May 2015 

The Economic Impacts of Early 

Stage Consensus Standards 

Development: 

A Case Study of Nanotechnology 

Documentary Standards 

This publication is available free of charge at: 

http://dx.doi.org/10.6028/NIST.GCR.15-1001
Front cover photo credits: 

Left: H. Kang / NIST and F. Tokumasu / NIAID; Left Middle: Courtesy NIST 

Right Middle: Courtesy NIST; Right: A. Sanders/NIST; Bottom: Courtesy NIST 

Background: iStock Image © Nongkran_ch 
   

  

   

     

The Economic Impacts of Early Stage Consensus 

Standards Development: A Case Study of
 

Nanotechnology Documentary Standards
 

Prepared for
 

National Institute of Standards and Technology,
 

Standards Coordination Office
 

This publication was produced as part of contract SB1341­12­NC­0500 with the National 

Institute of Standards and Technology.  

The contents of this publication do not necessarily reflect the views or policies of the
 

National Institute of Standards and Technology or the US Government.
 

David P. Leech 

Economic Analysis & Evaluation, LLC

John T. Scott Ph.D. 

Consultant

Dartmouth College

May 2015 

This publication is available free of charge at: 

http://dx.doi.org/10.6028/NIST.GCR.15-1001 
Acknowledgements

Heather Benko, of the American National Standards Institute (ANSI); Mike Leibowitz, of 

the National Electrical Manufacturers Association (NEMA); Debra Kaiser, of the 

National Institute of Standards and Technology (NIST); Vincent Caprio, of the 

NanoBusiness Commercialization Association (NanoBCA); and Jessica Adamick, of the 

National Nanomanufacturing Network, all went the extra mile (or two) in supporting the 

survey execution process. Ajit Jillavenkatesa, of NIST’s Standards Coordination Office, 

provided guidance through a maze of organizations and personalities involved in the 

nanotechnology standards community. Andrew Salamon of PerkinElmer provided 

valuable insight into the structure and nature of the many­faceted, burgeoning 

nanotechnology industries. Gary Anderson, of NIST’s Economic Analysis Office, 

completed a review of an earlier draft that led to significant refinements. Last, not least, 

Erik Puskar, of NIST’s Standards Coordination Office, was the NIST project manager 

and guided the project to completion. 
     

   

   

  

 

     

  

ES. Executive Summary 

Documentary standards are precisely written agreements that result from a consensusmaking process concerning a common recurrent technical issue or set of issues, from 

terminology to how measurements about quality or perfromance will be made, to product 

labeling conventions. Typically, such standards ease the frictions inherent in the 

development and wide application of a new technology application. Documentary 

standards are part of a national and international innovation system, a public­private 

technical infrastructure that is critical to the development and diffusion of the new 

knowledge and know­how that leads to economic growth and development. 

One of NIST’s core missions is to assist U.S. industry with the standards­related tools 

and information it needs to compete more effectively in the global marketplace. NIST 

devotes considerable resources to supporting the consensus standards process. The 

landscape of NIST’s involvement in standards development is very broad and it behooves 

NIST to justify its support of industry especially when the nature and scale of the benefits 

of it doing so are not obvious to all. This is especially true of documentary standards:  

they are not well understood by much of the general public; they are seen as trivial or old 

fashioned by many economic policy analysts and business strategists; and yet they are 

critically important to the scientific and engineering community that develops them, 

increasingly so by those who understand the role of technology as the engine of economic 

growth. 

This economic impact assessment focuses on documentary standards development for 

nanotechnology. Nanotechnology developments and applications are just emerging; thus, 

the standards studied in this report are regarded as “early­stage” or “proactive” standards 

that are promulgated early in the life cycle of the development of nanoscience­ and 

nanotechnology­based products and services. This is both a strength and a weakness. On 

the positive side, the report provides insights, based on the perspectives of industry 

participants, not widely available elsewhere. On the negative side, the markets for 

nanotechnology­based products, and the “industries” that provide them, are inchoate so 

routine statistics that are often used to assess economic impact are unavailable, certainly 

at the level of granularity required to assess economic consequences of a specific set of 

documentary standards. 

Unlike most survey­based economic impact evaluations conducted for NIST, in which 

the impact of NIST’s resource investments is evaluated, this case study focuses on the 

economic significance of nanotechnology standards to industrial firms, both as users of 

the completed standards and as the standards developers.  

The economic importance of NIST efforts in support of consensus standards has been 

demonstrated in other NIST reports. While standards are recognized by NIST’s 

leadership as fundamentally important to the process of economic growth and 

development, outside the relatively small community of participants in the standards 

development process, the benefits and costs of participation are less widely understood. 

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The significant economic benefits accruing to industry participants in the early stages of 

the standards development process, as well as non­participating users, are the focus of 

this assessment. Specifically, the work of the following standards development 

organization (SDO) technical committees (TCs) and their beneficiaries are analyzed: the 

ASTM International (ASTM) TC E56, the International Electrotechnical Commission 

(IEC) TC 113, and the International Standards Organization (ISO) TC 229. The results of 

the study suggest that there is a major difference of perspective between those in industry 

who participate in standards development and those who do not. The former appear to be 

future­focused and committed to developing the means to communicate accurately about 

the many applications and risks associated with nanotechnology despite the near­term net 

costs required to do so. It appears that the latter and much larger group of non­SDO 

participants (“free riders”) are satisfied, strategically, to reap considerable near­term net 

benefits from SDO participants’ investments without a commensurable contribution to 

SDO development; possibly cannot afford to position themselves with respect to 

important practical matters that are being advanced by the SDOs; or, perhaps, are 

convinced that active participation in SDOs entails no significant strategic advantage. 

The evidence gathered also suggests that an important difference in perspective exists 

between forward­focused companies that participate in SDOs and many universities 

(organizations at the forefront of generating knowledge about nanoscale science and 

technology). While there are notable exceptions, it appears that many university 

researchers think that documentary standards are irrelevant to their work, yet national 

technology policy assumes that university research will generate a body of knowledge 

and know­how that will eventually be utilized by industry. If basic standards were more 

widely used in the university research community, for example, terminology and 

nomenclature standards, logic suggests that the resulting knowledge would be less costly 

for industry to acquire and interpret and be generally more applicable to industry users. 

In the United States, industry, government, and a few university representatives have 

been engaged in the development of nanotechnology standards, formally, since 2005. 

While it is claimed that that no single technology offers more economic and societal 

promise than nanotechnology, it is also observed that barriers and potential barriers 

impede further commercialization that may limit the nation’s ability to capture the full 

potential of nanotechnology, including economic growth, wealth, and job creation, and 

improvements in our standard of living and quality of life. Among those barriers is the 

urgent need to develop standards for each phase of the new nanotechnologies: standards 

for research, production, products, and waste disposal. 

The results of this economic impact assessment, shown in Table ES­1, demonstrate that 

industry­wide investments in early stage development of nanotechnology documentary 

standards have already started to pay off handsomely. SDO participants as a group have 

already realized substantial net benefits, and industry­wide net benefits have included 

very substantial benefits to non­SDO participants, free riders, who reap the near­term 

benefits of having standards available without the costs of SDO participation. SDO 

participants, taking a long view, believe that the internal practices they are mastering and 

social networks they are cultivating as a result of their SDO involvement will yield 

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significant advantages and net economic benefits in the years ahead. The benefit and cost 

trends reported here show that SDO participants have already realized substantial net 

benefits. Those net benefits are expected to grow larger in the years ahead. 

Table ES­1. Estimate of Economic Impact (constant 2012 dollars) 

Performance Metric Value

Net Present Value in 2005 50,869,841 

Cumulative Net Benefits in 

2012 (2005­2012)1 81,685,848 

Industry Rate of Return 270% 

Benefit­to­Cost Ratio 13 

The benefits of nanotechnology documentary standards are conceptualized as the costs 

avoided because industry has access to information contained in the standards. On 

average, nanotechnology­related activities would have cost industry almost 50 percent 

more in the absence of the standards. The costs incurred in developing and using the 

standards are the dollar value of hours TC members dedicated to the SDO consensus 

process plus the cost of pulling the information into their organizations. Beneficiaries 

who have not participated in SDO processes also incur pull costs.  

Because those benefits and costs vary across the respondents from one year to the next, 

the time value of money and inflation need to be factored into the evaluation. This is 

accomplished by the financial analysis convention of calculating the net present value 

(NPV) of the estimated time series of benefits and costs in constant dollars.   

The performance metrics shown in Table ES­1 are different ways of representing the 

return on investment to the resources industry has devoted to developing nanotechnology 

documentary standards. The net present value (NPV) in 2005 metric says that if, in 2005, 

TC members could have projected the actual timing and size of the costs avoided they 

would have valued the project at ~$51 million, net of the costs industry would have 

incurred. The cumulative net benefits metric looks back at that stream of benefits and 

costs from the perspective of 2012 and compounds the ~$51 million in NPV by 7 percent 

per year (the cost of capital used by the federal government when evaluating investment 

returns). The industry rate of return metric says that the rate of return on industry­wide 

investment in nanotechnology standards development over the period from 2005 to 2012 

has been 270 percent. The benefit­to­cost (B/C) metric says that for every $1 dollar of 

costs expended by industry (2005­2012), ~$13 dollars in benefits have been returned. 

These estimates of industry­wide economic impact can be considered conservative for 

reasons explained in the report. The results are well within the range of private sector 

return­on­investment metrics reported in the economics literature and within the range of 

many other public­private partnerships evaluated by NIST over the last 20 years. 

1 (Net Present Value in 2005) multiplied by (1.07)7

. 

iv
 
   

 

As with all economic impact case studies, this assessment has limitations that are

discussed in the report that follows. They are limitations necessitated by a tradition of 

economic analysis, not least at NIST, that attempts to understand the economic

implications of very specific technologies and their supporting infrastructure. Without 

such insights technology managers would be without a compass concerning the benefits 

and costs of their investments even if the accuracy of the compass is not ideal. 

v 
 

 

 

 

 

 

ES.  Executive Summary ......................................................................................................ii
	

1 Introduction and Background.....................................................................................1
	

1.1 Documentary Standards ....................................................................................................1
	

1.2 U.S. Consensus Standards ..................................................................................................1
	

1.3 Standards and the Technology Infrastructure .......................................................... 2
	

1.3.1 Technology Infrastructure..........................................................................................................2
	

1.3.2 Early Stage Documentary Standards...................................................................................... 4
	

1.4 Nanoscale Basics...................................................................................................................5
	

1.4.1 Nanoscience and Nanotechnology .......................................................................................... 6
	

1.4.2 The Future Significance of Nanotechnology .......................................................................6
	

1.5 The National Commitment to Nanoscale Science and Technology..................... 7
	

1.5.1 The Federal Nanotechnology Infrastructure ......................................................................7
	

1.6 Nanotechnology and Industry ......................................................................................... 9
	

1.6.1 Market Growth Projections........................................................................................................9
	

1.6.2 Nanotechnology Value Chain.................................................................................................. 10
	

2		 Nanotechnology-Focused Standards Development Organizations (SDOs)
	

13
	

2.1 SDOs Focused on Nanotechnology .............................................................................. 13
	

2.2 The SDO’s Early Efforts.................................................................................................... 14
	

2.2.1 Proactive Standards Development....................................................................................... 14
	

2.2.2 Early Technical Concerns......................................................................................................... 15
	

3		 Economic Analysis Framework................................................................................ 19
	

3.1 Documentary Standards as a Response to Emerging Market Design
	

Problems............................................................................................................................................. 19
	

4		 Impact Assessment Approach .................................................................................. 23
	

4.1 Survey Strategy .................................................................................................................. 23
	

4.2 Survey Execution ............................................................................................................... 23
	

4.3 Comparison Scenario and Timeline ........................................................................... 24
	

5 Survey Findings ............................................................................................................. 25
	

5.1 Qualitative Findings ......................................................................................................... 25
	

5.1.1 The Composition of Survey Participation ......................................................................... 25
	

5.1.2 High-Impact Nanotechnology Standards .......................................................................... 28
	

5.1.3 Industry Activities Most Affected ......................................................................................... 30
	

5.2 Quantitative Findings ...................................................................................................... 32
	

6 Quantitative Analysis .................................................................................................. 35
	

6.1 Industry Benefits............................................................................................................... 35
	

6.2 Industry Costs..................................................................................................................... 36
	

6.3 Measures of Economic Impact ...................................................................................... 38
	

7		 Conclusion ....................................................................................................................... 42
	

Appendix A. Economic Effects of Nanotechnology Documentary Standards
	

Survey Instrument ................................................................................................................ 43
	

Appendix B. Economic Impact Metrics.............................................................................. 51
	

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1 Introduction and Background

This introductory chapter presents the rationale for undertaking an economic impact 

analysis of nanotechnology documentary standards and discusses a range of issues that 

provide context for the economic analysis of Chapters 3­7. 

1.1  Documentary Standards

There are two different types of standards ­­ physical measurement standards and 

documentary standards. 

The National Institute of Standards and Technology (NIST) is responsible for developing, 

maintaining and disseminating national physical measurement standards for basic 

measurement quantities (such as mass, time and frequency), which are traceable to the 

International System of Units (SI). These standards promote order, efficiency, and 

fairness in the marketplace, facilitate technological progress, and enhance U.S. 

competitiveness. 

Documentary standards are written agreements among producers and/or users of products 

and services containing technical specifications or other precise criteria that may contain 

rules, guidelines, or definitions of characteristics. Documentary standards ensure that 

materials, products, personnel qualifications, processes, and services are: adequate for 

their purpose; compatible and/or interchangeable, if necessary; ensure public health and 

safety; protect the environment; and/or improve economic performance. They can specify 

product characteristics, establish accepted test methods and procedures, characterize 

materials, define processes and systems, or specify knowledge, training, and 

competencies for specific tasks.2 

Frequently, documentary standards act as a bridge connecting national representations of 

international physical measurement standards to the day­to­day operations of industry in 

its research and development (R&D) efforts, in the application of this R&D to new 

technologies and innovations, and in transitioning new products and services into 

growing markets. 

1.2  U.S. Consensus Standards3 

The U.S. standards system is highly decentralized, primarily voluntary, private sector and 

marketplace­driven. Unlike other nations, where governments play a more active role and 

the process is more centralized, the U.S. federal government participates only as one of 

many stakeholders in the standards development process. By comparison with the 

2 ISO/IEC Guide 2: 2004, Standardization and related activities ­­ General vocabulary, provides general 

terms and definitions concerning standardization and related activities.  3 This section relies on Maureen A. Breitenberg, The ABC’s of Standards Activities (NISTIR 7614),
 

August 2009, National Institute of Standards and Technology.
 

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umbrella­type standards organizations that operate in other nations or at the international 

level, the more specialized U.S. SDOs are often quicker to generate the standards most 

needed by industry. 

Approximately 19 standards developing organizations (SDOs) generate the large majority 

of standards in the U.S. The American National Standards Institute (ANSI) coordinates 

the activities of many U.S. SDOs, a role it has played for over 90 years. ANSI is a 

private, not­for­profit membership organization comprised of government agencies, 

organizations, companies, academic and international bodies, and individuals. As one of 

its responsibilities, ANSI accredits U.S. standards developers using criteria based on 

international requirements for consensus standards.  

ANSI, in turn, is the sole U.S. representative and dues­paying member of the two major 

private sector, consensus­based, international standards developing organizations: the 

International Organization for Standardizations Organization (ISO) and the International 

Electrotechnical Commission (IEC). ANSI participates fully in technical programs of 

both the ISO and the IEC and administers many key committees and subcommittees. As 

the U.S. member body to the ISO, ANSI  accredits U.S. Technical Advisory Groups 

(U.S. TAGs). The primary purpose of U.S. TAGs is to develop and transmit U.S. 

positions on ISO and IEC activities. 

