nanotechnology Initiative, National Research Council/The National Academies, and Board of Trustees Professor of Materials Science, 

Chemistry and Medicine, Northwestern University ......................................... 24

Prepared statement and summary .................................................................. 26

Swami, Nathan, Director, Initiative for Nanotechnology, Commonweawlth of 

Virginia, and Microelectronics Program Director, University of Virginia ....... 36

Prepared statement .......................................................................................... 38

Williams, R. Stanley, HP Fellow and Director, Quantum Science Research, 

Hewlett-Packard ................................................................................................... 30

Prepared statement .......................................................................................... 32

APPENDIX

Lieberman, Hon. Joseph I., U.S. Senator from Connecticut, prepared statement ...................................................................................................................... 57

Roma ́n, Dr. Cristina, Executive Director, European NanoBusiness Association, prepared statement ..................................................................................... 74

Response to Written Questions Submitted by Hon. Ron Wyden to: 

F. Mark Modzelewski ....................................................................................... 61

Hon. Richard Russell ........................................................................................ 58

Dr. Samuel I. Stupp ......................................................................................... 68

R. Stanley Williams .......................................................................................... 71

(1)

NANOTECHNOLOGY 

TUESDAY, SEPTEMBER 17, 2002

U.S. SENATE, SUBCOMMITTEE ON SCIENCE, TECHNOLOGY, AND SPACE, COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION, Washington, DC. 

The Subcommittee met, pursuant to notice, at 2:35 p.m. in room 

SR–253, Russell Senate Office Building, Hon. Ron Wyden,

Chairman of the Subcommittee, presiding. 

OPENING STATEMENT OF HON. RON WYDEN,

U.S. SENATOR FROM OREGON 

Senator WYDEN. Today, the Subcommittee on Science, Technology, and Space convenes the first ever Senate hearing on 

nanotechnology. Certainly in coffee shops and senior centers this 

afternoon Americans are not exactly buzzing about this science of 

building electronic circuits and devices from single atoms and molecules, but there is no question that this field will dramatically 

change the way the American people live. 

Today, I have introduced legislation on this issue with my distinguished colleague, the Senator from Virginia, and others. He and 

I have been pursuing all of these important technology issues on 

a bipartisan basis throughout the session, and I want to thank him 

for his support and also note that Senator Lieberman, Senator 

Landrieu and Senator Clinton are original sponsors of our bipartisan legislation as well. 

My own judgment is that the nanotechnology revolution has the 

potential to change America on a scale that is equal to if not greater than, the computer revolution. As chair of this Subcommittee, I 

am determined the United States will not miss the opportunities 

in this exciting field. At present, efforts in the nanotechnology area 

are strewn across a half-dozen Federal agencies. I believe it is critical that the Government marshall its various nanotechnology efforts in one driving force to become the Nation’s leader in this burgeoning field, and I am of the view that Federal support is essential to achieving the goal. 

The legislation that we have introduced today will provide a 

smart, accelerated, and organized approach to nanotechnology research, development, and education. In my view, there are three 

major steps that need to be taken. First, a national nanotechnology 

research program should be established to superintend long-term, 

fundamental nanoscience and engineering research. The program’s 

goals are to ensure America’s leadership and economic competitiveness in nanotechnology, and to make sure that the ethical and soVerDate 0ct 09 2002 08:05 May 12, 2005 Jkt 093633 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 S:\WPSHR\GPO\DOCS\93633.TXT JACK PsN: JACKF
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cial concerns are taken into account, alongside the development of 

the discipline. 

Second, the Federal Government should support nanoscience 

through a program of research grants and also through the establishment of nanotechnology research centers. These centers would 

serve as key components of a national research infrastructure, 

bringing together experts from the various disciplines that must 

intersect for nanoscale projects to succeed. As these research efforts 

take shape, educational opportunities will be key to their success. 

In this hearing room, I have already laid out a challenge to triple 

the number of people graduating with math, science, and technology degrees. Today, I commit to helping students who would 

enter the field of nanotechnology. This discipline requires multiple 

areas of expertise. Students with the drive and the talent to pursue 

physics, chemistry, and materials science, simultaneously, deserve 

all the support that we can offer. 

Third, the Government should create connections across agencies 

to mesh the various ongoing nanotechnology efforts. These should 

include a national steering office, a Presidential Nanotechnology 

Advisory Committee modeled on the President’s Information Technology Advisory Committee. I also believe that as these organizational support structures are put in place, rigorous evaluation must 

take place to ensure the maximum efficiency of our efforts. Personally, I would call for an annual review of America’s nanotechnology 

efforts from the presidential advisory committee and a periodic review from the National Academy of Sciences. 

In addition to monitoring our own progress, the Government 

should keep abreast of the world’s nanotechnology efforts through 

benchmarking studies. If the Federal Government fails to get behind nanotechnology today with organized goal-centered support, 

the country runs the risk of falling behind other nations. 

Nanotechnology is already making pants more stain-resistant, 

more windows self-washing, and making car parts stronger with 

tiny particles of clay. 

America risks missing the next generation of nanotechnology. In 

the next wave, nanoparticles and nanodevices will be the building 

blocks of health care, agriculture, manufacturing, environmental 

cleanup, and even national security. America does risk missing a 

revolution in electronics where a device the size of a sugar cube 

could hold all of the information in the Library of Congress. Today’s silicon-based technologies can only shrink so small. Eventually, nanotechnology will grow devices from the molecular level up. 

Small though they may be, their capabilities and their impacts are 

going to be enormous. Spacecraft could be the size of mere molecules. 

America risks missing a revolution in health care. In my home 

State, Oregon State University researchers are working at the 

microscale to create lapel pin-sized biosensors that use the colorchanging cells of the Siamese fighting fish to provide instant visual 

warnings when a biotoxin is present. An antimicrobial dressing for 

battlefield wounds is already available today, containing silver and 

nanocrystals that prevent infection and reduce inflammation. 

The health care possibilities are limitless. Eventually, nanoscale 

particles will travel through human bodies to detect internal disVerDate 0ct 09 2002 08:05 May 12, 2005 Jkt 093633 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 S:\WPSHR\GPO\DOCS\93633.TXT JACK PsN: JACKF
3

ease. Chemotherapy could attack individual cancer cells and leave 

healthy cells intact. Tiny bulldozers could unclog blocked arteries. 

Human disease would be fought cell by cell, molecule by molecule, 

and nanotechnologies would provide victories over disease that cannot be imagined today. 

So America does risk missing a host of beneficial breakthroughs. 

America’s scientists could be the first to create nanomaterials for 

manufacturing and design that are stronger, lighter, harder, selfrepairing, and safer. Nanoscale devices could scrub automobile pollution out of the air as it is produced. Nanoparticles could cover 

armor to make America’s soldiers almost invisible to enemies, and 

incredibly enough, tend to their wounds. Nanotechnology could 

grow steel stronger than what is made today with little or no waste 

to pollute the environment. 

And especially, there is an extraordinary opportunity to promote 

more jobs and an economic revolution. With much of 

nanotechnology now existing in a research surrounding, venture 

capitalists are already investing $1 billion in American nanotech 

interests this year alone. It is estimated that nanotechnology will 

become a trillion dollar industry over the next 10 years. As the 

field grows, the ranks of skilled workers needed to discover and 

apply its capabilities have to grow as well. In the nanotechnology 

revolution, areas of high unemployment could become magnets for 

domestic production, engineering, and research for nanotechnology 

applications, but only if the Government does not miss the boat. 

The National Nanotechnology Initiative is clearly a step in the 

right direction. Significant funds have already been committed to 

nanotechnology research and development, and what we need to 

make clear is that funding is not enough. There has to be careful 

planning to make sure that the money is used for sound science 

over the long term. That is the reason for the bipartisan legislation 

that Senator Allen and I have teamed up on today. 

I am going to put the rest of this statement that I have, and a 

lengthy one it is, into the record, and recognize my colleague. As 

I say, it has been a pleasure to team up with Senator Allen on a 

host of these technology questions. This is one that I think is going 

to be particularly exciting in States like Virginia and Oregon, 

where there are already pioneering efforts underway, and I want 

to again express my appreciation to my colleague. 

[The prepared statement of Senator Wyden follows:]

PREPARED STATEMENT OF HON. RON WYDEN, U.S. SENATOR FROM OREGON

Today the Subcommittee on Science, Technology and Space convenes the first-ever 

Senate hearing on nanotechnology. In coffee shops and senior centers this afternoon, 

Americans aren’t exactly buzzing about this science of building electronic circuits 

and devices from single atoms and molecules. But there’s no question that this field 

will dramatically change the way Americans live. 

My own judgment is the nanotechnology revolution has the potential to change 

America on a scale equal to, if not greater than, the computer revolution. As Chair 

of this Subcomittee, I am determined that the United States will not miss, but will 

mine the opportunities of nanotechnology. At present, efforts in the nanotechnology 

field are strewn across a half-dozen Federal agencies. I want America to marshal 

its various nanotechnology efforts into one driving force to remain the world’s leader 

in this burgeoning field. And I believe Federal support is essential to achieving that 

goal. 

Legislation I am introducing today will provide a smart, accelerated, and organized approach to nanotechnology research, development, and education. In my 

4

view, there are three major steps America must take to ensure the highest success 

for its nanotechnology efforts. 

First, a National Nanotechnology Research Program should be established to superintend long-term fundamental nanoscience and engineering research. The program’s goals will be to ensure America’s leadership and economic competitiveness 

in nanotechnology, and to make sure ethical and social concerns are taken into account alongside the development of this discipline. 

Second, the Federal government should support nanoscience through a program 

of research grants, and also through the establishment of nanotechnology research 

centers. These centers would serve as key components of a national research infrastructure, bringing together experts from the various disciplines that must intersect 

for nanoscale projects to succeed. As these research efforts take shape, educational 

opportunities will be the key to their long-term success. 

In this hearing room, I have already laid out a challenge to triple the number of 

people graduating with math, science and technology degrees. Today, I commit to 

helping students who would enter the field of nanotechnology. This discipline requires multiple areas of expertise. Students with the drive and the talent to tackle 

physics, chemistry, and the material sciences simultaneously deserve all the support 

we can offer. 

Third, the government should create connections across its agencies to aid in the 

meshing of various nanotechnology efforts. These could include a national steering 

office, and a Presidential Nanotechnology Advisory Committee, modeled on the 

President’s Information Technology Advisory Committee. 

I also believe that as these organizational support structures are put into place, 

rigorous evaluation must take place to ensure the maximum efficiency of our efforts. 

Personally, I would call for an annual review of America’s nanotechnology efforts 

from the Presidential Advisory Committee, and a periodic review from the National 

Academy of Sciences. In addition to monitoring our own progress, the U.S. should 

keep abreast of the world’s nanotechnology efforts through a series of benchmarking 

studies. 

If the Federal government fails to get behind nanotechnology now with organized, 

goal-oriented support, this nation runs the risk of falling behind others in the world 

who recognize the potential of this discipline. Nanotechnology is already making 

pants more stain-resistant, making windows self-washing and making car parts 

stronger with tiny particles of clay. What America risks missing is the next generation of nanotechnology. In the next wave, nanoparticles and nanodevices will become 

the building blocks of our health care, agriculture, manufacturing, environmental 

cleanup, and even national security. 

America risks missing a revolution in electronics, where a device the size of a 

sugar cube could hold all of the information in the Library of Congress. Today’s silicon-based technologies can only shrink so small. Eventually, nanotechnologies will 

grow devices from the molecular level up. Small though they may be, their capabilities and their impact will be enormous. Spacecraft could be the size of mere molecules. 

America risks missing a revolution in health care. In my home state, Oregon 

State University researchers are working on the microscale to create lapel-pin-sized 

biosensors that use the color-changing cells of the Siamese fighting fish to provide 

instant visual warnings when a biotoxin is present. An antimicrobial dressing for 

battlefield wounds is already available today, containing silver nanocrystals that 

prevent infection and reduce inflammation. The health care possibilities for 

nanotechnology are limitless. Eventually, nanoscale particles will travel through 

human bodies to detect and cure disease. Chemotherapy could attack individual cancer cells and leave healthy cells intact. Tiny bulldozers could unclog blocked arteries. Human disease will be fought cell by cell, molecule by molecule—and 

nanotechnology will provide victories over disease that we can’t even conceive today. 

America risks missing a host of beneficial breakthroughs. American scientists 

could be the first to create nanomaterials for manufacturing and design that are 

stronger, lighter, harder, self-repairing, and safer. Nanoscale devices could scrub 

automobile pollution out of the air as it is produced. Nanoparticles could cover 

armor to makes American soldiers almost invisible to enemies and even tend their 

wounds. Nanotechnology could grow steel stronger than what’s made today, with little or no waste to pollute the environment. 

Moreover—and this is key—America risks missing an economic revolution based 

on nanotechnology. With much of nanotechnology existing in a research milieu, venture capitalists are already investing $1 billion in American nanotech interests this 

year alone. It’s estimated that nanotechnology will become a trillion-dollar industry 

over the next ten years. As nanotechnology grows, the ranks of skilled workers 

needed to discover and apply its capabilities must grow too. In the nanotechnology 

5

revolution, areas of high unemployment could become magnets for domestic production, engineering and research for nanotechnology applications—but only if government doesn’t miss the boat. 

Our country’s National Nanotechnology Initiative is a step in the right direction. 

This nation has already committed substantial funds to nanotechnology research 

and development in the coming years. But funding is not enough. There must be 

careful planning to make sure that money is used for sound science over the longterm. That is the reason for the legislation I am issuing today. The strategic planning it prescribes will ensure that scientists get the support they need to realize 

nanotechnology’s greatest potential. 

In 1944 the visionary President Franklin Delano Roosevelt requested a leading 

American scientist’s opinion on advancing the United States’ scientific efforts to benefit the world. Dr. Vannevar Bush offered his reply to President Harry S. Truman 

the next year, following FDR’s death. In his report to the President, Dr. Bush wrote, 

‘‘The Government should accept new responsibilities for promoting the flow of new 

scientific knowledge and the development of scientific talent in our youth. These responsibilities are the proper concern of the Government, for they vitally affect our 

health, our jobs, and our national security. It is in keeping also with basic United 

States policy that the Government should foster the opening of new frontiers and 

this is the modern way to do it.’’

Those principles, so true nearly sixty years ago, are truer still today. I propose 

that the government now accept new responsibilities in promoting and developing 

nanotechnology. Our witnesses today will make it clear that nanotechnology will vitally affect our health, our jobs, and our national security—as well as our economy. 

I look forward to hearing from them on how this Congress might take up what I 

believe is a proper concern—and an essential one—indeed.

STATEMENT OF HON. GEORGE ALLEN,

U.S. SENATOR FROM VIRGINIA 

Senator ALLEN. Thank you, Mr. Chairman, and I want to thank 

you for calling today’s hearing. I want to share your enthusiasm 

about today’s prospect as well as many other matters. We worked 

as leaders in a bipartisan manner to try to get our colleagues in 

the Senate and, indeed, the whole Federal Government to address 

many important needs of our country, especially in the areas of 

science and space and technology. I look forward to listening to our 

panel of experts. I know that one, Dr. Swami, is from Virginia, and 

there is a great deal of promise here. I think it is exciting, because 

it is not just a matter of jobs, which is great, but it is truly improving our lives, our communications, our material sciences, and many 

other areas. 

We had a hearing in this Committee earlier about the importance of basic scientific research and whether or not Congress 

should consider doubling the budget for the National Science Foundation, and in the midst of that hearing, one of the more intriguing 

conversations was the discussion on nanotechnology, and those witnesses were saying, pay attention to that and, of course, you and 

I were, and in fact in preparing for this I looked back to a speech 

I gave in April of last year, and my view is, nanotechnology is 

quickly transforming every corner of our modern world and has already—as you gave some of the examples, already transforming 

and improving the quality of our life. 

Whether it is electronic devices in computers to health care, 

pharmaceuticals, agriculture, energy, or national defense, 

nanoscience is really at the foundation and will be at the foundation of many of these revolutionary advances and discoveries in the 

decades to come. Some will be years to come, some decades to 

come, but it is certainly going to occupy a major portion of our techVerDate 0ct 09 2002 08:05 May 12, 2005 Jkt 093633 PO 00000 Frm 00009 Fmt 6633 Sfmt 6601 S:\WPSHR\GPO\DOCS\93633.TXT JACK PsN: JACKF
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nology economy. It is that promise, it is that potential that should 

impel us as Americans, in a land that has always historically valued and encouraged innovation and entrepreneurship, that we embrace and support this research and this work. 

Our Nation has been at the forefront of virtually every important 

and transformative technology since the Industrial Revolution, and 

we must continue to lead the world in the new frontier of 

nanoscience, and that is why, Mr. Chairman, I am so proud and 

enthusiastically joining with you in supporting and introducing the 

21st Century Nanotechnology Research and Development Act. I 

think it is vitally important for the future of our country, for our 

competitive edge. 

Maybe some people will wonder what in the world is 

nanotechnology. We will get a definition of nanotechnology. It is 

typically defined by size, and the science of nanotechnology is really the ability to pick and place and manipulate atoms one one-hundred thousandth times smaller than the width of a human hair. So 

pull one of these out of your head. 

Senator WYDEN. I do not have any left. I have given them to this 

cause. 

[Laughter.] 

Senator ALLEN. What a personal commitment. 

[Laughter.] 

Senator ALLEN. They are one one-hundredth times smaller than 

the width of a human hair. Of course, you would have to look at 

that under a microscope. You probably could not see it with the 

naked eye, but this is going to generate these materials and the 

fundamentally new and superior methods of science for us, and to 

improve our lives, so I agree with everything you said, Mr. Chairman, and I look forward to working with you and this Committee 

in making sure that the United States leads in this, as well as 

other areas. If we are going to lead, we have to be well-coordinated. 

We need a game plan. 

We do not just—obviously there is more funding in our act, and 

it is consistent with President Bush’s initiatives as well, but we do 

want to have measurement, also recognizing in this that many of 

these developments and improvements in the marketing of these 

advancements may be decades down the road, but this is what I 

think the taxpayers of the United States Government would like us 

to do. And we look forward to listening to this esteemed panel as 

to how we can make sure that the Federal Government, working 

with the private sector, working with colleges and universities and 

the scientists therein, to make sure we have the right fertile 

ground conditions present for the collaboration that is needed for 

us to move forward in this area. 

Again, I thank you for this hearing, and thank these fine gentlemen for sharing their views with us. 

Senator WYDEN. I thank my colleague for an excellent statement, 

we have got a big job ahead of us in terms of educating the Senate 

on these issues, and I look forward to tackling them with you. 

So we will introduce our panelists. We will begin with Hon. Richard Russell, Associate Director for Technology, Office of Science 

and Technology Policy; and then we will have Mr. Mark 

Modzelewski, executive director of the NanoBusiness Alliance; and 

7

then Dr. Samuel Stupp, Board of Trustees Professor in materials 

science, chemistry, and engineering at Northwestern; Dr. Stan Williams, HP fellow and director of quantum science research at Hewlett-Packard; and Dr. Nathan Swami, Director of the Initiative for 

Nanotechnology, Commonwealth of Virginia, and the microelectronics program director at the University of Virginia. 

Gentlemen, we welcome all of you. We are going to put your prepared statements into the record in their entirety, and I know that 

at these hearings there is almost a physical compulsion to just 

read, word for word, everything that is down in your statement, 

and I think in the interest of more having a free-flowing discussion, 

if I can talk you into summarizing some of your big concerns so 

that we can have a discussion about some of the issues, we will 

make your prepared statement a part of the hearing record in its 

entirety. Why don’t you take, each of you, 5 minutes or so, and we 

will proceed with you. 

Mr. Russell, welcome. 

STATEMENT OF HON. RICHARD M. RUSSELL, ASSOCIATE

DIRECTOR FOR TECHNOLOGY, OFFICE OF SCIENCE AND

TECHNOLOGY POLICY 

Mr. RUSSELL. Thank you, Mr. Chairman and Senator Allen, for 

this opportunity to testify about the National Nanotechnology Initiative and the importance of nanotechnology research. I agree with 

you wholeheartedly that this is a tremendously important area and 

a tremendously exciting area for us to be looking at. Properties 

that govern physics of materials and artifacts at the nanoscale can 

differ significantly from those at more conventional scales. As a result, nanotechnology represents more than simply another step in 

the progression of technology miniaturization. 

Looking to the future, commercialization of nanotechnology is expected to lead to new products and in some cases the creation of 

new markets and applications as diverse as materials and manufacturing electronics, biotechnology, information technology, and 

national security. New discoveries in nanotechnology are being 

made on a regular basis. 

Just last week, and I am sure we will hear from the other panelists, Hewlett-Packard announced a breakthrough in molecular electronics through a joint Federal/industry-funded project at UCLA. 

The team pioneered a method to fabricate closely spaced nanoscale 

wires. This novel device represents a major breakthrough in memory storage density. 

Another example of great promise is federally funded BioCOM 

chip under development at UC Berkeley. This device allows for 

real-time blood screening for prostate cancer. Though still in the 

prototype stage, this device and others like it promise to improve 

significantly medical diagnostics. 

Nanotechnology is still at a very early stage of development. The 

role of Federal R&D funding in this area is to provide the fundamental research underpinnings on which future commercial 

nanoscale technologies could be based. Numerous challenges must 

be addressed before the envisioned promise of these technologies 

can be reached. These challenges include fundamental research to 

improve our understanding in several fields of science and engiVerDate 0ct 09 2002 08:05 May 12, 2005 Jkt 093633 PO 00000 Frm 00011 Fmt 6633 Sfmt 6601 S:\WPSHR\GPO\DOCS\93633.TXT JACK PsN: JACKF
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neering as well as synthesis, analysis and manufacturing of 

nanoscale-based products. 

Because of its significant potential impacts on the physical 

sciences, life sciences, and engineering and more broadly on the 

United States’ economy and society, nanotechnology is viewed by 

the Bush administration as an important component of the Federal 

research and development portfolio. The President requested a 17-

percent increase for nanotechnology research in fiscal year 2003. 

The administration’s ongoing support for nanotechnology was 

also articulated through a joint guidance memorandum issued to 

heads of Federal science and technology agencies from OSTP and 

OMB, which specifically identified nanotechnology as 1 of 6 interagency R&D priorities for 2004. Federal funding for 

nanotechnology is focused through NNI. NNI is an interagency program that encompasses relevant nanotechnology R&D-participating 

Federal agencies. 

The research agenda for the 9 agencies currently participating in 

NNI is coordinated by the Nanoscale Science and Engineering 

Technology Subcommittee, or NSET, which is part of the National 

Science and Technology Council. The National Nanotechnology Coordinating Office assists NSET-participating agencies in coordinating their nanotechnology funding. It also serves as the secretariat for NNI. The coordinating office carries out the objectives established by NSET members, coordinates and publishes information for workshops sponsored by NNI, and prepares annual reports 

on the activities of NNI. The coordinating office also contracts for 

program reviews to provide feedback on NNI. 

NNI funding provides support for a range of activities which include basic research, grant challenges, research infrastructure and 

centers, and networks of excellence, which are centralized facilities 

intended to provide sites for cooperative research amongst groups 

of researchers from multiple institutions. NNI funding is also used 

to address nontechnical research problems in the broader context, 

including societal implications and workforce and training issues 

that will likely emerge in relation to nanotechnology. 

The National Research Council recently completed a report on 

NNI. The report highlighted the strong leadership of NNI, praising 

the degree of interagency collaboration and the early successes of 

the research programs. The report also provided a number of recommendations to further strengthen NNI. 

OSTP is working through the coordinating office and the NSTC 

to improve the structure of NNI, and to create a strong framework 

for implementing NNI’s technical objectives. NNI’s early program 

success and positive independent review by the NRC provides a 

sound justification for continued support in this important research 

field. With a history of only 2 years, the ultimate impact of NNI 

lies in the future, and will only be realized through continued Federal R&D funding. 

Mr. Chairman, Senator Allen, the administration supports 

nanotechnology research, the NNI program, and I look forward to 

working with the Committee on this important research. 

[The prepared statement of Mr. Russell follows:]

9

PREPARED STATEMENT OF HON. RICHARD M. RUSSELL, ASSOCIATE DIRECTOR FOR

TECHNOLOGY, OFFICE OF SCIENCE AND TECHNOLOGY POLICY

Mr. Chairman and Members of the Subcommittee, thank you for the opportunity 

to appear before you today to speak about the National Nanotechnology Initiative 

(NNI). 

Nanotechnology is research and development at the nanoscale—a scale on the 

order of 10¥9 meters, or a thousandth of a millionth of a meter. To provide some 

perspective, this is approximately 1/100,000 the diameter of the average human 

hair. Research in nanotechnology is contributing to a fundamentally new understanding of the unique properties that occur on the nanoscale. The properties and 

governing physics of materials and artifacts at the nanoscale can differ significantly 

from those at more conventional scales. As a result, nanotechnology represents more 

than simply another step in the progression of technology miniaturization. 

Looking to the future, commercialization of nanotechnology is expected to lead to 

new products, and in some cases the creation of new markets, in applications as diverse as materials and manufacturing, electronics, medicine and healthcare, environment, energy, chemicals, biotechnology, agriculture, information technology, 

transportation, national security, and others. Nanotechnology will likely have a 

broad and fundamental impact on many sectors of the economy. Some have even 

suggested that this impact will surpass the combined impact of both biotech and information technology. 

New discoveries are being made on a regular basis. Just last week (9/10/02), researchers at Hewlett Packard announced a nanotechnology breakthrough in molecular electronics. Through a joint federal/industry funded project at the University 

of California at Los Angeles, the team pioneered a method to fabricate nanoscale 

wires separated by a thousand molecules. This novel device represents a major 

breakthrough in memory storage density that heralds a new era in microelectronic 

miniaturization. It serves as a prime example of the promise—and the challenge—

posed by nanotechnology. This includes the promise of new materials, new devices, 

and new processes that will enable continued growth in our high tech industries. 

But it also highlights the challenge of understanding nanoscale phenomena, reliably 

producing nanoscale structures and systems, and converting this new knowledge 

into new technologies that contribute to our economic prosperity. 

Another example of great promise is the federally funded BioCOM chip under development at the University of California at Berkeley. This device combines elements of both the nano- and the micro-scale into a lab-on-a-chip package that provides a new tool for real-time sampling of blood for Prostate Specific Antigen (PSA) 

screening. Though still in the prototype stage, this device, and others like it, promise to revolutionize medicine. These developments are leading to new sensors that 

will be utilized in medicine as well as homeland security, broadly contributing to 

healthcare, economic strength, and national security. 

Nanotechnology is still at a very early stage of development. The role of federal 

R&D funding in this area is to provide the fundamental research underpinnings 

upon which future commercial nanoscale technologies will be based. Numerous challenges must be addressed before the envisioned promise of these technologies can 

be reached. These challenges include fundamental research to improve our basic understanding in several fields of science and engineering, as well as novel approaches 

toward synthesis, analysis and manufacturing of nanotechnology-based products. 

Because of the complexity, cost, and high risk associated with these issues, the private sector is often unable to assure itself of short-to-medium term returns on R&D 

investments. Consequently, industry is not likely to undertake the basic research investments necessary to overcome the technical barriers that currently face the 

nanotechnology field. The NNI program is structured to overcome these barriers so 

that America’s industries will prosper from our investment in nanotechnology. 

The President’s FY 2003 budget represents a record request for federally funded 

R&D ($112 billion), an increase of eight percent over the previous investment. Because of its significant potential impact on the physical sciences, life sciences, and 

engineering—and more broadly on the U.S. economy and society—nanotechnology is 

viewed by the Bush Administration as an important component of the federal research and development (R&D) portfolio. Funding for nanotechnology was increased 

seventeen percent in the FY 2003 request ($679 million). In the previous fiscal year, 

President Bush signed into law a thirty seven percent increase in the NNI budget 

(from $464 million to $579 million). 

The Administration’s ongoing support for nanotechnology was articulated through 

a joint guidance memorandum issued to heads of Federal science and technology 

agencies from John H. Marburger III, Director of OSTP, and Mitchell Daniels, DiVerDate 0ct 09 2002 08:05 May 12, 2005 Jkt 093633 PO 00000 Frm 00013 Fmt 6633 Sfmt 6621 S:\WPSHR\GPO\DOCS\93633.TXT JACK PsN: JACKF
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rector of the Office of Management and Budget, which specifically identified 

nanotechnology as one of six interagency R&D priorities for FY 2004. 

Federal funding for nanotechnology is focused through the National 

Nanotechnology Initiative (NNI). The NNI is an interagency program that encompasses relevant nanotechnology R&D among the participating Federal agencies. The 

research agenda for the nine agencies currently participating in the NNI is coordinated by the Nanoscale Science and Engineering Technology (NSET) Subcommittee 

of the National Science and Technology Council (NSTC). The NSET is staffed by 

representatives of the participating agencies, OSTP, OMB, as well as other Federal 

agencies that lack relevant R&D programs but which have an interest in these technologies. NSET members meet on a monthly basis to measure progress, set priorities, organize workshops, and plan for the coming year. The National 

Nanotechnology Coordination Office (NNCO) assists NSET-participating agencies in 

coordinating their nanotechnology funding. It also serves as the secretariat for the 

NNI. The NNCO carries out the objectives established by the NSET members, coordinates and publishes information from workshops sponsored by the NNI, and 

prepares annual reports on the activities of the NNI. The NNCO also contracts for 

program reviews to provide feedback on the NNI. 

The federal agencies currently performing nanotechnology research coordinated 

through the NNI are:

• Department of Defense; • Department of Energy; • Department of Justice; • Department of Transportation; • Environmental Protection Agency; • National Aeronautics and Space Administration; • National Institutes of Health; • National Institute of Standards and Technology; and • National Science Foundation.

This funding provides support for a range of activities, which include: basic research, focused efforts directed at answering specific sets of questions of high significance—so-called ‘‘grand challenges,’’ research infrastructure (instrumentation, 

equipment, facilities), and centers and networks of excellence, which are larger centralized facilities intended to provide sites for cooperative and collaborative efforts 

among distributed networks and groups of researchers at multiple affiliated institutions. Depending on the agency, funding is being used to support mission-oriented 

research within agencies, research at national laboratories, or to support research 

at academic institutions. A small portion of the funding is also dedicated to addressing non-technical research problems in a broader context, including societal implications, and workforce and training issues that will likely emerge in relation to 

nanotechnology. 

The National Research Council (NRC) conducted an evaluation study of the NNI 

from mid-2001 to mid-2002. Earlier this summer, the NRC released the results of 

this study in a report entitled Small Wonders, Endless Frontiers: A Review of the 

National Nanotechnology Initiative. The report highlighted the strong leadership of 

the NNI, praised the degree of interagency collaboration, and lauded the early successes of the research programs. The report also provided a number of recommendations to further strengthen the NNI. OSTP is working closely with the NNCO, as 

well as through its representation on the NSTC’s Nanoscale Science and Engineering Technology Subcommittee, to improve the structure of the NNI, and to create 

a stronger framework for implementing the NNI’s technical objectives. One recommendation of the NRC was to create an independent Nanoscience and 

Nanotechnology Advisory Board (NNAB) to provide input to the NSET members. 

OSTP believes that this function can be met through the President’s Council of Advisors and Science and Technology (PCAST). As you know, PCAST members represent a distinguished cross section of industry and academia and have always functioned as an external advisory board on science and technology issues of relevance 

to the nation. They are clearly qualified to carry out such functions for 

nanotechnology. 

The NNI was initiated in FY 2001. The early program successes and positive independent review by the NRC provide a sound justification for continued support in 

this important research field. With a history of only two years, the ultimate impact 

of the NNI lies in the future and will only be realized through continued federal 

R&D funding. 

