Senate subcommittee looks to nano for economic boost

May 8, 2006 – The U.S. Senate Commerce Committee’s Subcommittee on Trade, Tourism and Economic Development heard representatives from universities, business and government describe nanotechnology as the frontier of a new global competition at a hearing on Capitol Hill Thursday.

“Nanotechnology has tremendous potential to improve the quality of life for our citizens, create high paying jobs, and increase U.S. global competitiveness,” said Sen. Gordon Smith (R-OR), who presided over the hearing. “Unfortunately, the government has not made the economic development aspect of nanotechnology much of a priority. We’re going to try to do that.”

Smith cited a program in Oregon using nano- and microtechnology in the development of Hewlett-Packard’s popular Inkjet printers as an example of the kind of economic development possible. By the year 2014 nanotechnology will affect most manufactured goods, Smith said.

Two themes emerging from the hearing were the need to meet global competition from Europe and Asia, and the opportunities offered by nanotechnology development for smaller states and areas in economic transition.

Sean Murdock, executive director of the NanoBusiness Alliance, said the U.S. faces stiff competition from abroad in the race to commercialize. The NanoBusiness Alliance estimates that more than 50 percent of firms involved with nanotechnology worldwide are based in the U.S., but announcements made at the ChinaNano2005 trade expo place the number of Chinese companies involved at 800, while a recent European Union report estimated 500 European firms active in the field

“If you were to believe statements made by the Chinese we don’t have the majority of companies” active in the field, Murdock said.

The period between a company’s formation and its producing cash flow, referred to as the “valley of death,” is especially acute for firms involved in nanotechnology, Murdock said. Early stage technology firms need adequate capital to segue from basic research to commercialization but funding from venture capital sources stung by the dot com bubble has been insufficient to promote economic development, he said.

The panel heard from leaders in public-private nanotechnology initiatives based in rural states, including Philip Boudjouk, vice president for research, creative activities and technology transfer at North Dakota State University in Fargo, N.D.; Robert “Skip” Rung, president and executive director of the Oregon Nanoscience and Microtechnolgies Institute (ONAMI) in Corvallis, Ore.; and Jerry Gwaltney, city manager of Danville, Va.

Boudjouk said the North Dakota State program has made “enormous progress” in converting research into useful products. He said research at universities should be targeted to meet commercial needs.

Rung reflected on his 25 years of experience at HP to conclude that leadership based on technological change requires “sacrificial investment, hard work — and frankly — a fair amount of stress.

“Nanotechnology…is the frontier, the battlefront, in the global innovation competition,” Rung said. “We will keep or lose our prosperity — all that that comes with — based on the outcome of this one global competition.”

Gwaltney represents a city that is using nanotechnology development to offset declines in tobacco and textiles — declines that put Danville in the unenviable position of ranking among the top four U.S. metro areas for job losses. Spurred by a public-private partnership, the city has seen its Luna nanoWorks, a division of Luna Innovations Inc., create new employment opportunities.

The panel also heard a cautionary tale from David Rejeski, director of the Woodrow Wilson Center’s Project on Emerging Nanotechnologies. Rejeski said a product accident occurred in Germany in March involving a cleanser that is called “Magic Nano.”

“The product had significant health impacts,” he said. Approximately 100 people had respiratory problems and six were hospitalized.

“Things can go wrong if we fail to provide (product) oversight,” he said. Germany’s Federal Institute for Risk Assessment is investigating the incident to determine what caused the problem and whether it had anything to do with nanotechnology.

Rejeski offered three recommendations to avoid accidents, including placing adequate research before product introductions, making sure the oversight system is transparent to the public and industry and engaging the public to build consumer confidence.

Prior to the hearing, Sen. Max Baucus (D-MT) introduced the Research Competitiveness Act of 2006, which creates a tax incentive to support investment funds that back innovative enterprises such as nanotechnology start-ups.

“This bill will help nanotechnology startup companies attract the capital they need to pass safely through the ‘valley of death’ between research and full commercialization,” said Murdock.

In October of last year, Sen. Smith introduced the Nanoscience to Commercialization Institutes Act of 2005 (S. 1908), which would provide $24 million to establish up to eight nanoscience institutes across the country to bridge the gap between research and the marketplace. An aide in Smith’s office said the senator was hopeful of getting the bill passed by the Commerce Committee and brought before the full Senate.


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