Many U.S. SDOs produce standards that are used globally. The U.S. representatives of 

three international SDOs are the focus of this economic impact assessment.  Surveyed are 

U.S. representatives of ASTM International, a standards­developing membership 

organization that produces the largest number of nongovernmental, voluntary standards 

in the United States, and the National Electrical Manufacturers Association (NEMA), an 

industry association whose membership consists of companies that operate in a specific 

industry sector, and the U.S. technical advisory group (TAG) of ISO’s Technical 

Committee 229. 

1.3  Standards and the Technology Infrastructure

1.3.1  Technology Infrastructure

Economists who study innovation recognize that there are many different kinds of 

institutions—private, public, and mixed—required to maintain the national standard of 

living and to successfully generate new products and services that fuel economic growth.4 

National and global innovation systems are complex networks of agents, policies, and 

institutions supporting technical advances.5

 Technology­intensive system and component 

4 See, Gregory Tassey’s, “The Disaggregated Technology Production Function: A New Model of 

University and Corporate Research,” Research Policy, Vol. 34, 2005, pp. 287­303; and Albert Link and 

Donald Siegel, Technological Change and Economic Performance, Routledge, 2003. 

5 See Bengt­Ake Lundvall (ed.), National Systems of Innovation, PINTER, 1995, pp. 13­15; and Jeffery 

Furman, et. al., “The Determinants of National Innovative Capacity,” Research Policy, Vol. 31, 2002, pp. 

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innovations typically require substantial outlays for research, development, design, 

engineering, testing, tooling, construction of production facilities, market research, 

establishment of distribution channels, advertising and promotion, and other support 

activities. Many functions entail different types and degrees of risk that vary over the life 

cycle of the innovative product or service, and an institutional “division of labor” exists 

to mitigate ubiquitous barriers to technology development and innovation. Standards 

development organizations are important, often overlooked, elements of the private, 

public, and mixed institutional division of labor that comprises the innovation system. 

Economists use a few fundamental concepts to explain the sources and levels of funding 

for science and technology development. One concept is that of externalities, defined as 

impacts of production and consumption activities that are not directly reflected in market 

prices. The second and related concept is that of public goods, defined as goods and 

services that benefit all but, because these benefits are difficult to “fence off,” too few are 

supplied by private sector investors. 

Private sector firms may produce too much or too little of the goods and services that are 

affected by externalities and public goods attributes. Negative externalities occur when 

the actions of one party impose costs on another party, for example because of pollution. 

In competitive markets, negative externalities lead to too much of the goods and services 

produced. Positive externalities occur when the action of one party benefits another 

without requiring compensation for the benefits. In competitive markets, positive 

externalities lead to too few goods and services being produced by the private sector.6 

A textbook example of a positive externality is the outcome of a firm’s investments in 

research and development. Often, the inventions that result from private sector research 

cannot be protected from use by other firms. Know­how is notoriously “leaky.” People 

talk, papers are published, patents are filed, products are “reverse­engineered,” and “good 

ideas,” once put into practice, can be imitated. The spillover of know­how acts as a 

barrier to adequate investment because the investor does not easily capture the benefits of 

the investment. In addition, some technology implementations, such as measurement 

technologies, are most effectively utilized if they are widely shared; they have network 

effects (the value of a product or service increases as more people use it). So it behooves 

the innovation system to ensure that these technologies are shared as widely as possible. 

Spillovers and network effects sometimes erect powerful barriers to the development of a 

robust technology infrastructure and to the innovations it generates. 

In the context of this report, the apt example of positive externalities and network effects 

is a consensus standard. Many benefit from the use of standards but relatively few invest 

in their development. Standardization affects both innovation and technology diffusion. 

899­933. The most complete and most policy­relevant conceptualization of the national innovation system
 

is Tassey, ibid.
 6 Robert Pindyck and Daniel Rubinfeld, Microeconomics, Macmillan Publishing Company, 1989, pp. 617­

646. 

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Standards are a form of technology infrastructure that represent the codification of some 

element of the technology.7

 Consensus standards development typically involves the 

contributions of public and private organizations. This is evidence of their high “public 

goods” content.8 

The economic logic of the technology infrastructure suggests that investments such as 

consensus standards will be among the most effective for transitioning between current 

and emerging technology life cycles. Emerging technology, such as nanotechnology, has 

the potential for superior performance but relative to the current mature technology, the 

emerging technology is at a performance per dollar disadvantage. As a general matter this 

may occur because system elements of the new technology platform do not develop at the 

same rate, the system interfaces may not exist, the technology infrastructure is not fully 

developed, or initial product offerings are insufficient to predict long run costs.9 

On the one hand, investments in an emerging general­purpose technology, like 

nanotechnology, will increase the rate at which the performance per dollar of the 

emerging technology improves.10 Investments in technology infrastructure, on the other 

hand, shift the entire emerging technology diffusion S­curve upward. As hypothesized by 

Tassey: 

“[T]he collective efficiency gains from multiple [technology 

infrastructure elements, including standards and their underlying 

measurement technologies] over a technology’s life cycle [...] 

accelerates market penetration of a new technology and more quickly 

delivers its benefits to society.”11 

1.3.2  Early Stage Documentary Standards

Close observers of the nanotechnology standards development process posit the 

following distinction between most SDOs and those focused on nanotechnology: 

7 Gregory Tassey, “Standardization in Technology­Based Markets,” Research Policy, Vol. 20, 2000, pp. 

587­602 8 For the sake of clarity, the modifier “public” does not refer, in the first instance, to a government role.
	

Rather, it refers to the “publicness” characteristics of the goods or services in question. Broadly speaking,
	

economists identify two characteristics that account for intrinsic publicness: public goods are “non­rival” 

and “nonexclusive.” A good is non­rivalrous if a person can consume the good without reducing its
 

availability to others. The cost of providing for the use of an additional unit is zero. A good is nonexcludable if a one can consume the good without paying for it. In such circumstances, a private market 

will not adequately provide the good. See, Pindyck and Rubinfeld, op. cit.
 9 Gregory Tassey, The Technology Imperative, Edward Elgar, 2007, pp. 290­295.  10 General purpose technologies, like nanotechnology, are systems of technology whose benefits spillover
 

and enable new products and services or enhance the productivity of the downstream industries they
 

“feed.” They provide a platform from which many markets can evolve. See Robert Atkinson, The Past and
 

Future of America’s Economy: Long Waves of Innovation that Power Cycles of Growth, Edward Elgar, 

2004; and Bresnahan, T., Trajtenberg, M. (1995). “General purpose technologies—Engines of growth?” 

Journal of Econometrics Vol. 65, pp. 83–108.
 11 Tassey, 2007, op. cit. 

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“Existing standards developing organizations or SDOs, both public and 

private, organize their work through groups of experts focused on 

specific application areas. With nanotechnology, however, technical 

groups spanning the entire technology, or very broad aspects of the 

technology such as environmental safety and health issues, have been 

formed to coordinate standard setting activities and to allow for 

sufficient flexibility to accommodate rapidly evolving knowledge about 

nanotechnology and its potential risks and benefits.”

12 

Nanotechnology development is still in an early stage. Current nanotechnology standards 

development activities are focused on addressing fundamental issues such as 

terminology, measurement and property characterization aspects, and material behavior, 

including toxicological aspects. As interest in nanotechnology has grown, the breadth of 

consensus standards development has grown.13 

1.4  Nanoscale Basics

Nanoscience and nanotechnology involve the knowledge of, and know­how for, precisely 

manipulating the structure of matter at the molecular level. A nanometer is a thousandth 

of a micron and a micron is a thousandth of a millimeter, so a nanometer is a millionth of 

a millimeter or 10­9 meters. In other words, a nanometer is one billionth of a meter. 

As an indication of just how small that is, a single human hair has a diameter between 

80,000 and 100,000 nanometers. Many important functions of living organisms take 

place at the nanoscale. The human body uses natural nanoscale materials such as proteins 

and other molecules, to control the body’s many systems and processes. A typical protein 

such as hemoglobin, which carries oxygen through the bloodstream, is 5 nm in 

diameter.14 

To be classified as a nanomaterial (NM), the material must be less than 100 nm in size in 

at least one direction. A nano­object is a material with at least one dimension in the 

nanoscale range of 1 to 100 nm, and a nanoparticle is a nano­object with all three 

external dimensions in the 1 to 100 nm range and showing a property not evident in the 

bulk material. Hence, a nanofiber, 400 nm long and 12 nm in diameter, and a 20 nm 

12 Vladimir Murashov and John Howard (Editors), Nanotechnology Standards, Springer, 2011, p. vi.
 13 A. Jillavenkatesa, Ph.D., H. Evans, Ph.D., and H. Wixon, J.D., “Patents and Intellectual Property
 

Management in Nanotechnology Standardization: A NIST Perspective,” National Institute of Standards and
 

Technology, U.S. Dept. of Commerce (Commissioned by the National Academies and Presented to the 

Symposium on Management of Intellectual Property in Standard­Setting Processes), Board on Science,
 

Technology, and Economic Policy, October 3­4, 2012.
 14 Andrew W. Salamon, Patrick Courtney and Ian Shuttler, Nanotechnology and Engineered
 

Nanomaterials: A Primer, PerkinElmer, 2010.
 

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diameter nanoparticle, are both classified as nanomaterials.15 

Nanotechnology involves imaging, measuring, modeling, and manipulating matter on the 

nanometer scale.  At this scale, new material properties can emerge (e.g., the color of 

matter may change due to quantum properties), or entirely new structures may be 

possible. For example, a C60 fullerene — referred to as a “buckyball” — is a small 

carbon molecule with a structure similar to a soccer ball that has unique chemical and 

electronic properties.16 

1.4.1  Nanoscience and Nanotechnology

Nanoscience involves research into, and discovery of, nanoscale principles and materials. 

Nanoscience bridges disciplinary boundaries because the same nanoscale principles and 

tools apply to chemistry, biology, physics, and other fields. Scientists working in this 

field aim to discover new phenomena, properties, and functions at the nanoscale; develop 

libraries of components to form building blocks for potential future applications; and 

advance the tools used in characterizing, monitoring, and controlling matter at the 

nanoscale. They are also interested in organizing new nanostructures into larger and more 

complex functional structures and devices.17 

Nanotechnology is concerned with the control and restructuring of matter at the atomic 

and molecular levels in the size range of about 1 to 100 nanometers. The aim of 

nanotechnology is to create materials, devices, and systems with fundamentally new 

properties and functions by engineering their small structure. Nanotechnologists aim at 

changing the properties of materials in an affordable fashion, especially for 

manufacturing and molecular medicine applications.18 

Advances in nanotechnology promise to enable revolutionary technological advances and 

introduce new products across a wide spectrum of application areas. For example, 

nanoscale processors and other electronic components are expected to enable smaller and 

smaller features that will improve speed and performance. Nanotechnology­based water 

purification methods are being developed as well as medicines to deliver therapeutic 

drugs to a targeted cancer cell by means of nanoparticle vehicles. Carbon­based 

nanocomposites are among a new class of lightweight, strong, fuel­saving material for 

use in cars, airplanes, and military equipment. High performance paint and other coatings 

are another area of concentration.19 

1.4.2  The Future Significance of Nanotechnology

Nanotechnology is recognized as a "general purpose technology" comparable to the 

development and application of electricity, biotechnology, and digital information. 

15 Ibid.
 16 Jillavenkatesa, op. cit.
 17 Courtland Lewis, Innovations in Nanotechnology at the NSECS and NNIN: Highlights of Achievements, 

prepared for the National Science Foundation, June 2011.
 18 Ibid.
 19 Jillavenkatesa, op. cit
 

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Research in nanotechnology is broad­based and multidisciplinary. By capitalizing on the 

unusual properties of materials at the nanoscale, it is anticipated that the application of 

nanotechnology will profoundly affect how we live, our health, what we produce, how 

we interact and communicate with others, how we produce and use new forms of energy, 

and how we maintain our environment.20 

The wide range of application areas to which nanotechnology can be applied suggests 

that the potential market, in terms of products and jobs, is significant. Lux Research, a 

widely cited source, estimates that in 2009 businesses generated $254 billion in revenue 

from products incorporating nanotechnology. It estimates that the total market in 2020 

could be as high as $3 trillion.21 

The global landscape for nanotechnology is emerging as a very competitive environment. 

The United States government advanced the global pace for nanotechnology innovation 

by launching the National Nanotechnology Initiative in 2000 and by investing almost $18 

billion of federal funds since then; however, over the past decade other nations have 

ramped up their own programs and are significantly investing in and prioritizing 

nanotechnology over other programs. The realization of the promise of innovations 

enabled by nanotechnology is closely coupled with the need for environmental, health, 

and safety (EHS) research. An improved understanding of the EHS effects of nanoscale 

materials will help foster a regulatory environment that supports the safe development of 

nanotechnology and that provides certainty for companies as they develop new products 

incorporating nanotechnology.22 

1.5  The National Commitment to Nanoscale Science and Technology

1.5.1  The Federal Nanotechnology Infrastructure

According to the President’s Council of Advisors on Science and Technology (PCAST): 

"The National Nanotechnology Initiative (NNI) is the U.S. 

Government’s crosscutting program that coordinates Federal research 

and development (R&D) activities in nanoscale science, engineering, 

technology, and related efforts among various participating agencies. 

The Federal Government launched the NNI in 2001 with an initial $500 

million budget to accelerate the development of nanotechnology. Over 

the ensuing [...] years [...] the NNI has played a key role in positioning 

the United States as the world leader in both nanotechnology R&D and 

commercialization. The NNI has also catalyzed State activities that 

leverage Federal investments with a focus on economic growth and job 

creation. Indeed, nanotechnology appears slated to become an 

20 Lewis, op. cit. 21 Jillavenkatesa, op. cit 22 Ibid. 

7 
   

  

   

                                                 

       

 

       

important contributor to the economic growth of the United States over 

the coming decade and beyond.”

23 

Central to the progress envisioned by the PCAST are two major sources of 

nanotechnology research and development, both funded by the National Science 

Foundation: the Nanotechnology Science and Engineering Centers (NSECs) and the 

National Nanotechnology Infrastructure Network (NNIN). The NSECs and NNIN 

facilities and the start­ups and other commercial ventures formed as a result of advances 

made at these centers and facilities have achieved many innovations and also have 

supported education and outreach efforts.24 

In addition to the NSECs and the NNIN facilities, federal agencies have underwritten and 

developed a broad array of capabilities to advance the technology of the nanoscale. For 

example, the Nanotechnology Characterization Laboratory (NCL), operated under the 

National Cancer Institute's Cancer Nanotechnology programs, is focused on the preclinical characterization of nanomaterials intended for cancer therapeutics and 

diagnostics developed by researchers from academia, government, and industry. The 

Federal Drug Administration (FDA) and the National Institute for Occupational Safety 

and Health (NIOSH) have developed expertise and research facilities for physical and 

biological nanomaterial characterization over the past few years. 

NIST has developed significant capabilities in nanotechnology metrology and 

measurement.  Those capabilities include measurement science and method development 

for toxicological, environmental, and physical­chemical nanomaterial assessment, 

including nanoparticle metrology for applications in health and the environment. 

Additional capabilities include the preparation of gold, titanium dioxide, silver, and 

carbon nanotube reference materials and other standard reference materials. Also, 

through its Center for Nanoscale Science and Technology (CNST), NIST maintains the 

National Shared­Use Nanofabrication facility that provides industry, government, and 

academia with access to a comprehensive suite of tools, processes, and measurements for 

nanofabrication. 

Federal agencies, such as the Consumer Product Safety Commission (CPSC), the 

Environmental Protection Agency (EPA), and the NIH’s National Institute for 

Environmental Health Science (NIEHS), have strong interests in nanotechnology 

research, but tend to fund other agencies or university centers to perform the research. 

The Department of Energy’s (DOE’s) National Laboratories, too, have developed 

nanotechnology capabilities that are important to their mission areas. 

23 Report to the President and Congress on the Third Assessment of the National Nanotechnology Initiative,

Executive Office of the President, President’s Council of Advisors on Science and Technology, March 12, 

2010.
 24 Lewis, op. cit.
 