Mr. Chairman and Members of the Committee, I hope that this overview has conveyed this Administration’s commitment to nanotechnology and the NNI program. 

OSTP is actively working with the NNCO to implement many of the NRC recVerDate 0ct 09 2002 08:05 May 12, 2005 Jkt 093633 PO 00000 Frm 00014 Fmt 6633 Sfmt 6621 S:\WPSHR\GPO\DOCS\93633.TXT JACK PsN: JACKF
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ommendations. We believe that our efforts will improve the program substantially 

and will enhance our investment in nanotechnology.

Senator WYDEN. Thank you. Mr. Modzelewski. 

STATEMENT OF F. MARK MODZELEWSKI, EXECUTIVE 

DIRECTOR, NANOBUSINESS ALLIANCE 

Mr. MODZELEWSKI. Mr. Chairman, Senator Allen, I thank you for 

allowing me, on behalf of the NanoBusiness Alliance, the member 

organizations, the opportunity to testify before you on the topic of 

nanotechnology as a transition from a science into a business. 

Nanotechnology is rapidly becoming an industrial revolution for 

the 21st Century. However, today’s nanotech industry might best 

be compared to the computer industry of the 1960s before the integrated circuit, or the biotech industry of the 1970s. While many 

nanotechnology sectors are in the nascent stages, others are already delivering products to market. A variety of nanomaterials, 

for instance, including enhanced polymers, coatings, and fillers, are 

already available, producing revenues and profits, and advanced 

nanotechnology medical and electronics applications will be imminently impacting our lives. 

As production of nanoproducts becomes easier, faster, and cheaper, every market sector will begin to feel the impact. We at the 

NanoBusiness Alliance estimate that the global market for 

nanotechnology-related products and services could reach more 

than $225 billion by 2005. The NSF conservatively predicts a $1 

trillion global market for nanotechnology in a little over a decade. 

Since its inception, the National Nanotechnology Initiative has 

proven to be an incredible instance of Government outpacing the 

imagination of the private sector. Mike Roco, Jim Murday, and the 

other individuals who created and continue to advance the NNI 

should be highly commended. That is why the NanoBusiness Alliance and its members would like to enthusiastically endorse the 

21st Century Nanotechnology Research & Development Act that is 

being introduced today by the Chairman and Senator Allen. This 

will be a timely and vital bill that builds on the fine work of the 

NNI and will assist America’s long-term scientific and economic 

competitiveness in this field. 

Currently, nanotechnology is becoming nanobusiness faster than 

anyone could have ever imagined. Just 5 years ago, only a few corporate visionaries, IBM, HP, Texas Instruments among them, were 

undertaking any research and development in the nanosciences. 

Today, you would be hard pressed to find a member of the Fortune 

500 that does manufacturing without some nanotechnology effort 

underway. GM, GE, Siemens, Intel, Hitachi, Dow have all launched 

significant nanotechnology initiatives. 

Unlike the dot com era, nanotech startups are built on science, 

and they are out there. They have real technology and real assets, 

and more often than not they are founded by researchers from universities, Government and corporate laboratories. More than half of 

the world’s nanotech startups are in the U.S., and while it is difficult to pin an exact number on how many there are, it is safe to 

say at least 1,000 are currently in operation, up from approximately 100 just 3 years ago. 

12

Venture capitalists, institutional investors, and wealthy angels 

have also begun to see the potential of nanotechnology. Chastened 

by the lessons of the dot com disaster, they are nevertheless aggressively seeking investment opportunities. As you mentioned, Mr. 

Chairman, over $1 billion will be invested this year in 

nanotechnology, when you look at corporate venturing efforts, venture capital firms, and other wealthy angels. 

Ultimately, regional development efforts, the creation of technology clusters, Nanotech Valleys, if you will, will fuel the explosive growth of the nanotechnology industry. Localized development 

efforts are already underway from Virginia, to Texas, to California. 

The alliance ourselves launched a nanotechnology hubs initiative a 

few months ago to jump start regional technology cluster development, and frankly, we have been overwhelmed. 

We launched efforts in 6 regions as well as affiliates in the EU 

and Canada, and have been inundated with calls from over 35 

States and 11 countries to help develop this capacity. These States 

and regions are already looking to nanotechnology to ignite economic development. 

As far as foreign competition goes, nanotechnology is truly 

emerging as a global technology, and unlike many past waves of 

technology development the United States is not dominating; in 

several areas of nanotech the U.S. is being outpaced by foreign 

competition. Japan, EU, Russia, Korea, and China are all significant players in the field of nanotechnology. A recent report from 

the Journal of Japanese Trade and Industry notes the Japanese 

Government views the successful development of nanotechnology as 

the, quote, ‘‘key to restoration of the Japanese economy,’’ and they 

are not alone. Funding is growing at unprecedented rates across 

the globe over the past 3 years. 

Not everything is rosy for the future of nanobusiness. While the 

NNI and overall Government nanotech efforts have been a great 

source of coordination and basic research funding, these nanotech 

grants remain among the most competitive in the Government. In 

addition, many nanotechnology companies have emerged from the 

basic research cycle and are addressing issues such as scaling and 

integration. Few Government programs address this time frame. 

Add to that a venture capital sector that is unwilling, too, and you 

have companies falling into what investors term, the Valley of 

Death. 

Another great fear is uneasiness over lack of research in the 

nanotech health and safety issues, and more than one CEO has 

raised this as a concern. Others range from the U.S. Patent Office 

and its inability to understand the multidisciplinary nature of 

nanotechnology. In addition, the current state of technology transfer is lacking, by any measure. The technology transfer process 

from Government, academic labs, and the marketplace is impossible at times and arduous at best. And lastly the education as well 

as workforce training and development are beginning to become 

real issues among the nanotechnology community. 

In summation, we certainly, as the alliance, greatly support this 

effort to continue to drill down on nanotechnology and to develop 

Government programs for it. While maintaining the development of 

basic research as a priority, we must expand our search to cultivate 

13

nanotechnology as an industry, and truly usher in a new Industrial 

Revolution. 

I thank you. 

[The prepared statement of Mr. Modzelewski follows:]

PREPARED STATEMENT OF F. MARK MODZELEWSKI, EXECUTIVE DIRECTOR, NANOBUSINESS ALLIANCE

Introduction 

Mr. Chairman, Senator Allen, Members of the Subcommittee, I thank you for allowing me—on behalf of the NanoBusiness Alliance and our member organizations—the opportunity to testify before you on the topic on nanotechnology and its 

transition from a science into a business. 

Nanotechnology has really been here since the dawn of creation. The difference 

now is that man is beginning to tap into it. Nanotechnology is the ability to do 

things—measure, see, predict and manufacture—on the scale of atoms and molecules. Traditionally, the nanotechnology realm is defined as being between 0.1 and 

100 nanometers, a nanometer being one thousandth of a micron (micrometer), which 

is, in turn, one thousandth of a millimeter. Working at the scale of atoms and molecules is not merely about miniaturizing items. Working at this scale allows for the 

actual opening of nature’s toolbox. Working at this scale allows man to act as nature 

does in creating things. 

Currently, nanotechnology is transitioning from a science into a business. It is 

rapidly becoming the Industrial Revolution of the 21st century. The importance of 

nanotechnology cannot be overstated. It will affect almost every aspect of our lives, 

from the way we do computing, to the medicines we use, the energy supplies we 

require, the foods we eat, the cars we drive, and the clothes we wear. More importantly, for every area where we can fathom an impact from nanotechnology, there 

will be others no one has thought of—new capabilities, new products, and new markets. 

We are at the earliest stage of this ‘‘nano-revolution.’’ The nanotech industry 

might be compared to the computer industry of the 1960s, before the development 

of the integrated circuit, or the biotech industry of the 1970s. But while many 

nanotechnology sectors are in their nascent stages, others are already delivering 

products to the market. Forward-thinking corporations and entrepreneurs are reaping revenues and profits from a variety of nanomaterials, including enhanced polymers, coatings, and fillers. And advanced nanotech medical applications, such as 

disease detection and drug delivery, are in human trials and will be greatly impacting lives within a few years. 

As production of nano-products becomes easier, faster and cheaper, every market 

sector will begin to feel their impact. We at the NanoBusiness Alliance estimate 

that the global market for nanotechnology-related products and services could reach 

more than $225 billion in 2005. The U.S. National Science Foundation conservatively predicts a $1 trillion global market for nanotechnology in little over a decade. 

(It should be noted that the Microtechnology Innovation Team at Deutsche Bank 

AG. announced last week the results of a comprehensive market analysis on 

nanotechnology (full study available Q3/Q4 2002). They estimate that the current 

market size of nanotechnology products is greater than $116 billion, excluding electronics, and $300 billion total. According to the report, the nanomaterials market 

size is expected to reach $29.4B per year by 2006. While these significant numbers 

are appreciated, they do not align with other research in the field and will need to 

be explored upon the full release of the report.) 

Nanotechnology Development 

Nanotechnology is an enabling technology. It allows us to do new things. Like 

other enabling technologies, such as the internal combustion engine, the transistor 

or the Internet, its impact on society will be broad and often unanticipated. And 

nanotech is indeed changing many fields of business in truly revolutionary ways. 

Life Sciences and Medicine 

In life sciences and medicine, nanotechnology means we are beginning to be able 

to measure and make things on the level at which organisms in the living world, 

from bacteria to plants to ourselves, do most of their work. Being able to work at 

this scale doesn’t just empower us in our control of the biological world, but also 

allows us to start borrowing from that world, leveraging the extraordinary inventions that nature has produced through billions of years of evolution. 

14

Nanotechnology will ultimately help to extend the life span, improve its quality, and 

enhance human physical capabilities. In the near future, about half of all production 

of pharmaceuticals will be dependent on nanotechnology—affecting over $180 billion 

in revenues per year in 10 to15 years. 

Disciplines in LifeSciences and Medicine that are seeing nanotechnology’s 

impact are: 

• Nanoparticle Tagging: Nanoparticles small enough to behave as quantum 

dots can be made to emit light at varying frequencies. If you can get particles 

that emit at different frequencies to attach to different molecules you can literally put a sign of identification on them. This development will allow for the 

tagging of disease, infection and bacteria, allowing for detection at the earliest 

moment of a disorder’s onset.

• Nanostructured Materials: Nanostructured materials, coupled with liquid 

crystals and chemical receptors, offer the possibility of cheap, portable biodetectors that might, for instance, be worn as a badge. Such a badge could change 

color in the presence of a variety of chemicals and would have applications in 

hazardous environments. The U.S. armed forces are already in advanced research stage for this discovery to be part of the military uniform of the future.

• Drug Delivery: Drug delivery is one of the areas that is anticipated to have 

applications hitting the market very soon; clinical trials have already begun. Almost all current medications are delivered to the body as a whole, which is fine 

as long as they only become active in the areas you want them to. But this is 

not usually the case. When the treatment is designed to kill cells, as in the case 

of cancer, the side effects are enormous. Nanotech also promises to allow for 

substance ‘‘extraction’’ potentially removing poisons or toxins from the body or 

allowing for organic coatings of these substances so they pass harmlessly 

through the body.

• Cellular Manipulation: Cells are extraordinarily complex systems about 

which we are still quite ignorant. For this reason, it will be a long time before 

we see nanorobots doing complex work in our bodies. However, as we learn 

more we are likely to find ways to manipulate and coerce cellular systems and 

will achieve a lot that way—persuading lost nerve tissue to regrow. 

Agriculture 

Nanotechnology will ultimately provide the ultimate solutions for many hurdles 

presented by biotechnology and agri-sciences. The most likely area in which 

nanotechnology will initially enter the agricultural industry is the world of analysis 

and detection, such as bio-sensors to detect the quality of and the health of agricultural products and livestock. Also, innovative waste treatment options and composite materials, as part of the manufacturing and processing of agricultural products, are already entering the market.

• Food Safety: Advanced nano-sensors that can detect surface and airborne 

pathogens are already leaving the lab, yet work to develop these products for 

the agriculture sector remain limited. Should pricing continue to fall and enhanced development be undertaken, the extent of nano-sensor usage can go 

right to the consumer level with the packaging of agriculture products such as 

meat actually examining and denoting quality and safety.

• Animal Health: Work on unique drug delivery, protease inhibitors, cell tagging 

and treatment are already hitting the trail phases. Targeted drug delivery for 

instance is one of the areas that are anticipated to have applications hitting the 

market very soon. With protease inhibitors, viruses, prions and diseases such 

as BSE (Mad Cow Disease) and Brucellosis.

• GMO Enhancements: Nanoparticles small enough to behave as quantum dots 

can be made to emit light at varying frequencies. If you can get particles that 

emit at different frequencies to attach to different molecules you can literally 

put a sign of identification on them. This development will allow for the tagging 

of molecules in the GMO development process. This development can also be 

used to tag disease, infection and bacteria, allowing for detection at the earliest 

moment of a disorder’s onset. Also the tagging can be a part of the treatment 

as cells that are tagged can be engineered or attacked separately from nontagged cells—allowing for pinpoint eradication.

• Nano-filtration: NF uses partially permeable membranes to preferentially separate different fluids or ions, and will remove particles from approximately 

0.0005 to 0.005 microns in size. NF membranes are usually used to reject high 

percentages of multivalent ions and divalent cations. while allowing monovalent 

15

ions to pass. Removal includes sugars, dyes, surfactants, minerals, divalent 

salts, bacteria, proteins, particles, dyes, and other constituents that have a molecular weight greater than 1000 daltons. Waste treatment efforts are already 

in development.

• BioComposities: Nano-bio composites are in development that can serve as 

composite material for manufacturing that is lighter, stronger, yet completely 

bio-degradable. Uses include body panels, parts, organic fibers and many other 

areas.

Materials Science 

In materials, things start to behave differently at the nanoscale. The bulk materials that we have traditionally dealt with are uncontrolled and disordered at small 

scales. The strongest alloys are still made of crystals the size and shape of which 

we control only crudely. By comparison, a tiny, hollow tube of carbon atoms, called 

a carbon nanotube, can be perfectly formed, is remarkably strong, and has some interesting and useful electrical and thermal properties. 

When particles get small enough (and qualify as nanoparticles), their mechanical 

properties change, and the way light and other electromagnetic radiation is affected 

by them changes (visible light wavelengths are on the order of a few hundred 

nanometers). Using nanoparticles in composite materials can enhance their strength 

and/or reduce weight, increase chemical and heat resistance and change the interaction with light and other radiation. While some such composites have been made 

for decades, the ability to make nanoparticles out of a wider variety of materials 

is opening up a world of new composites. For example, in 10–15 years, projections 

indicate that such nanotechnology-based lighting advances (utilizing nano-phosphorus among other materials) have the potential to reduce worldwide consumption 

of energy by more than 10 percent, reflecting a savings of $100 billion dollars per 

year and a corresponding reduction of 200 million tons of carbon emissions. 

It has been estimated that nanostructured materials and processes can be expected to have a market impact of over $340 billion within a decade (Hitachi Research Institute, 2001). Like so many aspects of nanotechnology, this is a difficult 

thing to estimate because of potential new applications—if you can make a material 

ten times as strong and durable as steel for a lesser mass, what new products will 

people dream up? 

The nanometer scale is expected to become a highly efficient length scale for manufacturing. Materials with high performance, unique properties and functions will 

be produced that traditional chemistry could not create. 

Disciplines in Material Sciences that are seeing nanotechnology’s impact 

are: 

• Nanoparticulate Fillers: Alternatively, composite materials can use 

nanoparticulate fillers. Composite materials already enjoy an enormous market, 

but making the filling material nanophase (i.e. consisting of nanoscale particles) 

changes its properties. As particles get smaller, the material’s properties 

change—metals get harder, ceramics get softer, and some mixtures, such as alloys, may get harder up to a point, then softer again.

• Nanoparticles for Many Applications: Recently, clay nanoparticles have 

made their way into composites in cars and packaging materials. (Widespread 

use of nanocomposites in cars could lead to an enormous decrease in fuel consumption: savings of over 1.5 billion liters of gasoline over the lifespan of one 

year’s vehicle production, thereby reducing carbon dioxide emissions by more 

than 5 billion kilograms). You’ve probably heard of sunscreens using 

nanoparticulate zinc oxide. Nanoparticles are also being used as abrasives, and 

in paints, in new coatings for eyeglasses (making them scratchproof and unbreakable), for tiles, and in electrochromic coatings for windscreens, or windows. 

Anti-graffiti coatings for walls have been made, as have improved ski waxes and 

ceramic coatings for solar cells to add strength. Glues containing nanoparticles 

have optical properties that give rise to uses in optoelectronics. Casings for electronic devices, such as computers, containing nanoparticles, offer improved 

shielding against electromagnetic interference. That famous spin-off of the space 

age, Teflon, looks soon to be trumped for slipperiness thanks to nanoparticle 

composites.

• Textiles: Another huge industry that will be impacted by nanotechnology is the 

textiles industry. Companies are working on ‘‘smart’’ fabrics that can change 

their physical properties according to surrounding conditions, or even monitor 

vital signs. The incorporation of nanoparticles and capsules in clothing offers 

some promise and nanotubes would make extremely light and durable mateVerDate 0ct 09 2002 08:05 May 12, 2005 Jkt 093633 PO 00000 Frm 00019 Fmt 6633 Sfmt 6621 S:\WPSHR\GPO\DOCS\93633.TXT JACK PsN: JACKF
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rials. Fabrics infused with nanoparticles are already being marketed that are 

highly resistant to water and stains and wrinkling.

Nanoparticle Catalysts 

Many industrial processes will be affected by nanotechnology. One major early impact will come from our improved capabilities in making nanoparticles, the reason 

being that nanoparticles make better catalysts. A catalyst (a substance that initiates 

or enhances a reaction without being consumed itself) does its work at the point 

where it contacts the reactants, i.e. its surface. Since volume changes as the cube 

of the linear dimension, but surface area changes only as the square, when you 

make a particle smaller in diameter (the linear dimension), the volume, and thus 

mass, decreases faster than the surface area. Thus a given mass of catalyst presents 

more surface area if it consists of smaller particles. 

Equally, a given catalytic surface area can be fitted into a smaller space. The use 

of catalysts in industry is widespread so there should be a large market here for 

nanoparticle manufacturers. It should be noted, though, that nanostructured catalysts have already been used in industry for decades—zeolites, catalytic minerals 

that occur naturally or are synthesized, have a porous structure that is often characterized on the nanoscale. 

Catalysts are also of major importance in cleaning up the environment, allowing 

us to break down harmful substances into less harmful ones. Improved catalysts 

will make such processes more economical. Petroleum and chemical processing companies are using nanostructured catalysts to remove pollutants, creating a $30 billion industry in 1999 with the potential of $100 billion per year by 2015. 

Improved catalysts offer a nice example of how taking an existing technology and 

making it better can open up whole new markets. Nanostructured catalysts look 

likely to be a critical component in finally making fuel cells a reality, which could 

transform our power generation and distribution industry (for example, our laptops 

and cell phones would run for days on a single charge). 

Disciplines in Catalysts sector that are seeing nanotechnology’s impact are: 

• Fuel Cells: The development of fuel cells will probably be impacted by 

nanotechnology in other ways too, certainly by structuring components in them 

on a nanoscale but also in terms of storing the fuel, where the nanotube, yet 

again, shows promise for storing hydrogen for use in fuel cells. A relative of the 

nanotube, the nanohorn, has been touted as ready to hit the market in two to 

four years in a methane-based fuel cell.

• Solar Cells: Nanotechnology has been cited as a way to improve the efficiency 

of solar cells. However, typical commercial cells have efficiencies of about 15 

percent, with over 30 percent having been achieved, which is already much better than photosynthesis, at about 1 percent. The cost of solar cells is currently 

the biggest barrier to commercialization.

• Light Sources: In the world of light transmission, organic LEDs are looking 

like a promising way of making cheaper and longer-lasting light sources, reducing power consumption in the process. By contrast, at least one group of researchers has created a bulb driven by nanotubes. Tiny electron emitters, called 

field emission devices, including ones based on nanotubes, hold promise for use 

in flat panel displays.

• Pharmaceutical Processes: The pharmaceuticals industry will probably experience a benefit not only from advances in catalysis, but also from the new, 

cheaper and smaller bioanalysis tools. One estimate claims that nearly half of 

all pharmaceutical production will be dependent on nanotechnology within 15 

years—a market of some $180 billion per year (E. Cooper, Elan/Nanosystems, 

2001).

• Waste Treatment: Photocatalysis will play in this field in the future. There 

are efforts underway to sensitize TiO2 to visible light; this could open the door 

for this technology in large-scale waste treatment, because visible light is free 

and plentiful, especially as compared to UV-light.

Electronics and Information Technology 

The impact of the Information Technology (IT) Revolution on our world has far 

from run its course and will surely outstrip the impact of the Industrial Revolution. 

Some might claim it has done so already. Key to this is decades of increasing computer power in a smaller space at a lower cost. 

In electronics, the benefit of working on the nanoscale stems largely from being 

able to make things smaller. The value comes from the fact that the semiconductor 

industry, which we have come to expect to provide ever smaller circuits and ever 

17

more powerful computers, relies on a technology that is fundamentally limited by 

the wavelength of light (or other forms of electromagnetic radiation, such as X-rays). 

The semiconductor industry sees itself plunging towards a fundamental size barrier 

using existing technologies. The ability to work at levels below these wavelengths, 

with nanotubes or other molecular configurations, offers us a sledgehammer to 

break through this barrier. Ultimately, circuit elements could consist of single molecules. MEMS are generally constructed using the same photolithographic techniques as silicon chips and have been made with elements that perform the functions of most fundamental macroscale device elements—levers, sensors, pumps, rotors, etc. Nanoscale structures such as quantum dots also offer a path to making 

a revolutionary new type of computer, the quantum computer, with its promise of 

mind-boggling computing power, if it can be converted from theory to practice. Lasers constitute an area that is likely to be commercially affected by nanotechnology 

in the near future. Quantum dots and nanoporous silicon both offer the potential 

of producing tunable lasers—ones where we can choose the wavelength of the emitted light. 

You may have heard of Moore’s law, which dictates that the number of transistors 

in an integrated circuit doubles every 12 to 24 months. This has held true for about 

40 years now, but the current lithographic technology has physical limits when it 

comes to making things smaller, and the semiconductor industry, which often refers 

to the collection of these as the ‘‘red brick wall’’, thinks that the wall will be hit 

in around fifteen years. At that point a new technology will have to take over, and 

nanotechnology offers a variety of potentially viable options. 

Disciplines in Electronics and Information Technology that are seeing 

nanotechnology’s impact are: 

• Carbon Nanotubes in Nanoelectronics: Carbon nanotubes hold promise as 

basic components for nanoelectronics—they can be conductors, semiconductors 

and insulators. IBM recently made the most basic logic element, a NOT gate, 

out of a single nanotube, and researchers in Holland are boasting a variety of 

more complex structures out of collections of tubes, including memory elements. 

There are two big hurdles to overcome for nanotube-based electronics. One is 

connectibility—it’s one thing making a nanotube transistor, it’s another to connect millions of them together. The other is the ability to ramp up to mass production. Traditional lithographic techniques are based on very expensive masks 

that can then be used to print vast numbers of circuits, bringing the cost per 

transistor down to one five-hundredth of a U.S. cent. Current approaches to 

nanotube electronics are typically one-component-at-a-time, which cannot prove 

economical. Molecular electronics (which, strictly speaking, includes nanotubes) 

faces similar scaling hurdles. There are some possible solutions, however.

• Organic Nanoelectronics: Organic molecules have also been shown to have 

the necessary properties to be used in electronics. However, unlike nanotubes, 

the speed of reaction, for instance in switching a memory element, and hardiness in face of environmental conditions, will likely limit uses. Devices made of 

molecular components would be much smaller than those made by existing silicon technologies. But the issue of mass production remains.

• Soft Lithography: There is an approach to making nanoscale structures that 

potentially offers great promise for nanoelectronics in the near term, owing to 

its simplicity. This is soft lithography, which is a collection of techniques based 

around soft rubber nanostructured forms or molds. You can use these to stamp 

a pattern on a surface, in the form of indentations, or using some form of ‘‘ink’’. 

No special technology is required, and nor are the fantastically clean environments required for existing silicon chip production. Additionally, a wide variety 

of materials can be used.

The approach is reminiscent of one of the most famous examples of mass-production—the printing press. Soft lithography is already used to make 

microfluidic systems, such as those in lab-on-a-chip systems, and it scales readily down to the nanoscale (depending on the variant of the technology used, resolution can get below 10 nanometers). The techniques also promise potential in 

the creation of optical devices, which may in turn ultimately be used in optical 

computing. As a replacement for traditional lithography for creating electronic 

devices, however, there is currently a major obstacle—the technique is not well 

suited to making the precisely-aligned, multi-layered structures currently used 

in microelectronics, although researchers are working to overcome this limitation.

• Memory and Storage: When it comes to the technology behind the vast IT 

market, there is much more than just shrinking microprocessors to consider. 

18

Storing information is vitally important and can be done in many ways. Magnetic disks in computers have been increasing their capacity in line with 

Moore’s law, and have a market at the moment of around $40 billion. The other 

type of information storage common to all computers is DRAM (dynamic random access memory). DRAM provides very quick access but is comparatively expensive per bit. Magnetic disks can hold much more information but it takes 

much longer to access the data. Also, DRAM is volatile—the information disappears when the power is switched off. The trade-offs between access speed, 

cost, and storage density dictate the architecture of computers with respect to 

information storage. New technologies may change this dynamic.

• MRAM: Some memory technologies that are currently being researched are single-electron tunneling devices, rapid single flux quantum devices, resonant tunneling diodes, and various types of magnetic RAM (MRAM). MRAM offers the 

promise of non-volatile RAM, enabling devices such as a PC or mobile phone 

to boot up in little or no time. This puts the technology somewhere between existing DRAM and magnetic disk technologies. Nanotubes also hold promise for 

non-volatile memory and recent news suggests nanotube-based RAM may hit 

the market very soon (commercial prototype in 1 to 2 years).

• Quantum Computing: In the much longer term, there’s quantum computing, 

which offers staggering potential by virtue of the ability to perform simultaneous calculations on all the numbers that can be represented by an array of 

quantum bits (qubits). The atomic scale, the scale at which quantum effects 

come into play, argues for a requirement for nanoscale structures and quantum 

dots to come up regularly in discussions of quantum computing. Primary applications would be in cryptography, simulation and modeling. The realization of 

a quantum computer is generally believed to be a long way off, despite some 

very active research. Funding in the area is thus still largely that provided for 

pure research, though some defense department money has been made available.

The total potential for nanotechnology in semiconductors has been estimated to 

be about $300 billion per year within 10 years, and another $300 billion per 

year for global integrated circuit sales (R. Doering, ‘‘Societal Implications of 

Scaling to Nanoelectronics,’’ 2001). But it’s actually much harder to predict the 

commercially successful technologies in the world of electronics than in the 

world of materials. The assumption that continually increasing processing 

power will automatically slot into a computer hardware market that continues 

to grow at the rate it has done historically, is not necessarily sound. Most of 

the growth over the last decade has been driven by personal computers and 

some argue that this market is nearing saturation. 

The National Nanotechnology Initiative 

Since its inception, the National Nanotechnology Initiative (NNI) has proven to 

be an incredible instance of government outpacing the vision of the private sector. 

And already we are the better for it. 

The NanoBusiness Alliance indeed fully endorses the work of the NNI and offers 

our deep appreciation to the fine work of Dr. Mike Roco, Dr. James Murday and 

the other individuals who created the NNI and continue to advance its efforts everyday. 

The NNI has been an exceedingly successful program. From our industry vantage 

point the NNI has made an incredible impact in the following areas:

• 1. Funding: The NNI has provided much needed funding for basic research at 

America’s universities and government labs. By fueling innovation, this investment is—and will continue to—find its way to the public marketplace promoting 

industry development.

• 2. Awareness: Before the NNI. the overwhelming majority of Americans 

thought that nanotechnology was science fiction—or they never even heard of 

it. A survey just a couple years back showed that less than 5 percent of CEOs 

knew what nanotechnology was, never mind what it meant to their businesses. 

This is changing rapidly. In fact, we now hear claims that people talk about 

nanotechnology too much.

• 3. Collaboration: The NNI has been extraordinarily successful at fueling collaborations between corporations, universities, start-ups and government labs—

in the U.S. and abroad. Also, the NNI has helped to break down internal research silos. Nanotechnology is an incredibly cross-disciplinary field. To succeed 

in developing applications you need chemists to work with engineers; and engineers to work with physics and so on. Due to the educational efforts of the NNI, 

19

and the structure of their grants programs, this collaborative movement is beginning to ferment. Universities, such as University of Washington, are already 

giving out PhDs in NanoScience which trains students across many needed disciplines, and other schools are following at the undergrad and graduate level.

• 4. Competition: For better and for worst, the announcement of NNI set forth 

a global contest for dominance in the nanoscience and nanotech industry. Ultimately this will make the consumer the winner. This global competition will 

push even more rapid developments.

That is why the NanoBusiness Alliance and its members would like to enthusiastically endorse the 21st Century Nanotechnology Research and Development Act 

that is being introduced by this Senator Wyden. 

By all accounts it will be a vital and timely bill that will assist America’s scientific 

and economic competitiveness as well as play a key role in developing 

nanotechnology efforts for Homeland Defense. 

State of NanoBusiness 

Few realize that the age of nanotechnology as a business—NanoBusiness—is already here. Though we are admittedly at the earliest stages, substantial change is 

already taking place. Some of the most recent predictions for the development of 

nanotechnology and time to market are being rapidly eradicated. For instance, in 

January 2000 at the NNI kick-off announcement at Cal Tech, President Clinton 

noted:

‘‘Just imagine, materials with 10 times the strength of steel and only a fraction 

of the weight; shrinking all the information at the Library of Congress into a 

device the size of a sugar cube; detecting cancerous tumors that are only a few 

cells in size. Some of these research goals will take 20 or more years to 

achieve.’’

When President Clinton said those words it seemed like a highly reasonable timeframe. Yet here we are a couple of years later and just last week Hewlett-Packard 

said they had created a 64 bit computer memory chip using new molecular technology that takes miniaturization further than ever before. Some thousands of these 

memory units could fit on the end of a single strand of hair. 

In addition, incredibly strong nanocomposites are already available and being 

used by aircraft manufacturers and automakers among others. Researchers at Rice 

University are in early trials using quantum dots to detect cancer in the lab. Have 

we completely erased the 20 year prediction? No, but we are getting close. Very 

close. 

Corporations 

Just five years ago only a few corporate visionaries—IBM, HP, Texas Instruments 

among them—were undertaking any research and development in the nanosciences. 

Today you’d be hard pressed to find a single member of the Fortune 500 that is involved in manufacturing that does not have some nanotechnology effort underway—

GM, GE, Ford, Siemens, Intel, Motorola, Lucent, Toyota, Hitachi, Corning, Dow 

Chemical, NEC, Dupont, 3M, etc. have launched significant nanotech initiatives. 

Some of the biggest spenders on R&D are allocating up to a third of their research 

budgets to nanotech. 

As an example of current market applications in corporate America for one small 

area of nanotech—carbon nanotubes—already some 60 percent of the cars on our 

highways utilize nanotubes or other nanoparticulate fillers in their fuel lines, airbags, and body panels. And 50 percent of lithium batteries on the market utilize 

nanotubes to enhance their energy storage capabilities. These are compelling cases 

of American corporations already tapping into the potential of nanobusiness. 

