Sept. 24, 2004 – No one can deny the impact of the nanotechnology bill that President Bush and his administration championed. Funding for nanotech has nearly doubled since Bush took office and his fiscal year 2005 budget called for $1 billion for nanotech. That federal support assures that America’s best nanotechnology thinkers can get ideas from concept to lab to product.
I submit, however, that it’s now time to take the next step. The industry and policymakers need to work together to find ways to move the U.S. government from funder to purchaser. Government purchases are a key component in creating the right environment for growth by ensuring that we have a domestic market. Without it, companies and technologies will look for the places that do, which can undermine both our economic and military security.
The federal government is known in procurement circles as The Fortune One Company. The federal shopping list resulted in $300 billion in procurement spending last year. What would be the impact if existing commercial nanotech entities had a front row seat in procurement discussions?
Imagine that the military had a preference for vehicular coatings that lasted longer because they were strengthened with nanoparticles. What if the National Park Service specified smaller, less obtrusive nano-enabled solar cells for their facilities?
Consider the impact of military hospitals expressing a preference for antibacterial wound dressings containing nanofibers that help prevent infection. Companies focused on nanotechnology could more quickly have the critical market mass to fuel expansion, develop new products and stay competitive in the worldwide market.
The 21st Century Nanotechnology Research and Development Act specifically addresses commercial issues. One of its objectives is to “encourage progress on Program activities through the utilization of existing manufacturing facilities and industrial infrastructures such as ¿ the employment of underutilized manufacturing facilities in areas of high unemployment as production engineering and research test beds.”
Sustained growth in manufacturing depends on commerce: customers buying products. If the federal government primes the pump, the free market takes care of the rest. Existing manufacturing facilities and infrastructures will, by demand, be utilized.
We’ve all read headlines questioning nanotech’s substance. While we understand great breakthroughs are yet to come, those of us selling products every day also know that nanotech already contributes to our economic and social good. Companies with a track record can provide a foundation and springboard for upcoming advancements. Let’s start building with the Fortune One Company.
Let me start the dialog with a proposal that mirrors the way procurement is handled in other fields. In fiscal year 2003, more than $26 billion in government procurement worked through the General Services Administration (GSA) Multiple Award Schedules (MAS). Under this system, a variety of more mature companies interested in selling to the government already have completed a long list of GSA form documents, legal representations, disclosures, and price lists. This process and paperwork are substantial barriers to small tech firms.
Often, their only alternative is to offer products through large distributors or resellers who represent perhaps thousands of products and are unable to make a handful of nanotech products a priority.
I propose the creation of a streamlined “Jump Start” procedure, in which nano-products can be quickly added (i.e. within 30 days) to a special Nanotech MAS. This Nanotech MAS would hold preference for purchasing over other MAS for a period of three years. After that time, products would be automatically moved to normal MAS contracts specific to each nanotech company.
What about nano companies whose products are components of other items? Let’s consider a version of a plan already in place for large government contractors. Large businesses are often required to have small business subcontracting plans in which they commit that they will reach certain goals in subcontracting to small businesses.
Specifying a three-year focus on subcontracting to small nanotechnology companies would fast-track nanotech components and technology into a broad range of applications.
Market pressures provide reliable limiters, just as they do in the small business arena. Competitive dynamics are still at work; this program simply gives the tie to the innovator. Moreover, it rewards development of the most market-sensitive nano solutions, since the same entrepreneurs who create the products create competition. At the program’s phase-out stage, nanotechnology’s potential will have been more thoroughly mined and fine-tuned to market demands.
What’s the next step? I discussed the issue with Secretary of the Treasury John Snow when he toured Nanofilm’s facilities recently. I suggested a summit of the National Nanotechnology Initiative under the guidance of the National Nanotechnology Coordination Office since the NNCO includes outreach to industry among its functions.
In addition, the NanoBusiness Alliance recognizes the importance of this issue and has plans for a forum for government procurement personnel as part of its 2005 public policy tour to Washington.
The act’s objective is “ensuring United States global leadership in the development and application of nanotechnology.” R&D can’t be the end of that commitment. It’s time to move beyond the lab report to the purchase order.