8 
   

  

  

                                                 

       

                   

     

             

             

                         

     

The patterns of collaboration within, and among, these organizations and industry are 

complex. Due to nanotechnology's inherently interdisciplinary nature, groups of 

researchers are learning to collaborate across organizational lines.25 

1.6  Nanotechnology and Industry

1.6.1  Market Growth Projections

Since this economic impact assessment is retrospective, future projects are beyond its 

scope. Not surprisingly, projections tend to outpace actual outcomes. Estimates for the 

worldwide market for nanotechnology vary, from billions to trillions of dollars over the 

coming decade.26 

A 2003 study found that a small number of commercial nanoscale products and 

applications had emerged, such as nanoscale titanium dioxide, gold, silver and copper 

additives that improve the performance of plastic, paint, and other bulk materials. It was 

estimated that more than a dozen companies had established medium­to­large­scale 

manufacturing facilities.27 Other products were assessed as close to commercialization, 

such as nanoscale drug delivery vehicles and carbon nanotubes for field emissive 

displays. Demand for nanoscale raw materials such as nanotubes was substantial in 2003. 

By 2009, a survey by the National Center for Manufacturing Science (NCMS) found that 

industrial uses of nanotechnology had become routine in companies that had invested in 

enhancing the awareness and skill levels of scientific and engineering staff.28 Nanoengineered material properties, near­atomically precise material or thin­film features, and 

rapid processing methods, they report, are becoming commonplace in a broad range of 

manufactured components for consumer and durable goods. NCMS found that nearly 25 

percent of respondents’ organizations are already marketing products and instruments 

incorporating nanotechnology, and about 85 percent were expected to commercialize 

products by 2013. According to NCMS survey results, current applications are dominated 

by: 

• Nanomaterials (e.g. nano­structured catalysts, carbon nanotubes, 

quantum dots, nanowires and dopants);
 

• Complementary metal­oxide semiconductor (CMOS)­based electronics 

and manufacturing processes; 

• Other silicon­based energy conversion process industries that leverage 

similar large scale fabrication equipment; 

• Thin­film coating processes; 

25 Vincent Hackley, NIST, personal communication, April 04, 2013. 

26 Mihail C. Roco, et. al., NanoTechnology Research Directions for Societal Needs in 2020, WTEC, 

September 30, 2010, p. v.
 27 Rashba, Edward and Daniel Gamota, "Anticipatory Standards and the Commercialization of 

Nanotechnology," Journal of Nanoparticle Research Vol. 5, No. 3­4, 2003, pp. 401­407.
 28 As discussed in Section 5.1.1 of this report, such companies may be overrepresented in the survey
 

conducted for this impact assessment. 

9 
  

  

  

                                                 

                

       

 

      

   

                     

   

                    

• Closed­environment handling systems; 

• Nanotechnology­enabled, miniaturized biomedical and diagnostic 

devices; and, 

• Designer drugs and targeted therapies.29 

A close industry observer notes that, today, nanoproducts are coming to market too fast 

for environmental sciences and toxicological sciences to keep up. This is creating gaps in 

the industry’s ability to analyze risk.30 Closing those gaps is one of the objectives for 

standards developers. 

1.6.2  Nanotechnology Value Chain

The value chain depicted in Figure 1 is a snapshot of the complex process by which many 

economic actors contribute their “ingredients” to product and service integrators further 

up the chain. Those contributions “add value” that ultimately provide nanotechnologybased products and services to intermediate producers and end users, such as consumers. 

Since nanotechnology is expected to affect so many industries it may be more helpful to 

refer to the “nanotechnology innovation system.” In any event, Figure 1 is intended to 

help the reader picture the basic relationships among the key institutional actors.31 

Beginning at the top of the figure (“downstream” of the technology’s origin), industry 

representatives distinguish the widest possible ranges of products including foods, 

beverages, personal care and cosmetics, pharmaceuticals, medical devices, paints and 

coatings, structural materials, automobile tires, energy, lightweight materials, clothing, 

sporting goods, and communications. Each of these application areas has its own value 

chain of intermediate and ultimate consumers but below that level the segments of the 

value chain will be the same. 

Upstream from the application areas are material synthesizers and raw material 

producers. More than 40 nanomaterials are used in commercial products and in research 

and development projects. Their applications span a wide range of products.32 

At the upstream "source" of the value chain is the network of university organizations 

funded through the NNI, described in Section 1.5.1 of this report. 

29 2009 NCMS Study of Nanotechnology in the U.S. Manufacturing Industry, National Center for 

Manufacturing Science, August 23, 2010 

30 Andrew W. Salamon, “The Current World of Nanomaterial Characterization: Discussion of Analytical 

Instruments for Nanomaterial Characterization,” Environmental Engineering Science, Volume 30, Number 

3, 2013.
 31 The value chain concept will be referred to in the discussion of economic impact in Chapters 5 and 6 of
 

this report.
 32 See Salamon, 2013, op. cit. and Salamon, et. al., 2010, op. cit.
 

10 
Figure 1. Nanotechnology Application Value Chain 

Some elements of the supply chain provide products and services that cut across tiers of 

the value chain and act as infrastructural elements. The adjacent rectangles on the left 

represent cross cutting private sector elements. The availability of testing laboratories 

with proficiency to measure the large number of properties for which values will need to 

be measured is important to the growth and expansion of nanotechnology applications on 

the horizon. Independent testing laboratories are participating in nanotechnology 

standards development and are in the process of "gearing up" to fill their pervasive role.  

Instrumentation manufacturers, too, play a crosscutting role. Instrumentation is a key to 

leading edge university research and is integral with much of NIST's measurement 

mission. Instrumentation has been a major focus of SDO activities and will play a large 

role in the implementation of regulation. Instrumentation will also be important across 

the vast variety of application areas because of the common industry problem of 

nanomanufacturing waste management and its environmental implications.33

The adjacent rectangle on the right of Figure 1 represents both mixed private­public 

sector value chain element (SDOs) and purely public sector elements (regulatory 

agencies and NIST). The economic role of the SDOs is discussed in section 1.3.1. The 

regulatory agencies are in the process of learning how to regulate nanomaterials and 

products. From an industry perspective their decisions are critical to how the industry will 

take shape in the years ahead. Some regulators are developing expertise and constructing 

33 Ibid., Salamon, 2013. 

11 
   

research facilities for physical and biological nanomaterial characterization while others 

are funding existing capabilities to conduct important analyses. 

Last, but not least, NIST regularly interacts with upstream and downstream elements of 

the value chain. NIST routinely works with producers, researchers, and other federal 

agencies, making significant contributions to all the nanotechnology SDOs. It develops, 

produces, and distributes nanotechnology­related reference materials and a range of 

related measurement methods and procedures. In addition, NIST maintains the Center for 

Nanoscale Science and Technology (CNST), a national user facility equipped with stateof­the­art commercial fabrication tools, next­generation nanoscale measurement 

instruments, and a multi­disciplinary staff of scientists and engineers. 

In this introductory chapter the motivation for this impact assessment has been explained; 

the basic concept of “nanoscale” has been defined; the national policy interest in 

nanotechnology has been presented; and the elements of the nanotechnology innovation 

system have been identified. In the following chapter the central focus of this economic 

impact assessment, nanotechnology standards development organizations (SDOs), will be 

identified and many of the issues that motivate the early activities of the SDOs will be 

highlighted. 

12 
  

   

                                                 

                       

           

             

                 

         

2 Nanotechnology­Focused Standards Development 

Organizations (SDOs) 

2.1  SDOs Focused on Nanotechnology34 

The major nanotechnology standardization efforts of SDOs were initiated in the early to 

mid­2000s. They include the efforts of ASTM International, the European Committee for 

Standardization (CEN), the International Electrotechnical Commission (IEC), and the 

International Organization for Standardization (ISO). 

Activities of three of these organizations, ASTM, IEC, and ISO, fell within the scope of 

this economic impact assessment. Based on communications with the U.S. Technical 

Advisory Groups (TAGs) of these SDOs, approximately 150 private sector, public sector, 

and university organizations are involved in the development of nanotechnology 

documentary standards. 

ASTM International, TC E56. Established in 2005, ASTM International’s Committee 

E56 on Nanotechnology focuses on terminology standards, definitive practices, test 

methods, and interlaboratory studies. ASTM also develops nanotechnology guidance 

information and requirements specifications. E56 coordinates ASTM committees on 

aspects of nanotechnology and participates in other nanotechnology standardization 

organizations. Many of the Committee’s standardization efforts focus on measurement or 

characterization test methods for nanomaterials or their related properties. These test 

methods provide a common basis for measurement and support the reproducibility of 

measurement within and between laboratories. Standardized test methods are important 

for regulators and can reduce regulatory burdens on the regulated community. 

Subcommittee standardization activities include:  informatics and terminology; physical, 

chemical, and toxicological properties characterization; environment, health and safety; 

and nano­enabled consumer products. 

International Electrotechnical Commission (IEC), TC 113. 

IEC TC113 on “Nanotechnology Standardization for electrical and electronic products 

and systems” began with the establishment of an Advisory Board on Nanotechnologies, 

2005. The Advisory Board is charged with reviewing progress, expectations, and impact 

on electrotechnical standardization in nanotechnology. The scope of this activity includes 

standards development relevant to electrical and electronic products and systems in the 

field of nanotechnology. 

34 Unless otherwise indicated, this section relies on A. Jillavenkatesa, Ph.D., H. Evans, Ph.D., and H. 

Wixon, J.D., “Patents and Intellectual Property Management in Nanotechnology Standardization: A NIST 

Perspective,” National Institute of Standards and Technology, U.S. Dept. of Commerce (Commissioned by 

the National Academies and Presented to the Symposium on of Intellectual Property in Standard­Setting 

Processes), Board on Science, Technology, and Economic Policy, October 3­4, 2012. 

13 
     

   

                                                 

                       

     

Working group standardization activities include: terminology and nomenclature (jointly 

with ISO TC229); measurement and characterization (jointly with ISO TC229); and 

assessment of performance, reliability and durability related to nanotechnology­enabled 

aspects of electronic components and systems. 

International Organization for Standardization (ISO), TC 229. ISO TC229 was 

established in 2005 with a broad scope, addressing standardization issues related to 

understanding and controlling matter and processes at the nanoscale, and also to utilizing 

the unique properties of nanoscale materials to create improved materials, devices, and 

systems properties. 

Working group standardization activities include: terminology and nomenclature (jointly 

with IEC TC113); measurement and characterization (jointly with IEC TC113); health, 

safety and environment; and materials specification. Two task groups are also under way 

to:  1) identify and make recommendations about important issues concerning the 

consumer and societal dimensions of nanotechnology, i.e., the groups seek to identify 

important issues in these areas and make recommendations; and 2) review the 

standardization opportunities for nanotechnologies to address issues in the sustainability 

arena. 

2.2  The SDO’s Early Efforts35

2.2.1  Proactive Standards Development

The immaturity of the nanotechnology field, the pace of development, and the scope of 

potential applications have necessitated an important challenge for SDOs that is being 

met, according to close observers, by a novel approach to standards development: 

“The desire to guide the development of an emerging technology, and 

to proactively assess and manage any risks arising from that technology 

at the earliest opportunity, highlights the challenging conditions under 

which nanotechnology standards are being developed. While the 

electronics industry has been at the forefront of proactive approach to 

standards development and IEEE coined the term “anticipatory” 

standards to describe standards produced well before the products they 

concern are commercialized, nanotechnology standards development 

has brought proactive standards development into the main stream and 

has become a testing ground for this approach. [...] The launch of 

national nanotechnology programs in the first 5 years of the twentyfirst century was followed by establishing nanotechnology technical 

committees and working groups in major standards developing 

organizations. Unlike the traditional structure of standards development 

35 Unless otherwise indicated, this section relies on, Vladimir Murashov and John Howard (Editors), 

Nanotechnology Standards, Springer, 2011. 

14 
   

   

   

  

   

  

                                                 

   

   

   

around specific application areas, umbrella committees were formed to 

cover nanotechnology as a whole, which reflects the nascent nature of 

nanotechnology and the desire to guide its development.”36 

Nanotechnology standards developers are mindful of the public’s initially negative 

reception of genetically modified organism­based products. Failure by the product 

developers to consider early the risks that the public would perceive “down the road” 

contributed to the public’s initial attitude. The subsequent slow pace of acceptance 

significantly hinders the development of what many regard as promising genetically 

modified organism (GMO) technology.37 

2.2.2  Early Technical Concerns

The scope of nanotechnology standardization efforts is very broad. Sketched out below 

are major technical areas of concern:  (1) definitions, terminology, nomenclature, and 

data file formats; (2) reference material standards; (3) metrology and measurement; (4) 

performance standards; (5) environmental, health, and safety (EHS).  

Importantly, observers note that “proactive” standards development faces the unique 

challenge of reaching consensus under conditions of limited knowledge.38 A cacophony 

of definitions, terminology, nomenclature, and data file formats is one manifestation of 

this knowledge constraint. “The multidisciplinary nature of nanotechnology” writes an 

SDO participant, “almost invites a similar multiplicity of definitions as each specialty (or 

scientific discipline) adjusts to the new findings of what is a dynamic research effort.” 

“The same dynamism,” it is argued, “leads to ambiguity in meanings and to uncertainty 

in the overall impact this field will have when products are commercialized.”39 

The properties that various organizations and scientific disciplines associate with 

nanoscale materials are varied. Standardized definitions, terminology and nomenclature, 

facilitate the repeatability of experimental data among separate research groups, help 

support the development and use of standardized reference materials, and serve as a 

communication tool in grant applications and for the protection of patents. 

Standardization of file format for the exchange of data on nanomaterials and 

characterizations is also part of this area of concern. 

Reference material standards are an area of interest to nanotechnology SDOs. Reference 

materials (RMs) have homogeneous and stable properties that have been established for 

an intended use in a measurement process. They are used in the calibration of a 

measurement system, assessment of a measurement procedure, assignment of values to 

other materials, and quality control. They are regarded as essential tools in the quest for 

comparable and reliable measurement results. Eventually, the production of reference 

36 Ibid., p. 14. 37 Ibid., p. 13. 38 Ibid., p. vi. 

39 Ibid., p. 21. 

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materials will depend on the availability of laboratories that are proficient in the 

measurement of the properties for which values need to be measured. As discussed 

momentarily, concerning metrology and measurement standardization efforts, those 

properties are many. The awareness of the need for RMs is growing.40 The availability of 

reference material standards for nanoparticle size, film thickness, chemical contrast 

imaging, surface area measurement, powder porosity, and carbon nanotube 

characterization is important to the work of SDOs that develop test methods. 

Metrology and measurement are the bridges from science to technology.41 They are a 

major area of concern for nanotechnology SDOs. The predictive models required for 

nanoscale manufacturing can only be attained on the basis of measurement results that 

are widely reliable and comparable. Reliability and comparability, in turn, require 

measurement traceability to international standards; stepping stones to quality products 

with widest possible acceptance in the global marketplace.42 

In the words of a nanotechnology SDO participant, “engineers know that if you can't 

measure it, you can't build it.” That concept applies across the nanotechnology value 

chain in the source and quality of raw materials, the control of the nanomaterials 

manufacturing process, and the formulation and integration of end products into systems 

of products, their use, and their disposal. It is noted that because nanoproducts are 

coming to market faster than environmental sciences and toxicological sciences are able 

to keep up, gaps in our ability to measure environmental, health, and safety risks are 

occurring. These risks are the measurement challenges that are common across the value 

chain and will be foundations for measurement instrumentation as they develop in 

response to new commercial uses.43 

The metrology and measurement challenges are significant. At least twenty­three 

different physio­chemical material properties are important to characterize as part of the 

risk assessment process. The nine most common nanomaterial characteristics are the size 

of the particle, its shape, size distribution, concentration, agglomeration, surface 

characteristics, presence of surface coatings, presence of impurities, and structure. More 

than 35 analytical techniques are available to characterize these nine basic nanomaterial 

characteristics (e.g., scanning electron microscopy (SEM), transmission electron 

microscopy, atomic force microscopy, and confocal microscopy, dynamic light scattering 

(DLS), field flow fractionation (FFF), molecular gas adsorption (BET), electrophoresis, 

ultraviolet/visible spectroscopy (UV/Vis) and fluorescence spectroscopy (FL).44 

According to instrumentation experts, “there is no single instrument that can do it all 

...and... multiple instrument manufacturers may provide instrument solutions that 

exacerbate the need for specific skills to precisely prepare samples, maneuver through 

40 Ibid., p. 53.
 41 Ibid., p. 81.
 42 Ibid., p. 77.
 43 Salamon, 2013, op. cit.
 44 Ibid., p. 103.
 

16 
                                                 

           

         

     

different instrument software packages, and finally obtain and interpret the data.” 45  As 

demand for nanotechnology­based products grows, it is expected that demand for new 

nanomaterial characterization methods and instruments will also grow.46 Standardization 

of measurement and characterization for nanotechnology is believed to be critical to the 

promotion of industrial applications of nanotechnology. It is also thought to be critical to 

bringing about social acceptance of nanotechnology.47 Measurement guides and standards 

have been an important nanotechnology SDO thrust. 