Some examples:

• General Electric: At a time when many corporations are scaling back research 

and development operations, General Electric, the world’s largest company, reaffirmed its commitment to R&D this year with a $100 million+ pledge to modernize its global research center. The Center will focus its greatest emphasis on 

nanotechnology. GE views nanotechnology as a key component to its future.

• IBM: Few would question that IBM is the world’s leading nanotechnology company with bleeding edge efforts in nano-electronics, life sciences and nano-materials. IBM has major nanotechnology operations underway in New York, Zurich 

and in Silicon Valley. They are patenting literally hundreds of new 

nanotechnology discoveries a year.

• Mitsubishi Corp: Mitsubishi Corp. created a joint venture with two Arizonabased start-ups, MER and Research Corporation Technologies, to form 

20

Fullerene International Corp. (FIC). FIC has established a fullerene manufacturing facility in Osaka, Japan, with MER providing the reactor.

Start-Ups 

Unlike the Dot-com era, nanotech start-ups are built on science. They have real 

technology. Real assets. And more often than not, they are founded by researchers 

from universities, government and corporate laboratories. These young companies 

are already pushing the growth of the field through their innovation. And these 

start-ups will most assuredly be part of the next NASDAQ boom. 

More than half the world nanotech start-ups are in the U.S.. And while it is difficult to pin an exact number on how many there are, it is safe to say that around 

a 1,000 are currently in operation up from maybe 100 three years ago. 

Some examples:

• C Sixty Inc., A pioneering biotech company that is modifying fullerenes for 

medical applications,—drug delivery, protease inhibitors, and disease prevention. C-Sixty has begun clinical trials on an AIDS drug already. The Houstonbased company also reported progress on another fullerene-based approach—

this one for Lou Gehrig’s disease, a degenerative disorder that affects nerve 

cells.

• Luna Innovations: A diverse research company based in Blacksburg, Va., re- cently received a $2 million federal grant to develop buckyballs that can be used 

in magnetic resonance imaging (MRI) systems and for possible diagnosis and 

treatment of cancer. They also have a cutting edge sensor in final development 

for the oil and gas industry.

• NanoBio: A start-up company spun off from the University of Michigan has 

created an emulsion that protects civilians and troops from biological terror attacks. It actually kills anthrax and was approved several years ago, far in advance of the horrible events of last fall. This antimicrobial substance called 

NanoProtect, can be applied either before or after an attack to all kinds of surfaces, including skin, clothing and vehicles. NanoProtect is the result of a fiveyear, $11.8 million grant by the U.S. Defense Advanced Projects Research Agency (DARPA) to researcher Dr. James Baker Jr.

• Evident Technologies: Evident is a nanotechnology manufacturing and application company that draws upon semiconductor nanocrystal expertise to develop 

sophisticated, cost effective, innovative devices and products. Their products 

have applicability in biotechnology, optical switching, and computing, telecommunications, energy and other fields. Evident’s quantum dot technology can 

be used to ‘‘tag’’ cancerous cells, create new lighting source, or serve as part of 

developing electronics. This self funded company has been creating profits by 

supplying testing materials to the semiconductor and biotech industries.

Funding 

Venture capitalists, institutional investors and wealthy angels have also begun to 

see the potential in nanotech, and, though chastened by the lessons of the ‘‘dot-com 

disaster,’’ are nevertheless aggressively seeking investment opportunities. Over 60 

U.S. venture capital firms invested in nanotech-related companies in 2000. Investment in nanotechnology start-ups will rise from $100 million in 1999 to nearly a 

$1billion by 2003. Recent investments include NanoPhontonic, a semiconductor company that received over $25mm this spring in venture investment. Surface Logic, 

a nanoelectronics firm obtained almost $22 mm in new funding as well. 

All signs demonstrate that this growth curve will continue to increase rapidly over 

the next 3–5 years for nanotechnology regardless of the current economic slow down. 

So-called angel investors and corporate venturing operations are expected to outpace 

traditional venture capital firm’s investments for the foreseeable future due to the 

business models and return times. 

Regional Development 

Ultimately, regional development efforts —the creation of technology clusters 

(Nanotech Valleys if you will)—will fuel the explosive growth of the nanotechnology 

industry. The bringing together of universities, government officials, corporations, 

investors, non- profits, start-ups and service firms to coordinate, plan, and develop 

an environment condusive for collaboration and attracting talent is the key to developing the industry. Region specific approaches. Region specific planning. National—

even international—collaboration and impact. 

Localized development efforts are already underway from Virginia to Texas to 

California. The NanoBusiness Alliance launched a ‘‘Nanotech Hubs Initiative’’ a few 

months back with the hope of jump starting regional technology cluster developVerDate 0ct 09 2002 08:05 May 12, 2005 Jkt 093633 PO 00000 Frm 00024 Fmt 6633 Sfmt 6621 S:\WPSHR\GPO\DOCS\93633.TXT JACK PsN: JACKF
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ment. We have been overwhelmed. Though we have launched efforts in Colorado, 

New York, San Francisco, San Diego, Michigan and Washington DC metro—as well 

as affiliate organizations in the EU and Canada—we have been inundated with calls 

from 35 states and 11 countries to help develop this capacity. They are looking for 

best practices, partners and funding. They are looking for roadmaps and shared 

databases. 

These states and regions are already looking to nanotechnology to develop local 

economies and fuel overall state economic development. 

Some examples:

• New York State: Albany NanoTech is a fully-integrated research, development, prototyping, pilot manufacturing and education resource managing a 

strategic portfolio of state-of-the-art laboratories, supercomputer and shareduser facilities and an array of research centers located at the University at Albany—SUNY. Its first research center, the NYS Center for Advanced Thin Film 

Technology, was established to provide its company partners with a unique environment to pioneer, develop, and test new ideas within a technically aggressive, yet economically competitive, research environment. Governor Pataki has 

been instrumental in expanding this center, as has IBM. It has served to be 

a magnet for corporate development and start ups. It was recently announced 

that the SEMATECH—the largest semiconductor industry developers—would 

locate its next generation R&D facility at the Center. When the last 

SEMATECH located in Austin it turned the city from a quiet college town into 

one of Americas 5 great technology centers.

• Chicago: Chicago is looking to seize leadership in the emerging field of 

nanotechnology by providing tax subsidies to foster a high-tech corridor. The 

area has also created a Chicagoland nanotech initiative of sorts, with large corporate players like Boeing and Motorola; nanotech companies like NanoPhase 

and NanoInk; investors; consultants like McKinsey: Northwestern’s 

Nanotechnology Center; U Chicago; and Argonne National Laboratory all collaborating.

Foreign Competition 

Nanotechnology is emerging as a truly global technology. Unlike the many waves 

of technological development over the past seventy-five years, nanotechnology is not 

dominated by the United States. The U.S. is being outpaced by foreign competition 

in several areas of nanotechnology. Japan, Italy, Israel, Ireland, Switzerland, the 

Netherlands, UK, Germany, Russia, South Korea, China, France, Canada, and Australia are all significant players in the field of nanotechnology. 

A recent report from the Journal of Japanese Trade & Industry notes that the 

Japanese government views the successful development of nanotechnology as the 

key to ‘‘restoration of the Japanese economy.’’ They are not alone. Funding has 

grown at unprecedented rates in the last three years fueled by the awareness of the 

U.S. National Nanotechnology efforts. 

Problems in the NanoBusiness World 

Not everything is rosy for the future of nanobusiness. Though much development 

has occurred, many obstacles remain. While the NNI and overall government 

nanotech efforts have been a great source of .coordination and basic research funding for many, these nanotech grants remain among the most competitive in the government. 

In addition, many nanotech companies have emerged from the basic research 

cycle and are addressing issues such as scaling and integration. Few government 

programs address this timeframe. Add to that a venture capital sector that is battered, not knowledgeable on nanotech and now working in a shortened cycle of investment return and you have many nanotech companies falling into what investors 

term ‘‘Death Valley.’’

Another area of concern for nanotech start ups is the current state of U.S. intellectual property and the USPTO. The Patent Office is in desperate need of training 

programs to ensure its examiners understand nanotechnology. At USPTO, nanotech 

patent applications—understandably due to the wide breadth of application areas 

the technology covers—go down many different review silos at USPTO. Also, several 

early nanotech patents are given such broad coverage, the industry is potentially 

in real danger of experiencing unnecessary legal slowdowns. 

Another grave fear that is often expressed by CEOs, particularly at large corporations that are undertaking nanotech R&D, is uneasiness over the lack of research 

on nanotech health and safety issues. More than one CEO has raised the specter 

of ‘‘are we sitting on the next asbestos working with all these tiny things.’’

22

In addition, the current state of technology transfer is lacking by any measure. 

The technology transfer process from government and academic labs to the marketplace is impossible at worst—arduous at best. 

And lastly, education, as well workforce training and development are beginning 

to become issues among the nanotech community. 

Close 

In closing, nanotechnology the science is indeed now rapidly becoming 

nanotechnology the business. As a nation we have been very fortunate to have the 

visionary support—from both sides of the aisle—in developing and maintaining the 

National Nanotechnology Initiative. However, we are now at a cross roads where 

we must expand the reach of this national initiative from the laboratory to the 

board room. While maintaining the development of basic research as a priority, we 

must expand our sights to cultivate the nanotechnology industry and usher in a new 

Industrial Revolution. Again, that is why the 21st Century Nanotechnology Research and Development Act is so important.

1. We see the Act’s ability to strengthen the structure of the National 

Nanotechnology Initiative as being of vital importance—increasing the long 

term stability and growth of our Nation’s nanotechnology efforts.

2. The Act makes the development of the nanotechnology sector a major government focus. Increasing understanding and awareness of nanotechnology 

throughout the government’s political and civil service ranks by providing 

mechanisms for program management and coordination across government 

agencies and White House. We especially support Act’s call for the development of a government advisory board made up of nanotechnology leaders to 

regularly discuss the state of the industry and recommend solutions to the 

President and Congress.

3. Due to real challenges to our Nation’s efforts to obtain a secure leadership 

position in nanotechnology and nanobusiness, we also strongly support the 

Act’s call for further examination and tracking of international funding, development and competition in nanoscience and nanobusiness.

4. And, we strongly support the Act’s efforts to encourage nanoscience through 

additional grants, and the establishment of interdisciplinary nanotechnology 

research centers, as this will lead to more innovation and further development 

of the nanotech economy.

Long term, the Alliance would like to see Congress continue its focus on 

nanotechnology as it becomes nanobusiness and develop programs—and expand existing programs—for commercializing nanotechnology development.

a. Create programs that offer opportunities to entrepreneurial start-ups and innovative corporations alike. Programs that offer incentives, loans, and funding 

to take nanotechnology innovations into the marketplace.

b. Ensure that the USPTO is properly educated and equipped to evaluate and 

approve nanotechnology patents

c. Organize an extensive global effort with industry, academia and government 

to study the health and environmental effects—good and bad—on 

nanotechnology now before potential problems or even negative intimations 

arise. The effort should include social and scientific studies building on much 

of the fine work of the National Nanotechnology Initiative staff. Ensure that 

publicly accessible materials, events and websites are developed to disseminate such information to a broad audience.

d. Develop programs, possibly though the Office of Technology Policy in the Department of Commerce, economic development organizations, universities and 

industry groups to promote and nurture regional nanotechnology cluster development. Create best practices reports, guides, and extensive national 

nanobusiness database.

e. Develop programs to improve the state of tech transfer at government labs 

and academic institutions which will improve the commoditization of emerging 

technologies

Again, I would like to thank the Chairman, Senator Allen and the Committee for 

this opportunity to address them.

Senator WYDEN. Mr. Modzelewski, we also understand you could 

provide a couple of demonstrations today, and since you are under 

your 5 minutes, please have at it. 

23

Mr. MODZELEWSKI. One that we can start off with, if we could 

dim the lights, I am going to demonstrate a technology by a company called Evident Technology, which is based in New York, and 

this is a testing kit which basically uses quantum dot technology. 

This technology could be used for everything from potentially detecting individual cancer cells in the human body to being used actually for lighting sources, everything from light bulbs that use less 

energy to flat screens. It is even being used in the electronics industry in semiconductor work. 

The thing that you will find most interesting about them is your 

ability to give off a large and intense color spectrum. I am going 

to use a black light to demonstrate that for you. As you can see, 

they are very hard to see initially, but when given the color spectrum they can give off an incredible glow, and these glows can literally be assigned to pick up individual pathogens, even can be 

used as biosensors for the military and be used for individual forms 

of cancer. 

The thought is, is that this could be advanced in, say, cancer research to where you are not only identifying them, but are able to 

link up the light spectrum to things like lasers or other ultraviolet 

sources that could eradicate just the individual cells, as opposed to 

treating the whole area of the body. 

Another thing we have is here from a company called Infomat, 

which is a Connecticut-based company, and what they are able to 

do is actually use a flexible ceramic coating, and you have instead 

an incredibly heat-resistant product here, and we have the flexible 

ceramic. We can start looking at things like ceramic engines and 

other things that have long been difficult for us to even imagine 

being able to successfully do this. This actual little piece of metal 

is actually a band that the U.S. Navy is beginning to use on some 

of the development of their ships and things along those lines. 

I am not sure if we also want to demonstrate the nanochinos. Is 

anyone interested in that? 

Senator WYDEN. We have a huge demand for nanochinos. 

Mr. MODZELEWSKI. You have to understand, this is already in 

the marketplace. There is the availability of nanofibers, and these 

coated fibers create such a level of surface area that anything that 

is spilled on them does not just bead up like Scotchgard, but literally is repelled away, and we can actually be looking, potentially, 

within the next decade, for clothing that does not need to be 

cleaned, and you are seeing how grape juice, I believe, beads up 

and works off of the nanochinos. 

Voice: I wipe it and it is all completely dry. 

Senator WYDEN. That is unbelievable. 

Voice: If it is submersed, it will release and allow washing. 

Mr. MODZELEWSKI. That product is already available. He is not 

wearing something experimental. Big name brands n the American 

fabric industry, Levi’s, Lee, Eddie Bauer sell nanochinos, 

nanojeans, and also shirts with such a capacity, and in fact Dockers is running a commercial right now where a gentleman is in a 

bar and his buddy keeps pouring a drink on him, and he is begging 

him to stop pouring the drink on him to watch how cool the 

nanotechnology works. And so I think we are starting to enter an 

age right now where, true, we do need the basic research, and we 

24

should continue to advance that, but we are already really seeing 

this technology start to enter our lives in very simple ways, and 

soon to be more advanced ways. 

I thank you. 

Senator WYDEN. Dr. Stupp. 

STATEMENT OF SAMUEL I. STUPP, PH.D., CHAIRMAN OF THE 

COMMITTEE FOR THE REVIEW OF THE NATIONAL 

NANOTECHNOLOGY INITIATIVE, NATIONAL RESEARCH 

COUNCIL/THE NATIONAL ACADEMIES, AND BOARD OF 

TRUSTEES PROFESSOR OF MATERIALS SCIENCE,

CHEMISTRY AND MEDICINE, NORTHWESTERN UNIVERSITY 

Dr. STUPP. Mr. Wyden, Mr. Allen, thank you for the opportunity 

to present this statement. I chaired the review committee for the 

NNI of the National Research Council. I am here representing a 

committee which was composed of a mix of individuals from academe and industry, and drawn from a variety of scientific and engineering disciplines relevant to the topic of nanoscience and 

nanotechnology. The committee spent 9 months reviewing the NNI 

and writing the report that is the basis of my testimony to you 

today. During those 9 months, we heard from all of the agencies 

currently being funded under the NNI, and most of the agencies 

that are planning on joining the NNI in the near future. 

In addition to the information gathered from these agencies, we 

also relied on the knowledge committee members have about activities ongoing in our universities, in the private sector, in State and 

local regions, and internationally. The committee was asked to review the NNI with particular attention to (1) whether the balance 

of the overall research portfolio is appropriate, (2) whether the correct seed investments were being made now to assure U.S. leadership in nanoscale work in the future, (3) whether partnerships 

were being used effectively to leverage the Federal investment in 

this area, and (4) whether the coordination and management of the 

program is effective, such that the whole is greater than the sum 

of its parts. 

Our committee detailed many of the important outcomes that 

could come from nanotechnology, including applications in medical 

diagnostics, new therapies for disease and injury, the very exciting 

frontier of regenerative medicine, which is not discussed all that 

frequently, and homeland security as well. 

The committee found that the agencies participating in the NNI 

have made a good start in organizing and managing such a large 

interagency program. The committee was impressed with the leadership and level of multiagency involvement in the NNI, particularly the leadership role played by the National Science Foundation. Programs funded to date that were presented to the committee were all of an appropriately high technical merit, and the 

participating agencies have sponsored a number of influential 

symposia in nanotechnology. 

The committee formulated 10 major recommendations to help the 

NNI agencies build on their efforts to date to further strengthen 

the implementation of the initiative. So concerning the research 

portfolio, the committee recommended that (1) more emphasis be 

given to long-term funding of new concepts in nanoscale science 

25

and technology. Truly revolutionary ideas will need sustained funding to achieve results and produce important breakthroughs. There 

are not currently enough funding mechanisms to give longer term 

support to higher risk but potentially groundbreaking ideas. There 

are more of those in Europe than here in the U.S. 

(2) The committee recommends increasing the multiagency investments in research at the intersection of nanoscale technology 

and biology. We can already see applications of nanoscale science 

and technology that will have significant impacts in biotechnology 

and medicine. Bionano is not currently as well-represented in the 

NNI portfolio as it should be. Since many of the advances foreseen 

in this area involve the marriage of physical sciences and engineering with biology, these investments should focus on collaborations 

between the NIH and the other NNI agencies. 

(3) The committee recommends investment also in the development of new instruments for measurement and characterization of 

nanoscale systems. Historically, many important advances in 

science happened only after the appropriate instruments became 

available. 

(4) The committee recommends that NSET develop a new funding strategy to ensure that the societal implications become an integral and vital component of the NNI. 

On whether the ‘‘correct’’ seed investments are being made now 

for the future of U.S. leadership in nanotechnology, the committee 

recommends, (1) that NNI agencies provide strong support for the 

development of an interdisciplinary culture for nanotechnology. 

Nanoscale research is leading us into areas involving the convergence of many disciplines, biology, chemistry, physics, material 

science, all areas of engineering. However, the overall value system 

used by the scientific community to judge its members continues to 

discourage interdisciplinary research. 

Looking at the question of whether partnerships are being used 

effectively in the NNI, the committee found that industrial partnerships need further stimulation and nurturing to accelerate the commercialization of NNI development. The U.S. is most likely to realize economic benefits from nanotechnology when its underlying intellectual property comes from U.S.-based laboratories, institutions, 

and corporations. 

(2) Interagency partnerships also require further attention. 

While the NNI implementation plan lists major interagency collaborations, the committee has no sense that there is any common 

strategic planning occurring in those areas, any significant interagency communication between researchers in those areas, or any 

significant sharing of results before publication in the open literature. 

To stimulate meaningful interagency collaborations, we proposed 

a special fund within NNI, perhaps under the oversight of OSTP, 

for grants to exclusively support interagency research programs. 

On the topic of program management and evaluation, the committee recommends that NSET develop a crisp, compelling, overarching strategic plan for the NNI which includes both short, medium, and long-term goals. 

The committee recommends that NSET develop performance 

metrics to assess the effectiveness of the NNI in meeting its objecVerDate 0ct 09 2002 08:05 May 12, 2005 Jkt 093633 PO 00000 Frm 00029 Fmt 6633 Sfmt 6601 S:\WPSHR\GPO\DOCS\93633.TXT JACK PsN: JACKF
26

tives and goals. Currently, the programs have only been evaluated 

as a part of the procedures of individual agencies. 

(3) The committee recommends that OSTP establish an independent standing nanoscience and nanotechnology advisory board 

now. The existence of such a board would help the NSET agencies 

vision beyond their own individual missions. It could identify and 

champion research opportunities that do not fit conveniently into 

any one agency’s mission. To ensure that nanoscale research continues its progress towards its ultimate potential, such a board 

should be composed of leaders from industry and academia with 

scientific, technical, social science or research management credentials. 

I think this is the end of my statement. 

[The prepared statement of Dr. Stupp follows:]

PREPARED STATEMENT OF SAMUEL I. STUPP, PH.D., CHAIRMAN OF THE COMMITTEE

FOR THE REVIEW OF THE NATIONAL NANOTECHNOLOGY INITIATIVE, NATIONAL

RESEARCH COUNCIL/THE NATIONAL ACADEMIES, AND BOARD OF TRUSTEES

PROFESSOR OF MATERIALS SCIENCE, CHEMISTRY AND MEDICINE,

NORTHWESTERN UNIVERSITY

Good morning, Mr. Chairman and Members of the Committee. My name is Samuel Stupp. I am Board of Trustees Professor of Materials Science, Chemistry and 

Medicine at Northwestern University, and chaired the Committee for the Review of 

the National Nanotechnology Initiative of the National Research Council. The Research Council is the operating arm of the National Academy of Sciences, National 

Academy of Engineering, and the Institute of Medicine, chartered by Congress in 

1863 to advise the government on matters of science and technology. 

I am here representing a committee that was composed of a mix of individuals 

from academe and industry, and drawn from a variety of scientific and engineering 

disciplines relevant to the topic of nanoscience and nanotechnology. The committee 

spent nine months reviewing the National Nanotechnology Initiative or NNI, and 

writing the report that is the basis of my testimony to you today. During those nine 

months, we heard from all of the agencies currently being funded under the NNI, 

and most of the agencies that are planning on joining in the NNI in the near future. 

In addition to the information gathered from these agencies, we also relied on the 

knowledge committee members have about activities on-going in our universities, in 

the private sector, in state and local regions, and internationally. 

The committee was asked to review the NNI with particular attention to:

• Whether the balance of the overall research portfolio is appropriate,

• Whether the correct ‘‘seed’’ investments were being made now to assure U.S. 

leadership in nanoscale work in the future,

Whether partnerships were being used effectively to leverage the federal investment in this area, and

• Whether the coordination and management of the program is effective, such 

that ‘‘the whole is greater than the sum of its parts.’’

In writing its report, the committee was very concerned with communicating to 

the reader the importance of nanotechnology and its future potential. There have 

been a lot of promises made for the wonders which nanotechnology will provide for 

society, and while there has been hype, the committee can say definitively that 

nanoscience and nanotechnology are not dreams but are here today in products and 

technologies we currently use. You already use nanotechnology everyday in applications as mundane as the sunscreen and lipstick you may be wearing, to those as 

sophisticated as the high-density hard disk that runs your pc or laptop. Current research results point to even more applications in the near future, such as improved 

medical diagnostics and new therapies for disease and injury. 

The committee found that the agencies participating in the NNI have made a good 

start in organizing and managing such a large interagency program. The committee 

was impressed with the leadership and level of multi-agency involvement in the 

NNI, particularly the leadership role played by the National Science Foundation. 

Programs funded to date that were presented to the committee were all of an appropriately high technical merit, and the participating agencies have sponsored a numVerDate 0ct 09 2002 08:05 May 12, 2005 Jkt 093633 PO 00000 Frm 00030 Fmt 6633 Sfmt 6621 S:\WPSHR\GPO\DOCS\93633.TXT JACK PsN: JACKF
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ber of influential symposia in nanoscale science and technology, including one on the 

potential ethical, legal, and social issues involved in these technical advances. 

The committee formulated ten major recommendations to help the NNI-participating agencies build on the foundation of their efforts to date to further strengthen 

the implementation of the initiative. 

Concerning the balance of the research portfolio, the committee recommended 

that:

• More emphasis be given to long-term funding of new concepts in nanoscale 

science and technology. Truly revolutionary ideas will need sustained funding 

to achieve results and produce important breakthroughs. There are not currently enough funding mechanism to give longer-term support to higher risk but 

potentially groundbreaking ideas.

• The committee recommends increasing the multiagency investments in research 

at the intersection of nanoscale technology and biology. We can already see applications of nanoscale science and technology that will have significant impacts 

in biotechnology and medicine. ‘‘Bio-nano’’ is not currently as well represented 

in the NNI portfolio as it should be. Since many of the advances foreseen in 

this area involve the marriage of physical sciences and engineering with biology, these investments should focus on collaborations between NIH and the 

other NNI agencies.

• The committee recommends investment in the development of new instruments 

for measurement and characterization of nanoscale systems. Historically, many 

important advances in science happened only after the appropriate investigative 

instruments became available. Since one must be able to measure and quantify 

a phenomenon in order to understand and use it, it is critical that we develop 

tools that allow for more quantitative investigations of nanoscale phenomena.

• The committee recommends that NSET develop a new funding strategy to ensure that the societal implications become an integral and vital component of 

the NNI. The current level and diversity of efforts concerning societal implications of nanotechnology is disappointing. Federal agencies have not given sufficient consideration to societal implications of nanoscale science and technology. 

To ensure that work in this area is funded, the participating agencies should 

develop a funding strategy that treats societal implications as a supplement or 

set-aside to agency core budget requests, which is then awarded to agencies 

willing and capable to engage in this type of work.

On whether the correct ‘‘seed’’ investments are being made now for the future of 

U.S. leadership in nanoscale science and technology, the committee recommends:

• That NNI agencies provide strong support for the development of an interdisciplinary culture for nanoscale science and technology. Nanoscale research is 

leading us into areas involving the convergence of many disciplines—biology, 

chemistry, physics, materials science, mechanical engineering, and others. However, the overall value system used by the scientific community to judge its 

members continues to discourage interdisciplinary research. Although the number of interdisciplinary research groups will grow as it becomes evident that 

this approach is necessary to make the most exciting advances in nanoscale research, federal agencies should accelerate this process by developing creative 

programs that encourage interdisciplinary research groups in academia.

Looking at the question of whether partnerships are being used effectively in the 

NNI, the committee found that:

• Industrial partnerships need further stimulation and nurturing to accelerate 

the commercialization of NNI developments. The U.S. is most likely to realize 

economic benefits from nanoscale science and technology when this technology 

and its underlying intellectual property come from U.S.-based laboratories, institutions, and corporations.

• Interagency partnerships also require further attention. While the NNI Implementation Plan lists major interagency collaborations, the committee had no 

sense that there is any common strategic planning occurring in those areas, any 

significant interagency communication between researchers working in those 

areas, or any significant sharing of results before publication in the open literature. All NNI funds are currently directed by each agency to the projects and 

programs of that agency’s choice. To stimulate meaningful interagency collaborations, the committee recommends the creation of a special fund within NNI, 

perhaps under the oversight of the Office of Science and Technology Policy 

(OSTP), for grants to exclusively support interagency research programs.

28

On the topic of program management and evaluation, the committee recommends:

• That NSET, the Nanoscale Science, Engineering and Technology subcommittee 

of the National Science and Technology Council, develop a crisp, compelling, 

overarching strategic plan for the NNI. This plan should articulate short, medium, and long-term goals, and emphasize those long-range goals that move results out of the laboratory and into society. In particular, the strategic plan 

should include a consistent set of anticipated outcomes for each funding theme 

and each Grand Challenge in the NNI implementation plan.

• The committee recommends that NSET develop performance metrics to assess 

the effectiveness of the NNI in meeting its objectives and goals. Currently the 

programs have only been evaluated as part of the GPRA procedures of individual agencies.

• Finally, the committee recommends that OSTP establish an independent standing Nanoscience and Nanotechnology Advisory Board (NNAB). The existence of 

such a board would help give the NSET agencies vision beyond their own individual missions. It could identify and champion research opportunities that 

don’t fit conveniently into any one agency’s mission to ensure that nanoscale 

science and engineering continue to progress toward their ultimate potential. 

Such a board should be composed of leaders from industry and academia with 

scientific, technical, social science, or research management credentials.

With this, I will be happy to take your questions on the report and its findings. 

THE NATIONAL ACADEMIES, DIVISION OF ENGINEERING AND PHYSICAL 

SCIENCES 

Small Wonders, Endless Frontiers: A Review of the National Nanotechnology Initiative—Summary 

Background. Nanoscale science and technology, often referred to as 

‘‘nanoscience’’ or ‘‘nanotechnology,’’ is science and engineering at the scale of 10¥9

meters, or 1/100,000 the width of a human hair. In the last two decades, researchers 

have begun developing the capability to manipulate matter at the level of single 

atoms and small groups of atoms, and to characterize the properties of materials 

and systems at that scale. This capability has led to the astonishing discovery that 

clusters of small numbers of atoms or molecules—nanoscale clusters—often have 

properties (such as strength, electrical resistivity and conductivity, and optical absorption) that are significantly different from the properties of the same matter in 

either the single molecule or bulk scales. 

Using these discoveries, scientists and engineers have begun controlling the structure and properties of materials and systems. Current applications of nanoscale materials includes titanium dioxide and zinc oxide powders which are used by cosmetics manufacturers for facial base creams and sunscreen lotions. Nano-structured 

materials have been integrated into complex products such as the hard disk drives 

that store information and the silicon integrated circuit chips that process information in every Internet server and personal computer. In the future, these researchers anticipate that nanoscale work will enable the development of materials and 

systems with dramatic new properties relevant to virtually every sector of the economy, such as medicine, telecommunications, and computers, and to areas of national 

interest such as homeland security. With potential applications in virtually every 

existing industry, and new applications yet to be discovered, there is no doubt that 

nanoscale science and technology will emerge as one of the major drivers of economic growth in the decades to come.

29

Recognizing the tremendous scientific and economic potential of nanoscale science 

and technology, in 1996 a federal inter-agency working group formed to consider the 

creation of a National Nanotechnology Initiative (NNI). As a result of this effort, 

around one billion dollars have been directed towards NNI research since 2001. At 

the request of officials in the White House Economic Council and NNI-participating 

agencies, the National Research Council (NRC) agreed to review the NNI. A review 

committee was formed by the NRC and asked to consider topics such as the current 

research portfolio of the NNI, the suitability of federal investments and inter-agency 

coordination efforts in this area. 

Findings and Recommendations. The committee was impressed with the leadership and level of multi-agency involvement in the NNI. Specifically, the committee 

commends the leadership of the National Science Foundation in the establishment 

of the multi-agency Nanoscale Science, Engineering and Technology (NSET) committee as the primary coordinating mechanism for the NNI. NSET has played a key 

role in establishing research priorities, identifying Grand Challenges, and involving 

the U.S. scientific community in the NNI. 

Nevertheless, the committee has formulated a limited number of recommendations to further strengthen the implementation of NNI. Using information provided 

by all federal agencies involved in the NNI, the review panel considered the structure of this initiative over the past several months and makes the following ten recommendations:

• The committee recommends that the Office of Science and Technology Policy 

(OSTP) establish an independent standing Nanoscience and Nanotechnology Advisory Board (NNAB) to provide advice to NSET member agencies on research 

investment policy, strategy, program goals, and management processes. This 

board could identify and champion research opportunities that do not conveniently fit within any single agency’s mission. It should be composed of leaders 

from industry, and academia with scientific, technical, social science, or research management credentials.

• NSET should develop a crisp, compelling, overarching strategic plan that emphasizes long-range goals that move results out of the laboratory and into the 

service of society. The Strategic Plan should include a consistent set of anticipated outcomes for each theme and grand challenge and estimated time frames 

and metrics for achieving those outcomes.

• The committee recommends that the NNI support more long-term funding and 

investment in nanoscale science and technology. Establishing a proper balance 


917st1.eps
30

between the short-term and long-term funding of nanoscale science and technology will be critical to realizing its potential.

The committee recommends increased multi-agency investments in research at 

the intersection between nanoscale technology and biology. The relevance of the 

NNI to biology, biotechnology, and the life sciences cannot be overstated. Cellular 

processes are inherently nanoscale phenomena. Barriers to inter-agency and interdisciplinary work must be over come to enable such developments.

• Historically, many important advances in science have come only after appropriate investigative instruments have become available. The committee recommends the NSET create programs to facilitate the invention and development of instruments for nanoscale science and technology. This should include 

analytical instruments capable of modeling, manipulating, tailoring, characterizing, and probing at the nanoscale.

• To help foster interagency collaboration the committee recommends the creation 

of a special fund for Presidential Grants, under OSTP management, to support 

interagency research programs relevant to nanoscale science and technology. 

These grants should be used exclusively to fund meaningful interagency collaborations that cross mission boundaries, particularly among the National Institutes of Health, the Department of Energy, and the National Science Foundation.

• Noting the need for greater interdisciplinary research, the Committee recommends that NNI provide strong support for the development of an interdisciplinary culture within science. To date, NSET agencies have encouraged 

multidisciplinary collaborations, but creative programs are needed that encourage the development of self-contained interdisciplinary groups as well.

• To enhance the transition from basic to applied research, the committee recommends that industrial partnerships be stimulated and nurtured, both domestically and internationally, to help accelerate the commercialization of NNI developments. NSET should create support mechanisms for coordinating and 

leveraging state initiatives, which focus on fostering local industry, to organize 

regional competitive clusters for nanoscale science and technology development.

• The committee recommends that the NSET develop a new funding strategy to 

ensure that consideration and assessment of societal implications becomes an 

integral and vital part of the NNI. This effort will help ensure that the ‘‘next 

industrial revolution’’ produces social and economic as well as technical benefits.

• NSET should develop metrics to assess the effectiveness of the NNI in meeting 

its objectives and goals. The committee sees a need to measure the progress of 

the NNI as a whole, with measurable factors including quality, relevance, productivity, resources, and movement of research concepts toward applications.

Senator WYDEN. Thank you. Dr. Williams. 

STATEMENT OF R. STANLEY WILLIAMS, HP FELLOW AND

DIRECTOR, QUANTUM SCIENCE RESEARCH,

HEWLETT–PACKARD 

Dr. WILLIAMS. Chairman Wyden, Senator Allen, and Members of 

the Subcommittee, I thank you for the opportunity to testify before 

you on the topic of nanotechnology. My name is Stanley Williams, 

and I work for Hewlett-Packard Company in Palo Alto, California. 

To appreciate the smallness of a nanometer, first consider 

shrinking yourself down in three-dimensional factors of 1,000. You 

are now the size of an ant. Now shrink the ant down by another 

factor of 1,000. You would be the size of a red blood cell, the smallest cell in your body. Now take that cell and shrink it down by another factor of 1,000. That is the size of a nanometer, the size of 

a few atoms. 

Nanoscience is the study of structures that are just a few atoms 

in size, and it is the scientific field where hundreds of years of advances in physics, chemistry, and biology have just recently converged. The unifying theme is that the intrinsic properties of matVerDate 0ct 09 2002 08:05 May 12, 2005 Jkt 093633 PO 00000 Frm 00034 Fmt 6633 Sfmt 6601 S:\WPSHR\GPO\DOCS\93633.TXT JACK PsN: JACKF
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ter such as color, chemical reactivity, and electrical resistivity depend upon the size and shape of matter only at the nanoscale. 

Nanoengineered systems have the broadest possible arrangement 

of properties that human beings can design, which in turn means 

that building anything with control at the nanometer scale will enable us to produce them in the most efficient possible manner. 

Thus, nanotechnology is a collection of tools available to a broad 

range of scientists and engineers. However, it is not a complete solution to any problem. We will increasingly find that the crucial or 

enabling component of a system is engineered at the nanometer 

scale. 

Indeed, Deutsche Bank in Berlin has estimated that the total 

value of nanotechnology-enabled products and services will be $116 

billion this year. Thus, as we consider creating a national 

nanotechnology program, we must not neglect other scientific and 

engineering areas that provide the other components to complete 

solutions. I am going to give three examples that illustrate the 

breadth and scope of what is possible in the present, in the near 

future, and the longer term of nanotechnology. 

By mixing hard and tough materials at the nanoscale, new composites have been made with levels of both properties never seen 

before in a single material. In the past year, General Motors has 

introduced a polymer clay nanocomposite already mentioned by 

Chairman Wyden that is used for running boards on their pickup 

trucks, and they plan to utilize this new composite in an increasing 

number of components in their vehicles in the future. In this one 

example, we see that a nanotechnology can help the fuel economy, 

the safety, the repair costs, and the ecological impact of our transportation system. 

I believe one of the most significant nanoscience discoveries of 

the past couple of years is that carbon nanotubes and semiconductor nanowires are extremely sensitive sensors of chemical compounds. They should actually be ideal in home defense applications 

for the detection of explosives, poisons, and biological agents. Given 

an appropriate level of support, it should be possible to begin deploying such sensors in susceptible areas within 2 to 3 years. 

On the 5 to 10 year time frame, it should be possible to cheaply 

manufacture such sensors in the hundreds of millions to billions of 

units per year to provide continuous monitoring of our public buildings, post offices, transportation networks, and other institutions 

vulnerable to terrorist attack. 

On a longer time frame, recent discoveries and announcements 

in the areas of nanoelectronic memory and logic circuits promise to 

extend the dramatic improvements in performance of computers 

that we have seen well into the future. These advances also promise to extend the economic benefits of the electronics industry that 

the U.S. has enjoyed for many more decades. 

From these examples, we see that nanotechnology has the potential to greatly improve the properties of nearly everything that humans currently make, and will lead to the creation of new medicines, materials, and devices that will substantially improve the 

health, wealth, and security of American and global citizens. 

However, current experience in the United States shows that the 

number of excellent research proposals submitted for 

32

nanotechnology-related research far outstrips the available funds. 

The ramp-up in funding must be steep. I estimate approximately 

30 percent a year, and sustained for at least the next 5 years. A 

national nanotechnology program will allow for continuous monitoring and feedback to make sure the best ideas are funded. 

Also, increases in nanotechnology support must be consistent 

with an overall increase in the total physical science and engineering base in agencies such as the National Science Foundation, the 

Department of Energy, and the Department of Defense. 

My primary concern for U.S. nanotechnology is that we will not 

train or retain enough of the best researchers to be the leaders in 

this crucial area. Currently, the United States is supplying only 25 

percent of the global funding for nanotechnology research by national Governments. Other countries are determined to keep pace 

and even surpass our efforts by investing heavily and by recruiting 

the best and the brightest researchers away from the United 

States. 

We will need to leverage our academic, Government, and corporate research capabilities to compete globally. However, relations 

between large corporations and American universities have never 

been worse. Severe disagreements have arisen over conflicting interpretations of the Bayh-Dole act. Many large U.S.-based corporations now work with the leading institutions in France, Russia, and 

China, which are willing to offer extremely favorable intellectual 

property terms for their support. 

The U.S. Government has several roles to play to ensure that 

America leads the world in nanotechnology. The first is to invest 

sufficiently in the basic research enterprise which produces the scientists and engineers who will invent the future. The second is to 

act as an early adopter of new technologies, especially in the areas 

where technological advances enhance our security. 

Finally, the Government should consider a new role, that of mediator to bring together academic, corporate, and national labs so 

that they can work together, and the Nation can share in the benefits of their discoveries. 

Thank you very much. 

[The prepared statement of Dr. Williams follows:]

PREPARED STATEMENT OF R. STANLEY WILLIAMS, HP FELLOW AND DIRECTOR, 

QUANTUM SCIENCE RESEARCH, HEWLETT-PACKARD

Chairman Wyden, Senator Allen, Members of the Subcommittee, I thank you for 

allowing me—on behalf of Hewlett-Packard Company—the opportunity to testify before you on the topic of nanotechnology. 

Few words have generated as much hype and controversy over the past few years 

as ‘nanotechnology’. On the one hand, some enthusiasts have established a quasireligion based on the belief that nanotechnology will generate infinite wealth and 

life-spans for all humans. On the other, alarmists fear that nanotechnology will 

somehow end life as we know it, either by poisoning the environment or releasing 

some type of self-replicating nanobot that conquers the earth. Neither scenario is 

realistic, and both have been propagated by people who are good communicators but 

actually have no relevant scientific experience in the nanosciences. 

This knowledge gap exists primarily because most scientists actually working in 

the field are either unable to communicate what they are doing to lay audiences or 

think they are too busy to try. I am afraid that many scientists are guilty of believing that the public in general and policy makers in particular are incapable of understanding science, and that their work should be supported simply because it is 

important and beautiful. This patronizing attitude has not served the citizens of the 

33

U.S. or American scientists. It is certainly true that policy makers do not have the 

time to understand the full details of the research in any field of scientific endeavor, 

just as most scientist have no clue about the intricacies of the legislative process. 

However, we owe it to each other and to the American public to engage in meaningful dialog. Our two communities may not understand the details of what the other 

does, but we should each appreciate what the other has to contribute to the overall 

benefit of society. 

I will attempt to provide you with some of that appreciation today by providing 

a high-level description and a series of analogies, each of which is certainly flawed 

but taken together I hope they provide you with a picture that you can utilize in 

your deliberations. Nanotechnology is particularly frustrating to describe. It is not 

one thing, and it is certainly not all things. I have been told by public relations experts that I need to simplify the field and provide a single rallying point upon which 

policy makers can focus. However, this would do a grave injustice to the field and 

I think in the long run it is an insult to your intelligence. Therefore, let me attempt 

to describe what nanotechnology has to offer by delving into some of the complexity. 

First, one needs to appreciate the smallness of a nanometer. Consider shrinking 

yourself down in all three dimensions by a factor of 1000—you would become the 

size of a fairly small ant. Now take that ant and shrink it down by a factor of 

1000—it would be about the size of a single red blood cell, which are the smallest 

cells in your body. Finally, shrink that red blood cell by a factor of 1000—that is 

the size of a nanometer, essentially the width of a few atoms. When thinking explicitly about this as a fundamental building block, Richard Feynman was truly prescient when he said there is ‘plenty of room at the bottom’. 

Nanoscience, the study of structures that are a few nanometers in size, is the field 

where hundreds of years of advances in the fields of physics, chemistry and biology 

have come together in just the past decade. Each discipline naturally and separately 

evolved toward this common goal through a series of intellectual advances, instrument developments and experimental discoveries. A significant fraction of the Nobel 

prizes in physics, chemistry and medicine in the past 10 years have been awarded 

for research discoveries at the nanoscale. Now that all three disciplines have arrived 

at this same goal, each has realized that it can learn much from the others, so that 

the field of nanoscience has transcended traditional academic boundaries. Engineers 

have been very quick to adapt the insights gained at the nanoscale, and in many 

cases have actually been the leaders in recognizing the trans-disciplinary synergies 

available. Material science, bio-engineering and electrical engineering are all rapidly 

becoming components of a nano-engineering super-discipline. The unifying issue for 

engineering is that the intrinsic properties of matter, such as color, chemical reactivity, and electrical resistivity, depend on size and shape only at the nanoscale. 

Thus, nano-engineered systems have the broadest possible range of properties that 

can be designed, which in turn means that building anything with control down to 

the nanometer scale will enable them to be produced in the most efficient possible 

manner. Thus, nanotechnology can and will be applied to everything made by 

human beings—it will allow us to dramatically improve nearly everything that we 

currently make, and it will enable us to create an entire range of new materials, 

medicines and devices that we cannot even conceive of today. Human cleverness is 

at a premium—which means high value added products and high wages for companies and countries that dominate nanotechnology. 

With that said, we must realize that nanotechnology is a collection of new tools 

available to a broad range of scientists and engineers—it is not a complete solution 

to any problem. For the next several decades, there will be very few cases in which 

an entire product is the result of nanotechnology, but more and more we will find 

that the crucial or enabling component of a system is engineered at the nanometer 

scale. A current example of this is the giant magneto-resistance, or GMR, read head 

currently found in hard disk drives for computers—the recent dramatic increase in 

storage capacity of disk drives is directly attributable to the fact that GMR heads 

have components that are nano-engineered. The value of the read heads alone is 

fairly small, but they enable a multi-billion dollar per year industry. Indeed, 

Matthias Werner of Deutsche Bank has estimated that the total value of 

nanotechnology-enabled products will be $116 billion in 2002, and will increase dramatically in the near future. Thus, as we think about increasing support for the 

U.S. Nanotechnology Initiative, we must not neglect other disciplines that will also 

be contributing necessary components to complete solutions. As in all things, a balanced approach is essential. 

What are the recent advances in nano science and engineering? 

There have been so many recent advances in the nano sciences and engineering 

in recent past I could take up all my time just listing them. Let me give just three 

34

examples that illustrate the breadth and scope of what is possible in the present, 

the near future, and the longer term. 

During the past couple of years, a significant number of new nanocomposite materials have come into the market place. These materials are engineered to combine 

properties that natural materials have never displayed, such as hardness and toughness. Naturally hard materials such as diamond shatter easily, whereas naturally 

tough materials like wood are easy to scratch or dent. However, by mixing hard and 

tough materials at the nanoscale, new composite materials can be made with levels 

of the two properties never seen before. In the past year, General Motors has introduced a polymer-clay nanocomposite material that is used for a dealer installed optional running board on their SUVs and pickup trucks. This material is not only 

harder and tougher, but it is also lighter and more easily recycled than other reinforced plastics, and GM plans to utilize it in more and more components of their 

vehicles as economies of scale make it cheaper. In this one example, we see that 

a nanotechnology can help the fuel economy, the safety, the maintenance cost, and 

the ecological impact of our transportation system. In the future, nanocomposites 

will become increasingly sophisticated and truly smart, with the ability to adapt to 

new environments and even to self-repair. 

One of the most significant nanoscience discovories of the past couple of years 

that came out of Stanford, Harvard and UCLA is that nanowires, especially carbon 

nanotubes and semiconductor wires, can be used as extraordinarily sensitive detectors of light and of chemical and biological agents. In this case, the nanowires have 

such a small diameter that any change on the surface of the nanowire has a dramatic effect on its electrical conductivity. There is already a significant activity in 

the U.S. and abroad to build sensors based on this discovery. These sensors can be 

used for medical diagnostics to detect and report extremely small amounts of pathogens for the early detection of disease such as a known cancer or even a new bacterial or viral infection not previously known. Prof. James Heath of UCLA has proposed a vision in which a laboratory on a chip with nanosensors could help investigators go from a new ‘bug to drug’ in 24 hours. However, probably their most 

pressing near term application will be for security applications for the detection of 

explosives, chemical warfare agents and biological threats. Given an appropriate 

level of support, it should be possible to begin deploying such sensors in sensitive 

areas within two to three years. Given economies of scale, it should be possible on 

the five to ten year time frame to cheaply manufacture such sensors in the hundreds of millions to billions of units to provide continuous monitoring our public 

buildings, post offices, transportation networks and other institutions vulnerable to 

terrorist attack. 

I will also mention that on a longer time frame, recent discoveries and announcements in the area of nanoelectronic memory and logic circuits promise to extend the 

dramatic improvements in performance for cost that we have seen over the past 40 

years. These advances promise to extend the economic benefits of the electronics industry that the U.S. has enjoyed for several decades, and also continue the efficiency with which we conduct our business and government affairs. We will see a 

wide variety of new products emerging, but most important of all we will see our 

electronic tools become much easier and intuitive to use. 

What is the significance of and potential for the development and deployment of nanotechnology? 

From these examples, we can see that nanotechnology has the potential to greatly 

improve the properties of nearly everything that humans currently make, and will 

lead to the creation of new medicines, materials and devices that will substantially 

improve the health, wealth and security of American and global citizens. 

Is the Federal Government adequately investing in nanotechnology (i.e. 

perspective on the National Nanotechnology Initiative)? 

Given the starting point of the NNI in the year 2000 and budgetary realities, I 

think the current funding for nanotechnology is appropriate. It would be a mistake 

to put too much money earmarked for nanotechnology too quickly into the research 

community, since it could not adjust and efficiently absorb that funding . However, 

current experiences show that the number of excellent proposals for research funding in nanoscience and engineering far outstrips the available funds, and thus the 

ramp-up must be steep, approximately 30 percent per year, and sustained for at 

least the next five years. A National Nanotechnology Program will allow for continuous monitoring and feedback to make sure that the best ideas are funded. Also, 

increases in nanotechnology support must be consistent with an overall increase in 

the total physical science and engineering base in agencies such as the National 

Science Foundation, the Department of Energy, and the Department of Defense. 

35

As a nation, we have neglected our investments in physical sciences and engineering over the past decade. We have forgotten that these have been the drivers for 

our current level of material well being. The analogy is that physical science and 

engineering have been orchards, and we have been busily harvesting the fruits of 

those orchards for the past 20 years. However, we as a nation have forgotten that 

if we want to continue to harvest from such orchards, we must continually be planting new trees. As a fraction of GNP, our investments in basic research in the physical sciences and engineering have declined nearly 30 percent over the past decdade. 

This state of affairs has convinced American young people that there is no future 

for them in these disciplines, even though the potential in these areas is great. 

As an expert and a leader in this field what are your concerns in the 

nanotechnology area? 

My primary concern is that we in the United States will not have enough of the 

best researchers to be the leaders in this crucial area. Currently, the U.S. is supplying approximately 25 percent of the global federal funding for nanotechnology. 

Other countries are determined to keep pace and even surpass our efforts. Even 

though Japan has experienced significant economic problems, they make certain 

that their NNI meets or exceeds the funding levels approved in the U.S.. The European community is doing the same. Korea, Singapore, Taiwan and China are pouring a much higher percentage of their economy into research in this area, and when 

considering the local purchasing power of currencies, the PRC has the largest NNI 

in the world in terms of the number of researchers they intend to support. Another 

significant part of the NNIs of all other nations is that they have set aside significant funds to recruit senior and talented researchers from other countries, and for 

the most part they are targeting the U.S. The primary requirement for federal support of basic research, from a large corporation point of view, is the training of the 

people needed in our corporate research and development labs to invent the new 

products that secure our futures. We are going to have to be smarter and more efficient going forward—we need cooperation among government at all levels, national 

labs, and corporate R&D facilities. 

I also have some secondary concerns for the future health of the U.S. R&D enterprise. 

Largely as a result of the lack of federal funding for research, American Universities have become extremely aggressive in their attempts to raise funding from 

large corporations. 

Severe disagreements have arisen because of conflicting interpretations of the 

Bayh-Dole act. Large U.S. based corporations have become so disheartened and disgusted with the situation they are now working with foreign universities, especially 

the elite institutions in France, Russia and China, which are more than willing to 

offer extremely favorable intellectual property terms. 

The situation with respect to corporate partnering with U.S. National Labs is not 

much better. In this case, inconsistent policies, the long time lines to negotiate relationships, and constantly shifting government priorities often make it too difficult 

for companies to partner with National Labs. Again, there is an international market place. National Labs in other countries are aggressively courting American companies. Perhaps the major example of this is Center for Innovation in Micro and 

Nano Technologies, or Minatec, in Grenoble, France, which provides access to facilities and a source of students for companies that locate research labs on their campus. 

The most important problem of all is that we have lost sight of the fact that government and corporate funds spent on research are not expenditures or luxuries 

that can be cut at a whim, they are essential investments to the long term viability 

of an enterprise. We have neglected those investments for a long time now. The 

prosperity of the 1990’s was prepared by the investements of the 1960’s, when the 

U.S. Federal Goverment was investing 2 percent of GNP on R&D. That investment 

has paid off many fold over the decades, but because we became wealthy, we forgot 

that we needed to keep investing to stay wealthy. The impatience of corporate 

boards and institutional investors have placed too strong a focus on short term results with too little long-term investment. A significant factor in the current economic situation, especially in the high tech sector, is that we do not have enough 

new and compelling products and services to generate customer demand. The internet bubble was a failed experiment to substitute clever business plans for new 

goods. 

36

How should and could government-industry collaboration enhance research and development in the nanotechnology area? 

The U.S. government has several roles to play to insure that America leads the 

world in nanotechnology. The first is to invest sufficiently in the basic research enterprise, which produces the scientists and engineers who will invent the future. 

The second is to act as an early adopter of new technologies, especially in the areas 

where technological advantage enhances our security. Finally, government should 

consider a new role, that of mediator to bring together academic, corporate and national research labs so they can work together and the nation can share in the benefits of their discoveries.

Senator WYDEN. Thank you, very helpful. Dr. Swami, welcome. 

STATEMENT OF NATHAN SWAMI, DIRECTOR, INITIATIVE FOR 

NANOTECHNOLOGY, COMMONWEALTH OF VIRGINIA, AND 

MICROELECTRONICS PROGRAM DIRECTOR,

UNIVERSITY OF VIRGINIA 

Dr. SWAMI. Thank you, Mr. Chairman and Senator Allen. My 

name is Nathan Swami, and I am here representing the Initiative 

for Nanotechnology in Virginia, INanoVO for short. We are a coalition of State Government, leading research universities, and a 

growing family of nanobusinesses all across the Commonwealth. A 

list of our members and stakeholders is attached in the written 

version of this testimony. 

Our organization has the goal to position Virginia among the national leaders in nanotechnology research and business development, as we are keenly aware that leadership in this key technology is a key to our economic future. In our short history in this 

field, we have seen great enthusiasm amongst different institutions 

in Virginia, different labs and different universities, including businesses, and we urge the passage of the 21st Century 

Nanotechnology Research and Development Act, as in the draft 

bill. 

In my remarks this afternoon, I wish to sketch some general arguments in favor of this bill, and touch briefly on Virginia’s perspective, which we believe will be shared by numerous regions 

across the Nation, and conclude with two recommendations that we 

believe will strengthen the impact of this legislation. 

First, some comments. The rest of the panel have talked about 

scientific and business aspects of nanotechnology. I will extend it 

to its social implications and also its regional implications. First, 

we must recognize that our entire economy has become heavily dependent on technological innovation. Some economists estimate 

that nearly half of the American economy is now driven by new scientific discoveries in the technology-heavy sectors, ranging from agriculture and medicine, to man-made materials, electronics, information technology, and telecommunications. 

We now know that further development in these and other industries will be driven in large part by a broad general movement that 

we have come to know as nanotechnology. So it is inevitable that 

we view nanotechnology, which in its simplest definition is a natural outgrowth of our ability to work with ever-greater precision in 

ever-smaller dimensions, as the foundation upon which we will 

enter this new age of innovation. 

Some may ask, why do we need this bill? If nanotechnology is so 

promising, why cannot private enterprise foot the bill? The answer, 

37

quite simply, is this. We owe our leadership in high technology to 

the Government’s timely investments in critical early stages, time 

and again, when emerging technologies were most in need of a 

boost in order to move toward eventual commercial success. From 

the dawn of modern agriculture, to aerospace, to the launching of 

the information age, Government support has been a powerful catalyst to drive basic research and accelerate technology transfer from 

the laboratory to the marketplace. 

To those who ask, why pass this bill, we can respond to another 

question. What will happen if we do not? The answer is disconcerting. As we see other Governments of the European Union 

and East Asian nations investing heavily in long-term major 

nanotechnology research and development centers, the hard reality 

is the worldwide race for preeminence in nanotechnology is on, and 

America must push to stay ahead. 

From Virginia’s perspective, we see great promise for 

nanotechnology to boost business and industries that are crucial to 

our own overall economy, which include information technology, 

biotechnology, advanced materials, health care, et cetera. We have 

an impressive infrastructure in the State, with leading research 

universities, a lively venture capital community, and a businessfriendly State government. For all our strengths, however, we are 

not yet at the point of critical mass. We have not yet created the 

synergies necessary to form leading nanotechnology research and 

development centers such as those currently under development in 

several other States. 

I believe this will be the case with numerous regional areas 

where nanotechnology is carried out, and so we believe that this 

bill will be a catalyzing force to encourage nanotechnology research 

and education in Virginia, as in industrial regions of the Nation, 

to foster development of major public-private partnerships and to 

actively engage larger segments of our business communities and 

academic communities in nanotechnology movement. 

Regarding the bill itself, we have two major recommendations 

that we believe will enhance its effectiveness. First, we judge that 

the pace of nanotechnology research will be accelerated considerably if the bill were to encourage the development of regional centers for excellence in research instrumentation which encompass 

both multidisciplinary facilities and state of the art infrastructure. 

All scientific disciplines are engaged in nanoscale research, and 

much of this work requires sophisticated and expensive equipment. 

If this bill were to encourage the formation of regional networks of 

such research equipment, then access would be enhanced. We 

would anticipate more efficient utilization of equipment, a much 

broader participation of researchers from colleges and universities 

of all sizes, and a faster spread of the scientific, technological, and 

educational benefits of nanotechnology. 

Second, we believe the bill should specifically require coordination between the National Nanotechnology Coordination Office and 

existing State nanotechnology initiatives, as well as university research offices. This decentralized approach is particularly necessary for nanoscale sciences, where much of the fundamental innovations will occur, or have been occurring in a bottom-up fashion. 

38

One method to accomplish this is for the national office to directly fund State initiatives and charge them with the task of identifying and encouraging specific lines of research and business development based on identified strengths in their particular regions. 

In conclusion, the Initiative for Nanotechnology in Virginia 

strongly supports the proposed bill and envisions it as a muchneeded catalyst to help the Nation and regional centers realize 

their ultimate potential for scientific, technological, educational innovations through the enabling science of nanotechnology. 

Finally, I would like to thank the committee Chairman and Senator Allen for inviting us to speak at this forum, and I gladly offer 

the services of our organization to help the swift passage of this 

bill. 

Thank you. 

[The prepared statement of Dr. Swami follows:]

PREPARED STATEMENT OF NATHAN SWAMI, DIRECTOR, INITIATIVE FOR

NANOTECHNOLOGY, COMMONWEALTH OF VIRGINIA, AND MICROELECTRONICS

PROGRAM DIRECTOR, UNIVERSITY OF VIRGINIA

Good afternoon. My name is Nathan Swami, and I am Executive Director of the 

Initiative for Nanotechnology in Virginia, or INanoVA for short. We are a coalition 

of state government, leading research universities, and a growing family of 

nanobusinesses that are emerging throughout the Commonwealth of VA. A list of 

our members and stakeholders is appended to the written version of my testimony. 

INanoVA’s overall goal is to position Virginia among the national leaders in 

nanotechnology research and business development, as we are keenly aware that 

leadership in this exciting field is the key to Virginia’s economic future. In our short 

history, we have found a rising tide of interest in nanotechnology, and it is with 

great enthusiasm that we urge passage of the ‘‘21st Century Nanotechnology Research and Development Act.’’ 

In my remarks this morning (afternoon), I wish to sketch out some general arguments in favor of this bill, touch briefly on Virginia’s perspective, and conclude with 

two recommendations that we believe will strengthen the impact of this important 

legislation. 

First, we must recognize that our entire economy has become heavily dependent 

on technological innovation. Some economists estimate that nearly half of the American economy is now driven by new discoveries in technology-heavy sectors ranging 

from agriculture and medicine to man-made materials, electronics, information technology, and telecommunications. We now know that further developments in these 

and other industries will be driven in large part by the broad general movement 

known as nanotechnology. So it is inevitable that we view nanotechnology, which 

in its simplest definition is the natural outgrowth of our ability to work with greater 

and greater precision in ever smaller dimensions, as the foundation upon which we 

will enter a new age of innovation. This new age, the Age of Nanotechnology, is one 

where we will imitate nature itself, thus endowing us with the capability to make 

materials, devices, machines and medicines with an efficiency and effectiveness that 

is undreamt of today. We are on the cusp of that new age now, and government 

support can assure that we will get there first. 

Some may ask, ‘‘But why do we need this bill? If nanotechnology is so promising, 

why can’t private enterprise foot the bill?’’ The answer quite simply is this: We owe 

our world leadership in high technology to the government’s timely investments at 

critical early stages, time and again, when emerging technologies were most in need 

of a boost in order to move toward eventual commercial success. From the dawn of 

modern agriculture to aerospace to the launching of the Information Age, government support has been a powerful catalyst to drive basic research and accelerate 

technology transfer from the laboratory to the marketplace. In industry after industry, one sees the same pattern: federal dollars encourage early discoveries in a new 

technology, which then attracts private investment, which then grows into a successful industry, with large employers and many jobs for working Americans. Trace 

the history of agribusiness and the green revolution and you find federal dollars 

funneled through Agricultural Extension services in our land grant universities, an 

ongoing investment that has revolutionized American farming. Silicon Valley and 

Boston’s Route 128 high tech corridor would not exist if the Federal Government 

39

had not invested in early stage research in computer science. The Internet itself is 

an outgrowth of federally supported research. We are now at another critical juncture in our technological evolution, and timely passage of this bill will go far to assure continuing American leadership in the global economy. 

To those who ask, ‘‘Why pass this bill?,’’ we can respond with another question: 

‘‘What will happen if we don’t?’’ The answer is discomforting, as we see other governments of the European Union and East Asian nations investing heavily in major 

nanotechnology research and development centers. The hard reality is that the 

worldwide race for preeminence in nanotechnology is on, and America must push 

to stay in the lead. 

From Virginia’s perspective, we see great promise for nanotechnology to boost 

business development in industries that are crucial to our overall economy: information technology, biotechnology, advanced materials, health-care, aerospace, shipbuilding, and telecommunications, to name just a few. We have an impressive infrastructure in this state, with leading research universities, a lively venture capital 

community, and a business-friendly state government. Indeed, INanoVA owes its 

very existence to timely funding from Virginia’s Center for Innovative Technology, 

an economic development agency focused on innovative technologies with an impressive track record in facilitating the start up and growth of leading edge businesses. 

For all our strengths, however, we are not yet at the point of critical mass, and we 

have not created the synergies necessary to form leading nanotechnology R&D centers, such as those currently under development in several other states. This bill, 

we believe, will be a catalyzing force to encourage nanotechnology research and education in Virginia, to foster the development of major public/private partnerships, 

and to actively engage larger segments of our academic and business communities 

in the nanotechnology movement. 

Regarding the bill itself, we have two recommendations that we believe will enhance its effectiveness. 

First, we judge that the pace of nanotechnology research will be accelerated considerably if the bill were to encourage the development of regional centers for excellence in research instrumentation, encompassing both multi-disciplinary facilities 

and state-of-the-art infrastructure. All scientific disciplines are engaged in nanoscale 

research, and much of this work requires sophisticated and expensive equipment. 

If this bill were to encourage the formation of regional networks of such research 

equipment, then access would be enhanced. We would anticipate more efficient utilization of the equipment, a much broader participation of researchers from colleges 

and universities of all sizes, and a faster spread of scientific, technological, and educational benefits. 

Second, we believe the bill should specifically require coordination between the 

National Nanotechnology Coordination Office and existing state nanotechnology initiatives, as well as university research offices. This decentralized approach is particularly necessary for nanoscale sciences where much of the fundamental innovations occur in a ‘‘bottom-up’’ fashion. One method to accomplish this is for the national office to directly fund state nanotechnology initiatives and charge them with 

identifying and encouraging specific lines of research and business development 

based on identified strengths in their particular regions. 

In conclusion, the Initiative for Nanotechnology in Virginia strongly supports the 

proposed bill and envisions it as a much-needed catalyst to help the nation and regional centers realize their ultimate potential for scientific, technological, business 

and educational innovations, through the enabling science of nanotechnology. 

Finally I would like to thank the Committee for inviting me to speak, and I gladly 

offer the services of our organization (INanoVA) to help in the swift passage of this 

bill. Thank you.

Senator WYDEN. Dr. Swami, thank you. that is very helpful. All 

of you have been very good. Just a few questions from me on this 

round, and Senator Allen and I always go back and forth, and as 

I said, what I would really like to do is just see if we could engage 

in a discussion. 

I think it is fair to say, gentlemen, that the premise of this bill 

is that the National Nanotechnology Initiative is a sensible step for 

Government. I think it is a good step, a constructive step, and we 

are for it. 