Performance standards for nanotechnology­base products are another early area of SDO 

focus. An SDO participant explains performance standards as follows: 

“[Performance standards] are intended to support the fabrication of new 

innovative products with extraordinary high performance enabled by 

the use of nanotechnology. Therefore, they support commercialization 

of scientific results by providing standardized methods to qualify 

nanomaterials and control nano­related production processes. 

Nanotechnology–enabled products are to be developed and produced 

for a specific purpose. [...] [T]he product must be specified in terms of 

its performance from the perspective of the customer/user, which is a 

completely different point of view than the view of the engineer or 

scientist for nanotechnology materials or products.”48 

Illustrating by reference to a nano­enabled battery, the authors continue: 

“The main relevant performance measures from the users’ perspective 

are energy storage capacity, recharging time and the maximum power 

that can be drawn from the battery. Additionally the user will be 

interested in the durability... To design and produce such a battery, 

there has to be a model that relates nanomaterial properties and process 

parameters in the production process to the superior performance of the 

battery. [...] [T]here is a systematic way to do this. The two tools are 

called Advance Product Quality Planning (APQP) and Quality 

Function Deployment (QFD).”

49 

“The central idea is the implementation of the “key control 

characteristic (KCC)” concept, i.e. the identification of those material 

and process parameters which are key to ensuring that the technical 

45 Ibid., p. 104.
 46 Salamon, 2013, op. cit., p. 107.
 47 Murashov and Howard, op. cit., p. 91.
 48 Ibid., p. 118.
 49 Ibid., pp. 91­92.
 

17 
   

  

   

   

  

   

  

   

                                                 

   

       

specifications for the performance parameter of the final product are 

met.”50 

Material parameters, production process parameters, and product planning tools have 

been areas of early concentration for nanotechnology SDOs.51 

Environmental, health and safety (EHS) aspects of nanotechnology are a major public 

concern and involve standards development aimed at the characterization and 

minimization of risks; nanotoxicology; and workplace exposure limits, hazard 

communication instructions, safety procedures and codes of conduct, and industrial 

hygiene guidance for safe handling of nanomaterials. SDO participants recognize that 

understanding the risks associated with the manufacturing and use of nanoscale products 

is an important part of moving from nanoscience to application and also that many of the 

same issues have been raised in other industrial settings outside the nanotechnology 

context. It is expected that standards developed for other purposes may need adaptation 

for application in the nanotechnology context.52 

Some express enthusiasm for the unusual historical opportunity that early stage 

nanotechnology standards development offers: 

“For the first time in the history of industrialization, nanotechnology 

offers the unique opportunity to consider material safety concerns prior 

to widespread adoption and use by industry. Many scientists around the 

world have been motivated by this and are working on developing and 

applying nanotechnology as safely as possible, attempting to avoid the 

pitfalls of our earlier introductions of new chemicals and chemical 

processes into commerce.”

53 

The anticipated scale of the requirement for nanomaterial testing is significant. One 

projection puts the timeframe for assessing the toxic potential of all existing 

nanomaterials in the U.S. between 34 and 53 years at costs ranging from $249 million, 

for optimistic assumptions, to $1.18 billion.54 

The nanotechnology SDOs that are the subject of this assessment have been characterized 

in this section; the unique opportunities afforded by early stage nanotechnology standards 

development has been highlighted; and some of the main technical concerns of the 

nanotechnology SDOs have been highlighted. In the following chapter, the framework 

for estimating the industry impact of SDO participation is described. 

50 Ibid., p. 114. 

51 Ibid., p. 93. 

52 Ibid., pp. 164­176. 

53 Ibid., p. 179. 

54 Ibid., p. 205. 

18 
   

                                                 

       

                   

    

               

       

      

3 Economic Analysis Framework

3.1  Documentary Standards as a Response to Emerging Market Design

Problems

A SDO is a collective activity often involving members from industry, government, 

academia, and citizen organizations. Previous impact assessments for NIST’s Standards 

Coordination Office have discussed NIST’s role in the standards development process 

from an economic perspective.55 NIST personnel in standards development organizations 

typically fulfill two economic roles: that of an “honest broker” due to the absence of a 

product­specific vested interest thus reducing the cost of coming to consensus; and a that 

of a “conduit,” increasing the likelihood that the underlying measurement principles are 

traceable to international standards of measurement. 

The focus of this economic impact assessment is on private sector participation in SDOs 

and the associated benefits and costs. Still, from an economic perspective, these 

collective activities are also responses to emerging market design issues, commonly 

referred to as “market failures.”

56 According to a prominent standards researcher: 

“There is still little awareness about the benefits of standards and 

standardization among researchers. Due to the broad accessibility to 

standards [...] the connected free­rider [“externalities”] problem has 

resulted in too few incentives for researchers to become actively 

engaged in standardization, especially in new fields of research and 

technology.”57 

The interdependence between research and standardization has been characterized as 

catalytic; as a technology transfer channel for knowledge integrated within a consensus 

process. On this account, the selection and prioritization of knowledge and technologies 

in the SDO consensus process leads to the bundling of resources that helps avoid 

fragmentation among the many actors in industry, universities, and the public sector. In 

addition, an exchange of tacit knowledge (“know­how”) takes place during the 

standardization process. Finally, there is also an integration of inputs from heterogeneous 

sources, especially of knowledge from implementers of technologies and consumers. 

Because consensus standards are widely accessible, they are more likely to be broadly 

implemented. Maximum economic efficiency is realized if publicly funded R&D results 

55 See, The Economic Impacts of Documentary Standards: A Case Study of the Flat Panel Display 

Measurement Standard (FPDM), David Leech and John T. Scott, National Institute of Standards and 

Technology, December 2011. 

56 For a thorough discussion of “market failures” and their causes, see John Roberts, The Modern Firm,
 

Oxford University Press, 2004; Gregory Tassey, The Economics of R&D Policy, Quorum Books, 1977; and 

Oliver Williamson, The Economic Institutions of Capitalism, Free Press, 1985.
 57 Kurt Blind, “Standardization as a Catalyst for Innovation,” ERIM Report Series, 2009 (Reference No.
 

EIA­2009­LIS, SSRN: http://ssrn.com/abstract=1527333).
 

19 
   

   

   

                                                 

       

 

             

                          

                       

           

become public goods via standards. In addition to creating channels for knowledge and 

know­how transfer within the SDO, as technical infrastructure the standards provide a 

framework for future research and product development. In early stages of emerging 

fields, self­regulation via consensus standardization allows flexible framework conditions 

which can later be transferred into governmental regulations.58 

As discussed in greater detail below, this depiction of the economic dynamics of early 

stage standardization accords well with the findings of this report. One of the challenges 

of the standards development process is convincing potential private sector participants 

that it is in their interest to share know­how that will provide benefits to all participants. 

This sentiment is expressed by an industry participant: 

“Nanomaterial­based products have the potential for great monetary 

gain [therefore creating] a competitive market that is very secretive. 

Processes, formulations, and product risk mitigation are guarded 

secrets. Some companies consider their creative and cost–effective 

environmental health and safety (EHS) solutions as a competitive edge 

over their competition. In fact, in some cases, the cloak of secrecy 

covers the manufacturing EHS procedures that keep the workplace 

safe.”

59 

Efforts at private collaboration and public­private collaboration arise in response to 

barriers to innovation. These barriers, in turn, are driven by two kinds of risk:  technical 

risk and market risk.60 Economic barriers that are likely to affect industry investment in 

the early stages of a technology development include: 

• Externalities that deprive investors of compensation because benefits 

from their investments in technology “leak out” to other firms. Concerns 

about such leakage can deprive a burgeoning industry of the momentum 

needed to “take off.” The SDO process can mitigate excessive secrecy 

by cultivating transparency about the dimensions of what is considered 

secret and a better appreciation of costs and benefits of excess secrecy. 

• Excessive discount rates that cause potential benefits to be heavily 

discounted relative to investment projects with shorter projected 

recovery times. Qualitatively, this study suggests that the companies that 

participate in SDOs are focused on building the technical infrastructure 

for the market long­term. 

58 Ibid. 

59 Salomon, op. cit. 

60 Gregory Tassey, “The Disaggregated Technology Production Function: A New Model of University and 

Corporate Research,” Research Policy, Vol. 34, 2005, pp.287­303; Economics of R&D, Quorum Books, 

1997, pp. 82­100. An extended discussion of barriers to innovation and technology in the context of the 

role of government and public research institutions is provided in Albert N. Link and John T. Scott, Public 

Goods, Public Gains: Calculating the Social Benefits of Public R&D, Oxford University Press, 2011, pp. 4­

19. 

20 
     

  

     

   

                                                 

     

• Information asymmetries and uncertainties that arise because the 

complexity of the technology makes agreement about product 

performance difficult. This is especially relevant to early phases of 

development when the requirements for conducting R&D and product 

development demand multidisciplinary teams, unique facilities, or the 

"fusing" technologies from heretofore separate, non­interacting 

industries. Market recognition difficulties can also arise because the 

technical breadth of the potential market is broader than the scope of 

existing markets and firms fail to recognize potential applications of 

their technology. The SDO organizations studied in this assessment 

ranked knowledge acquisition, market intelligence, and business­to­ 

business (B2B) networking among the top beneficial activities 

associated with participation in their SDOs. (See Section 5.1.3, below.) 

• Network externalities can affect market participation if a product will 

not interface with other products in the system and the cost of attaining 

compatibility or interoperability reduces the expected return on 

investment to the point that the project is not undertaken. (The mitigation 

of network externalities may not have been a leading concern of the 

earliest stage nanotechnology SDO efforts covered by this report; 

however, product and process interoperability standards are being 

developed by nanotechnology SDOs going forward.) 

Providing an insight into the nature of economic barriers at work, an industry 

representative enumerated the following important concerns and barrier categories that 

instrument manufacturers face as they develop their marketing strategies for 

nanotechnology characterization instruments: 

• Nanotechnology is a complex science (information asymmetries and 

uncertainties); 

• Development of engineered nanomaterials requires varied skill sets (information 

asymmetries and uncertainties); 

• The instrument market spans many scientific and engineering disciplines 

(information asymmetries and network externalities); 

• There are a vast number of end­product applications, many unique (network 

externalities); and 

• The industry is draped in secrecy (externalities).61 

Documentary standards are developed, in large part, to mitigate barriers such as these. 

The very opportunities afforded by the existence of qualified SDOs like ASTM, IEC, and 

ISO, and the participation of large and small firms’ future­focused business and 

technology leaders to address common, hard issues in competitively neutral environment, 

attest to the ubiquitous presence of economic barriers and industry’s determination to 

61 Salamon, 2013, op. cit.

21 
   

address them. The study survey instrument was designed to capture the manifestations of 

the barrier­mitigating effects of early stage documentary standards. Evidence that the 

standards are reducing barriers is discussed in Chapters 5 and 6.  

22 
  

   

   

   

   

   

4 Impact Assessment Approach

4.1  Survey Strategy

The focus of this impact assessment was on industry users and developers of 

nanotechnology documentary standards. The documentary standards published by three 

standards development organizations were selected as the study focus: ASTM 

International’s Technical Committee on Nanotechnology (ASTM E56); the International 

Electrotechnical Commission’s (IEC’s) Technical Committee (IEC/TC113), 

Nanotechnology Standardization for Electrical and Electronics Products and Systems; 

and the International Organization for Standardization’s (ISO’s) Technical Committee 

229 – Nanotechnologies (ISO/TC229). Based on communications with the ASTM and 

the U.S. Technical Advisory Groups (TAGs) of the IEC and the ISO, approximately 150 

private sector, public sector, and university organizations are identified as being involved 

in the development of nanotechnology documentary standards. These organizations 

comprise one survey population subset. 

In addition, it was hypothesized that many more private sector organizations utilize the 

published nanotechnology standards to reduce gaps in understanding and increase the 

efficiency of a wide range of production, testing, and research operations. To represent 

this facet of the user population, the support of two organizations was enlisted. 

Approximately 100 members of the broad­based NanoBusiness Commercialization 

Association (NanoBCA) were targeted. In addition, hundreds of recipients of the 

National Nanomanufacturing Network Newsletter (a "LISTSERVE") were also targeted 

to receive surveys. 

A third element of the intended survey population included members of a network of 

university research organizations funded as part of the U.S. National Nanotechnology 

Initiative (NNI). The National Nanotechnology Infrastructure Network (NNIN) consists 

of 14 advanced nanotechnology user facilities, located at 14 major universities across the 

country. The site directors of these user facilities comprised a third survey population 

subset. 

4.2  Survey Execution

The survey instrument was designed following background interviews with selected U.S. 

technical committee members from industry, universities, and government agencies. On 

the basis of their descriptions of the substantive benefits and costs of SDO participation, 

nanotechnology­specific impact activity categories were developed. (See section 5.1.3 

below.) The survey instrument was tested and improved with feedback from potential 

industry survey recipients.  

The survey was conducted by email with email or phone follow­up. Preceding the survey 

execution phase, the project was introduced to the potential survey populations through 

presentations by the project manager and interviews with U.S technical committee 

members. 

23 
   

   

   

An introductory email message was sent directly to the prospective respondents, some of 

whom who volunteered to be contacted directly, or, by proxy, though their technical 

committee chairpersons, a U.S. TAG liaison office, or by the NanoBCA’s Executive 

Director. The email was sent directly to the 14 National Nanotechnology Infrastructure 

Network (NNIN) site directors. Most potential respondents were contacted multiple 

times, by the impact assessment project leader, by a U.S. TAG liaison office or technical 

committee chairperson, by the NanoBCA’s Executive Director, and through multiple 

email appeals by the National Nanomanufacturing Network. 

After multiple rounds of direct and indirect communications, 26 survey responses were 

obtained (in addition to numerous email exchanges). Thirteen (13) of these were industry 

respondents; 9 were university respondents; and 4 respondents were government agency 

representatives. The primary focus of the following analysis is the industry response. 

University and government agency responses are discussed qualitatively. 

4.3  Comparison Scenario and Timeline

In general, the benefits of the SDO participation outputs are assessed using a 

counterfactual technique. In essence, the survey posed the following question to 

respondents: 

“For the activity area in your organization that benefited most from 

nanotechnology standards, what would it have cost your organization to 

perform those activities in the absence of ATM E56, IEC/TC113, and 

ISO TC229 standards published between 2005 and 2012?” 

The counterfactual costs that respondents estimate would have been incurred in the 

absence of the relevant nanotechnology documentary standards are interpreted as the 

economic benefits of utilizing the standards. Respondents also estimated the annual costs 

of participating in the SDO technical committees and “pull costs,” one­time labor and 

materials costs of adopting the standards. These costs are subtracted from the benefits 

estimates to obtain a measure of the net benefits resulting from the investment in the 

nanotechnology documentary standards. 

The economic impact timeframe is 2005 to 2012. Survey participants provided 

information about the economic impacts of documentary standards published by ASTM 

E56, IEC/TC113, and ISO TC229 within that timeframe. (The standards were 

enumerated in the appendix of the survey instrument. The survey instrument is included 

in Appendix A of this assessment report.) 