We think we can do better. We think we can build on it. I think 

what would be helpful is if you would highlight for us what you 

40

think the strengths and limitations of the NNI are. We’ll start with 

you Dr. Stupp because of your work with the Academy. That way 

we can get your sense of where we are without getting you into endorsing every part of our bill as it is written. 

Feel free, if you would choose to, to endorse every part of this 

legislation. But seriously, what I think we are more interested in 

is getting your sense of what the Government is doing well in this 

area, what areas the Government could do better in, and starting 

off our discussion in that kind of way. 

Dr. STUPP. Certainly, what the Government did well was create 

NNI. That was a great concept. I think the only way to ensure that 

nanotechnology proceeds to its ultimate potential here in the U.S. 

is to have some kind of national program in nanotechnology. I 

think what is being done very well is certainly the great interest 

that all Federal agencies have shown in this initiative. I think 

across the board all agencies recognize the importance of 

nanotechnology, and that it has been very reassuring for members 

of the scientific community. 

The limitations, of course, are along the lines of interagency partnerships, which we view as being key to the future of 

nanotechnology. A very important partnership, for example, is that 

of the NIH and the other agencies, because the only example of 

nanotechnology at work in its best expression is biology itself. 

Senator WYDEN. What should be done in the biology area? I 

noted that in your testimony earlier. What would you like to see 

done in the biology area that isn’t being done now? 

Dr. STUPP. I think I would like to see programs that are specifically targeted to this interface of biology, medicine, and the physical sciences in the nanocontext, programs that are started by or 

initiated by agencies such as NSF, working alongside the NIH. 

I think the NIH, for example, needs to invest a lot more money 

in nanotechnology than they are investing today, and the NSF on 

the other hand needs the funds to leverage those interactions with 

agencies such as the NIH. 

I think my community, you know, the scientific community is 

really screaming for initiatives that are at this interface. The NIH 

has been an organization that has had a very strong mission, and 

you cannot criticize that. Their mission is to look over the health 

of our Nation, but at this point we all recognize in the scientific 

community that many of the most exciting opportunities lie at this 

interface with biology, and the NIH does not have the background, 

perhaps, to deal with it, and the NSF does not have the funds, so 

we have I think a problem of resources. We have, on the other 

hand——

Senator WYDEN. But that is a serious problem, we have a mix 

of insufficient talent and insufficient funds in an area that has extraordinary potential. 

Dr. STUPP. We have great talent, and insufficient funds. 

Senator WYDEN. Maybe I missed it. Did you not say at NIH there 

are people with the requisite expertise in the biology field, and at 

NSF there are the funds? 

Dr. STUPP. But, of course, I am referring to the NIH as an agency that funds research. I am not speaking about the community of 

scientists, but there is, if you talk to any young person, our brightVerDate 0ct 09 2002 08:05 May 12, 2005 Jkt 093633 PO 00000 Frm 00044 Fmt 6633 Sfmt 6601 S:\WPSHR\GPO\DOCS\93633.TXT JACK PsN: JACKF
41

est young people in American universities today that are interested 

in science, you will find a large majority of them are interested in 

biology, but not necessarily traditional biology. They would like to 

innovate in medicine, and they see the technology as an enabling 

tool to get there. 

Senator WYDEN. Let us see if we can get from Mr. Modzelewski 

and Dr. Williams and Dr. Swami the pluses and minuses of the 

NNI. 

Mr. MODZELEWSKI. The biggest plus was the actual awareness. 

It told so many people in the corporate world and other Nations 

that nanotechnology was real and was serious. Unfortunately, the 

negative side of that awareness was sort of the nanotechnology 

race that might be best compared to a space race that was set off 

among Governments, who are increasingly funding and are increasingly aware of what this means to their economies in the future. 

Other positive areas were the much-needed funds, the level of coordination, and a lot of groundbreaking research that I think was 

actually very visionary for a new program that looked into social 

aspects and implications, and economic aspects and implications of 

what was greatly a basic research program, so it was quite innovative. 

We see some negative, not so much negative comments, but 

where there is a jumping off point to go a little further is probably 

look at research and development for commercialization. Again, 

things like scaling issues, it is one thing to make a very small 

amount of something on basically a small piece of glass in a laboratory, it is another thing to scale it up to production levels that industry could use. That is something in particular that many of the 

Asian competitive Nations such as Japan and Korea are very good 

at. 

Another area to look at is the integration of private sector, all 

the more so into the NNI, and ensure that on things such an advisory panel, that industry is strongly represented, so that much of 

the research direction does go to the future of the economy, not 

that we would like to take out a lot of wild-haired ideas that are 

some of the foundations of great scientific discovery. But to know 

that there is a level of looking towards the commercialization of 

these technologies I think would be very important to any further 

direction. 

And then I think there are a couple of issues that you could look 

at that are problematic across emerging technologies, and I think 

that would be things like the technology transfer system in the 

United States. It has certainly been improving at the Government 

level, but it still by most standards would be considered lacking at 

the universities, and still at a corporate level, when compared to 

other commercial operations, so to speak, and also the fear of a lot 

of patent issues, with the Patent Office being properly trained to 

understand this multidisciplinary structure, in granting patents 

that are too wide or too small, and also very timely and accurately 

approving patents. 

Senator WYDEN. Dr. Williams. 

Dr. WILLIAMS. I will have to second most of that. I think the primary issue that NNI did was give the field legitimacy. At that 

point in time it was viewed primarily as fiction, and it was often 

42

very difficult for people who were working in the area to be taken 

seriously, or to get grants funded when they submitted proposals. 

Also, I think one thing that NNI did wonderfully was accept responsibility for ethical issues. Very early on, we were looking at the 

societal impacts and issues, trying to make sure that we did not 

have any nasty surprises that would come along and blindside the 

people working in this area. There was good communication about 

both the good, the benefits, and the potential downsides of 

nanotechnology and how they could be dealt with. 

It is also true that the creation of the United States NNI has 

seeded tremendous competition worldwide. As soon as we had an 

NNI, the world had an NNI. In fact, Japan makes absolutely sure 

that whatever we do in this country, they do at least as much, because their fiscal year follows ours by about 5 months. Whatever 

the United States enacts, they do the same or more, and that can 

also be said of the European Union. 

So as I mentioned in my remarks, I think the only way we can 

deal with global competition is to leverage all of the assets we have 

available in this country: the academic research community, our 

national labs and our corporate labs. I think the problem we have 

right now is that what few interactions existed are dramatically 

falling apart. 

I see these communities essentially turning their backs on each 

other and just walking away. I myself have just given up hope of 

negotiating with universities anymore to get engaged in joint research ventures. It is just too painful. I think we really need to 

have, as a part of a national nanotechnology program, means for 

bringing these communities back together and conflict resolution 

among these communities. Perhaps even an explanation of what 

the heck Bayh-Dole actually means, and what it was intended to 

do, rather than the very, shall we say, aggressive types of actions 

that we see taking place whenever we try to negotiate with the 

university now. 

Senator WYDEN. We’ll talk a little bit more about Bayh-Dole in 

a minute or two. Dr. Swami. 

Dr. SWAMI. Yes, briefly, I think a major strength, as has been 

stated in the past, has been increasing the visibility and the legitimacy of nanotechnology, no doubt about that. 

Another strength, although it has been also pointed out as a 

drawback, by Dr. Stupp, is getting organizations to work together. 

Yes, there is no doubt that there is a limitation in that, but to me 

it is also a major strength that agencies as diverse as the EPA 

were brought into, with the NSF, all to work together on 

nanotechnology. Five years, seven years ago I would never have 

thought this would have happened. 

Major limitations from the point of view of at least a regional 

center is, there are just too few large center opportunities, and 

since these are too few they end up being extremely competitive, 

fighting for a certain small amount of funds for a small amount of 

time, with a large number of competitors, and so I think the programs of the NSET and the interdisciplinary research programs 

that NSF has should be expanded to basically allow longer term research. 

43

Second is research infrastructure has not been directly addressed. There is a lot of good infrastructure available to some centers which are near national labs, or which work with those national labs, but otherwise universities have to build this infrastructure, and then have the industry come and work with the universities at these, the infrastructure, and I think the infrastructure 

should be addressed in some form, for nanotechnology especially. 

And finally, coordination of agencies, which many people have 

pointed out as a limitation, I would take that a step further. It is 

not just coordination of agencies for actual research done, but coordination of what happens with that research, who is doing what, 

coordination at the State and at the regional levels. That would be 

a limitation I think that could be acted upon. 

Thank you. 

Senator WYDEN. Okay. Senator Allen. 

Senator ALLEN. Thank you, Mr. Chairman. Thank you all for 

your insightful testimony here, and answering questions. Let me 

ask Hon. Richard Russell a question. Listening to all of these concerns, I am going to follow up on some of them with him, but does 

the Administration have any target plans to aid in technology 

transfer and the commercialization of nanotechnologies? 

It has been said through a variety of ways, and I do want to follow up on why it is so hard to work with universities for the private sector and so forth, but do you have any target areas to get 

through some of these problems? Much of which is saying, get it 

into commercialization like some of the examples we have, and that 

will obviously pay for some of the research in the future. 

Mr. RUSSELL. Let me break that into two pieces. I think part of 

what NNI has been trying to do is push the envelope, and push 

technologies out, and if you look at the grand challenges under the 

NNI programs that currently exist, and look at things like 

nanoscale manufacturing, this is clearly an effort to push 

nanotechnology into, not just manufacturing, but into the economy. 

The second issue revolves around generically the concept of how we 

push tech transfer, and I think that with nanotechnology, as with 

all research we do with the Federal Government that we try to get 

commercialized, I think the very same issues that are revolving 

around nanotechnology are also relevant across the board, and so 

we wanted to promote things like CRADAs, we want to promote—

Senator ALLEN. Like what? 

Mr. RUSSELL. CRADAs, corporate research and development 

agreements. We want to promote the use of the existing legal 

framework. Bayh-Dole was mentioned, and obviously there are 

issues between universities and industry, because really it is a winwin when you look at the universities and you look at industry. It 

is in both their interests to get this technology out. Industry obviously gains, the economy obviously gains, as does the university, 

and so where there are breakdowns in terms of nanotechnology I 

think there are probably the exact same issues we see across the 

board for all technology issues. 

Senator ALLEN. Let me follow up, then, with the rest of the panel 

here. Thanks for your comments. 

Some have alluded to the space race, and so forth, of the 1960s, 

and we have heard about how the Japanese and obviously Taiwan, 

44

Korea, and the European countries are all wanting to emulate or 

do more than we are. We hear the same things in aeronautics research. There are a lot of similarities in here. 

The one thing that has been a thread through here, though, and 

especially from Dr. Williams and Hewlett-Packard’s comments, as 

well as Mr. Modzelewski’s comments, is the scientific research 

here, as far as the collaboration which is necessary with the private 

sector and universities and the Government, everyone collaborating, rather than having the Federal Government kind of as a 

mediator, and maybe it has to be. 

Why are intellectual property laws—in some cases, I have heard 

you say that is harming us, and how is that different from the intellectual property laws in other countries, whether it is Japan or 

whether it is Europe? And if anyone of you all—and maybe, Dr. 

Williams, I would ask you to do this, since you say you do not want 

to bother working with universities and colleges, that HewlettPackard, it is just too much of a nightmare, it is too difficult. 

These sorts of things, such as our patent laws, our intellectual 

property laws, and whatever other laws there may be at the Federal level that are harming cooperation with the private sector and 

universities, all are just fundamental problems that need to be addressed. And to the extent we can we ought to fix it so that people 

will have that collaboration, and make those investments, and obviously help the universities as far as their education, but ultimately, 

of course, benefit the competitive leadership role of our country. 

So Dr. Williams, if you could start off, and any of you all who 

want to lend some commentary to that, I would appreciate hearing 

it. 

Dr. WILLIAMS. I think the problem is not that the legislation is 

not good. I have now read the Bayh-Dole Act so many times I think 

I have actually memorized significant portions of it, and as I read 

it, it is a very fine act. However that is as I interpret it, and what 

we find is that people at universities interpret the same act, the 

same words in an entirely different fashion. 

Senator ALLEN. For purposes of the record, would you share with 

us what your view is of the purpose of the Bayh-Dole Act? And how 

is it being misinterpreted? 

Dr. WILLIAMS. My view of the Bayh-Dole Act is that it is a vehicle by which universities should be able to license intellectual property that they create in order to generate an economic benefit to 

the universities, and reward them for having created intellectual 

property. And in a sense to repay the investment that the public 

has made into performing research in generating an income stream 

for the universities. From that standpoint I believe that that is a 

very excellent idea. What it does is, it made universities more 

aware that intellectual property was important, and that it was an 

asset that they should take seriously. 

I would say that from a large corporation point of view the problem comes down to the interpretation of just a few very simple sentences in the Bayh-Dole Act, which state that in the case of commercialization opportunities, small companies should be preferred 

over large companies. And there’s also another sweet little sentence 

in there that says, if a company provides some funding to a reVerDate 0ct 09 2002 08:05 May 12, 2005 Jkt 093633 PO 00000 Frm 00048 Fmt 6633 Sfmt 6601 S:\WPSHR\GPO\DOCS\93633.TXT JACK PsN: JACKF
45

search program, the university ‘‘may’’ give a license for that work 

to the company that provides the funding. 

A large company reads that and says, okay, I give money to Professor X, whatever Professor X does, I own that. The university 

says, no, we actually have to prefer small companies, so you give 

money to Professor X, we, the university owns it. And by the way, 

when it comes time to license it, we are going to license it to a 

small company, and it is going to be very likely that that small 

company actually was created by Professor X. 

So large companies have been burned many times by giving 

money for research to universities, only to find that they had absolutely no rights to the intellectual property that was created at all, 

and the intellectual property winds up being put in the hands of 

a small startup company which actually has the principals of the 

startup company being the professors who got the research funding. There’s a fairness issue there, and enough large companies 

have been burned enough times by this type of thing happening 

that most of the people I have talked with at large companies say, 

forget it, we are just not going to go there anymore. This is the 

end. 

But in fact there is a reasonable decent and fair middle ground. 

The thing that the University interpretation of the Bayh-Dole Act 

does not really recognize is that there is a difference between an 

exclusive and a nonexclusive license, that if a company gives 

money to a professor to do research, of course it is totally unfair 

for the company to claim ownership to all of that research because 

they are not paying for the infrastructure that has been paid for 

by State and Federal funds and everything else that goes on. But 

on the other hand, it is possible to grant a nonexclusive license, in 

other words a license that recognizes a sharing of that intellectual 

property, the fact that the company provided money, and also often 

provides intellectual input to help to create those ideas as well. 

So I think there is a meaningful middle ground. What has happened is that the discussion between most large companies and 

universities has become so strident that they become polarized and 

refuse to even acknowledge that there is a middle ground available 

to them, and what is happening is that they are growing further 

and further apart. And for my own part, I find it is far easier to 

me to start up a research collaboration with a university in Russia, 

or China, or France, than it is with a university, shall we say, just 

a few miles from where I am located. 

Senator ALLEN. Thank you, Dr. Williams. Dr. Stupp. 

Dr. STUPP. As Professor X, I guess I have to say something. 

right? 

[Laughter.] 

Senator ALLEN. This is a great concern, that it is easier for a 

company to deal with it especially in another country. 

Dr. STUPP. I just wanted to say for the record that even though 

I agree with many of the things that my colleague Mr. Williams 

said, I think for the most part universities are careful, usually, to 

grant exclusive or nonexclusive licenses to those companies that 

funded the research. I think, I am sure there are exceptions. There 

may be different trends on the West Coast versus the East Coast 

46

or the Midwest, but I think if you look at the problem specifically, 

usually the universities are careful to do that. 

The issue of a nonexclusive license, I agree with what Stan said, 

and yet the problem is that sometimes we receive, you know, 

$50,000 for 1 year of research from a company, often times a large 

company, and we are always very eager to please the company and 

show good results, so that you end up spending a lot more than 

$50,000 to achieve the goals. And so in that case, of course, a nonexclusive license is perfectly reasonable, and that is the way it 

should be done. 

But just for the record, I think that if one wants to assess if this 

is a real problem, you really have to look at the statistics. There 

are too many universities in this country, and many of them are 

extremely careful, I would say, about matching one-to-one, and 

funds versus licensing. 

Senator ALLEN. Well, Mr. Modzelewski, from your association, 

which obviously has a multitude of folks, you are looking for capital 

in your alliance, as far as your nanobusinesses, what do they say 

about this? We have two slightly different points here. 

Mr. MODZELEWSKI. I think actually, picking off of something you 

just said, it is that careful nature. They are so careful that nothing 

gets transferred out. There tends to be, there are very few operations. I have heard less than a dozen among all the thousands of 

universities in America that are actually profitable on a tech transfer standpoint. Something like 6, I think, were last year, and one 

of the reasons for this is that nothing gets transferred out. The negotiations tend to be quite aggressive and quite onerous. The 

amount, the percentage that the university asks for tends to be 

very high. 

This is—looking at the psychology, I mean, not being a psychologist myself, but looking into some of it, you tend to see from conversations with tech transfer people that they are all trying to hit 

a home run. They are all looking for the next Gatorade, or the next 

giant biotech revolutionary discovery that will bring in millions if 

not billions to the university, so in light of that they tend to negotiate so tough that nothing gets out. 

They tend to look for such a big percentage just in case something hits, and that they are not held responsible for only getting 

10 percent of a multibillion dollar drug discovery, that instead they 

just put the brakes on everything. And it does include, certainly, 

the corporations, but also the startups. There are many entrepreneurial professors at universities that try to take their discoveries 

off, and just cannot, or the fight is so long they say, I am really 

considering leaving my university. 

I have had professors say, I would rather go to one of the ones 

that is working, or get out of here and give up my past portfolio, 

just cede it to the university, rather than sit here and just not be 

able to get anything done. They want to be entrepreneurs, they 

want to get things out, but the negotiation process generally just 

ties them up so badly. 

Continuing along the same lines, there is also just issues with 

taking intellectual property and making it something that is global. 

The cost of registering patents in the U.S. is actually very cost-effective, and our processes really should be the envy of the world, 

47

but when you try to take a simple discovery that is here in the 

United States and get global protection, you are talking about more 

than a $100,000 process with legal fees and registration fees, and 

that is an incredible burden that most universities, unless award 

after award is being given to the research that was discovered, are 

willing to extend to the professor. And so that is another point that 

once you get to that global level, you start having some real difficulties and hit the wall. 

Senator ALLEN. Well, some of those are similar to business decisions, regardless of whether it is a university and having to register it. 

Mr. MODZELEWSKI. They cannot be blamed for that. If every professor who discovered something wanted a global patent, I think 

the university certainly does need to make that business decision. 

Nevertheless, you are entering an area of where might there be 

some easement of that sort of pain on a researcher, and where 

might there be programs, whether they be loan programs, or something along those lines, that might be able to help this bottleneck, 

the ability to get global protections. 

Senator ALLEN. If I may, Mr. Chairman, can I follow up on this 

line of concern? 

Senator WYDEN. Of course. 

Senator ALLEN. In listening to the three of you all on this, there 

is maybe three different perspectives. Let us assume that some 

universities are more easy to deal with than others, some are very 

picky and very restrictive. Apparently, Hewlett-Packard has not 

found those that are better. 

In listening to you, obviously the Nanobusiness Alliance, their 

view is that some are better than others. Could it be the case, or 

could it occur that those universities that are, let us say, more willing to strike a reasonable deal and a partnership with the private 

sector working with their professors, students and so forth, would 

those not then be one of the more attractive universities, or are 

they commonly known? 

And I do not ask you to start listing names here, but if they were 

more commonly known, say the top 10 percent that have good business sense and are willing to take some of these risks and partner, 

would not more research go to those universities in the event that 

they have that reputation, so that it does not matter? Any company, Intel or Micron, would want to do that? 

Mr. MODZELEWSKI. Yes. It almost becomes self-fulfilling. The 

ones who are very good at it are able to cut much easier terms, because they have so much flow that they know there will be something to receive on the other end. We have a lot of other universities, a few that they only have one shot. They swing for the fence 

on the ones they do get out. So you do see the schools that are well 

known in technology development, some of which are actually represented right here, being able to be much more fair in their negotiations than others, who are again just looking for that big hit 

that will change the university’s dynamic. 

Senator ALLEN. Dr. Swami, have you found this in Virginia, since 

you have worked with a dozen universities? 

Dr. SWAMI. Yes. In Virginia we have the same paradigm with the 

big company and the small company, but clearly even small compaVerDate 0ct 09 2002 08:05 May 12, 2005 Jkt 093633 PO 00000 Frm 00051 Fmt 6633 Sfmt 6601 S:\WPSHR\GPO\DOCS\93633.TXT JACK PsN: JACKF
48

nies have had trouble getting these technologies on board because 

of negotiations with universities. Nevertheless, we still have had 

some success with at least about a handful of such technologies. 

Usually that has occurred when the professor, the entrepreneur, is 

entrepreneurial enough to take it to the next stage. If the professor 

has not been of that nature, then usually there is an even bigger 

stumbling block than anything else. 

Senator ALLEN. Dr. Stupp, do you have any closing comments on 

behalf of the universities? 

Dr. STUPP. I think one other thing one should add is that our experience with this process is still pretty young, and I would argue 

that maybe 5 years from now you will be able to make a better assessment, and this is a self-selecting process, I think. The universities who are really smart about dealing with technology transfer, 

eventually they will become attractive places, as you said, and people will gravitate to those, and those will be successful, I think. 

We do not have many decades of experience in tech transfer at 

universities, and so I think you just need to let things sort out. 

Senator ALLEN. Thank you, and thank you, Mr. Chairman, for 

letting me go a little longer. 

Senator WYDEN. I thank my colleague, and I thank Dr. Williams. 

I have been trying to get everybody in this town to get interested 

in Bayh-Dole, because I think if people really understood what was 

at stake, we would do more than talk about this from time to time 

for a few minutes. 

The fact of the matter is, and we have considerable statistics on 

this, Dr. Stupp, we spend billions and billions of taxpayer dollars 

every year on the National Institutes of Health, energy laboratories, and environmental laboratories. Under the Bayh-Dole law, 

which is more than 20 years old, we are supposed to have a process 

for commercially transferring these fruits of the taxpayers’ research 

treasure trove to the private sector, yet virtually nothing gets out. 

I have done a number of analyses of Bayh-Dole, and in my view, 

not only does the system not work for companies, it does not work 

for universities, and it does not work for taxpayers. We are at the 

point now where major agencies cannot even document where the 

tax dollars go with respect to key areas of investments with the 

universities and companies. Specifically at my instigation, the National Institutes of Health has sought to document Government investments in medicines, and they have not been able to do it. They 

literally do not know where all the investments are in promising 

medicines that the taxpayers have put up money for. 

We do have a sense that perhaps half of the breakthrough drugs 

can get to market with taxpayer money, but we do not know where 

all of those investments go, and NIH is just now trying to assemble 

such a database. 

And so I am going to leave this question of Bayh-Dole, other than 

asking Mr. Russell one question. We discussed this when you came 

to my office, when you were going to be confirmed. In light of the 

testimony today, our discussion, and other discussions I know you 

have had on Bayh-Dole, are you now convinced that it is time for 

an administration task force composed of university officials, of 

companies, and taxpayer advocates, to work together in a cooperative way to get more value out of taxpayer investments? 

49

What Dr. Williams has done is blow the whistle here. Thank 

goodness somebody did from the real world, because when people 

talk to me about it, they say it does not work for universities, it 

does not work for companies, and it sure does not work for taxpayers. The statistics are pitiful, beyond the paltry return and the 

fact that we do not know where the money goes. 

I have talked about this several times, and every time I do—Dr. 

Williams, I am going to be able to invoke your name—everybody 

heads for the ramparts. The universities worry that Ron Wyden is 

about to upset the apple cart. Western civilization is going to end, 

universities will not be able to do any more of the research, and 

all I have talked about is creating a winner for universities, companies and taxpayers. 

I want to leave Bayh-Dole after we get Mr. Russell’s comments, 

but what I would like to hear from Mr. Russell is that you get the 

message. You understand how serious this is. I would like to know 

within 30 days, whether the administration is willing to work with 

universities, companies and taxpayer groups to take a look at this 

22 year old law. I believe it was enacted in 1980, and it does not 

seem to work for anyone now. I think we ought to examine this on 

a cooperative basis, because after all this is not a question of somebody being corrupt or evil. 

[For example] a big part of Bayh-Dole did not even envisage the 

kind of health care applications that Senator Allen and I are so excited about. It did not even envisage what would happen with the 

tax law, where Bristol Myers Squibb made $1.6 billion last year 

and virtually nothing was given back to the taxpayers. So I would 

like to see you all within the administration review this on a cooperative basis. 

Mr. RUSSELL. As you indicated, you have raised this with me 

previously. We took it seriously at that time, as we continue to 

take it seriously. We did ask PCAST, the President’s Council of Advisors on Science and Technology, which is made up of both university presidents and industry CEO’s, to look at this issue. 

The initial reports that we have gotten back is that Bayh-Dole 

as a framework makes sense. I think some of the specific issues 

that have been raised here today, though, are interesting, and I 

think that we should look at those, I am more than happy to work 

with you and your staff on fleshing out some of these very specific 

issues, because clearly, we are talking about nanotechnology, the 

Federal Government is investing a lot of money in nanotechnology. 

It will be investing a lot of money in the future in nanotechnology. 

The universities are going to get a lot of that research money, 

and we do want to see that research passed through to the U.S. 

economy, so I am more than happy to work with you and your staff 

on the issue. I hate to commit to a task force. I will tell you that 

right up front. 

Senator WYDEN. If you all want to try and reinvent the BayhDole law through the prism of nanotechnology, that is fine with 

me, but what Dr. Williams just told us is that he is having so much 

trouble with this that he and his colleagues will traipse to Russia 

and around the world, rather than work with universities here. 

That is not a trifling kind of concern. That goes right to the heart 

of what I have been interested in trying to change. 

50

Mr. RUSSELL. And I would say, as I think I started my comments 

off to Senator Allen, that I use nanotechnology as an example. I do 

not think this is a nanotechnology-exclusive issue. I think we have 

to be careful that when we talk about tech transfer we look at it 

broadly, and not based on any single emerging technology, because 

I think whatever lessons we learn from nanotechnology are going 

to be the same for other technologies as well. 

Senator WYDEN. I am willing to look at it broadly. I have looked 

at it broadly, and I have looked at it in depth; I have even looked 

at the exclusivity matter, Dr. Williams. A few years ago, there was 

an exclusive deal between Scripps and Sandoz, and I basically 

busted that up, because it was totally contrary to the interests of 

the public, to the business community, and to this country. 

The Scripps-Sandoz deal would essentially have put an exclusive 

agreement together with respect to general scientific knowledge, 

and it would all have been lubricated with taxpayer money. We 

broke that up, and since then I have followed the issue. At a minimum, Mr. Russell, I would hope that the administration would use 

nanotechnology in a cooperative way with universities, companies, 

and with taxpayer groups to get some changes. I think we can do 

so much better, and I have tried to promote such a discussion for 

some time. 

Dr. Williams, I did not know you were going to discuss BayhDole today, but I think you performed a great service by blowing 

the whistle on this. 

Dr. STUPP. Mr. Chairman, I wonder if you would allow me just 

one extra thing. 

Senator WYDEN. Sure. 

Dr. STUPP. That when you speak about the enormous investment 

of taxpayers’ money, and the billions of dollars, you should also recognize that this always needs to be a part of the equation if we are 

going to revisit the law and so forth, that we have, of course, we 

provide—I mean, the main function that we have is education, and 

we have invested—a lot of that taxpayer money actually goes into 

training a very technically competent workforce, perhaps the best 

in the world, possibly, and we use the investment from taxpayers’ 

money to educate our people, and this is a very costly procedure. 

At the same time, large companies in the last 20 years have 

downsized their basic research efforts, and so there is now suddenly a much greater—you know, there is a spotlight on universities to take the burden of basic research and development, which 

is very difficult to do inside universities, because it is not compatible with education. 

Senator WYDEN. I think that is a very fair comment, and there 

is no question that there are many beneficial ramifications of the 

work between companies and universities. Bayh-Dole’s central 

premise is that when taxpayers support research, we are supposed 

to get breakthroughs out of the laboratory and turn it into innovations in the marketplace. Clearly this is an area where we must 

do better. If companies like Hewlett-Packard tell us that not only 

are we not doing it, but they are so frustrated at this point that 

they are going to go to the former Soviet Union, we have got a challenge on our hands. 

Dr. STUPP. Maybe you should come to the Midwest. 

51

Senator WYDEN. Let us have those discussions. I thank my colleagues. I have additional questions. Would you like to ask any? 

Senator ALLEN. No, but I do want to thank you all for your very 

insightful testimony. 

Mr. Chairman, I am sorry, I have other meetings I have to get 

to. 

Senator WYDEN. Thank you. Let us go specifically back to 

nanotechnology. Now that we have had this discussion on BayhDole, I would like to hear about the health care applications of 

nanotechnology, and particularly what kind of nano-inspired health 

care applications look promising in the short term. What does the 

landscape look like further down the road? Would any of you like 

to start with that? Dr. Stupp. 

Dr. STUPP. Well, there are two technologies, I think, that are 

likely to be nano-inspired, that will have broad impact. One of 

them is targeted drug delivery. If you think about cancer, for example, we basically kill our patients with toxic drugs, and in the end 

the battle is lost, and a lot of these problems have to do with our 

ability to target medicines to the right locations of the body. 

I think the nanodesigns of drug couriers will definitely address 

this problem. Whether you see this as a short or a long term is not 

really clear, but nonetheless I think, I would prefer to think that 

it is not really long range, it is actually middle range. 

The other one is regenerative medicine, because that is an alternative to medicines. Why not use nanotechnology to regenerate 

parts of the heart, or to regenerate cartilage, or bone, or regenerate 

spinal cords so you can reverse paralysis, reverse blindness? 

What is needed there is, you have to design materials, which are 

typically referred to as scaffolds, that will give cells the right signals to regenerate normal tissue, and the only way we are going 

to be able to get that is to design materials at the nanoscale that 

can in some rational way interact with cells, so I would say regenerative medicine is one of those areas where nanotechnology has 

enormous potential, and it happens to be a wonderful example of 

something that biologists alone will not do, engineers alone will not 

do. This is going to have to be a team effort, and highly interdisciplinary effort, and a very important fruit of nanotechnology, 

basically repairing human beings, and this will eliminate the need 

for a lot of the medicines that we now take which are not very successful, probably shorten our life span. 

Senator WYDEN. Others on the health care applications of 

nanoscience? Dr. Williams? 

Dr. WILLIAMS. I think an area that actually has potential for 

happening relatively soon is an entirely new means for diagnosis. 

Right now, of course, when you go to the doctor you give a little 

blood sample and it goes off to a lab, and it takes several days to 

come back, and then, of course, it is fairly nonspecific set of information that the doctor gets. 

With new technologies for being able to build entire laboratories 

on a chip, and within those laboratories, being able to build extremely sensitive nanoscale detectors which can be targeted at a 

wide range of vectors, if you will, for either external attack or some 

type of internal disease like cancer, a medical exam can essentially 

be performed immediately. You get results back in real time. 

52

I think that with the marriage of advanced information technology we also have the possibilities of creating in real time with 

the diagnosis a directly specific treatment for the particular patient 

who is coming to see the doctor, so I think that this whole area of 

diagnosis is going to change the way people interact with their doctors, and the way you have your physical exams, and that I think 

is the type of thing that literally can happen within a relatively 

short number of years, 2, 3 years, some of these things can be up 

and ready to go if there is the will to actually do it. 