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5 Survey Findings
 

5.1  Qualitative Findings
 

5.1.1  The Composition of Survey Participation
 

SDO participants were the only members of the industry population to provide survey 

responses. Despite considerable effort by the leadership of NanoBCA and the National 

Nanomanufacturing Network to solicit responses, numerous email requests from the 

impact assessment project leader, and follow­up exchanges, no responses were 

forthcoming from the potential industry respondents who did not participate in SDO 

activities.62 

Too few university­based and government­based respondents provided sufficiently 

complete responses to estimate the economic impact of documentary standards to their 

institutions. Regarding government respondents, it was hoped that regulatory agencies 

would respond since it is believed that their processes have been significantly affected; 

however, no regulatory agencies responded to the survey.63 

62 It is not unusual for surveys associated with case study economic impact assessments to have a small 

number of respondents. This has been a feature of narrowly focused microeconomic case studies since the 

pioneering work of Edwin Mansfield. Echoing the difficuties this study experienced, in his influential paper 

on social and private returns to innovation Mansfield writes: “As would be expected, a substantial 

percentage of those who were contacted refused to cooperate because, despite our assurances that the data 

would be held in the strictest confidence, they felt the data was too sensitive to show to outsiders.” (Edwin 

Mansfield, et. al., “Social and Private Rates of Return from Industrial Innovations,” Quarterly Journal of

Economics Vol. 91, No. 2, 1977, pp. 221–240.) In addition to this general and long­standing sensitivity 

about sharing information concerning company innovation practices, as discussed in section 3.1 of this 

report, industry participants use the phrase “cloak of secrecy” to characterize the extraordinary sensitivity 

of participants in the emerging markets for nanotechnology­based products and services. All things 

considered, the number of survey responses (26) could be considered relatively good. One might also 

observe that the survey response rate is low. Of course broader participation would have increased 

confidence in the estimates of economic impact but response rate has rarely been reported in NIST 

economic impact assessments and usually no attempt is made to treat the survey data from these case 

studies statistically. 

63 Some potential respondents read the survey instrument as "industry­oriented." While that is true (the 

survey instrument was focused on the economic impact of documentary standards to industry), when they 

raised that issue in email exchanges they were requested to interpret problematic questions liberally; that 

the aim of the project was to understand the changes in resource allocations within their organizations, and 

among their collaborators, that resulted from the development and use of standards. The small number of 

full responses from some government­based and university­based respondents indicates that a liberal 

interpretation of "industry­oriented" questions was indeed possible. One government agency respondent 

suggested that the benefits would be substantial: "Prior to these standards, there was a lot of variation in 

protocols among laboratories within [our organization]. Work on safe handling procedures for 

nanomaterials in the workplace [has] been a key contribution ... to global health and safety practices." 

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One likely reason that potential survey respondents do not respond is that they do not 

grasp the potential benefits of SDO participation, or of standards more generally. One 

non­respondent (an industry "start­up") stated baldly: "the questions are really not 

applicable to the nano business." Yet, it is clear from the results of this economic impact 

assessment that the survey questions were germane and that the benefits of participation 

in SDOs are real for companies that understand how standards are related to their 

businesses and to free riders who enjoy the benefits of the SDO’s outputs (documentary 

standards as well as informal industry communications) without contributing to their 

development. 

To some extent, the same interpretation could apply to university­based respondents. A 

few very complete responses were received but, again, from those few already committed 

to the standards development process. Several non­responses were accompanied by email 

exchanges, the crux of which were that many university­based researchers do not 

appreciate the utility of standards because the academic community, as such, incentivizes 

scientific innovation rather than standardization. According to one member of the 

university community, reflecting the sentiments expressed in fewer words by many 

others: 

"Academic research is based upon peer­reviewed scholarly literature. 

Information about pre­existing methods is drawn from the "materials 

and methods" section of published papers. Definitions of terms are 

based on who coined the phrase, or how the term is widely used, in the 

literature. Standards documents, whether they agree or disagree, carry 

little to no weight, and I think that most academic researchers have 

little awareness of them." 

To some extent, too, university researchers are just focused on other issues. According to 

a university researcher and SDO participant: 

"[A]cademics have a different perspective on standards development 

since they can investigate libraries of ENMs [engineered 

nanomaterials] that may not be of immediate interest to industry or 

suitable for certification as reference materials."64 

Some university non­respondents are simply unaware of standards or their relevance to 

their operations. One nanofabrication center manager felt he had no contribution to make: 

“I manage a purely research­oriented university lab, and don't have any 

knowledge of these standards. My input would not be useful.  

64 Vincent Hackley, et. al., “Enabling Standards for Nanomaterial Characterization,” InfoSim, August, 

2009, pp. 24­29. 

26 
   

   

I would be very surprised if our grad student researchers were aware of 

the standards. [...] I can't say how much our site director knows about 

the standards since I can't recall discussing them with him.” 

Following­up with the site director, the manager's expectations were confirmed: 

“I am not familiar with the standard development process, and I could 

only guess as to their utility to industry. I would think that you would 

be better served by contacting people in industry or in trade groups that 

serve industry in the nano sector.” 

In the light of the value chain depicted in Section 1.6.2 of this report, above, and the 

economic policy assumption that it is desirable for university research to feed industry 

innovation, the distance from the university focus to an industry focus regarding 

nanotechnology standards is too great. Adding dimensions to the “value chain distance” 

issue, another thoughtful non­respondent focused on some of the university’s more 

immediate links to industry: 

“While I can imagine that some of the equipment we use is subject to 

some of the standards in [the survey] Appendix, it would be the 

vendors who would relate to them better than our students. ...[Y]ou’re 

right from the instrumentation calibration perspective, [but] we rarely 

do our own.  We send them to the vendors. 

My thinking is that unless a research topic specifically required us to 

read/review specific standards they would not be looked at. 

Times have certainly changed – I recall as an undergraduate back in the 

late 70’s ­ it [discussion of standards] was almost a daily staple for 

some of the classes I was taking. ... 

Looking at some of the titles under ISO, they would be highly useful. I 

know as a unit and institution we’re becoming more aware of the safety 

(EHS) aspects of nanotechnologies. 

[Regarding] university PI start­ups, good question. I know our tech 

transfer folks are very interested in licensing IP (university patents) 

[but] where the standards come into play ... I’m not sure – though – 

certainly if it goes to manufacture [there should be a connection].” 

Currently, the links from industry standards to the university community are not obvious. 

An engineering professor and SDO participant observes: 

27 
   

   

   

   

   

"The College and University are developing nanotechnology IP and 

licensing it, but there are few links between this and the ISO, ASTM, 

IEC standards developed so far." 

Others appear to believe that the impetus for the linkage between standards­related 

activities and the universities is most likely to come from the outside: 

"The drive to establish this suite of methods is driven by the board ... 

consisting of representatives from industry, national labs, and other 

educational institutions." 

While survey participation was limited, participants’ formal and informal responses and 

communications provided a wealth of information and insights about early stage 

development of nanotechnology standards. One of these insights is that there appears to 

be a lack of effective linkages in the value chain connecting universities, increasingly 

anxious to transfer their technology, to the industry­wide perspectives represented by 

SDOs. The SDOs studied here appear to be populated by future­focused industry 

representatives struggling to lay the technical infrastructure intended to clear some paths 

to nanotechnology commercialization. 

5.1.2  High­Impact Nanotechnology Standards 

The survey was not intended to quantitatively discern the economic significance of 

individual standards or groups of standards; however, the majority of survey respondents 

identified the nanotechnology standards that were most significant for their organizations 

in terms of benefits received.  

Of the 26 organizations responding, 21 respondents identified the nanotechnology 

standards that were most significant in terms of benefits created for their organizations. A 

list of the nanotechnology standards published by the ASTM International, IEC, and ISO 

technical committees was provided as an appendix to the survey instrument.  From 2005 

through 2012, there were 10 nanotechnology standards published by ASTM TCE56, 4 by 

IEC TC113, and 26 by ISO TC229. Each respondent was asked to examine the list of the 

40 nanotechnology standards and to identify the five that were the most significant for the 

respondent’s organization.  For the standards that were indicated by more than one 

respondent, Table 1 shows the ranking of the top five (including ties—for example, three 

standards were top five picks for six of the 13 industry respondents and are tied for third 

place among the most significant standards for the industry respondents) standards based 

on a simple count of the number of respondents that chose each standard as one among its 

most significant five. 

Table 1. Standards Among the Top Five (including ties) for Impact on the
 

Organization's Activities
 

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All

Respondents

(n = 21)

Industry

Respondents

(n = 13) Documentary Standard Title

13 8 ISO/TS 80004­1:2010 – Nanotechnologies – Vocabulary – Part 1:  Core terms 

14 7 ISO/TS 27687:2008 – Nanotechnologies ­­ Terminology and definitions for nano­objects 

10 6 ISO/TR 12885:2008 – Nanotechnologies – Health and safety practices in occupational settings 

­ 6 ISO/TS 80004­4:2011 – Nanotechnologies – Vocabulary – Part 4: Nanostructured materials 

­ 6 ISO/TR 13121: 2011 – Nanotechnologies ­­ Nanomaterial risk evaluation 

8 5 [ASTM E56] E2535­07 Standard Guide for Handling Unbound E ngineered Nanoscale Particles in Occupational Settings 

7 5 ISO/TR 11360:2010 – Nanotechnologies – Methodology for the classification and categorization of nanomaterials 

7 5 ISO/TR 13014: 2012 ­ Nanotechnologies ­ Guidance on phys icochemical characterization...for toxicologic assessment 

­ 4 ISO/TS 12805: 2011 – Nanotechnologies ­­ Materials specifications – Guidance on s pecifying nano­objects 

7 - [ASTM E56] E2456­06 Standard Terminology Relating to Nanotechnology 

For the group of all types of respondents—from industry, academia, and government— 

standards about terminology and vocabulary and about health and safety are of greatest 

importance for the respondents. To explore further the difference, observed in Section 

5.1.1, about the importance of nanotechnology standards for industry as compared with 

universities, the 13 industry responses were compared with the responses of the five 

university respondents that provided information about the nanotechnology standards 

most important for their work. In particular, as observed in Section 2.2.2, standards for 

materials specification and characterization are critical for industrial applications of 

nanotechnology, yet even those universities that report that nanotechnologies are 

significant for their work have a different view than industry about the importance of 

materials specification and characterization standards.  

To explore the difference between the university and industrial respondents in the 

importance of the various types of nanotechnology standards for their work, the forty 

standards listed in Appendix A were divided into three categories: (1) vocabulary, 

terminology, or classification system, (2) health and safety, and (3) materials 

specification and characterization (not obviously in the health & safety category). With 

the 40 standards divided into the three broad types, there are nine in the vocabulary, 

terminology, or classification category,65 nine in the health and safety category,66 and 22 

in the materials specification and characterization category.67 

Each of the five university respondents provided a list of the five nanotechnology 

standards of most importance to the university.  Of the five university respondents, four 

are large, major U.S. universities. For all four, among the five most important 

nanotechnology standards for the university, none were in the category for materials 

specification and characterization. The one university respondent from outside the U.S. 

was an exception. It had three of its five most important standards in the materials 

specification and characterization category. 

65 Using the numbering of the standards listed in Appendix A, these were standards numbered 1, 15, 17, 18,
 

19, 22, 26, 27, and 28.
 66 The standards numbered 4, 5, 6, 16, 20, 24, 25, 29, and 38.
 67 The standards numbered 2, 3, 7, 8, 9, 10, 11, 12, 13, 14, 21, 23, 30, 31, 32, 33, 34, 35, 36, 37, 39, and 40. 

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While 80 percent of the responding universities, and 100% of the responding U.S. 

universities, showed an absence of the importance for their work of the standards in the 

specification and characterization category, in contrast only 50 percent of the 12 

industrial respondents answering the question reported an absence of important standards 

in that category. 

5.1.3  Industry Activities Most Affected

In background interviews, technical committee members representing industry, 

universities, and government organizations discussed the ways documentary standards 

make a difference in their organizations, and from those discussions a list of 

nanotechnology­related activities emerged. To avoid asking too much of respondents, 

simply the information about the percentage of benefits in each of the top three categories 

was collected to indicate the areas of greatest importance. Each survey respondent was 

asked to determine the three activities in the list that within their organization were most 

affected by nanotechnology standards. Each respondent was asked to estimate the 

percentage of all benefits—for the organization from the adoption of nanotechnology 

standards—associated with each of the three most significant activities.  For the 13 

industrial respondents, Table 2 identifies and ranks the activity areas by the percent of 

total benefits accounted for by each activity.  

Table 2. Industry Respondents’ Activity Areas Most Affected by Documentary 

Standards*
 

Nano­RelatedActivities

Percent of All Benefits

(Averageof Respondents Reporting 

Activity Category as in Top Three) 

Number of

Respondents

Reporting the

Activity as in 

Top Three

Rangefor

Percent of All

Benefits

Safety & Environmental Monitoring 

and Risk Management 39 8 10­100 

Product Design & Development 

(Excluding Regulatory Compliance) 38 8 20­50 

Pre­Deveopment R&D & 

Knowledge Acquisition 36 6 20­60 

Marketing, Market Intelligence & 

B2B Networking  30 2 20­40 

Contract Negotiations 30 1 30 

Quality Assurance & Control 20 2 10­30 

Regulatory Compliance, Negotiations, 

& Monitoring 18 4 10­33 

Equipment Adaptation & Acquisition 

Justification 17 3 10­20 

Worker & Student Training 15 2 10­20 

Intellectual Property Due Diligence 10 2 10 

* Respondents were instructed:  “[For the] Nanotechnologies­Related Activities Table ... select the top 3 

activities within your organization that  you judge  have  been most  affected by nanotechnology standards 

and estimate the  percent  of all the  benefits from nontechnology standards that  each of these  3 activities 

represent. (For example, your top 3 activities could each account for 33% of all benefits equally, leaving

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very little benefits accounted for by other activities; or they could account for 50%, 30% and 2%, leaving 

the unspecified 18% of all benefits spread among the remaining activities.)”

Some respondents briefly described how the existence of nanotechnology standards 

changed the processes within their organizations that resulted in efficiencies and quality 

improvements. Their comments reflect the ranking in Table 2, but also the breadth of the 

ways standards have an economic impact. 

Many respondents highlighted the importance to their organizations of planning and 

implementing EHS procedures. Accordingly, respondents claim that guidance standards 

related to risk while working with nanomaterials were helpful in establishing internal 

practices to protect employees from potentially harmful exposure to nanomaterials; 

facilitating global corporate meetings concerning new risk management procedures or the 

development of new products; aiding in the work of safety and environmental monitoring 

of nanomaterials and as guidelines in the safe handling of nanomaterial; training workers 

in proper protocols and data handling; detailing a prudent approach to workplace safety 

and product stewardship; and enabling the improved design of laboratory and 

manufacturing space. 

Others stress that terminology standards dramatically improved communications 

internally and externally. Some claim that consistency in terminology ensures that all 

participants, regardless of the diversity of their goals and perspectives, know what is 

meant by defined terms. Others stress that standard terminology supports correct 

communications; that participants know what is being communicated and also that what 

is being communicated is correct. 

Some industry participants also benefit from the role of early nanotechnology standards 

to set specifications and materials usage in production quality assurance and in 

developing quality assurance plans.  

Respondents stress several facets of the market intelligence value of the standards 

development process: allowing them to keep a focus on applications that matter to them; 

knowing the places where nanotechnology is being used; and supporting the product 

design and development that potential customers require. 

Finally some respondents understand current standards as a step on the path to regulation 

in lieu of, or in conjunction with, slow­moving regulatory legislation.68 

In summary, SDO members representing industry appear to be focused on gaining a 

firmer foothold in an ambiguous economic and regulatory environment. They appear to 

be very much future­focused, perhaps expecting to enjoy early­mover advantages in the 

marketplace. They are anticipating the market; concerned to reduce the technical and 

68 Although Table 2 uses the information from the industry respondents only, for comparison, note that 

university­based respondents focused on EHS, student training, pre­developmental R&D, and quality 

control. 

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market risks associated with burgeoning markets; and concerned about the effectiveness 

and correctness of communications within their sometimes large and diversified 

organizations but also between their organizations and other stakeholders. 

5.2  Quantitative Findings

To gain insight about the benefits and costs of the early stage of development of 

nanotechnology standards, the perspectives of the 13 industrial respondents, all of which 

are SDO participants, were examined. The respondents estimated the economic impacts 

of the nanotechnology documentary standards published by ASTM E56, IEC/TC113, and 

ISO TC229 within the period from 2005 (when those standardization efforts began) 

through 2012. As explained earlier, an appendix to the survey instrument provided a list 

of those standards. Each of the respondents was asked the following counterfactual 

question: 

For the activity area in your organization that benefitted most from 

nanotechnology standards, what would it have cost your organization to 

perform those activities in the absence of ATM E56, IEC/TC113, and ISO 

TC229 standards published between 2005 and 2012? 

For purposes of benefit­cost analysis, the counterfactual costs that in the respondent’s 

estimation would have been incurred in the absence of the relevant nanotechnology 

documentary standards are interpreted as the economic benefits accruing to the 

respondent’s activity that benefited most from the standards. Each respondent’s costs for 

the documentary standards are the costs of participating in the SDO technical committees 

plus the additional pull costs to implement the standards.69 Industry survey respondents 

provided a range of information from which time series of costs and benefits were 

constructed. The number of full­time equivalent (FTE) personnel dedicated to the activity 

most affected by standards (see Table 2 for the activity categories) was estimated.70 Also 

estimated was the multiple of these FTEs that would be incurred in 2012 in the absence 

of the documentary standards.71 This counterfactual multiple was used to estimate the 

benefits—the avoidance of additional personnel costs—companies derived from the use 

of nanotechnology documentary standards in the activity that benefited most from the use 

of the standards. 

Respondents’ estimates of the average annual growth rate, over the period from 2005 

through 2012, for the activities benefiting most from nanotechnology documentary 

69 Communications with some respondents indicated that their estimates of pull costs included significant 

elements of direct operational costs. Adjustments were made to these high estimates based communications
 

with respondents whose estimates, upon further investigation, were found to be a more accurate reflection
 

of “pure” pull costs. Pull costs are indirect costs; the costs of identifying, acquiring, and implementing
	

(“pulling in”) information or know­how from external sources. See, Albert Link, Economic Impact 

Assessments: Guidelines for Conducting and Interpreting Assessment Studies (NIST Planning Report 96­

1), May 1996.
 70 For the 13 respondents, the average was 3.19 FTE with a range between 0.05­20 FTEs.
 71 The 13 respondents reported multiples as high as 3 times with the average being 1.45 times more.
 

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standards ranged from 0 to 100 percent. The estimated growth rates were used to derive, 

from the benefit of avoided personnel costs reported for 2012, the benefits in the earlier 

years of the 2005 to 2012 period. The benefits in terms of hours of personnel time saved 

were converted to dollar costs using the annual compensation of full­time workers 

engaged in those activities.72 

One respondent estimated that there would have been a delay in some sales had important 

standards been delayed. That additional source of benefits was not factored into the 

estimated benefits, so there is an unmeasured benefit from avoiding a delay in sales.73 

The cost of SDO technical committee participation was derived from estimates of the 

average annual time each respondent devoted to technical committee work and each 

respondent’s estimated annual compensation for the employees involved.74 To this was 

added each respondent’s estimate of “pull costs” to derive the total cost to respondents’ 

organizations of participating in the technical committees’ standards development 

75 process. 

Respondents estimated the scale of their own company’s benefits from documentary 

standards relative to those of their direct competitors. The information about each 

respondent’s share of the benefits was used to estimate benefits for the “industry,” that is, 

the part of the broader emerging nanotechnology industries in which each respondent 

operates. The 13 respondents operate in different areas of the emerging nanotechnology 

industries, and each respondent’s industry is assumed to include the responding company 

72 For the 13 industrial respondents, that reported annual compensation averaged $137,000 for the fiscal 

year 2012. 

73 Considering a technical committee’s standards as a group, survey respondents estimated that NIST’s 

participation in a technical committee’s deliberation process shortened a standard’s publication time by an 

average of 20 weeks. Since this economic impact assessment focuses on industry’s costs and benefits, this 

time saving was not developed into an estimate of the social return on the investment of NIST’s time in 

support of technical committee activities. 

74 The average of the 13 industrial respondents’ average annual time for technical committee work was 218 

hours per year, ranging from 40 to 500 hours. The average for the 13 respondents’ annual compensation 

was $159,000, ranging from $45,000 to $250,000. 

75 The pull costs ranged from $975 to $66,000 for one­time labor costs and from $1000 to $4100 for onetime material costs. All but one of the 13 respondents were technical committee members during the study 

period (the one became a member in 2013) and, therefore, participated in the development of the standards. 

From the perspective of the respondent’s sponsoring company, technical committee cost associated with 

the development of standards could be construed as a type of pull cost.  However, for the participants, their 

technical committee costs were reported and then any separable, additional “pull costs” (apart from the 

costs of participation in the technical committee) were reported and the two categories of cost are combined 

into a total cost for each respondent. Companies that benefit from the nanotechnology standards but do not 

participate in technical committee activities are free riders and do not incur the costs of participating in the 

committee work to develop the standards, but they do incur pull costs. To estimate these, it was assumed 

that the temporal distribution of the non­participants’ pull costs was identical to the temporal distribution of 

the separable pull costs reported by SDO­participating respondents (pegged to the earliest standard cited as 

most significant for the survey respondent’s organization). The respondents’ pull costs were multiplied by 

the average multiplier used to estimate benefits and costs of a respondent’s close competitors from the 

benefits and costs of the respondent. 

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(or division in some cases) and its direct competitors in a particular segment of the 

nanotechnology supply chain.76 

76 While accepting SDO participants assertions regarding non­participants benefits might be questioned, 

relying on survey respondents to make estimates about their close competitors is a technique that has been 

used in many of the narrowly focused impact assessments conducted for NIST. See, for example, Economic 

Impact Assessment: NIST­EEEL: Laser and Fiberoptic Power and Energy Calibration Services,” NIST 

Planning Report 00­3; Economic Analysis of NIST’s Low­k Materials Characterization Research, NIST 

Planning Report 08­2; Economic Analysis of NIST’s Investments in Superfilling Research, NIST Planning 

Report 08­1; and The Economic Impact of Role­Based Access Control, NIST Planning Report 02­1, all 

available at: http://www.nist.gov/director/planning/impact assessment.cfm 

Arguably, survey respondent estimates concerning close competitors provides a more reliable picture of 

competitively meaningful markets (markets defined in terms of competition among providers of close 

substitutes — the basis of real­world competition) than the best standard, yet highly aggregated, U.S. 

Department of Commerce industry statistics. (See: http://www.census.gov/econ/survey.html) More detailed 

market analyses are typically available, at a signifant cost (relative to the typical economic impact 

assessment budget), from private sector market analysis companies. Unforunately, despite their greater 

detail (relative to U.S. government industry statistics) experience indicates that additional time and cost is 

usually required to customize industry data provided by commercial vendors to render them useful for the 

narrowly focused economic impact assessments conducted for NIST. Moreover, in the case of an emerging, 

inchoate industry structure, like the nanotechnology­based industry, it may be that information provided by 

competitors about close competitors is the best source of information available at any cost. 

34 
     

  

6 Quantitative Analysis

6.1  Industry Benefits

Industry beneficiaries include SDO participants and “free riders.” The latter beneficiaries 

do not participate in the SDO process. To understand the potential for beneficial 

spillovers from the SDO nanotechnology standards development process, benefits and 

costs are estimated for each respondent’s direct competitors. Some of those direct 

competitors are also SDO participants. Their benefits from the nanotechnology standards 

will be similar to those of the respondents. Their cost will include both SDO participation 

costs and pull costs. However, some competitors will be free riders for whom the costs of 

using the nanotechnology standards will be their pull costs alone. The survey asked the 

respondents to report the number of their direct competitors in nanotechnology­related 

research or in the sale of nanotechnology­related services or products to major customers. 

Respondents also reported the number of direct competitors were most similar to 

themselves in terms of the benefits and costs of nanotechnology standards. On average, 

the 13 industrial respondents reported that the group of direct competitors who were most 

similar constituted 34% of the total number of direct competitors. 

To estimate the spillover of benefits to non­participants in the SDO nanotechnology 

standards development process (free riders), it is assumed that all of the competitors of 

each of the 13 respondents enjoy the benefits of nanotechnology standards and that the 

34% of the respondents’ direct competitors that are most similar to the respondents in 

terms of the realization of benefits and costs are also participants in the SDO 

nanotechnology standards development process. The remaining 66% of the competitors 

are assumed to be free riders. 

Table 3 provides a time series of the benefit estimates for the period from 2005 through 

2012. Survey respondents estimated benefits for only the activity that benefited the most 

from the use of nanotechnology standards, yet the respondents each reported that many of 

their activities benefited from their adoption of nanotechnology standards. Without 

accounting for the benefits other than the one activity that benefited the most, the total 

benefits for the respondents’ industries would be greatly underestimated. In the survey 

information used to create Table 2, each respondent reported the proportion of its total 

benefits received from the use of nanotechnology standards that accrued to the activity 

benefiting the most. That proportion averaged 0.495 (with a range from 0.30 to 1.0) for 

the 13 industrial respondents. So, on average across the respondents, the total benefits 

from using nanotechnology standards averaged twice the benefits received for the activity 

that benefited the most. Using the benefits reported for the activity that received the most 

benefits for each respondent, together with each respondent’s information about that 

activity’s proportion of the benefits for all of the respondent’s activities, Table 3 shows 

the annual benefits of all activities for the 13 responding SDO participants (designated 

“Responding SDO Participants”). The respondents also reported the scale of their own 

benefits and costs relative to that of their direct competitors (both those who participated 

in the SDOs but did not respond as well as free riders, together designated 

35 
  

  

               

                     

           

     

       

 

    

               

   

   

     

   

     

         

                                                 

               

“Competitors”) and that allows the construction of the benefits and costs series for the 

competitors shown in Tables 3 and 4. 

Table 3. Constant 2012 Dollar Industry Benefits (2005 to 2012)* 

Year 

Responding 

SDO 

Participants' 

Constant 

2012 Dollar 

Benefits 

Competitors' 

Constant 

2012 Dollar 

Benefits 

Total 

Constant 

2012 Dollar 

Benefits 

2005 0  0  0 

2006 121,902  524,702  646,604 

2007 888,151  1,354,483  2,242,635 

2008 1,947,114  9,295,465  11,242,580 

2009 2,273,934  10,478,988  12,752,923 

2010 2,587,166  11,661,628  14,248,793 

2011 3,049,332  13,407,336  16,456,668 

2012 3,789,502  16,215,910  20,005,412 

* For the  sake  of survey simplicity, respondents were  instructed to estimate 

benefits and costs in FY2012 dollars. These  benefits and costs were  spread over 

time  according to the  activity growth rate  reported by the  respondent,  beginning 

with the  earliest  publication year of the  high­impact  documentary standards 

reported by the respondent. Variance in the yearly ratio of competitors’ benefits, 

to participants’ benefits, results because of variance in the timing of participants’ 

benefits. The  yearly variation in “industry” benefits then reflects the variation in 

benefits for different mixes of the parts of the emerging nanotechnology industries 

in different years. 

6.2  Industry Costs 

Table 4 shows the time series of costs for the 13 respondents and their competitors (SDO 

participating competitors and free riding competitors). As explained above, in Table 4 it 

is assumed that 34% of the respondents’ direct competitors are SDO participants and 

have the same costs as the SDO participants with which they compete, while 66% of the 

competitors would be free riders and would have only the pull costs associated with 

implementing the standards. If they all had the same costs, each item in the “Responding 

SDO Participants” cost column would be multiplied by the same ratio used to get the 

competitors' benefits in Table 3. But, given our assumptions, only 34% will have all of 

those costs.  Therefore, to estimate the costs of the SDO participating competitors the 

column of costs for the 13 respondents is multiplied by 34% of the multiplier used for 

each year in Table 3.77 Then only pull costs for the other 66% of the competitors are 

added, using 66% of the yearly pull costs that were estimated for all of the competitors. 

77 For 2005, 34% of the Table 3 2006 multiplier is used. 

36 
   

Table 4. Constant 2012 Dollar Industry Costs (2005 to 2012)
 

Year 

Responding 

SDO 

Participants' 

Constant 

2012 Dollar 

Costs 

Competitors' 

Constant 

2012 Dollar 

Costs 

Total 

Constant 

2012 Dollar 

Costs 

2005 192,004  284,962  476,966 

2006 198,844  296,227  495,071 

2007 252,365  141,416  393,781 

2008 279,302  460,699  740,001 

2009 258,265  431,445  689,710 

2010 266,325  560,172  826,497 

2011 280,588  469,140  749,728 

2012 341,413  751,075  1,092,488 

From the benefits shown in Table 3, the costs shown in Table 4 are subtracted to get the 

net benefits shown in Table 5. Competitors’ net benefits are probably overestimated 

because the pull costs of the free­riding competitors have been estimated with the pull 

costs of the SDO participants. Actual pull costs for non­participants would be expected to 

be higher because non­participants in the SDO process would have to gain knowledge 

that a participant would have absorbed while participating in the SDO TCs. 

Table 5. Constant 2012 Dollar Net Benefits to Industry (2005 to 2012) 

Year 

Responding 

SDO 

Participants' 

Constant 

2012 Dollar 

Net Benefits 

Competitors' 

Constant 

2012 Dollar 

Net Benefits 

Total 

Constant 

2012 Dollar 

Net Benefits 

2005 ­192,004  ­284,962  ­476,966 

2006 ­76,942  228,475  151,533 

2007 635,786  1,213,067  1,848,853 

2008 1,667,812  8,834,766  10,502,578 

2009 2,015,669  10,047,543  12,063,213 

2010 2,320,841  11,101,456  13,422,297 

2011 2,768,744  12,938,196  15,706,940 

2012 3,448,089  15,464,835  18,912,924 

Table 6 breaks out the benefits and net benefits for the free riders.
 

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Table 6. Constant 2012 Dollar Net Benefits to the Free Riders (2005 to 2012)
 

Free Riders' 

Free Riders'  Constant 

Constant  2012 Dollar 

2012 Dollar  Net 

Year Benefits* Benefits** 

2005  0  ­3,972 

2006  346,303 341,076 

2007  893,959 883,399 

2008  6,135,007 6,127,657 

2009  6,916,132 6,889,343 

2010  7,696,674 7,544,658 

2011  8,848,842 8,799,157 

2012  10,702,501 10,448,154 

*Free riders get 66% of the competitors’ benefits shown in 

Table 3.
 

**The net benefits for the free riders subtract their pull costs
 

from their benefits. Their pull costs are 66% of the pull costs
 

estimated for the competitors.
 

6.3  Measures of Economic Impact 

Table 5 and Table 6 provide the information needed to estimate the summary economic 

impact estimates reported in Table 7: net present value (NPV), cumulative net benefits, 

industry rate of return, and benefit­to­cost ratio (B/C). (For an explanation and discussion 

of these metrics, see Appendix B.) 

Table 7. Estimates of Economic Impact (constant 2012 dollars) for 2005 to 2012 

Impact Metrics 

Responding 

SDO 

Participants Competitors Free Riders ** Total 

NPV in 2005  8,837,538 42,032,301 29,093,297 50,869,841 

Cumulative Net 

Benefits in 2012* 14,191,155 67,494,690 46,717,477 81,685,848 

Industry Rate of 

Return 177% 321% 8758% 270% 

Benefit­to­Cost 

Ratio 6.5 17 85 13 

Present Value of 

Benefits in 2005 10,450,295 44,602,579 29,437,703 55,052,876 

Present Value of 

Costs in 2005 1,612,756 2,570,279 344,406 4,183,035 

*(Net Present Value in 2005) multiplied by (1.07)7 

**The exceptionally high return to the free riders is because they did not incur the SDO participants’ costs 

that generated their benefits (see discussion in text). 