Senator WYDEN. Dr. Swami, did you want to comment on health? 

Dr. SWAMI. My comments would probably follow on what Dr. Williams said. Basically, I would just extend it. Diagnostics is probably 

one specific application in the general field of sensors, because 

nanotechnology has the ability to sense extremely sensitive signals. 

Due to that, and due to the fact that it can be embedded very easily into products, sensors would be a field where you can see an immediate application, a platform where they could immediately or 

very soon work directly on the product development in that field. 

Mr. MODZELEWSKI. One other area that is already happening 

right now and is already in trials from a company called C–60 is 

actually using a Bucky ball as a protease inhibitor for the AIDS 

virus. As the AIDS virus tries to attach itself to a cell, you might 

almost consider it like an octopus trying to latch on, and what they 

basically are working on right now is actually using a Bucky ball 

to actually block it from attaching itself to the cell. 

It is not treating the HIV, so the HIV is not developing any 

mutations towards it, or going about it different ways. It is just 

thwarting it from doing its job, which is to attach itself and to replicate. 

Senator WYDEN. Gentlemen, some are raising concerns about the 

ethics of nanotechnology and saying in effect the scientific developments are outpacing the focus on ethical concerns. I am curious 

whether you share that view and, if so, whether you have any recommendations for how it ought to be dealt with. 

Dr. WILLIAMS. Frankly, I think, and largely because of Mike 

Roco’s leadership, the NNI has been almost unique in its focus on 

societal issues, and trying to elevate the awareness very early in 

the entire cycle, so yes, it is very, very true that right now our tools 

that we have are evolving much faster than we ourselves are. 

For millennia we have all very slowly worked with our tools, but 

now the tools are changing by orders of magnitude, well within the 

life span of any individual, so that is very difficult for us to deal 

with and adjust to, but in my own opinion the NNI provides the 

model that exists so far for being able to take into account these 

ethical and social issues in watching a science evolve into a technology and beyond. 

I think this is a first. I think it is the first time this has been 

done, so I am sure that the process can be improved. But I applaud 

Mike Roco and the others who have been involved in Examining 

ethical issues doing this, because it is imperative for people to be 

well educated in the tools that are going to be used in the society 

around them. 

Senator WYDEN. Doctor. 

53

Dr. STUPP. I just would add, briefly, that our committee, our report very specifically talks about this in recommendation 9, because we felt that even though there was the intention of the NNI 

to look into issues of societal implications, the reality is, it really 

has not happened to a great extent, and so we are recommending 

that the NNI implements a new strategy to make sure that those 

programs do take place. 

Senator WYDEN. Gentlemen, in your view, what needs to be done 

to make sure that this country has a properly educated 

nanotechnology workforce? It is very clear that the educational aspects of this are going to be key, and we are going to have to look 

at this systematically, particularly at the universities. Why don’t 

we take a minute or two to get your thoughts on what it is going 

to take for this country to have a properly educated workforce to 

really tap the potential in nanotechnology. 

Dr. Stupp, do you want to start with that, with the academy’s 

views? 

Dr. STUPP. Definitely, the development of an interdisciplinary 

culture is key for nanotechnology development. I think that it 

would be fair to say that most universities have recognized that 

multidisciplinary research is important. However, it is not yet clear 

to a lot of investigators what interdisciplinary research really is. 

I mean, there is a difference between multidisciplinary and interdisciplinary. What we need most is interdisciplinary culture, meaning that individuals themselves are interdisciplinary, and this is a 

very challenging educational task, but in fact the NNI, and hopefully with the advice of some external board that includes members 

of the scientific community, as well as individuals with expertise 

in research management, will be able to impact directly on this 

goal by creating the right programs that will encourage this kind 

of interdisciplinary development among individuals. So interdisciplinary culture is key. 

I think we need to catalyze it through the NNI programs, and 

so somebody has to think hard about how to do that. The solutions 

are not there yet. 

Senator WYDEN. Others? Mr. Modzelewski, particularly the private sector. I can think of an awful lot of public schools in Oregon 

where we are very excited about the prospects of nanotechnology, 

where we would like to see your companies make investments. 

Mr. MODZELEWSKI. I think it starts there. I think it starts very 

early. I mean, I think we have to make a real effort not to just consider this as a college program, but to get kids interested in the 

physical sciences at a much younger age, and not just getting them 

interested. I think too much emphasis is put on, perhaps, an idealistic view that this excitement in science will just naturally be 

drawn within them. 

I think there needs to be other buttons pushed, and I think certainly financial incentives, and that the entrepreneurs of tomorrow 

might be—are the researchers of today is certainly something that 

should be underlined far more, that the companies of tomorrow in 

nanotechnology are the startups that are being started by researchers at university and corporate labs, and that they are going out 

to start these, and I think that level of incentive also being worked 

in is something that we need to accept as probably being part of 

54

the incentive package for young people to think of this as a career 

move. 

Right now, you are talking about a field that is greatly dominated at American universities by foreign students. You will find 

Chinese nationals in some cases being the entire program at a university, and at some of the startups the entire research team being 

Chinese nationals, who they know at one time or another are going 

to be recalled to their home country to do their work. So we really 

do need to think of this as an imperative how we incentivize, and 

I think mainly just getting the information out there as science is 

cool and exciting is one thing, and that is sort of a path we have 

taken, but I think also to point out that it is a great career move, 

and a very lucrative career, is something that will certainly attract 

young people. 

Senator WYDEN. Any idea, of today’s nanotechnology workforce in 

this country, how many are from other countries? 

Mr. MODZELEWSKI. I would be giving a blind guess, but it is definitely more than half. 

Dr. WILLIAMS. I can give an observation. 17 out of the last 18 

people I have hired were born outside the United States, and half 

of those were educated outside the United States. 

Senator WYDEN. Well, that sort of sums it up. 

Dr. WILLIAMS. Actually, if I may just make a comment along this 

line, to be real crude about it, money talks. If you look at what has 

happened over the course of the past decade, and track as I have 

the enrollments of American undergraduate students in various 

disciplines as a function of time, what has happened is that the enrollment of American undergraduates tracks almost exactly the investments in basic research. 

So over the past decade, NIH has actually been doing very well. 

Their budgets have been going up. The enrollments of American 

under graduate students in biology departments in the United 

States is skyrocketing. It is up over 55 percent in just the past few 

years. 

On the other hand, in mathematics, in physical sciences, in engineering, overall funding is down, and down significantly. Enrollment of American undergraduates in those programs is down 20 to 

30 percent over the past decade. 

I have asked young people what they want to do, and they always tell me, oh, I am going to go into biology. I ask then why. 

Well, that is where the action is. You know, from the standpoint 

of a young person looking at a career, you go to a college and you 

see where all the money is being spent on a college campus, it is 

being spent primarily in the biology departments because of the 

strength of the NIH, so of course, that is what draws them into it. 

I believe that by taking the steps that we have taken, by legitimizing nanotechnology and as long as we have the commitment to 

increase the funding and keep it going, we will see significant increases in students going into this area, because it is very exciting 

intellectually. There are tremendous careers associated with 

nanotechnology, but the interface, the only place where young people learn that is when they first show up on a college campus; especially disadvantaged young people, who are the ones who are most 

likely going into sciences, you might say they do not know any betVerDate 0ct 09 2002 08:05 May 12, 2005 Jkt 093633 PO 00000 Frm 00058 Fmt 6633 Sfmt 6601 S:\WPSHR\GPO\DOCS\93633.TXT JACK PsN: JACKF
55

ter, but it turns out to be a great opportunity for them. And so I 

think that the NNI, just in being what it is, and in focusing attention and putting money into it, is going to have a tremendous impact on them. 

Senator WYDEN. Well, gentlemen, there are a couple of questions 

I am going to ask of you all in writing. One of them deals with 

some technical issues with respect to the employment picture. It is 

clear that this is a significant opportunity for new jobs. It is very 

important in my State. We have the highest unemployment rate in 

the country, and what I would like to do is get into some of the 

specific areas where you think the biggest sources of jobs are likely 

to be. We will submit that and a couple of other questions in writing. 

Let me leave you with this. The irony is that we did get into a 

significant area that I did not expect to talk about at all today, 

which is the Bayh-Dole law, because it is clear that cutting edge 

science and nanotechnology is something we are all particularly excited about. It means we have got to get it right with respect to 

the role for Government, the role for private sector, and the role 

for universities. As I think Mr. Modzelewski said, with respect to 

education, we need to start even earlier than the universities, and 

I think we have got that opportunity with nanotechnology. I think 

we have got an opportunity to get it right. 

The administration clearly is moving in the right direction. Mr. 

Russell is a good man, and we have worked with him in the past. 

The NNI is a very positive step, and that was clearly the consensus 

of all today. The purpose of the legislation Senator Allen and I 

have with Senator Lieberman, Senator Landrieu, and Senator Clinton introduced is to build on it. 

We can do a bit better, and you can be very sure we are going 

to work closely with the administration and all in this country who 

care so much about it. We hope as we adjourn today’s hearing and 

leave with a great deal of excitement about the possibility of regenerative medicine, never having to buy a pair of khakis again, and 

all kinds of other excitement that we have heard about today, that 

we leave with the idea that if we work together and get it right, 

nanotechnology can serve as a model that we will be able to duplicate again and again when there are other exciting fields. There is 

certainly enough goodwill and commitment over on that side of the 

dais to do it, and we will match it with bipartisan support over 

here, and we thank all of you for your patience. You have been 

here a long time, and with that, the Subcommittee is adjourned. 

[Whereupon, at 4:25 p.m., the Subcommittee adjourned.] 

(57)

APPENDIX

PREPARED STATEMENT OF HON. JOSEPH I. LIEBERMAN, U.S. SENATOR FROM CONNECTICUT

Our nation has long prided itself on being the world’s premier innovator of new 

ideas. Over the last two and a half centuries, the uniquely American willingness to 

experiment with novel concepts and to chart bold directions has placed us at the 

forefront of scientific and technological progress. Our ability to engage in scientific 

exploration and to marry research findings with the development of practical applications has, in turn, enabled us to set the benchmark on virtually every indicator 

of human progress, from longer lifespans, to higher standards of living, to unparalleled economic productivity. 

However, while past accomplishments may confer a present competitive advantage, it does not guarantee future success. We cannot afford to rest on our laurels 

in a world that is becoming increasingly characterized by the speed with which scientific paradigms shift and technological revolutions occur. In a global economy in 

which ideas and technology are the new currency, every new breakthrough represents an opportunity to claim—or, in our case, lose—global leadership. 

The emerging field of nanotechnology constitutes such an opportunity. It is not 

just any opportunity, however, but one whose magnitude and significance locates it 

on the scale of harnessing electricity, creating antibiotics, building computers, or 

wiring up the Internet. It is, in short, a new frontier in science and technology that 

has the potential to transform every aspect of our lives. Nanotechnology, in fact, 

may have even greater potential to affect the way we live since it has such broad 

prospective applications in so many different areas, from medicine, to electronics, 

to energy. Nanotechnology is what scientists and technologists often call an ‘‘enabling’’ technology—a tool that opens the door to new possibilities constrained only 

by physics and the limits of our imaginations. 

Yet, despite the enormous potential that nanotechnology offers, it is not an area 

in which we have assumed uncontested leadership. From an international perspective, the United States faces the danger of falling behind its Asian and European 

counterparts in supporting the pace of nanotechnological advancement. Other nations have grasped the fact that the first players to fully capitalize on the promise 

of nanotechnology have the potential to leapfrog in productivity and precipitate a 

reshuffling in the economic, and perhaps aspects of the military, pecking order. Accordingly, they have undertaken substantial efforts to invest in nanotechnology research, and to accelerate technology transfer and commercialization. While our nation certainly possesses the raw resources and talent to lead the world in developing 

this technology, it is also clear that a long-term focus and sustained commitment, 

as well as new collaborations between government, academia, and industry, will be 

needed to ensure our place at the head of the next wave of innovation. 

In recognition of the need to support ongoing nanotechnology efforts and to spur 

new ones, I am pleased to join Senator Ron Wyden in cosponsoring today the ‘‘21st 

Century Nanotechnology Research and Development Act.’’ This Act will build on the 

efforts of the National Nanotechnology Initiative (NNI), which was started under 

President Clinton and has received continued support under President Bush, to establish a comprehensive, intelligently coordinated program for addressing the full 

spectrum of challenges confronting a successful national science and technology effort, including those related to funding, coordination, infrastructure development, 

technology transition, and social issues. 

I feel it is appropriate at this point to give credit to President Clinton for having 

the prescience and initiative of creating the NNI, and to applaud President Bush 

for expanding support for nanotechnology R&D from $270 million in FY 2000 to the 

$710 million targeted in his budget request for FY 2003. The NNI has been a key 

driver of nanotechnology in this country by bringing coherence and organization to 

what had previously been a scattered set of research programs within the Federal 

Government. It has, in no small part through the efforts of its spokespersons, Dr. 

Mike Roco and Dr. Jim Murday, achieved a higher profile for nanotechnology both 

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within and outside the government, and brought the importance of this field into 

the national consciousness. 

The time is now ripe to elevate the U.S. nanotechnology effort beyond the level 

of an Executive initiative. Funding for nanotechnology will soon reach $1 billion a 

year, and the NNI currently attempts to coordinate programs across a wide range 

of federal agencies and departments. This level of funding and the coordination challenges that arise with so many diverse participants strongly recommend having a 

program based in statute, provided with greater support and coordination mechanisms, afforded a higher profile, and subjected to constructive Congressional oversight and support. 

Our bill closely tracks the recommendations of the National Research Council 

(NRC), which completed a thorough review of the NNI this past June. The NRC report stated how impressed the reviewers were with the leadership and multi-agency 

involvement of the NNI. Specifically, it commended the Nanoscale Science, Engineering, and Technology (NSET) subcommittee, which is the primary coordinating 

mechanism of the NNI, as playing a key role in establishing research priorities, 

identifying Grand Challenges, and involving the U.S. scientific community in the 

NNI. To catalyze the NNI into becoming even more effective, the NRC made a number of recommendations. These recommendations have largely been incorporated 

into our bill, including establishing an independent advisory panel; emphasizing 

long-term goals; striking a balance between long-term and short-term research; supporting the development of research facilities, equipment, and instrumentation; creating special funding to support research that falls in the breach between agency 

missions and programs; promoting interdisciplinary research and research groups; 

facilitating technology transition and outreach to industry; conducting studies on 

the societal implications of nanotechnology, including those related to ethical, educational, legal, and workforce issues; and the development of metrics for measuring 

progress toward program goals. This legislation will also complement the provision 

that I authored in this year’s Senate defense authorization bill, S. 2514, establishing 

a nanotechnology research and development program in the Department of Defense. 

If this provision is supported in conference, we will have matching pieces of legislation that will encompass and coordinate both civilian and defense nanotechnology 

programs, establishing a truly nationwide effort that leverages the expertise residing in every corner of our government. 

If history teaches us anything, it is that once the wheels of innovation have 

stopped and stagnation has set in, mediocrity will soon follow. Nowhere in the world 

are those wheels of innovation spinning more rapidly than in the realm of 

nanotechnology. This legislation provides a strong foundation and comprehensive 

framework that elicits contributions from all three sectors of our society in pushing 

nanotechnology research and development to the next level. I look forward to supporting Senator Wyden in getting this important bill through the Congress, and 

hope that we may all work together in a bipartisan fashion to set the stage for U.S. 

economic growth over the next century. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. RON WYDEN TO

HON. RICHARD RUSSELL

Bayh-Dole Act 

We heard from Dr. Stan Williams of HP and others at the September 17 hearing 

that the Bayh-Dole Act and the way that universities deal with intellectual property 

is a major barrier to university-industry collaboration. In fact, Dr. Williams noted 

that it is easier to work out a partnership with foreign universities than with U.S. 

academic institutions. While the promise of Bayh-Dole is to get research off the shelf 

and commercialized, the reality of Bayh-Dole is that industry and academia often 

view the process differently and we get few useful results. 

Question 1. As you know, I am of the opinion that the Bayh-Dole law isn’t working for any of its constituents—universities, industry, government, or taxpayers. 

How can we fix Bayh-Dole? Would OSTP or another appropriate agency be willing 

to lead an Administration task force made up of university people, companies, taxpayer advocates, and other interested parties that would work in a cooperative way 

to reform Bayh-Dole? 

Answer. The President’s Council of Advisors on Science and Technology (PCAST) 

has created a Panel on Federal Investment in Research and Development and its 

National Benefit. The panel has been charged with two goals:

1. To review the R&D portfolio to determine areas where programs should be 

expanded, curtailed and maintained; and

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2. To give advice on technology transfer mechanisms that will encourage commercial development to ensure maximum benefit for research funding.

With respect to the second goal, one of the Panel’s primary interests is the BayhDole Act. The PCAST Panel is seeking perspectives on the Act from all parts of the 

science and technology community, including representatives from industry, academia, government labs, the venture capital community, and other interested parties. 

The Panel is working with these representatives to understand their viewpoints 

regarding whether the Bayh-Dole Act has been effective in promoting or catalyzing 

the transfer of technology from federally funded research to the private sector 

through licensing of patented intellectual property. Likewise, these representatives 

may also suggest to the PCAST Panel whether improvements to Bayh-Dole would 

involve the Act itself, or the manner in which the Act is interpreted or implemented. 

The Panel is hoping to include these perspectives on the Bayh-Dole Act in their 

larger analysis of technology transfer mechanisms that should be developed at the 

end of 2002. 

In addition, PCAST tentatively plans to hold an open forum on tech transfer in 

December to assist in soliciting a wide range of viewpoints on tech transfer programs including best practices under Bayh-Dole. 

Sufficient Government Support of Nanotechnology Research 

Question 2. Given that other countries are also investing significant amounts in 

this field, do you feel that we are doing enough to ensure our leadership in this 

field? 

Answer. The administration proposed a $679 million investment in 

nanotechnology for FY 2003, a 17 percent increase over FY 2002 funding levels. 

Taken together with past increases (FY 2002 levels were 25 percent higher than FY 

2001 levels, for example), nanotechnology represents one of the fastest-growing 

areas of federal research funding. The investment in nanotechnology also leverages 

the overall federal R&D investment, which reached unprecedented levels in the 

President’s FY 2003 budget request. This overall investment helps support the research facilities and the higher education system that make the U.S. science and 

technology enterprise the world’s best. However, while federal funding is important 

to maintaining U.S. leadership in nanotechnology, it is but one component underlying the strength of this field. For example, private sector innovation, and policies 

that support this innovation, are of critical importance as well.

Question 3. The Administration has requested $1.1 billion for FY 2003 for 

nanotechnology. We want to ensure that the efforts are well coordinated. How is 

that effort coordinated? How does its coordination compare with the coordination 

mechanisms for the Information Technology Research program? Does it make sense 

to bring in an advisory committee of outside experts to aid in the coordination? 

Answer. The Federal investment in nanotechnology is coordinated through the 

Nanoscale Science and Engineering Technology (NSET) subcommittee of the National Science and Technology Council (NSTC). NSET is currently chaired by a representative from NSF. Representatives from each agency participating in the NNI, 

as well as OSTP and OMB, attend regular meetings of the NSET and have a voice 

in coordinating the programs of the NNI. A National Nanotechnology Coordinating 

Office (NNCO) serves as a secretariat for the NNI, in a manner directly analogous 

to the function of the National Coordinating Office (NCO) for the Networking and 

Information Technology Research and Development (NITRD) program. 

Outside input on federal R&D issues is important, and Presidential advisory committees are one mechanism for gaining this input. However, formation and maintenance of a Presidential advisory committee comes at significant cost. Creating an 

advisory committee dedicated solely to advising on issues related to nanotechnology 

would necessarily draw funds away from the research and development activities of 

the NNI. The President’s Council of Advisors on Science and Technology (PCAST) 

is an independent, external advisory body comprised of leaders from industry and 

academe who provide important extra-governmental input on R&D issues to the 

President and are clearly qualified to provide advice on issues related to 

nanotechnology. For this reason, drawing on an existing body such as PCAST represents a preferable means for gaining non-governmental, expert advice on 

nanotechnology without diverting funds away from research and development activities.

Question 4. How are you tracking and measuring the success of nanotechnology 

research programs? 

Answer. Each agency that participates in the NNCO is responsible for reporting 

its accomplishments to the NNCO, which then assembles and includes these data 

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in an annual report. Under the NNI, each agency invests in those R&D projects that 

support its own mission as well as the overarching NNI goals. While each agency 

consults with the NSET Subcommittee, the agency retains control over how resources are allocated against its proposed NNI plan. Each agency then uses its own 

methods for evaluating potential projects, and each assesses its NNI research activities according to its own Government Performance Review Act (GPRA) policies and 

procedures.

Question 5. Your hearing testimony highlighted the economic potential of 

nanotechnology. Let me play devil’s advocate for a moment—if nanotechnology is 

such a huge, revolutionary area, why should the Federal government invest here? 

Why can’t companies bear this burden, if they are going to be positioned to reap 

the profits? 

Answer. The Federal government supports basic research and development across 

a broad range of disciplines that advance the frontiers of knowledge. Because the 

field of nanotechnology is still, in many ways, in its infancy, there is a clear need 

for fundamental research that answers the most basic questions regarding why materials behave differently when studied at the nanoscale instead of at more conventional scales. Understanding these questions will enable further research, including 

the type of research and development most important to industry. Given industry’s 

focus on shorter term return on the research investment, the private sector simply 

will not fund the bulk of this type of long term, basic research. Thus there is a clear 

role for the Federal government in funding fundamental nanotechnology research, 

and this has been the priority of the NNI as a result.

Question 6. What do you see as the biggest challenges nanoscience currently 

faces? In other words, what barriers could potentially keep nanotechnology from 

reaching its potential? 

Answer. The biggest challenges facing nanoscience include the development of 

new scientific instruments to enable precise measurements and manipulation at the 

nanoscale; the development of robust, reliable methods for fabricating reproducible 

structures; and the generation of sufficient numbers of scientists and engineers to 

make these advances. In addition, the societal impacts of nanotechnology must be 

addressed. Each of these issues represents an area of focus within the existing 

framework of the NNI. 

Multidisciplinary Education 

It appears that nanotechnology is an interdisciplinary science, combining facets 

of chemistry, materials science, computer science, biology, mechanical and electrical 

engineering, and physics. 

Question 7. How well prepared are our universities to produce the next generation 

scientists who have the requisite expertise in multiple disciplines in order to ensure 

that the United States continues to lead in nanotechnology research? 

Answer. Academic institutions are routinely engaged in reviews of existing curricula. How best to address the increasing need for scientists and engineers who can 

function at the intersection of multiple disciplines is a question many academic institutions are grappling with. One role of the Federal Government in this area is 

to fund the development of innovative educational programs aimed at helping to 

educate the next generation of scientists and engineers. Examples of federally-funded higher education programs related to nanotechnology include the following: Penn 

State used NNI funding to implement a new degree program in Nanofabrication 

Manufacturing Technology; NSF Integrative Graduate Education, Research and 

Training (IGERT) programs have funded a host of graduate projects on 

nanotechnology at a range of institutions; and NNI funding has supported education 

and training centers and networks at Columbia, Rice, Cornell, Harvard, Northwestern, and Rensselaer.

Question 8. What needs to be done to promote a multidisciplinary curriculum at 

all levels, not just universities, so that we have a properly educated nanotechnology 

workforce? 

Answer. Decisions regarding the adoption of particular curricula at the K–12 level 

are best made by local entities. Federally-funded nanoscience-specific activities, including some funded through the NNI, are aimed at increasing the scientific and 

mathematics proficiency of the nation’s K–12 students. For example, the NNI-sponsored activities mentioned above also have outreach functions that support K–12 

educational programs, and additional K–12 activities at Wisconsin, North Carolina, 

Arizona State, Rensselaer, the University of Tennessee, Rice and the University of 

Illinois at Chicago are funded through the NNI. In addition, the National Science 

Foundation and the Department of Education support the Mathematics and Science 

Partnerships program. This program, a key element of President Bush’s No Child 

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Left Behind education blueprint, supports partnerships between institutions of higher education and school districts in order to improve preK–12 math and science 

achievement for all students, to improve teacher training and professional development in these crucial subjects, and to improve the quality of math and science curricula. In addition, Federal sponsorship of research at universities, including activities mentioned in the previous answer, includes significant support of work that will 

result in a better educated and larger nanotechnology workforce. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. RON WYDEN TO

F. MARK MODZELEWSKI

Nanotechnology, Job Creation, Regional Centers 

Question 1. How many jobs do you anticipate the nanotechnology industry creating over the next ten years? 

Answer. This is a challenging question to answer as no formal studies currently 

exist. In fact, we urge the Congress to ensure that the U.S. Department of Labor 

undertakes a study of this question in FY 2003. 

The difficulty in developing such a projection stems from the fact that 

nanotechnology is a platform technology—not unlike harnessed electricity, the internal combustion engine and the transistor. As a platform technology that will have 

a transformative impact on everything from the material sciences to life sciences to 

information technology and electronics means that in most cases nanotech will expand growth in these industries or reverse downward trends. It is expected that 

nanotechnology will become completely intertwined in current industries—before 

creating new ones. 

Nanotechnology employment growth trends will scale in much the same way biotechnology, the semiconductor industry, and the Internet sector developed; however, 

growth is reasonably expected to be sustained over a longer period of time as 

nanotech’s reach is far greater. Current projections predict nanotechnology to represent a value of $1 trillion to the U.S. economy in value in little over a decade, 

it is safe to say that 10 percent–25 percent of all U.S. jobs in a decade will be directly related to nanotechnology. 

On a regional jobs development scale, we can look to history for job growth projections. For instance, Albany, NY recently became home to the next generation of 

SEMATECH—the semiconductor industry’s development program. This project involves nanoscale semiconductor development and is part of the SUNY Albany 

NanoTech Center. Analysis by the State of New York strongly suggests that this 

$400 million project (together with the $400 million previously raised from corporate 

and state interests for the Albany NanoTech Center) will trigger economic development on par with Austin, TX’s extraordinary growth initiated by the original 

SEMATECH project in 1988. 

Since arriving in Texas, SEMATECH has been responsible for attracting 11 percent of all jobs in the State—35 percent of manufacturing, 10 percent of service, 13 

percent of trade, and 12 percent of construction job growth. Austin-metro region unemployment rate is one-half that of the nation at large. Employment in the broad 

technology sector totals 125,000 and includes approximately 2,000 firms, including:

• More than 200 semiconductor and semiconductor related companies located in 

the Austin area employing nearly 24,000 people.

• Approximately 120 computer manufacturing and peripherals companies employ 

more than 43,000 people.

• More than 450 software development companies employing 30,000+ employees.

• Annual R&D expenditures in Austin has risen from less than $200 million prior 

to 1980 to in excess of $1.4 billion by the private and public sectors with the 

number of technology patents awarded to the areas inventors nearly doubling 

since 1991.

Groundbreaking nanotech projects today will mean incredible regional—and national—job growth in the future. Again, serious analysis on this point is needed 

going further to make proper determination and to aid planning.

Question 2. How can this industry effect areas of high unemployment such as my 

home state of Oregon? 

Answer. Nanotechnology will create jobs in two profound ways:

1. New development of jobs and industries 

2. Invigoration of old industries as the opportunities provided by 

nanotechnology render their continuation and location economically feasible.

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Nanotechnology is already fueling development in new methods of drug delivery 

and medical treatments (in Texas and California); fuel and solar cell development 

(in New York and Texas); and organic electronics and quantum computing (in California, Colorado and New York). 

An example of a industry that is about to demonstrate explosive growth through 

nanotechnology is the sensors sector. Sensors have gradually found their way into 

vehicles and personal appliances, but their size and cost have placed major limitations on their availability and use. The industry was hitherto unable to maximize 

its extraordinary potential: small and inexpensive sensors to detect pathogens on 

meat, poisons in the air, diseases and disorders in the body, even tire pressure and 

stress on an aircrafts wings. Nanotechnology is rapidly providing the opportunity—

through capability, size and price—to fuel this development. Barriers to entry in 

this field from an R&D and manufacturing perspective are very low and areas of 

Oregon and other regions experiencing economic stress could certainly build and attract efforts in the field. 

As to invigorating old industries, nanotech is providing radical innovations to current products: composite materials, coatings, textiles, lighting, batteries and semiconductors, to name a few. at an ever increasing rate, many of these sectors have 

been transitioning to lesser-developed nations, leaving job loss in their wake. If the 

U.S. invests sufficiently in nanotechnology, its developments will make these industries economically feasible for the U.S. again. 

For example, the textile industry has all but left the United States, leaving major 

unemployment in its wake. Companies such as Nano-Tex and eSpin are now providing radical improvements to this field with wear resistant and water and stain 

repellent technologies. The cost of implementing these technologies into the manufacturing processes of textiles is nominal, yet it provides the industry with enormous 

financial incentives to keep factories in the United States, where such technology 

is easily available. 

New York State explicitly noted that the ‘‘Capital District’’ where the Albany 

NanoTech is located has both the solid university resources to build around, and a 

manufacturing base of great potential but now in despair since the relocation of 

IBM, Philips and other companies operations. The decision to align this 

nanotechnology development project with this region is purposeful and will allow for 

R&D to interplay with corporate and employment development. 

Focusing on Oregon’s major employers we see the following interplay of 

nanotechnology:

• Healthcare (Children’s Hospital, HMOs, etc): New drug delivery and treatment techniques using Bucky Balls and Q Dots; new MRI and X Ray technologies using caged atom techniques; new bio-sensor detection methods to spot 

diseases at their earliest stages.

• University System (OU, OSU, etc): Research programs across the spectrum 

of nanotech—materials science, catalysts, life science and medical, and IT and 

electronics. Potential to spin off start-ups and collaborate with in-state corporations.

• Nike: Health Sensors and monitors; stain and wear resistant nano-fabrics; and 

composites materials for the soles of shoes and athletic gear.

• Intel: Continuation of Moore’s law through nanoscale chip development and 

production technologies.

• NORPAC Foods: Sensors to detect pathogens on foods; new, more energy efficient refrigeration; new fuel, and lighting systems technologies.

The NanoBusiness Alliance strongly urges that the Federal Government undertake an effort to determine those regions most likely to experience a major industrial impact from nanotech at the management, research and wage earner levels. 

Additional studies are needed for PhD, MBA level development, as well as at America’s 4-year undergraduate level and at two-year colleges.

Question 3. What does it take to get a successful nanotechnology hub going? What 

elements do these communities share? How can the Federal government help in 

that process? 

Answer. This question is extremely important, as prevailing economic theory demonstrates the importance of developing such hubs. In his book ‘‘The Competitive Advantage of Nations,’’ Harvard Business School professor Michael Porter makes the 

case for a new approach for both understanding and creating economic success in 

a global economy. Porter relates the competitiveness of nations and regions directly 

to the competitiveness of their home industries. Moreover, he argues that in advanced economies today, regional clusters of related industries (rather than individual companies or single industries) are the source of jobs, income, and export 

63

growth. These industry clusters are geographical concentrations of competitive firms 

in related industries that do business with each other and that share needs for common talent, technology, and infrastructure (Mary Watts, ASU). Call it the power of 

collaboration.—a new competitiveness framework for state economic development. 

For any cluster development to work, government, corporations, start-ups, service 

firms, non-profits, venture capital and start-ups must come together to develop 

three tiers of interaction and collaboration:

• First Tier: Leading companies and/or research universities

• Second Tier: A myriad businesses that provide supplies, specialized services, investment capital, and research to these companies and others involved in the 

nanotech field.

• Third Tier: is composed of essential economic foundations (e.g., advanced infrastructure, specialized workforce training, R&D capability, the pool of risk capital available in the region) that are the building blocks of healthy clusters and 

a competitive economy.