38 
   

  

                                                 

           

         

                     

               

    

Despite the very large economic impact found for the early­stage documentary standards, 

the estimates of economic impact shown in Table 7 are probably conservative because (1) 

there are unmeasured benefits of avoiding shortfalls in performance (such as a shortfall in 

sales) even if the firm incurs extra costs to compensate for the lack of nanotechnology 

standards, and (2) the percentage of competitors that are SDO participants has probably 

been overestimated. 

The benefits of nanotechnology documentary standards are conceptualized as the dollar 

value of costs avoided because the industry has access to the standards. On average, 

nanotechnology­related activities would have cost industry respondents almost 50 percent 

more in the absence of the standards. The costs incurred by developing and using the 

standards are the dollar value of hours Technical Committee members dedicated to the 

SDO consensus process plus the cost of pulling the information into their organizations 

and into the organizations of free riders. 

The first impact metric shown in Table 7 (Net Present Value in 2005) uses the year the 

three nanotechnology SDOs were formally started as the base year and calculates the net 

present value of the project from the perspective of 2005. The NPV is the inflationadjusted (real or constant­dollar) value of the net benefits (benefits minus costs) 

generated by the project over the course of the study period (2005 to 2012). If, in 2005, 

an SDO’s leadership was trying to judge which of two or more projects (new TCs) would 

yield the highest economic return to the SDO, this is the kind of calculation they would 

have made. From an economic perspective, the project (TC) with the highest industrywide NPV would have been chosen. 

The second impact metric (Cumulative Net Benefits in 2012 (2005 to 2012)) is intended 

to interpret the NPV of the net benefits that actually occurred as a result of the SDOs’ 

efforts (NPV in 2005) from the perspective of 2012, rather than from the perspective of 

2005. If the net benefits that actually accrued to the effort (NPV in 2005, approximately 

$51 million) were invested in 2005 and were compounded annually at the rate of the cost 

of capital used by the U.S. government to evaluate investment projects (seven percent), 

the value of those benefits today would be approximately $82 million.78 

The third impact metric (Industry Rate of Return) is similar to an internal rate of return 

calculation, another corporate finance technique used to judge the performance of an 

investment project. The modifier “industry” indicates that the value of this performance 

metric accounts for the benefits and costs that accrue to the industrial firms that have 

78 The government cost of capital is stipulated as seven percent in Office of Management and Budget 

(OMB) Circular no. A­94: Guidelines and Discount Rates for Cost­Benefits Analyses of Federal Programs, 

1992. For a discussion of the rationale of the seven percent discount rate, see, Albert Link and John Scott, 

Public Goods, Public Gains, Oxford University Press, 2011; and (OMB) Circular no. A­4: Regulatory 

Analysis, 2003. 

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participated in or benefited from the work of the SDOs.79 The industry’s rate of return is 

the interest rate (also called the “discount rate”) that would reduce the NPV in 2005 of 

the TC’s efforts to zero and reduce the benefit­cost ratio to one—the investment would 

break even at that required rate of return. As a guide to making a decision on an 

investment project (private or public), if the industry’s rate of return is higher than the 

discount rate, the project is acceptable because the project earns a rate of return greater 

than its cost of capital. 

The benefit­to­cost ratio (B/C) is simply the ratio of the present value (PV) of benefits 

(2005 to 2012) to the PV of costs (approximately $55 million/$4.0 million). This value 

indicates that the real value of the benefits of the SDOs’ efforts, industry­wide, exceeded 

the costs by a ratio of approximately 13:1. 

These estimates can be considered conservative for reasons just explained. For 

comparison purposes, it is appropriate to recall a historically important analysis 

conducted in the mid­1970s. Economist Edwin Mansfield and his coauthors reported on 

the private rates of return and societal rates of return on private sector innovations. (The 

private and social rates of return differ because of the “externalities” discussed in Section 

1.3.1 of this report). Using a methodology similar to the one used in this assessment, 

Mansfield reported the median social rate of return (SRR, to which our industry­wide rate 

of return can be compared) for 17 private sector projects to be 56%, ranging between 

13% and 307%.80 To verify Mansfield’s results, the National Science Foundation funded 

two other similar assessments, each examining an additional 20 private sector 

innovations.81 The median SRR for one of these assessments was 70%, ranging between 

0 and 371%; the median SRR for the other was 99%, ranging between 0 and 472%. These 

SRRs can also be compared to the Industry Rate of Return  of 270% reported in Table 7.  

In that context, the results reported here (in terms of Industry Rate of Return) are close to 

the middle of the range for rates of return on other innovative activities undertaken by 

industry; however, observe that the nanotechnology standards development investments 

examined in this report are very different from the collection of innovative investment 

projects examined by Mansfield et al. The nanotechnology standards investments are 

investments in infrastructure technology that, because of their intrinsic “public goods” 

79 “Industry Rate of Return” is adopted here to indicate the study focus on industry­wide costs and benefits, 

exclusive of other social costs (for example, NIST’s costs of participating in the SDO activities) and 

benefits. Previous NIST reports have reported a similar metric, the “social rate of return” (SRR), which is 

an interpretation of the ordinary financial metric, “internal rate of return” (IRR) used routinely by industry 

to rank private sector investment projects. The “social” in SRR ideally measures the costs and benefits that 

accrue to all investors and beneficiaries, public and private.
 80 Concerning the historical importance of Edwin Mansfield’s work see, “Essays in Honor of Edwin
 

Mansfield,” F. M. Scherer and A.N. Link (Guest Editors), The Journal of Technology Transfer, Volume 30,
 

Nos. 1/2, January 2005; and Link and Scott, op. cit., 2011, pp. 28­31. The assessment of 17 private sector
 

innovations is reported in Edwin Mansfield, et al., “Social and Private Rates of Return from Industrial 

Innovations,” The Quarterly Journal of Economics, vol. 91, no. 2 (May 1977), pp. 221­240.  81 A Survey on Net Rates of Return on Innovations, Foster Associates, Inc., May 1978; and Net Rates of 

Return on Innovations, Robert R. Nathan Associates, Inc., October 1978.
 

40 
   

   

                                                 

           

                   

   

content, are especially likely to have large industry­wide social benefits for the reasons 

discussed earlier in this report. The evaluation metrics reported here for the 

nanotechnology standards development investments are also within the range of the 

evaluation metrics for many other public­private partnerships to develop infrastructure 

technologies that have been evaluated by NIST over the last 20 years.82 

Finally, Table 8 reports the economic impact metrics for the nanotechnology industry as a 

whole, without the distinctions among the various kinds of industry beneficiaries reported 

in Table 7. As explained in Section 6.1, the exploration of economic spillovers reported 

in Table 7 required some basis for distinguishing close and more distant competitors 

within a more broadly defined industry. That distinction is ignored in the following table 

of industry­wide economic impact estimates. 

Table 8. Estimates of the Industry­Wide Economic Impacts (constant 2012 dollars) 

of Early Stage Nanotechnology Consensus Standards (2005 to 2012) 

The net present value (NPV) in 2005 metric says that if, in 2005, TC members could have 

projected the actual timing and size of the costs avoided they would have valued the 

project at ~$51 million, net of the costs industry would have incurred. The cumulative net 

benefits metric looks back at that stream of benefits and costs from the perspective of 

2012 and compounds the ~$51 million in NPV by 7 percent per year (the cost of capital 

used by the federal government when evaluating investment returns). The industry rate of 

return metric says that the rate of return on industry­wide investment in nanotechnology 

standards development over the period from 2005 to 2012 has been 270 percent. The 

benefit­to­cost (B/C) metric says that for every $1 dollar of costs expended by industry 

(2005­2012), ~$13 dollars in benefits have been returned. 

82 Albert Link and John Scott, The Theory and Practice of Public­Sector R&D Economic Impact Analysis, 

NIST Planning Report #11­1, January 2012, National Institute of Standards and Technology (NIST), U.S. 

Department of Commerce. 

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7 Conclusion

NIST devotes considerable resources to the support of industry standards. The Standards 

Coordination Office (SCO) exists to support industry with the standards­related tools and 

information to compete more effectively in the global marketplace. Part of that support is 

to demonstrate the costs and the benefits of documentary standards. 

This economic impact assessment is one of many retrospective evaluations conducted by 

NIST for over 20 years but it is among a few retrospective assessments to concentrate 

solely on the industry benefits and costs and to focus on documentary standards. 

Some well­informed participants in the nanotechnology SDO community believed that it 

was too early to assess the impact of nanotechnology standards. To them, "economic 

impact" is about selling products and services in well­defined markets, often well 

downstream of the originating technology application, markets that today have not yet 

fully emerged. But from an economic perspective, people invest resources today (and 

from 2005 to 2012) for benefits in the future because they perceive there are good 

reasons to expect benefits. What “the future” entails will differ for different kinds of 

companies. This impact assessment shows that the benefits to SDO participants, and the 

net­benefits industry­wide, have been substantial and the net benefits to SDO participants 

appear to be increasing substantially in the more recent years of this retrospective 

assessment.  

Additionally, the qualitative assessment presented here indicates that SDO participants 

are very future­focused and relatively well situated to reap the rewards of the burgeoning 

growth in nanotechnology­based products and services markets. The large net benefits 

shown in Table 7 that accrued to the non­participant free­riders are because they did not 

incur the costs of participating in the SDO nanotechnology standard­setting activities, yet 

they received the benefits net of only their pull costs.  The record of benefits and costs for 

the free riders exemplifies the positive externality created by the nanotechnology 

standards setting activities of the SDO participants. Another finding of this report is that 

the universities that develop knowledge about nanoscience that is transferred to industry 

in the form of commercialized nanotechnology often do not perceive that the 

nanotechnology documentary standards are important for their work and largely ignore 

the standards. Even those universities that do recognize the importance of the 

nanotechnology documentary standards for their work often do not find the materials 

specification and characterization standards as significant as do the industry respondents 

as a group. The asymmetry in the views of universities and industry about the importance 

and use of nanotechnology documentary standards may inhibit the transfer of 

nanoscience and nanotechnology into commercialized products and services. 

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_____________________________________________________________________                     

                                     

                 

                   

                                        

                                    

Appendix A. Economic Effects of Nanotechnology
 

Documentary Standards Survey Instrument
 Survey 

Economic Effects of Nanotechnology Documentary Standards
 

Introduction 

NIST is conducting its first economic assessment of a suite of documentary standards aimed at advancing 

an emerging technology. NIST has conducted numerous economic assessments over the years. For 

examples go to < http://www.nist.gov/director/planning/study_info.cfm>. 

The survey population was chosen on the basis of their interest in, and familiarity with, nanotechnology 

documentary standards and their first­hand knowledge of the documentary standard development process. 

The focus of the survey is nanotechnology documentary standards published between 2005 and 2012 by the 

following Standards Development Organizations (SDOs): ASTM International’s Technical Committee on 

Nanotechnology (ASTM E56); the International Electrotechnical Commission’s (IEC’s) Technical 

Committee (IEC/TC113), Nanotechnology Standardization for Electrical and Electronics Products and 

Systems; and the International Standards Organization’s (ISO’s) Technical Committee (ISO/TC229), 

Nanotechnology. (See the list of relevant standards in Appendix A of this survey instrument). The choice of 

this group of standards was pragmatic. They are considered good candidates for understanding the role 

and economic significance of documentary standards in a field of emerging technologies. 

TASC Inc. is an independent analytical services company. We have conducted several such assessments on 

NIST’s behalf. All the answers you provide will be held in the strictest confidence. They will not be 

shared with NIST or the standards development organizations whose standards are the focus of the 

analysis. All data in the economic effects assessment will be reported in aggregated form, as averages 

and ranges, so that no individual person, company, or establishment data will be discernable. 

The assessment will be based on data collected for this survey and will employ a present discounted value 

approach to organizing time series estimates of benefits and costs provided by you, the survey respondents. 

The data will be used to calculate estimates of the economic effects according to NIST’s conventions. 

We DO NOT expect your estimates to be based on accounting quality data. We need you to provide your 

best estimates or estimate ranges to all questions based on your experienced judgment. Where these take 

you past your comfort zone, consider that there is likely no one in a better position to formulate such a 

response. If, in addition to your response, you would like to suggest a point of contact within your 

organization whose estimate we would also benefit from obtaining, please provide us with a name, phone 

number, and e­mail address. We will contact that person and solicit their estimates as well.  We welcome 

this opportunity. 

As a token of appreciation for participating in this survey effort, the final report will be available from 

NIST in late 2013 and you and your company will be listed in the acknowledgements unless you prefer that 

they not be. Your full participation in the survey assures that the report will be based on the best 

information available. 

Please return the completed survey to: david.leech@tasc.com 

David will discuss the survey questions with you by phone if you desire. Contact him at: 410­346­6338 

NOTE: This collection of information contains Paperwork Reduction Act (PRA) requirements approved by the Office of Management and Budget (OMB). Notwithstanding any 

other provisions of the law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the 

requirements of the PRA unless that collection of information displays a currently valid OMB control number.  Public reporting burden for this collection is estimated to be 

twenty­five (25) minutes per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed and completing 

and reviewing the collection of information. Send comments regarding this burden estimate or any aspect of this collection of information, including suggestions for reducing this 

burden, to the National Institute of Standards and Technology, Attn: Erik Puskar; Phone: 301­975­8619. OMB Control No. 0693­0033; Expiration Date: 03­31­2016 

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Respondent Name: Click here to enter text. 

Contact Information (email address or /phone #):   Click here to enter text. 

Organization Name: Click here to enter text. 

If your organization has a broad “product line” of which nanotechnology­related research, services, or

products are a part: 

Relevant Sub Division Name: Click here to enter text. 

Relevant Sub Division Technical or Product Focus: Click here to enter text. 

Background Information 

1. The nanotechnology value chain consists of multiple tiers. Please indicate (X) the industry tiers that best 

characterize your company’s (or relevant division’s) role. 

Click here to enter 

text. 

Waste management 

Click here to enter 

text. 

End product development and application 

Click here to enter 

text. 

Nanomaterial synthesis 

Click here to enter 

text. 

Raw materials producer 

Click here to enter 

text. 

Instrument manufacturer 

Click here to enter 

text. 

Internal testing laboratory 

Click here to enter 

text. 

Internal R&D laboratory 

Click here to enter 

text. 

Independent testing laboratory 

Click here to enter 

text. 

Independent R&D laboratory (including universities) 

Click here to enter 

text. 

Other (Please specify and offer an explanation of your role.) Click 

here to enter text. 

2.  In which of the nanotechnology SDO’s identified has your organization participated? 

Click here to enter 

text. 

ASTM E56 

Click here to enter 

text. 

IEC/TC113 

Click here to enter 

text. 

ISO/TC229 

Click here to enter 

text. 

We HAVE NOT participated in these 

nanotechnology SDOs. [Skip to question #7.] 

3. In what year did your organization first become active in one or more of the SDOs identified above? (If 

your involvement was instrumental in the formation of one of the above­mentioned organizations indicate 

the year in which you became involved even if it precedes for formal establishment of the SDO as indicated 

in the parenthesis.) 

ASTM E56 (2005) — Year First Active: Click here to enter text. 

IEC/TC113 (2007) — Year First Active: Click here to enter text. 

ISO/TC229 (2005) — Year First Active : Click here to enter text. 

4. If NIST personnel had not been involved in the SDOs in which your organization participated, estimate 

the number of weeks that the SDO’s publications would have been delayed — on average, across the 

nanotechnology standard development efforts in which your organization was involved. 

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Average Weeks of Delay:  Click here to enter text. 

Benefits and Costs Estimates

Nanotechnology Working Group Participation

5. Estimate the average annual number of hours your organization’s employees or consultants actually 

dedicated to all the nanotechnology standards working groups in which they were involved (indicated in 

your response to question #3 above) from their initial involvement through 2012. 