At this point no region has reach true critical mass in developing a 

nanotechnology cluster. The industry is so nascent and has been developing at an 

unexpectedly rapid rate that has prevented anyone from developing an insurmountable lead. What my organization, the NanoBusiness Alliance, has attempted to do 

is jumpstart the creation of nanotech clusters through our NanoBusiness Hubs Initiative. The Alliance Hubs bring together business leaders, researchers, government 

officials, investors, corporations, service industry principles, start-ups and other interested parties to drive forward the growth of nanobusiness in their regions. The 

new program kicked-off in New York, San Francisco/Silicon Valley, Colorado, Michigan, San Diego and Metro—Washington DC. 

The NanoBusiness Alliance Hub Initiative serves as a localized catalyst to fuel 

understanding, discussion, planning, and implementation for area specific 

nanobusiness development. Each Alliance hub undertakes the process of bringing together key stakeholders to develop regional nanotechnology business clusters. In 

turn we provide them with a top line assessment of their nanotech assets (universities, start-ups, corporate efforts, etc), generalized best practices of other regional 

development (using past industries efforts and current regional nanotech efforts as 

a model), organizing meetings with area stakeholders and networking their efforts 

into our other regional hubs so they can interact. Our goal is not to run these efforts, but to set them in motion and tie them together through our organization. 

To be perfectly blunt, our resources at the Alliance have been completely over 

tasked. We are proud of our work to date and have already gotten major progress 

under way in the New York and Colorado, substantial movement underway in 4 

other regions, as well as other efforts in Chicago and Texas into our network, we 

are an organization of under 10 employees, on a tight budget raised through corporate membership, events attendance, and report sales and can no way meet the 

demands of organizations in 35 states and 11 countries that have contacted us to 

help develop this capacity. 

What the Federal Government could do to be a force in jumpstarting the effort 

to create regional hubs is the following:

• Education: Too few political and corporate leaders, as well as the general public know anything about nanotechnology or its economic promise.

• National NanoBusiness Summit: Hold a high profile national summit in 

Washington DC to educate the public on the future of nanotechnology as a 

science, a technology and a business. Make special efforts to educating the 

youth of America to pursue the study of the physical sciences as a path for their 

future.

• Trade Missions/Exchanges: Hold trade missions between the U.S. and other 

leaders in the nanotechnology field to find opportunities for collaboration and 

markets for their nanotech developments.

• Regional Events: It is not enough to hold a large scale event in Washington 

to spread the word of nanotechnology and its economic impact, efforts must be 

made to hold events in states and regions to spark excitement.

• Database: Though databases are being developed for the nanosciences, no effort has been made to create or fund a database of corporations, start-ups, supporting service firms, and investment resources. There is also no platform for 

existing government resources under one p banner for nanotech—contracts, 

grants, loan programs. Not only to inform but also to be a platform for collaboration. Regions could also explain their efforts and share best practices.

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• Studies: Many basic studies to understand the dynamics of the 

nanotechnology economy have yet to be performed. The Departments of Labor, 

Education, Commerce, HUD, and Defense are all necessary components in developing an understanding of the nanotech workforce of tomorrow, its economic 

impacts and the state of global competition, etc. In addition, as we learned from 

how foreign markets have addressed GMOs, there is a real aversion to surprises 

in technology development. Nanotech is about to offer up many such surprises. 

There is a real need for global studies on the health and environmental effects 

of nanoscience right now or there may be major consequences later—either real 

or imagined—that will slow and perhaps cripple important developments.

• Coordination: Make the National Nanotechnology Initiative more than just an 

oversight and funding agency for basic research. The NNI should also be 

equipped to address the needs of the emerging business of nanotechnology and 

study the competitive business climate in the U.S. and abroad. There needs to 

be strong linkages with agencies such as Department of Commerce Office of 

Technology Policy, the Department of Labor and the Department of Education.

• Capital: The timing for the sudden rise of nanotechnology as a business could 

not be worst in terms of market conditions on Wall Street and in the venture 

capital sector. Recent corporate announcements by GE and Microsoft noting 

they saw real opportunities in new future markets (like nanotechnology), and 

hence were increasing R&D efforts, were met with extremely negative responses 

on the Street.

There is no need for the Federal government to become a blank checkbook for 

the nanotech industry with huge levels of new funding for business. However, 

the Federal Government would be missing a real opportunity to advance the 

nanotechnology industry if it did not develop some level of new incentives and, 

grant and loan programs. In addition, the Federal Government should have a 

mandate to take existing programs and ensure that they reach out to emerging 

technologies, such as nanotechnology—particularly at Defense, Agriculture and 

SBA.

In addition, though NIST ATP has certainly had its problems and has many opponents, it nonetheless is a program that could be critical to the long term development of nanotechnology. ATP is almost unique in the Federal Government 

in that it acts as a conduit for funding during the critical middle stage of development—post-basic research/pre-commoditization—when companies are dealing 

with issues such as packaging, scaling and integration. This is a timeframe that 

no venture capital firm will fund—and a timeframe they affectionately refer to 

as the ‘‘valley of death.’’

• Government Practices: There are many existing programs and methods employed by the Federal Government if changed could provide much needed assistance and resources to the emerging nanotechnology industry without requiring 

huge funding outlays. Some examples include:

• Tech Transfer: The technology transfer environment in the U.S. is abysmal 

at the university and government level—though admittedly the government is 

certainly making greater strides. Efforts should be made to reform the execution of the Bayh-Dole Act or to rewrite it. In addition, government labs, the land 

grant college system, and any university working on government research 

grants, should be pushed to post their nanotechnology IP portfolio in a central 

NNI database along with appropriate contact information to spur use and 

commoditization of these technologies.

• Patents: The U.S. Patent and Trademark Office is among the most highly 

overburdened organizations in the government. The PTO is expected to receive 

350,000 patents applications this year and on top of backlog roughly equal to 

that number. PTO is the gateway to technology commercialization on America. 

It must be given the necessary funds (or allowed to retain their fees collected) 

in order to properly attend to nanotechnology and other emerging technologies.

Case in point, PTO must have the funding to provide training to its examiners in the field of nanotechnology. Nanotech is an extraordinarily cross-disciplinary technology reaching into nearly all sectors of examination at PTO. Efforts must be made to ensure PTO can properly understand and manage the 

nanotechnology patent application process. In turn, PTO must also work with 

the nanotechnology industry to help train its researchers and companies so that 

legal protections are appropriate and timely. At the NanoBusiness Alliance we 

have begun to work with PTO on these issues, arranging for meetings between 

industry and officials and bringing in researchers to talk with PTO examiners 

about their work. Indeed we have found PTO officials to be extraordinarily welVerDate 0ct 09 2002 08:05 May 12, 2005 Jkt 093633 PO 00000 Frm 00068 Fmt 6601 Sfmt 6621 S:\WPSHR\GPO\DOCS\93633.TXT JACK PsN: JACKF
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coming and professional. However, this effort needs to be more formalized and 

extensive.

In addition, it is imperative that Congress address the October 3, 2002 Madey 

v. Duke decision by the Federal Circuit which ended the so-called research exemption from United States patent law. The effect will no doubt be chilling, essentially ensuring that all corporate collaborative research with universities and 

other non-profit research institutions will move offshore as every other industrialized country in the world recognizes a research exemption in patent law but 

the U.S.

Before Madey the research exemption had been unquestioned under the convincing case law line that came from no less an authority than perhaps the 

leading scholar on the early Supreme Court, Joseph Story, in his landmark 

opinion in 1813 in Whittemore v. Cutter which used the now anachronistic term 

‘‘philosophical’’ instead of ‘‘scientific’’ to describe the experimental use exemption from patent infringement. This ‘‘scientific-philosophical’’ exemption from 

patent infringement resides at the very core of the Constitutional mandate for 

Congress to create a patent system ‘‘to Promote the Progress of ‘‘the Useful 

Arts’’—an essential component being that those skilled in such Useful Arts are 

free to use the knowledge imparted by a patent disclosure to create better and 

newer technologies.

If the United States is to maintain its high level of nanotechnology research—

as well as any other emerging field of scientific study whether it be biotech, 

photonoics, or fuel cells—it is essential that the Congress not wait to see if the 

Supreme Court intervenes on Madey, and immediately reinstate the research 

exemption into law. If this is not done immediately, expect corporate research 

collaborations with America’s universities and non-profit institutions in America 

to come to a near end as this work is exported globally to the major research 

centers of the world—Kyoto, Zurich or Shanghai.

• FDA Advisory Committee: Much like the PTO, FDA is an enormously burdened agency. FDA historically has responded to new directions and techniques 

rather than being proactive. With such revolutionary developments as bucky 

ball drug delivery and protease inhibitors, quantum dot disease detection, and 

pin point cancer detect and removal through gold nano-shells all in advanced 

laboratory development, it is imperative that FDA be ready to rapidly and properly address and evaluate these developments and not let them languish—at 

the peril of the American public—for a decade or more of evaluation. That is 

why we strongly recommend that FDA be compelled and funded to immediately 

create an internal advisory committee on nanotechnology. This committee would 

establish education initiatives and relationships in the nanotech research community to ensure that future evaluations of developments are handled with 

great speed and great caution.

• EPA: Because of the rapid development of nanotechnology from science to a 

business there has been little research done into the health and environmental 

effects of the technological developments. While all current evidence suggests 

that c60 is safe for long term use in the body, we don’t know definitively. Activist groups, many of which have been involved in limiting the growth of the 

GMO industry, are already lining up against nanotechnology development, some 

even calling for moratoriums on commercialization. This can’t be allowed to 

happen.

For the industry to develop and meet its potential, we need study and we 

need public education to begin now. The NanoBusiness Alliance is working with 

our European and Canadian counterparts to create a foundation to ensure that 

a dialog on nanotechnology’s health and environmental effects is begun immediately. We are seeking to ensure that studies are undertaken and that public 

awareness campaigns are begun today. Our organizations are reaching out to 

the environmental community to work with them to address any concerns they 

have on nanotech’s development. We believe that it is imperative for the Federal Government to be aligned with these efforts—particularly the EPA and 

FDA.

• Government Grants and Programs: Because of the newness of nanotechnology, 

many researchers, business leaders and officials in the field have little understanding of programs and grants already provided by the government that may 

help develop nanotechnology. In turn government officials, at say SBA, have little idea of how their programs can be adjusted or administered to serve this 

emerging industry. Efforts should be made to develop regional outreach events 

at all major government agencies to ensure a dialog and full participation in 

66

existing programs for the nanotechnology community. In addition, the NNI 

website should become a one stop shop for all government programs and grant 

information that may be open to the NanoBusiness community.

Another area to address is evaluation criteria. Many self-funded companies in 

the nanotech arena have complained at length at how SIR criteria—for instance—is unbalanced and better serves venture backed start-ups.

In addition, criteria for evaluating new nanotech centers—whether it be new 

round of NSF, DoD or DOE centers—should be made to include commercialization planning and regional development planning as a grading criteria so that 

it does not become merely for research sake.

• Advisory Board: The NanoBusiness Alliance and our member organizations 

welcome the call for the 21st Century Nanotechnology Research and Development Act for the creation of a national advisory board on nanotechnology. We 

believe that it is imperative that the President and Congress have top advisors 

from outside the government—people who are on the front lines of 

nanotechnology’ s development—to provide vital feedback and advice on the 

NNI and overall government nanotech efforts. However, we feel it is essential 

that such a board reflect the full spectrum of the nanotechnology community 

and not be a board made up of just the research community. Nanotechnology 

business leaders—start ups, corporations, even service industry executives must 

be part of this effort to ensure that it is effective. Also, it is vital that the various regions of the U.S. where nanotech is developing be included fairly, so that 

traditional tech clusters like Silicon Valley, Boston and greater Washington 

been’t included at the exclusion of other developing regions such as the Pacific 

Northwest, Chicago, Texas, upstate New York, and others. Lastly, it is of grave 

importance that the Advisory Board also cover the breadth of the 

nanotechnology field—life sciences; material sciences; electronics; etc.—and not 

merely concentrate on one or two areas.

• NNI Mission: Lastly, and perhaps most importantly, it is vital that the NOT’s 

mission be expanded beyond the initiation and funding of basic research, and 

extend to the developing business of nanotechnology and ensure America’s leadership in global marketplace.

Government Investment 

Question 4. Some critics of the National Nanotechnology Initiative argue that the 

research portfolio is not in balance, currently favoring readily achievable research 

goals and not sufficiently supporting high-risk research, such as truly exploratory 

work in molecular nanotechnology. Do you agree or disagree? Please explain. 

Answer. We generally disagree. The NNI portfolio and other government programs such as NIST ATP have been in solid balance funding near, mid and longterm efforts. This should continue. The nanotechnology field includes many longterm visionaries and to be honest, some that harbor extreme ideas on technology 

development. It is not the government’s role in our opinion to fund their fantastic 

ideas at the expense of real development for the American people and our country’s 

economy. 

Currently the most under-funded area of nanotechnology is not the longer-term 

ideas such as universal assemblers, it is actually the mid-term development stage—

the so-called ‘‘valley of death.’’ This is the period after basic research but before commercialization. This period of research and application development includes scaling, packaging, and integration. Except for NIST ATP and some DARPA programs, 

no government effort addresses this period in the life cycle of development. Corporations and VCS also do not normally provide funds for this period. This is an area 

that particularly the Asia countries excel at—which is why so many Japanese and 

Korean companies are attempting to license U.S. nanotech research right now. We 

need a comprehensive effort on the part of the Federal Government to make funds 

available for this stage of nanotech’s development as it will have the greatest impact 

on our people and our industries. 

In this competitive budget environment it is important that funding priorities remain in balance and frankly touch more near term and achievable developments. 

With that said, as an industry that is projected to have an unrivaled impact of the 

global economy, we feel that more funding is necessary so that efforts can be enhanced and perhaps some longer term theories can be funded. We would like to see 

another doubling of the U.S. nanotechnology budget within two years to ensure our 

nation can compete globally in what is becoming the next industrial revolution.

Question 5. Given that other countries are also investing significant amounts in 

this field, do you feel that we are doing enough to ensure our leadership in this 

field? 

67

Answer. No. Nanotechnology is emerging as a truly global technology. Unlike the 

many waves of technological development, nanotechnology is not dominated by the 

United States. In several areas of nanotechnology the U.S. is being outpaced by foreign competition. The Japan, EU, Russia, Korea, and China are all significant players in the field of nanotechnology. 

A recent report from the Journal of Japanese Trade & Industry notes that the 

Japanese government views the successful development of nanotechnology as the 

key to ‘‘restoration of the Japanese economy.’’ They are not alone. Funding has 

grown at unprecedented rates across the globe over the last three years. 

The upside of 2000’s NNI announcement was that it provide the U.S. with a rallying point as well as additional funding for nanotechnology development. The 

downside was it set off a global competition not seen since the space race of the 

1960’s. In addition, most of these foreign efforts include strong corporate interaction, 

unlike the U.S. NNI effort that for the most part is a basic research program. The EU just announced a new $685.4 million budget for research in 

nanotechnology and the formation of the EU Nanotechnology Industrial Platform. 

When individual country spending is added to the EU mix, overall spending is nearly double that of the U.S. EU corporate spending has remained generally on par 

with ours. 

The Japanese are outspending us from a government perspective and their corporations are far more aggressive than ours in R&D and investment. There are few 

U.S. based start-ups in the nanotech field that have not been contacted by Japanese 

investors. Also in Asia, China in adjusted dollars is clearly outspending the U.S.—

and Korea, Singapore, Taiwan and others all have very significant programs underway. Add to this that the majority of U.S. nanotechnology grad students and postdocs are non-U.S. citizens from Asia. 

If one is to add to this construct the current U.S. business environment of R&D 

cuts, Wall Street in a severe downturn, and a stagnant VC market, the U.S. 

nanotechnology market is in need of serious attention and assistance from the Federal Government. 

To turn this around the U.S. government must consider the following:

• Increased funding for research and centers; additional incentives and contract 

opportunities for nanotech business; and extending current and adding new 

loan and assistance programs for nanotech businesses.

• Additional coordination between agencies and among government programs to 

reach out to the nanotech research and business community.

• Information development in terms of monitoring and developing reports on global competitiveness; regional development; best practices; etc.

• Promote regional development through information databases.

• Promote business development through omnibus government database of resources.

• Refashion the NNI to include a strong commercialization and industry development platform.

• Improve the current state of technology transfer in the U.S.

• Provide educational and organizational resources for PTO, FDA, and other 

agencies at the front line of developing the U.S. nanotechnology industry.

• Develop model curriculums for U.S. schools for nanotech. Create programs to 

promote careers in the nanotechnology field to get more U.S. kids into this field 

now before it is too late.

Question 6. What role could a Nanotechnology advisory committee of academic, finance, and industry experts serve in improving and grounding the Federal government’s nanotechnology research? Would you support the creation of such an advisory committee? 

Answer. The NanoBusiness Alliance and our member organizations welcome the 

call for of the 21st Century Nanotechnology Research and Development Act for the 

creation of national advisory board on nanotechnology. 

We believe that it is imperative that the President and Congress have top advisors from outside the government—people who are on the front lines of 

nanotechnology’s development—to provide vital feedback and advice on the NNI and 

overall government nanotech efforts. We feel it is essential that such a board reflect 

the full spectrum of the nanotechnology community and not be a board made up of 

just the research community. Nanotechnology business leaders—start-ups, corporations, even services industry executives must be part of this effort to ensure that 

it is effective. Also, it is vital that the various regions of the U.S. where nanotech 

is developing be included fairly, so that traditional tech clusters like Silicon Valley, 

68

Boston and greater Washington been’t included at the expense of other developing 

regions such as the Pacific Northwest, Chicago, Texas, Upstate New York, and others. Lastly, it is of grave importance that the Advisory Board also cover the breadth 

of the nanotechnology field—life sciences; material sciences; electronics; etc.—and 

not merely concentrate on one or two areas. 

As to the role of the board:

• Advice and real world feedback as to the industry’s needs and the effects of current government efforts.

• Assist with the overall NNI coordination between government, academia and industry.

• Bench marking, review and evaluation of government nanotechnology efforts.

• Development and review of reports, studies, and surveys on the field.

• Promotion of the science and business of nanotechnology.

Intellectual Property. 

Question 7. Mr. Modzelewski, in your testimony, you expressed concerns over the 

current state of intellectual property and the U.S. Patent and Trademark Office. 

Answer. Can you provide specific recommendations on how to improve the Patent 

Office system so that it does not hamper nanotechnology growth and innovation? 

The U.S. Patent and Trademark Office is among the most highly overburdened 

organizations in the government. The PTO is expected to receive 350,000 patents 

applications this year and on top of backlog roughly equal to that number. PTO is 

the gateway to technology commercialization on America. It must be given the necessary funds (or allowed to retain their fees collected) in order to properly attend 

nanotechnology and other emerging technologies. 

Case in point, PTO must have the funding to provide training to its examiners 

in the field of nanotechnology. Nanotech is an extraordinarily cross-disciplinary 

technology reaching into nearly all sectors of examination at PTO. Efforts must be 

made to ensure PTO can properly understand and manage the nanotechnology patent application process. In turn, PTO must also work with the nanotechnology industry to help train its researchers and companies so as that legal protections are 

appropriate and timely. At the NanoBusiness Alliance we have begun to work with 

PTO on these issues, arranging for meetings between industry and officials and 

bringing in researchers to talk with PTO examiners about their work. Indeed we 

have found PTO officials to be extraordinarily welcoming and professional. However, 

this effort needs to be more formalized and extensive. 

It should be noted that the signing of H.R. 2215 will make it easier for 

nanotechnology companies to eliminate mistakenly granted patent claims that 

would otherwise hinder their business development efforts. Other possible efforts 

can include accelerated patent examinations for a reasonable fee should be permitted to enable nanotechnology companies and other high-tech companies to bypass the backlog of cases at the U.S. Patent Office. 

In addition, it is imperative that Congress address the October 3, 2002 Madey v. 

Duke decision by the Federal Circuit which ended the so-called research exemption 

from United States patent law. The effect will no doubt be chilling, essentially ensuring that all corporate collaborative research with universities and other non profit research institutions will move offshore as every other industrialized country in 

the world recognizes a research exemption in patent law but the U.S. 

Before Madey the research exemption had been unquestioned under the convincing case law line that came from no less an authority than perhaps the leading 

scholar on the early Supreme Court, Joseph Story, in his landmark opinion in 1813 

in Whittemore v. Cutter which used the now anachronistic term ‘‘philosophical’’ instead of ‘‘scientific’’ to describe the experimental use exemption from patent infringement. This ‘‘scientific-philosophical’’ exemption from patent infringement resides at the very core of the Constitutional mandate for Congress to create a patent 

system ‘‘to promote the progress of the useful arts’’—an essential component being 

that those skilled in such ‘‘Useful Arts’’ are free to use the knowledge imparted by 

a patent disclosure to create better and newer technologies. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. RON WYDEN TO

DR. SAMUEL I. STUPP

Bayh-Dole 

Question 1. In testimony before the Subcommittee, Dr. Stan Williams of HP stated 

that due to U.S. universities’ interpretation of intellectual property sharing regime 

69

created under Bayh-Dole, it is easier to work with foreign universities rather than 

U.S. academic institutions. How would you respond to this criticism from the academic side? Does Bayh-Dole need an overhaul? If so, what would you specifically 

suggest? 

Answer. My personal view is that U.S. universities have been extremely proactive 

on technology transfer over the past decade, and I do not see any obvious problem 

with the system. If you look for example at the large number of successful start up 

companies in biotechnology and other fields that have emerged from technology 

transfer activities at universities, you see definite evidence of a healthy system. 

Many of these companies are now public and as far as I know no other country in 

the world is as successful as we are in this respect. I have no doubt that this 

proactive trend will continue into the nanotechnology era over the next few decades 

and I certainly do not see a justification for U.S. industry to flock to foreign universities to acquire technology. Of course there will always be exceptions, when very 

specific technologies are available for licensing overseas or when going a broad will 

be the only way to strike a ‘‘good deal’’ for large U.S. corporations. I do not know 

what experience Mr. Williams has had that would lead him to hold his opinion. 

Before opening a public forum on the subject, one would need to back up with 

good stastistics the alleged inappropriate practices by U.S. universities on technology transfer. My feeling is that stastistics will not support the case, and that the 

Bayh-Dole act does not need an overhaul. Furthermore, I would add that even ignoring technology transfer, the billions of dollars invested in research at U.S. universities have yielded over the course of decades the best technical/scientific work 

force in the world. This has been a critically important return for the economic success of our country. Furthermore, now that large U.S. corporations have downsized 

their research and development infrastructure, mostly for financial reasons in my 

view, universities are the ones leading the way to technical innovation as well as 

playing the role they always played of educating our scientists and engineers. Is it 

appropriate to tamper now with Bayh-Dole, I don’t think so. 

Promises of Nanotechnology 

New revolutionary technology often promises to ‘‘change the way we live.’’ Often 

times visionaries tell of how these technologies will enable better, more improved 

lives. There have been a number of promises about the bright potential of 

nanotechnology. For example, I have heard that with the ability to manipulate 

atoms, we can completely forgo smelting and instead essentially ‘‘grow’’ steel. While 

this is undoubtedly promising, it sounds rather fantastic.

Question 2. Can you distinguish for me between what is reasonably achievable 

and what are exaggerations? 

Answer. I think growing steel because we have now demonstrated the ability of 

manipulating individual atoms is an exaggeration. Smelting will be around for a 

very long time. That said, nanotechnology has undoubtedly the potential to change 

the way we live. My favorite examples are its potential impact on health care and 

personal as well as homeland security. Making nano-sized objects that can deliver 

medicines or genes to the specific cells that need them is definetely something that 

can happen and it would have remarkable impact on our ability to cure certain diseases and also controld the side effects of medication, including the life-threatening 

consequences of cancer chemotherapy. Regeneration of tissues, including the spinal 

cord, the heart, the retina which impact on dreams such reversing paralysis and 

blindness, or returning to a completely normal life after heart attacks. Along with 

advances in biology and medicine, nanotechnology will impact this field because regenerative medicine will require directing cells with nanostructured devices and materials. It is also reality that we can build with nanotechnology powerful machines 

to map out genomes very fast compared to current capabilities. This of course will 

have innumerable consequences in disease prevention and cure, but it will also advance biology faster. It is also real that we can achieve with nanotechnology the fabrication of single molecule detectors. This would have a profound impact on our security alerting us of dangerous events a lot earlier than we can today. There is no 

doubt that nanotechnology can also get us into a completely different regime of the 

information age giving us faster, smaller, and softer computers. On the lighter side 

it is also real that nanotechnology will help us look better and healthier—we are 

only starting to see what wonders nanotechnology can bring to the world of cosmetics. The real vision of nanotechnology will no doubt include other things that we 

cannot anticipate now that may deeply touch transportation and energy technologies. 

70

Government Investment 

Question 3. Some critics of the National Nanotechnology Initiative argue that the 

research portfolio is not in balance, currently favoring readily achievable research 

goals and not sufficiently support high risk research. Do you agree or disagree. 

Please explain. 

Answer. I would agree that the NNI portfolio needs to fund more high risk long 

term research. This was one finding of the National Research Council’s review of 

the initiative. In my own opinion, our research funding system is in general not very 

conducive to long term research because, budgets for the agencies fluctuate a lot 

leading to year-to-year programmatic changes, there is insufficient NSF funding, 

and the NIH has too much money and only a tiny piece of it is invested in long 

term technology-based research.

Question 4. Given that other countries are also investing significant amounts in 

this field, do you feel that we are doing enough to ensure our leadership in this 

field? 

Answer. In my opinion, we are not doing enough in nanotechnology research. In 

order to keep a balanced portfolio within the NNI that targets both short range development of nanotechnology products and at the same time maintain funding stability for long range nanoscience we need to be ramping up rapidly to a budget of 

at least one billion dollars a year. Our report shows for example that Japan’s 

nanotechnology budget is similar to ours. Normalizing by our GDP it is clear that 

we do not have equal capabilities. This is particularly important given that large 

industries are not contributing as much as they would have two decades ago to the 

research and development infrastructure. One critical issue is to raise the budget 

of the NSF, and get the NIH to engage in research programs on nanotechnology 

that are out of their box.

Question 5. What role could the Nanotechnology advisory committee of academic, 

finance, and industry experts that was suggested by the Academy panel serve in improving and grounding the Federal government’s nanotechnology research? 

Answer. This panel would be able to perform several critical functions. One of 

them is to guide the NNI’s development in the context of ongoing scientific interests 

and discoveries in the international community. They could be a very important 

science and technology ‘‘radar’’ to ensure that programs being funded couple to the 

most promising directions rather than to the internal interests and concerns of the 

various federal funding agencies. They will police for a more effective development 

of nanoscience and nanotechnology. Another important function will come from the 

members of this board associated with industry. These individuals can guide the 

programs to areas of interest to our economy in the global competition, ensuring 

that adequate programs of this type are always part of the NNI. This board should 

also develop the appropriate metrics to judge the success of the NNI and the changing needs for investment in this initiative year to year.

Question 6. All of us have called out the economic potential of nanotechnology. Let 

me play devil’s advocate for a moment—if nanotechnology is such a huge, revolutionary area, why should the Federal government invest here? Why can’t companies 

bear this burden, if they are going to be positioned to reap the profits? 

Answer. Companies, particularly the large ones that have traditionally had the 

greatest resources, cannot develop effectively the nano era of science and technology 

because they have by now nearly destroyed their R&D laboratories guided by Wall 

Street forces, merges and acquisitions. Most industrial labs are focused on short 

term product development and improvement. The most promising activities with regard to industry lie in start companies and these are often associated with universities. Once these grow and become successful they will hopefully use their wealth 

to remove at least part of the burden from the Federal Government. Thirty years 

ago maybe the argument would have been valid but at this time we need to move 

quickly in the global competition and there is no time to wait for industry to rebuild 

its long term research infrastructure. Funding to universities and small companies 

would be at this time the fastest route to success at this time.

Question 7. What do you see as the biggest challenges nanoscience currently 

faces? In other words, what barriers could potentially keep nanotechnology from 

reaching its potential? 

Answer. One barrier in my view would be a weak economy because we will then 

loose any chance of engaging industry for development that uses technology transfer 

from our academic and government laboratories. Another barrier is of course political instability in the world which is of course a real threat at this time. 

Nanotechnology development will benefit from meaningful international partnerships and flow of scientific information and people among communities in different 

parts of the world. Another possible barrier has to do with our educational systems. 

71

In this regard the interdisciplinary culture in which young scientists are conditioned 

and challenged to work on complex problems is a very important element for 

nanotechnology development to its optimal potential. 

Multidisciplinary Education 

It appears that nanotechnology is an interdisciplinary science, combining facets 

of chemistry, materials science, computer science, biology, mechanical and electrical 

engineering, and physics. 

Question 8. How well prepared are our universities to produce the next generation 

scientists who have the requisite expertise in multiple disciplines in order to ensure 

that the United States continues to lead in nanotechnology research? 

Answer. Programs at our universities are changing rapidly toward the interdisciplinary mode which is very critical to nanotechnology development. However, 

they are still sub-optimal and very deep cultural changes need to occur for the various scientific communities to learn to recognize and respect the value of interdisciplinary activity in science. Most scientists are hesitant to operate outside their 

comfort box, but starting early on with young students we can encourage those with 

interdisciplinary intelligence to stick to this mode throughout their careers and 

eventually natural selection will produce the right community for optimal 

nanotechnology development. The broad scientific scope of nanoscience and also its 

broad range of applications requires very definitely individuals who are themselves 

interdisciplinary and can work at interfaces among fields. Multidisciplinary teams, 

the current common mode in universities is not effective for interdisciplinary activity. It only serves to hide individuals that cling on to traditional modes of scientific 

thinking and results in ineffective investment in nanoscience which is a pervasive 

revolution across all of science. The nanotechnology board can play a key role in 

helping the agencies catalyze the process with innovative programs.

Question 9. What needs to be done to promote a multidisciplinary curriculum at 

all levels, not just universities, so that we have a properly educated nanotechnology 

workforce? 

Answer. We need to create programs from the top (OSTP for example) that offer 

significant resources to inter-agency programs at all levels that will attract what 

one might describe as individuals with interdisciplinary intelligence. The hope is 

that these populations of strong interdisciplinary scientists will eventually dominate 

the community demonstrating their ability to make key discoveries on complex phenomena and invent new things. This is a natural selection problem that nonetheless 

needs guidance from the top. 

Measurement Tools 

Dr. Stupp, the Academy panel pointed out the need to develop the tools and measurements to support nanotechnology in order to spur nanotechnology innovation. 

Question 10. Please explain this recommendation. What agency or agencies are 

best known for this field? Are we allocating enough resources in this area? 

Answer. The development of new tools is key for nanotechnology. In fact it was 

new instruments enabled by microtechnology and software that spearheaded many 

of the activities we now label as nanotechnology. Agencies such as the Department 

of Energy and the NSF have always played a pivotal role on tool development. 

These agencies cannot afford to fund sufficient research activity on tool development. This is clearly a budget problem, and no we are not allocating sufficient resources to this objective. The NIH and possibly DoD should take a stronger interest 

in funding outstanding teams and even international collaborations to develop new 

tools for measurement, manipulation, and characterization of nanoscale systems. 

Clearly DOE and NSF need greater budgets to be able to address this problem. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. RON WYDEN TO

R. STANLEY WILLIAMS

Bayh-Dole. 

Question 1. In your testimony before the Subcommittee, you stated due to U.S. 

universities’ interpretation of intellectual property sharing regime created under 

Bayh-Dole, it is easier to work with foreign universities rather than U.S. academic 

institutions. What would it take for you to work with U.S. universities? Does BayhDole need an overhaul? If so, what would you specifically suggest? 

Answer. I believe that it is still possible for leaders of good will from U.S. academia and industry to agree on a workable compromise that is fair and equitable 

to both parties and that satisfies the intent and the letter of the Bayh-Dole act. 

72

Unfortunately, we have seen significant polarization between attorneys representing these groups, and the level of acrimony has risen to the point that I despair that we can work together in the future. Typically at present, negotiating a 

contract to perform collaborative research with an American university takes one to 

two years of exchanging emails by attorneys, punctuated by long telephone conference calls involving the scientists who wish to work together. All too often, the 

company spends more on attorneys’ fees than the value of the contract being negotiated. This situation has driven many large companies away from working with 

American universities altogether, and they are looking for alternate research partners. On the other hand, many high quality foreign universities are very eager to work 

with American companies, and by keeping attorneys out of the discussion completely 

they have streamlined processes to allow a successful negotiation to take place in 

literally a few minutes over the telephone. It is possible to specify what one wants 

to a professor at a university in China or Russia and then issue a purchase order 

to obtain a particular deliverable. The deliverable is received and verified to be satisfactory before the American company pays for it, and in this case the American 

company owns all rights to the deliverable and the process by which it was created. 

Often, such transactions can be completed in a few months, a fraction of the time 

required to just negotiate a contract with an American University, which will insist 

on owning all rights to whatever is produced. Thus, just as American companies 

were long ago forced to deal with high quality and low priced foreign competition, 

American universities will either have to modify their behavior or lose their industrial customers. 

In my opinion, the root of the problem is in the desperate financial situation of 

most American universities. In the physical sciences and engineering, the support 

from the U.S. government for academic research has been decreasing in real terms 

for over a decade. This has forced the universities to try to raise funds from other 

sources. Since a few universities have made a large amount of money from a piece 

of valuable intellectual property, this has encouraged nearly all universities to attempt to duplicate this success. However, this strategy is rather like planning ones 

retirement on winning the lottery. The vast majority of those adopting this strategy 

will lose. 

In negotiations between American universities and large companies, the term 

‘‘Bayh-Dole Act’’ comes up frequently to justify an extreme position taken by universities with respect to intellectual property. Most universities claim that the BayhDole Act requires them to retain complete control of all intellectual property produced at the university. This then leads to the position by a university that a company needs to pay for research that is being done up front in a collaborative project, 

to pay the costs for any patents that are filed as a result of the research, and then 

to enter into a separate negotiation with the university to license the intellectual 

property that is created. In many cases, the root idea originated with the sponsoring 

company in the first place, not the university. Companies take the view that they 

are thus forced to pay three times for their own intellectual property, which puts 

them at a significant disadvantage with respect to a company that doesn’t spend 

anything to sponsor university research. Some companies have agreed to this arrangement in the past, but there are several instances where intellectual property 

that was supported and generated in collaboration with one company was then licensed to a different company, often a start-up that is owned by the professors who 

participated in the research. Again, this behavior is defended as being necessary because of the Bayh-Dole Act. However, I contend that this is an extreme interpretation of the Act, and in fact there are fair and equitable compromises that can be 

made that in the long run will benefit universities much more than the disastrous 

short-term strategies they are now following. Universities will in general receive far 

more funding in the form of research contracts from high tech companies than they 

will by licensing technology, because of the short life of such technologies and the 

fact that it is always possible to substitute one technology for another. 

If we look at the actual language of the Bayh-Dole act itself, it is difficult to understand where university-industry cooperative work is impacted. However, the 

Council on Government Relations (COGR—‘‘An association of research universities—

COGR’s primary function is to help develop policies and practices that fairly reflect 

the mutual interest and separate obligations of federal agencies and universities in 

federal research and training’’) has created a set of guidelines for university behavior: The Bayh-Dole Act—A Guide to the Law and Implementing Regulations (http:/

/www.cogr.edu/bayh-dole.htm) . In these guidelines, we find the statement ‘‘In their 

marketing of an invention, universities must give preference to small business firms 

(fewer than 500 employees), provided such firms have the resources and capability 

for bringing the invention to practical application,’’ which is the justification for 

73

channeling IP rights to university-based start-ups. Unfortunately, these start-ups 

almost always fail to get their technology to the market, since they lack the resources to do so and the market itself moves too quickly for them to be ready. The 

next sentence of the COGR guide states ‘‘However, if a large company has also provided research support that led to the invention, that company may be awarded the 

license.’’ The natural compromise position is this: in recognition of the fact that 

other research support created the institution and the general environment where 

any large-company funded research leads to intellectual property, that large company should be awarded a nonexclusive license, and the university should have 

the right to sell nonexclusive licenses to any other companies interested in buying 

them. This will be by far the most efficient means of actually getting a technology 

into the market place—by creating a competitive environment with multiple entities 

vying to get the technology to market. 

If we fail to find a broad consensus agreement between research universities and 

companies on IP licensing, then I would recommend amending the Bayh-Dole act 

to restrict the ability of a private institution that receives federal funding to award 

exclusive licenses. 

Government Investment 

Question 2. Some critics of the National Nanotechnology Initiative argue that the 

research portfolio is not in balance, currently favoring readily achievable research 

goals and not sufficiently supporting high-risk research. Do you agree or disagree? 

Please explain. 

Answer. I agree with this criticism, but this issue of sandbagging research proposals is not restricted to nanotechnology research alone—it is endemic within the 

entire academic and national lab research enterprise. Again, the problem is the 

scarcity of research funds. Individual professors believe that the risk of failure is 

too high, so they only propose projects that they know will succeed (or indeed 

projects that they have already completed). To have a ‘failed’ project could mean 

that the professor never gets another grant funded, which is the equivalent of academic death. Thus, nearly all projects ‘succeed’, but at a very small scale. This extreme risk aversion is now characteristic of nearly all research in the physical 

sciences and engineering. It means that in general we are not seeing many big 

breakthroughs, but mainly incremental progress along easily predicted directions. In 

order to escape from this risk-averse environment, it must be possible for university 

researchers to gamble big and not receive the equivalent of an academic death sentence if things do not work out exactly as they predict—we need to reward grand 

visions whether they turn out to be viable or not. It was possible to do that in an 

era where grant funding was plentiful—it can also be possible in an era of restricted 

funding if agencies decide to play long shots consistently, understanding that only 

a small fraction of them will pay off. This is the very nature of the way Venture 

Capital works, and I think that funding agencies should adopt some of the practices 

of VC’s when constructing their research investment portfolio.

Question 3. Given that other countries are also investing significant amounts in 

this field, do you feel that we are doing enough to ensure our leadership in this 

field? 

Answer. The European Union is currently boasting that they own a commanding 

lead in nanotechnology research, that they will invest at least twice as much for 

basic research in this crucial area as the United States in 2003, and that the entire 

field is ‘‘Its Ours to Lose’’ (title of an October 3, 2002 report issued by the European 

Nanobusiness Association). The Japanese government plans to invest 40 percent 

more than the presently announced U.S. National Nanotechnology Initiative (NNI) 

budget for 2003, and has consistently demonstrated a strong resolve to raise the 

ante every time the U.S. provides budget figures for the NNI. Given the local purchasing power of a dollar, the $200 M budget announced by China is already supporting what is probably the world’s largest nanotechnology effort in terms of the 

number of young scientists working in the field. Make no mistake about it: we are 

in a global struggle to dominate the technological high ground, and thus a large portion of the economy, of the 21st Century. The U.S. cannot outspend the rest of the 

world on research and development this time, so we must be by far the most productive at creating new technologies and the most efficient at bringing them to the 

marketplace. This will require coordination and cooperation across a wide variety 

of institutions and disciplines such as we have never seen before in the U.S.. To fail 

places the wealth and security of this nation at serious risk. 

We certainly can and must invest more in basic research, primarily to ensure that 

all the excellent proposals coming into the funding agencies are being supported. My 

suggestion is that the U.S. should increase funding for the NNI at the rate of 30 

percent per year for the next three years, and monitor the field to make sure the 

74

investment is well utilized. However, the only hope that we have to dominate this 

field is if we can be much more effective than anyone else with the research dollars 

we spend. Nanotechnologies will all be subject to exponential improvements for decades, which means that a sustained lead of just one-year in any area by one country 

can be an insurmountable barrier to entry of commercial products for all others. We 

need to have a balanced portfolio, with a reasonable number of well-placed long shot 

investments. Our real strength in American science and technology lies in our diversity of institutions: our research universities, our National Laboratories and our 

great corporate research labs. As to the latter, much has been made of corporate 

America’s de-emphasis of basic research, but in fact we have invested heavily and 

consistently in applied research and development over the past twenty years, and 

in general we have developed the world’s best institutions for turning technology 

into products. To win globally in nanotechnology, these strategic assets must work 

together as partners. This will require a significant engagement among these institutions to build trust and working relationships, which in turn will require wise and 

consistent policies that remain stable and are emphasized over many years. We will 

have to come to a better understanding of intellectual property and its value to each 

of these stakeholders, and attempt to understand how to adequately reward each 

partner while creating the maximum total benefit for the country. This is a difficult 

task, and in my view we are presently moving in exactly the opposite direction. Our 

current policies are driving American companies to look overseas for their research 

partners, which eventually will lead to the relocation of corporate R&D labs to be 

close to those partners. 

Question 4. What role could a Nanotechnology advisory committee of academic, finance, and industry experts serve in improving and grounding the Federal government’s nanotechnology research? Would you support the creation of such an advisory committee? 

Answer. I am always wary of creating a new bureaucracy, but in this case the 

stakes are so high that I think we should do so on an experimental basis. However, 

this advisory committee has to include real decision-makers, people who can come 

to agreements and obligate their institutions to abide by those agreements. Otherwise, it will just be a lot of hot air that winds up being more fodder for attorneys 

and multi-year debates. These decision-makers should create model agreements for 

their institutions that would then hopefully be adopted as standards for all university-government-corporate research interactions. It will take a few bold and brave 

visionaries to lead the way out of our current rather miserable situation. However, 

I believe that once some sensible new practices are established, they will become 

such a strong competitive advantage that the rest of the American institutions not 

leading way will have to follow the leaders. 

PREPARED STATEMENT OF DR. CRISTINA ROMA ́ N, EXECUTIVE DIRECTOR, EUROPEAN

NANOBUSINESS ASSOCIATION

It’s Ours to Lose—An Analysis of EU Nanotechnology Funding and the Sixth 

Framework Programme 

Executive Summary 

With funding for the Sixth Framework Programme (FP6) due to come into effect 

in a few months, comparisons have been made between U.S. and European 

nanotechnology funding that suggest that the U.S. is investing significantly more 

in this important area than the European Union. 

In fact, a closer look at the figures, performed here through the mechanism of 

three scenarios, suggests that European Union spending on nanotechnology research 

is not just comparable to that of the U.S. but will probably exceed it by a factor 

of two or more for 2003. Moreover, the reason that the ‘hidden’ European funding 

is not obvious may arguably lead to more results per dollar or euro spent. Although 

the increased focus on multidisciplinary endeavours that nanotechnology requires 

does argue for dedicated nanotechnology spending, there is also, no doubt, value in 

framing spending decisions in terms of high-level goals, in which nanotechnology 

will figure only if merit dictates, rather than being pre-ordained. The ‘hidden’ FP6 

spending is of this nature, being directed according to the Framework Programme’s 

‘thematic priorities’. This balanced approach may well yield dividends. 

According to our analysis, EU nanotechnology funding alone, which constitutes between 4 percent and 20 percent of total European research funding, will exceed the 

recently proposed 2003 U.S. nanotechnology budget. Given that EU spending often 

does not cover the infrastructure and manpower that U.S. spending does, this being 

met by individual nations, and given that European research funding represents a 

75

much smaller fraction of total European funding than U.S. federal funding does of 

total U.S. funding, European nanotechnology funding may exceed U.S. funding by 

a factor of 2 in 2003, or greater if funding from individual EU nations is taken into 

account. 

Though this analysis demonstrates that Europe recognises the long-term economic 

potential of a strong nanotechnology research base and is acting accordingly, it 

should not lead to complacency as there are still areas that warrant further attention if we want to maximise Europe’s ability to perform not just world-leading research but to translate that into economic benefits. These are outlined below. 

Recommendations 

In order to enable European industry to continue to be competitive on a global 

basis, attention is required in areas beyond providing adequate funding under FP6. 

These need to be tackled at national levels and at the European level, both from 

within the existing European structures and through organisations such as the 

ENA.

• Basic R&D and Fundamental Science: The EU cannot, for political and 

budgetary reasons, coordinate all European research. It is essential for all European countries to increase their efforts to fund both basic and applied 

nanotechnology research. Individual countries have the ability to react much 

faster to changing scientific and economic conditions than the EU, and should 

use this to their advantage. By implementing local measures based on local conditions, abilities and market requirements, Europe as a whole can maintain its 

current leading position. While some European countries have recognised this 

challenge and are meeting it head on, others could do more.

• Business Climate: The climate for nanotechnology business start-ups across 

Europe varies from friendly to positively hostile. This applies both to government regulations and funding bodies, both private and public.

• Technology Transfer: The wide variations across Europe will lead to a technological divide. While academic research is of a generally excellent standard 

across the continent, technology transfer is not. This will have an impact on 

both the corporate funding of academic research and start-up activity, these 

being concentrated in areas where technology transfer is most efficient for business. The recipe for successful technology transfer will vary from one member 

state to the other and some creativity will be required to come up with the best 

solutions for areas that currently lack effective mechanisms. Analysis of the 

mechanisms that have already shown success should be the starting point.

• Public Perception: The widespread perception among both the business community and the general public that nanotechnology is still science fiction does 

little to encourage industry to take advantage of it. An appropriate appreciation 

of the realities and potential of nanotechnology is taking root more slowly in 

much of Europe than in the rest of the world. The European Union, the ENA 

and individual governments need to continue to work on improving the perception of nanotechnology among the business community and the public.

• Government Inaction: While some European countries are already taking 

proactive measures, many, especially in southern Europe, seem to be taking a 

wait and see approach or ignoring the area completely. Applying this philosophy 

to microelectronics and the Internet has led to a wide economic gap between 

technology-based and agrarian/tourism-based economies. Nanotechnology will be 

much more fundamental to economic performance than any previous technological revolution and will have a part to play even in predominantly agrarian 

economies. All governments within Europe should be encouraged to understand 

what nanotechnology can do for them.

• Education: From Korea to the Irish Republic there have been many examples 

in recent history of countries being rapidly transformed into technological 

powerhouses by virtue of a well-educated and relatively cheap work force. The 

agrarian/tourism-based economies of Europe do offer low labour costs and many 

offer attractive climates and lifestyles. Thanks to European Union efforts they 

also offer good infrastructure. The final piece in the jigsaw that might allow 

such economies to transition to being more technology-based is education—it is 

essential that a significant pool of technically highly educated workers is maintained throughout Europe. An increased emphasis on natural science training 

is urgently required for European institutions to be able to absorb the planned 

funding. Equally important are mechanisms for attracting more students into 

science-related subjects. This is a problem that is being tackled with some sucVerDate 0ct 09 2002 08:05 May 12, 2005 Jkt 093633 PO 00000 Frm 00079 Fmt 6601 Sfmt 6621 S:\WPSHR\GPO\DOCS\93633.TXT JACK PsN: JACKF
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cess in a few European countries but the lessons learned need to be heeded elsewhere.

• Communication: It is intrinsically difficult to get messages across in an economic block composed of many countries with different languages and cultures. 

However, researchers, entrepreneurs and the public at large must be made 

aware of the significant opportunities that are available to them in Europe so 

that they don’t get the impression that the opportunities are greater elsewhere 

when this is not in fact the case. Combined efforts from the ENA, such as this 

report, and the European Union should be able to address this issue. 

Introduction 

A figure against which nanotechnology funding is often benchmarked is the budget of the U.S. National Nanotechnology Initiative. At first glance this appears to 

suggest that Europe’s often quoted 1.3 billion over 4 years is tiny compared to the 

2003 NNI budget of $710.2 million ( 0.72 billion). Our analysis indicates that the 

top level figures do not reveal the whole story, that many of these headline figures 

are in fact misleading, and that European nanotechnology spending may in fact be 

significantly higher than that of the U.S. 

Two criticisms are commonly levelled at endeavours such as this. One is that variations in funding mechanisms in different economic areas are complex, and varying 

definitions of nanotechnology add to this such that any comparison of numbers will 

always require certain assumptions and may be open to alternative interpretations. 

However, the comparisons can certainly give an indication of the approximate state 

of play. 

The other criticism is that putting numbers on nanotechnology spending is a 

pointless exercise, a little akin to putting numbers on spending for research into 

chemistry. Meaningful comparisons, the argument goes, would be at higher, application-oriented levels, such as cancer research, alternative energy, etc. 

The need for some sort of figure for nanotechnology spending, even if expressed 

as a range of figures in which the true figure probably falls, comes from the fact 

that businesses and academics look to these headline numbers and make decisions 

based upon them. If academics feel that the funding environment for 

nanotechnology is better in another region, they may be inclined to relocate. Equally, businesses will favour locations where grants may be more accessible and a 

greater pool of qualified individuals is present. For this reason, some attempt must 

be made to produce meaningful numbers. 

Global Nanotechnology Funding 

Europe

Table 1. Final budget breakdown (in millions of euros) for the Sixth Framework Programme for 

2002 through 2006. (Source. CORDIS). 

Commission’s final budget June 2002 Final 

INTEGRATING AND STRENGTHENING THE ERA 

1. Focusing and integrating Community research 13345

1.1 Thematic priorities 11285

1.1.1 Life sciences, genomics and biotechnology for health 2255

1.1.2 Information society technologies 3625

1.1.3 Nanotechnologies and nanosciences, knowledge-based multifunctional materials and new production processes and devices 1300

1.1.4 Aeronautics and space 1075

1.1.5 Food quality and safety 685

1.1.6 Sustainable development, global change and ecosystems 2120

1.1.7 Citizens and governance in a knowledge-based society 225

1.2 Specific activities covering a wider field of research 1300

Non-nuclear activities of the Joint Research Centre 760

2. Structuring the European Research Area 2605

3. Strengthening the foundations of the European Research Area 320

SPECIFIC PROGRAMME NUCLEAR ENERGY 1230

TOTAL 17500

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USA

Table 2. Breakdown (in millions of dollars) of NNI spending for FY 2001 (appropriated and actual), 2002 (appropriated) and 2003 (congressional request). Note: the ‘total’ includes funding 

reported on 2/4/02 p/us funding in associated nanotechnology programmes. (Source: National 

Nanotechnology Initiative) 

Department/Agency 

FY2001 FY 2002 

Appropr. 

Total 

FY 2003 

Request 

Appropr. Actual Total 

Department of Defense 110 123 180 201

Department of Energy 93 87.95 91.1 139.3

Department of Justice 1.4 1.4 1.4

Department of Transportation (FAA) 0 2 2

Environmental Protection Agency 5 5 5

National Aeronautics and Space Administration 20 22 46 51

National Institutes of Health 39 39.6 40.8 43.2

National Institute of Standards and Technology 10 33.4 37.6 43.8

National Science Foundation 150 150 199 221

U.S. Department of Agriculture 1.5 1.5 2.5

Total 422 463.85 604.4 710.2

Asia

Table 3. Estimated Japanese government nanotechnology R&D expenditures (in millions of 

dollars). (Source: National Science Foundation, Nanoscale Science, Engineering and Technology). 

1997 1998 1999 2000 2001 2002 2003

Japan 120 135 157 245 465 ∼750 ∼1000

Other Asian countries have also allocated large budgets to nanotechnology although many of these figures are not associated with clear timescales. However, 

given the increased purchasing power in many Asian countries, e.g. a researcher in 

China costs much less than one in Amsterdam, the funding is none the less significant. 

In the Japanese case, the annual 50 percent increases cast doubt upon the accuracy of these figures. While there is no question that funding will increase, increasing the number of researchers available to absorb this extra funding does not seem 

possible on an annual basis. 

Furthermore, given the difficulty of even agreeing on what constitutes 

nanotechnology, many of these numbers must be treated with caution. An example 

would be the recent assertion from the Taiwanese government that 800 companies 

in that country will soon be involved in nanoscience. This figure does not square 

with estimates from other sources of between 700 companies involved in 

nanotechnology (including multinationals) and 1000 nanotechnology start-ups worldwide (this latter figure quite likely uses an overly broad definition of 

nanotechnology).

Table 4. Asian nanotechnology budgets (in millions of dollars). (Source: CMP-Cientifica; Asia 

Pulse). 

Country 2002

Japan 750

China 200

Taiwan 111

Korea 150

Singapore 40

Total 1251

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EU Funding 

EU funding for nanotechnology is contained within the 6th Framework Programme, which runs from 2002 to 2006 and has an overall budget of 17.5 billion. 

(The discussion will be focused on ‘thematic priorities’, which is the area where 

nanotechnology can have a significant impact. Notice that almost a quarter of the 

budget goes to: Euratom; strengthening the European Research Area (ERA); and 

other, non-research-related, activities.) 

The official EU figure for nanotechnology, as quoted by Research Commissioner 

Philippe Busquin, is 700 million over 4 years, if nanotechnology is defined as only 

processes involving the manipulation of atoms and molecules. However, the EU does 

not have a standard definition of nanotechnology, preferring to use an upper limit 

of 50 nm, or ‘exploitation of mesoscopic and quantum effects at the macroscale’ or 

‘the manipulation of atoms and molecules’. 

A more detailed analysis of EU spending is given below in table 5. Following detailed discussions with Commission officials, an upper and lower limit for the 

nanotech percentage was assigned to each thematic priority. It is immediately obvious that the headline figure of 1.3 billion is in fact incorrect as thematic priority 

1.1.3 is only partly dedicated to nanotechnology.

Table 5. Budget percentage corresponding to Nanotechnology for each thematic priority of the 

6th Framework Programme for 2002–2006 (in millions of euros). (Source: EU Commission officials.) 

Thematic priorities budget June 2002 

Final 

Min

(percent) Total Max(percent) Total 

1.1.1 Life sciences, genomics and biotechnology for 

health 2255 1.0 22.6 2.5 56.4

1.1.2 Information society technologies 3625 7.0 253.8 9.0 326.3

1.1.3 Nanotechnologies and nanosciences, knowledgebased multifunctional materials and new production processes and devices 1300 25.0 325.0 30.0 390.0

1.1.4 Aeronautics and space 1075 0.2 2.2 0.2 2.2

1.1.5 Food quality and safety 685 0.2 1.4 0.2 1.4

1.1.6 Sustainable development, global change and 

ecosystems 2120 0.2 4.2 0.2 4.2

1.1.7 Citizens and governance in a knowledge-based 

society 225 0.2 0.5 0.2 0.5

TOTAL 11285 609.7 781.0

While the above table justifies Commissioner Busquin’s statement on EU spending, the figures should be treated as conservative. While institutions such as the European Space Agency have failed to match the NASA lead (and the $51 million 2003 

budget) in applications of nanotechnology, it is clear that any materials-dependent 

applications such as those prominent in aerospace will have a nanotechnology component far higher than 0.2 percent. Food quality and safety are seeing packaging 

applications based on nanotechnology already on the market and a variety of sensor 

technologies look set to hit the market soon, which also argues that the 

nanotechnology component in research would be significantly higher than 0.2 percent. Sustainable development is equally an area where recent nanotechnological developments show significant promise. Life sciences, genomics and health are already 

seeing major impacts from microtechnology, with nanotechnology looking to play a 

larger role very soon, in areas ranging from bioanalysis to drug delivery. 

In fact, some EU officials expect the percentage of nanotech across all items to 

be as high as 30 percent, as taken in the ‘nano inside’ scenario outlined below. 

So there is good reason to believe that the 0.7 billion figure given in the table 

above is a serious underestimate, and that the 30 percent figure is probably a better 

reflection, although this may, of course, be optimistic. 

The aim of the FP6 is to produce breakthrough technologies that directly benefit 

the EU, whether economically or socially. In order to achieve this, the research programme contains broad thematic areas, such as health, which are then broken down 

into sub-components for research funding. Instead of funding nanotechnology and 

nanoscience directly, an issue which is addressed in the nanotechnology thematic 

priority, the focus is on breakthroughs. By focusing on breakthroughs, nanotech 

funding is targeted at applications rather than pure science. Similar applications 

are being pursued in government programmes in the U.S. and in Europe; the fundaVerDate 0ct 09 2002 08:05 May 12, 2005 Jkt 093633 PO 00000 Frm 00082 Fmt 6601 Sfmt 6621 S:\WPSHR\GPO\DOCS\93633.TXT JACK PsN: JACKF
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mental difference between the European approach and that of the U.S. and some 

other countries is the way the applications are grouped—the EU structure makes 

considerations of benefits the priority by embodying them in the highest level of the 

funding structure. The NNI in the U.S. starts with a nanotechnology budget, then 

apportions this to various departments representing thematic areas. 

In order to decode the European Union’s spending plans on nanotechnology three 

scenarios have been examined. While none of these approaches is entirely adequate 

to explain the complexities of European funding, they do at least allow an approximate level of European commitment to nanotechnology to be determined. 

Scenario 1—‘Nano Inside’

Applying the view of some within the EC who believe that nanoscience and technology will play a large part in producing the breakthrough technologies of FP6, for 

example in drug delivery and biodetection, leads to the assumption by certain programme officials that 30 percent of all spending will be nanotechnology-related. This 

fits well with NNI estimates, which reach the fabled $1 trillion market size for products and services affected by nanotechnology by assuming that nanotechnology will 

have a part to play in almost everything. 

This 30 percent estimate for the nanotechnology component of the funded projects 

for FP6 is an average across all the thematic priorities and is described as ‘nano 

inside’. 

Of course, the true nanotechnology component may be higher or lower than 30 

percent and it will not be possible to extract it until a final review of the FP6 is 

complete after the end of the programme. 

If this 30 percent figure is applied to the European funding figure of 11.28 billion, 

then 3.4 billion, or 850 million a year, may well be spent on nanotechnology. 

Scenario 2—Mobilised Capital 

Many EU-funded programmes are not entirely supported by the EU. In the case 

of university research 100 percent of the marginal cost, e.g. for additional researchers or equipment, but not for those already in place, is funded, but for many other 

projects matching funds are provided by national governments or participating companies. 

The main instruments of FP6 are integrated projects (IP) and networks of excellence (NoE) proposed under FP6. For each NoE the EU funds up to 50 percent of 

the project. For each IP the EU only funds up to 25 percent of the project, requiring 

a minimum national contribution of 75 percent. Given the 400 million allocated for 

IPs and the 300 million allocated for NoEs, the amount of capital released by EU 

funding may be in the region of 2.4 billion, or 600 million a year. 

Taking another EU definition, that of ‘the manipulation of atoms and molecules’, 

which commission officials estimate to be around 1 billion, would give a mobilised 

capital figure of 3.43 billion or 857 million per year. 

Scenario 3—Pro-rata Comparison 

There are several fundamental differences between the EU approach and that of 

the U.S. and Japan. While a detailed analysis of U.S. and Japanese funding mechanisms is beyond the scope of this report, an appreciation of these differences 

changes the relative balance of funding. 

As previously discussed, the EU structure makes considerations of benefits the 

priority by embodying them in the highest level of the funding structure. Another 

fundamental difference is that rather than assigning a fixed budget for 

nanotechnology in health care, as the NNI is doing via the National Institutes of 

Health (NIH), the EU assigns a budget for health. 

A further difference arises as the EU funding only covers marginal cost, i.e. the 

extra funding required for researchers, equipment etc. The cost of infrastructure 

and that of paying academics already in place is borne by the national governments 

(but will generally not be a part of the budget for their own nanotechnology initiatives). This is in marked contrast to the U.S. system where the NNI generally wholly supports the institutes dedicated to nanotechnology. In fact, the National Science 

Foundation funding includes almost 10 percent of its budget for research infrastructure. 

However, the most significant difference is that the FP budget represents about 

4 percent of the total European public research budgets (see, for example, ftp://

ftp.cordis.lu/pub/nanotechnology/docs/nanosciencelpresentationl022002len.ppt). 

This is, however, an average figure. In high-technology areas such as aerospace, 

the figure is closer to 20 percent, while in others, such as cancer research, it is substantially less than 4 percent. Thus, assuming a similar nanotech proportion in 

other budgets, and an EU contribution of 10–20 percent, the conservative estimate 

80

of 700 million over 4 years could result in spending of between 3.5 billion and 7 

billion over 4 years, or 0.88–1.75 billion per year. 

This figure would, of course, need to be compared with a U.S. figure that included 

funding from individual states. However, current U.S. state spending suggests it 

may exceed the NNI budget by a factor of two, not, as in the EU, by a factor of 

10–25. In fact, to date, total nanotechnology funding by individual U.S. states has 

so far not approached the levels allocated nationally by the NNI.

Table 6. Total EU nanotechnology funding for the period 2002–2006. Comparison of the three 

described scenarios (in billion of euros). 

Scenario Nano Inside Mobilised 

Capital 

Pro-rata Com- parison 

EU Funding (Total FP6) ......................................................................................... 3.4 2.4–3.43 3.5–7.0

EU Funding per year .............................................................................................. 0.85 0.60–0.86 0.88–1.75

It is also arguable that by targeting some funding to specific thematic priorities, 

in addition to providing funding specifically for nanotechnology, which is probably 

necessary to effectively tackle the new cross-disciplinary issues it presents, EU 

funding may prove more effective in terms of results per dollar or euro spent. 

Given the huge differences between the EU and U.S. funding programmes, a direct comparison between them is difficult to make. An analysis of European researchers and patents by Commission official Dr. Ramo ́n Compan ̃ o ́, published in the 

journal Nanotechnology (volume 13, number 3, June 2002) indicates that European 

researchers are performing as well as their U.S. counterparts, with apparently far 

less funding. This is a further indication that the headline figures are not telling 

the whole story. 

Conclusions 

On balance, it looks as if Europe has a significant edge at the moment. However, 

it should be remembered that since discussions about FP6 started the U.S. NNI 

budget has almost doubled. Once the economic benefits of U.S. funding begin to be 

felt, whether in new company start-up activity, or progress towards military or social goals, U.S. funding is expected to increase rapidly. In addition, the FP6 budget 

is now fixed until 2006, at which point the balance may have changed dramatically. 

This is where the initiatives of individual European governments become important, 

as outlined in the recommendations at the start of this report. 

While European funding appears to be adequate to match the U.S. and Japanese 

initiatives, it is simplistic to divide the funding figures by 4. Simply turning on the 

funding will cause problems unless the scientific infrastructure is there to absorb 

that funding. Europe cannot just suddenly double the number of physics students 

being produced because the funding is there for their PhD and post-doctoral work. 

We will see more of an exponential ramp-up. 

The EU, national governments and organisations such as the ENA need to continue to focus on: improving the business climate in member states; developing 

strategies for improving technology transfer and increasing the number of students 

embarking on scientific training, to ensure an adequately trained labour pool; ensuring that public and business perception of nanotechnology is realistic; encouraging 

local governments that have not yet recognised the importance of nanotechnology 

to do so; making sure the opportunities in Europe are adequately communicated; 

and ensuring that national governments have nanotechnology R&D policies that 

allow a more rapid reaction to changing opportunities than is possible from the Europe-wide programmes. 

While much of the headline news is made by the EU, we expect European funding 

will be picked up where it goes with the grain of member states’ own programmes. 

Given that EU funding represents only 4 percent of Europe’s total, the efforts of 

member states are likely to be the deciding factor in the eventual competitiveness 

of European funding.

Æ