ASTM E56, IEC/TC113, ISO/TC229: 

Average Annual Hours, “Year First Active” 

through 2012: 

Click here to enter text. 

6. In 2013 dollars, estimate the value of the fully burdened (i.e., including benefits such as retirement and 

health) annual compensation for a full­time person with the requisite expertise to participate in the efforts 

of a nanotechnology working group. 

Total annual compensation for one full time 

person in 2013 dollars $ 

Click here to enter text. 

All data in the economic impact assessment will be reported in aggregated form, as averages and ranges, 

so that no individual person, company, or establishment estimates will be discernable.

Absent Nanotechnology Standards

Economic effects assessments are often conducted on the basis of a “counterfactual scenario” that posits 

how things would have been in the absence of the event being assessed. We hypothesize that, prior to the 

consensuses represented by the 40 nanotechnology standards identified in Appendix A, more time was 

required of you and your colleagues in the performance of a wide range of activities. 

7. From the list of nanotechnology standards listed in Appendix A, identify — by list number — the five 

(more if need be) that you think are representative of the most significant nanotechnology consensus 

standards for your organization. 

Click here to enter text. Click here to enter text. Click here to enter text. 

Click here to enter text. Click here to enter text. Click here to enter text. 

Click here to enter text. Click here to enter text. Click here to enter text. 

8. In Nanotechnologies­Related Activities Table below, select the top 3 activities within your organization 

that you judge have been most affected by nanotechnology standards and estimate the percent of all the 

benefits from nontechnology standards that each of these 3 activities represent.  (For example, your top 3 

activities could each account for 33% of all benefits equally, leaving very little benefits accounted for by 

other activities; or they could account for 50%, 30% and 2%, leaving the unspecified 18% of all benefits 

spread among the remaining activities.) 

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Nanotechnology­Related Activities Table 

PreDevelopment 

R&D/ 

Knowledge 

Acquisition 

% 

Click here to 

enter text. 

Worker/Student 

Training 

% 

Click here to 

enter text. 

Investment 

Justification 

for 

Equipment 

Adoption 

/Acquisition 

% 

Click here to 

enter text. 

Product 

Design & 

Development 

(excl. 

regulatory 

compliance) 

% 

Click here to 

enter text. 

Quality 

Assurance & 

Control 

% 

Click here to 

enter text. 

Safety and 

Environmental 

Monitoring/Risk 

Management 

% 

Click here to 

enter text. 

Contract 

Negotiations 

% 

Click here to 

enter text. 

Intellectual 

Property Due 

Diligence 

% 

Click here to 

enter text. 

Regulatory 

Compliance, 

Negotiations, 

& Monitoring 

% 

Click here to 

enter text. 

Marketing, 

Marketing 

Intelligence, 

& B2B 

Networking 

% 

Click here to 

enter text. 

Other 

(Describe) 

% 

Click here to 

enter text. 

Other 

(Describe) 

% 

Click here to 

enter text. 

9. For the 3 activities selected in the Nanotechnologies­Related Activities Table above, provide a few
 

sentences describing how the existence of nanotechnology standards changed the processes that resulted in
 

benefits to your organization. (A few words are far more helpful than no words.)
 

Click here to enter text.
 

10. For the activity with the highest percentage benefits to your organization (from the Activities Table 

above), estimate one­time labor and material costs — “pull costs” — associated with assimilating the 

information contained in the standards into your ongoing processes. (DO NOT include cost associated with
 

participating in SDO activities, if any, as these are already been estimated in your response to question #6.)
 

Material costs $ Click here to enter text. 

Year incurred Click here to enter text. 

Number of full­time persons years Click here to enter text. 

Year incurred Click here to enter text. 

All data in the economic impact assessment will be reported in aggregated form, as averages and ranges, 

so that no individual person, company, or establishment estimates will be discernable.

11a. In column A, of the Activity Benefits Table below, for the activity with the highest percentage benefits 

to your organization (from the Nano­Related Activities Table above), estimate the number of full­time 

person­years (FTPs) in 2012 dedicated to nanotechnology­related efforts in that category of activity. 

Activity Benefits Table 

Column A 

Full­Time 

Person­Years (FTPs) 

Dedicated to this 

Activity 

(2012) 

(E.g., 0.5, 1, 5.5, 10) 

Column B 

Annual Compensation 

of an FTP w/ 

Appropriate Expertise 

($ FY2013) 

Column C 

Multiple of FTPs 

Dedicated to this 

Activity Absent the 

Relevant 

Nanotechnology 

Standards

(E.g., .5X, 1X, 2.5X, 

10X) 

Column D 

Average Annual Rate 

of Growth in the Level 

of NanotechnologyRelated Activities 

2005­2012 

(Percent) 

Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. 

All data in the economic impact assessment will be reported in aggregated form, as averages and ranges, 

so that no individual person, company, or establishment estimates will be discernable.

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11b. In column B, of the Nanotechnologies­Related Activities Table, estimate the fully burdened annual 

compensation (i.e., including benefits such as retirement and health) for a full­time employee with the 

requisite expertise to engage in the selected activity. 

11c. In column C of the Nanotechnologies­Related Activities Table, estimate the multiple of FTPs that it 

would take to perform this function in the absence of consensus nanotechnology standards, holding 

constant the 2012 level of activity. 

11d. In column D of the Nanotechnologies­Related Activities Table estimate the average annual rate of 

growth in the level of this nanotechnology­related activity, 2005­2012. 

Skip questions 12a and 12b if your organization has not sold nanotechnology­related products, services, 

or intellectual property. 

12a. If the sale of any products, services, or intellectual property would have been delayed in the absence of 

nanotechnology standards, what is the average annual revenue from those sales, and how many weeks 

delay would have been incurred? 

Average annual revenue (2005­2012) Click here to enter text. 

Number of weeks delay Click here to enter text. 

All data in the economic impact assessment will be reported in aggregated form, as averages and ranges, 

so that no individual person, company, or establishment estimates will be discernable. 

12b. Please provide a brief description of the products, services, or intellectual property delayed. (A few 

words are better than no words.) 

Click here to enter text. 

Scaling the Benefits of Nanotechnology­Related Activities 

13a. How many companies/organizations do you collaborate with, or directly compete with, in the conduct 

of nanotechnology­related research or in the sale of nanotechnology­related services or products to major 

customers? 

Number of direct collaborators or competitors: Click here to enter text. 

13b. How many of your collaborators or direct competitors likely realized benefits and costs comparable to 

those you estimated in your responses to the question #11 and/or #12 above? 

Number of direct competitors/collaborators realizing Click here to enter text. 

comparable benefits from nanotechnology 

standardization 

13c. If all the benefits realized by your direct competitors/collaborators summed to 100, what percent is 

represented by the benefits your organization realized? 

Percent of total direct competitor/collaborator benefits? Click here to enter text. 

Thank you for taking the time to provide your best estimates for the answers to the above questions.
 

We look forward to providing you with the results of our analysis.
 

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Nanotechnology Standards 2005­2012 

ASTM (E56) Standards 

List 

Number 

1. E2456­06 Standard Terminology Relating to Nanotechnology 

2.	 E2490­09 Standard Guide for Measurement of Particle Size Distribution of Nanomaterials 

in Suspension by Photon Correlation Spectroscopy (PCS) 

3. E2524­08 Standard Test Method for Analysis of Hemolytic Properties of Nanoparticles 

4.	 E2525­08 Standard Test Method for Evaluation of the Effect of Nanoparticulate Materials 

on the Formation of Mouse Granulocyte­Macrophage Colonies 

5.	 E2526­08 Standard Test Method for Evaluation of Cytotoxicity of Nanoparticulate 

Materials in Porcine Kidney Cells and Human Hepatocarcinoma Cells 

6.	 E2535­07 Standard Guide for Handling Unbound Engineered Nanoscale Particles in 

Occupational Settings 

7.	 E2578­07 (2012) Standard Practice for Calculation of Mean Sizes/Diameters and Standard 

Deviations of Particle Size Distributions 

8.	 E2842­12 Standard Guide for Measurement of Particle Size Distribution of Nanomaterials 

in Suspension by Nanoparticle Tracking Analysis (NTA) 

9.	 E2859­11 Standard Guide for Size Measurement of Nanoparticles Using Atomic Force 

Microscopy (AFM) 

10.	 E2865­12 Standard Guide for Measurement of Electrophoretic Mobility and Zeta 

Potential of Biological Materials
 

IEC (TC113) Standards 

List 

Number 

11.	 IEC 62624_Test methods for measurement of electrical properties of carbon nanotubes 

(2009) 

12.	 IEC/PAS 62565­2­1_Nanomanufacturing ­ Material specifications ­ Part 2­1: Single­wall 

carbon nanotubes ­ Blank detail specification (2011) 

13.	 IEC/TS 62607­2­1_Nanomanufacturing ­ Key control characteristics ­ Part 2­1: Carbon 

nanotube materials ­ Film resistance (2012) 

14.	 IEC/TS 62622_Nanotechnologies ­ Description, measurement and dimensional quality 

parameters of artificial gratings (2012) 

ISO (TC229) Standards 

List 

Number 

15.	 ISO/TS 27687:2008 – Nanotechnologies ­­ Terminology and definitions for nano­objects ­

­ Nanoparticle, nanofiber and nanoplate 

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16.	 ISO/TR 12885:2008 – Nanotechnologies – Health and safety practices in occupational 

settings relevant to nanotechnologies 

17.	 ISO/TS 80004­3:2010 – Nanotechnologies ­­Terminology and definitions –Part 3: Carbon 

nano­objects 

18. ISO/TS 80004­1:2010 – Nanotechnologies – Vocabulary – Part 1: Core terms 

19.	 ISO/TR 11360:2010 – Nanotechnologies – Methodology for the classification and 

categorization of nanomaterials 

20.	 ISO/29701:2010 ­ Nanotechnologies ­­Endotoxin test on nanomaterial samples for in vitro 

systems ­­ LAL Assay 

21.	 ISO/TS 10867:2010 – Nanotechnologies ­­ Characterization of single­wall carbon 

nanotubes using near infrared photoluminescence spectroscopy 

22.	 SO/TR 12802­2010 – Nanotechnologies – Model taxonomic framework for use in 

developing vocabularies – Core concepts 

23.	 ISO/TS 11251:2010 – Nanotechnologies – Characterization of volatile components in 

single­wall carbon nanotube samples using evolved gas analysis/gas chromatograph­mass 

spectrometry 

24.	 ISO 10801:2010 – Nanotechnologies ­­Generation of metal nanoparticles for inhalation 

toxicity testing using the evaporation/condensation method 

25.	 ISO 10808:2010 – Nanotechnologies ­­Characterization of nanoparticles in inhalation 

exposure chambers for inhalation toxicity testing 

26.	 ISO/TS 80004­4:2011 – Nanotechnologies – Vocabulary – Part 4: Nanostructured 

materials 

27. ISO/TS 80004­5:2011 – Nanotechnologies – Vocabulary – Part 5: Bionano interface 

28.	 ISO/TS 80004­7:2011 – Nanotechnologies ­­ Vocabulary ­­ Part 7: Diagnostics and 

therapeutics for healthcare 

29. ISO/TR 13121:2011 – Nanotechnologies ­­ Nanomaterial risk evaluation 

30.	 ISO/TS 10798:2011 – Nanotechnologies ­­ Characterization of single­wall carbon 

nanotubes using scanning electron microscopy and energy dispersive X­ray spectrometry 

analysis 

31.	 ISO/TS 10868:2011 – Nanotechnologies ­­ Characterization of single­wall carbon 

nanotubes using ultraviolet­visible­near infrared (UV­Vis­NIR) absorption spectroscopy 

32.	 ISO/TS 13278 Ed. 1.0:2011 – Nanotechnologies ­ Determination of metal impurities in 

carbon nanotubes (CNTs) using inductively coupled plasma ­ Massspectroscopy (ICP­MS) 

33.	 ISO/TS 13278:2011 – Nanotechnologies – Determination of metal impurities in samples 

of carbon nanotubes using inductively coupled plasma massspectrometry (ICP­MS) 

34.	 ISO/TS 11308:2011 – Nanotechnologies – Characterization of single­wall carbon 

nanotubes using thermogravimetric analysis 

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35.	 ISO/TS 11888:2011 – Nanotechnologies ­ Characterization of multiwall carbon nanotubes 

­­ Mesoscopic shape factors 

36.	 ISO/TS 12805:2011 – Nanotechnologies ­­ Materials specifications – Guidance on 

specifying nano­objects 

37.	 ISO/TR 10929:2012 ­ Nanotechnologies ­­ Characterization of multiwall carbon nanotube 

(MWCNT) samples 

38.	 ISO/TR 13014:2012 ­ Nanotechnologies ­ Guidance on physicochemical characterization 

of engineered nanoscale materials for toxicologic assessment 

39.	 ISO/TS 10797:2012 – Nanotechnologies ­­ Characterization of single­wall carbon 

nanotubes using transmission electron microscopy (TEM) 

40.	 ISO/TR 11811­2012 – Nanotechnologies ­­ Guidance on methods for nano­ and 

microtribology instruments 

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Appendix B. Economic Impact Metrics83 

The economic impact metrics in this report are calculated from a time series of costs and 

benefits in constant dollars. They represent "real" rates of return. In contrast, "nominal" 

rates of return would be based on time series of current dollars (the dollars of the year in 

which the benefits were realized or the costs were incurred). 

Industry Rate of Return (IndRR)

The IndRR is the value of the discount rate, i, that equates the net present value (NPV) of 

a stream of all net benefits associated with an investment project to zero. (This is an 

adoption for the purposes of this study of what is normally referred to as the Social Rate 

of Return (SRR) when applied to societal benefits — typical for NIST economic impact 

studies — or the Internal Rate of Return (IRR) when applied to the investment projects of 

a company.) The time series runs from the beginning of the project, t = 0, to a milestone 

terminal point, t = n. Net benefits refer to total benefits (B) less total costs (C) in each 

time period. Mathematically, 

(1) NPV = [(B0 – C0) / (1 + i)0 + ... (Bt – Ct) / (1 + i)t 

... + (Bn – Cn) / (1 + i)n]=  0 

where (Bt ­ Ct) represents the net benefits associated with the project in year t, and n 

represents the number of time periods (years in most cases) being considered in the 

evaluation. 

For unique solutions of i, from equation (1), the IndRR can be compared to a value, r, 

that represents the opportunity cost of funds invested. Thus, if the opportunity cost of 

funds is less than the social rate of return, the project was worthwhile from an ex post 

social perspective. 

Benefit­to­Cost Ratio

The ratio of benefits­to­costs is precisely that, the ratio of the present value of all 

measured benefits to the present value of all costs. Both benefits and costs are referenced 

to the initial time period, t = 0, as: 

(2) B / C = [ t=0 to t=n Bt /(1 + r)t

] / [ t=0 to t=n Ct / (1 + r)t] 

A benefit­to­cost ratio of 1 implies a break­even project. Any project with B / C > 1 is a 

relatively successful project. Fundamental to implementing the ratio of benefits­to­costs 

is a value for the discount rate, r. 

The characterization of the three metrics follows A. Link and J. Scott, Public

Accountability: Evaluating Technology­Based Institutions (Boston: Kluwer Academic Publishers) 1998. 

51 

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While the discount rate representing the opportunity cost for public funds could differ 

across a portfolio of public investments, the calculated metrics in this report follow the 

guidelines set forth by the Office of Management and Budget where it is stated that 

constant­dollar benefit­cost analyses of proposed investments and regulations should 

report net present value and other outcomes determined using a real discount rate of 7 

84 percent.

Net Present Value (NPV)

The information developed to determine the benefit­to­cost ratio can be used to determine 

net present value as: 

(3) NPV = B – C. 

84 As noted earlier in the report, the government cost of capital is stipulated as seven percent in Office of 

Management and Budget (OMB) Circular no. A­94: Guidelines and Discount Rates for Cost­Benefits

Analyses of Federal Programs, 1992. 

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