The U.S. Nanotechnology Challenge

The federal government's plan to transition nanotechnology applications from the research and development (R&D) phase to full-scale manufacturing has hit a critical juncture. After spending more than $20 billion in nanotechnology research during the past 13 years, the federal government now finds itself struggling to develop a national strategy that will apply nanotechnology to the development of commercial products for the next decade and beyond.

Essentially, nanotechnology is the process of identifying and controlling individual atoms and molecules that are manipulated to create new materials with enhanced properties such as increased strength, lighter weight, greater control of light, and higher chemical reactivity versus their larger-scale counterparts. 

Nanotechnology is expected to impact the development of new products, innovation, and the supply chain process is significant enough that many scholars, high-tech leaders, government officials and other stakeholders are asking the question of who will be the world's premier nanomanufacturing nation.

U.S. Challenges in Nanotech Development

Two recently released reports – one from the General Accounting Office (GAO) and another from the President's Council of Advisors on Science and Technology (PCAST) – suggest that there are several challenges to U.S. competitiveness. These challenges include the lack of a national vision for nanotechnology, increasing global competition, a shortage of skilled workers. These reports also note that there is a lack of U.S. leadership in establishing international standards, and there is not enough research to indicate the potential effects associated with nanomaterials on the environment, health and safety. Another overriding challenge is funding.

Published last fall, the PCAST report entitled Report to the President and Congress on the Fifth Assessment of The National Nanotechnology Initiative, looked at the funding issue and examined the status of the National Nanotechnology Initiative (NNI), a U.S. government research and development program that involves 20 departments and independent agencies participating in nanotechnology projects.

To advance nanotechnology, the NNI joined with the Office of Science and Technology Policy, which has a broad mandate to advise the president and his staff on the effects of science and technology on domestic and international affairs. Together both organizations identified areas where nanotechnology applications can advance through targeting program-level interagency collaboration. Part of this collaboration includes Nanotechnology Signature Initiatives (NSIs), which focuses resources on critical challenges and R&D gaps to better address advancements in science and technology to support national economic, security, and environmental goals.

Nanotech Funding Dips

While agencies are encouraged to work on nanotechnology projects, however, the PCAST report found that federal department funding for NSIs has hit a plateau. According to the report:

….”overall funding for the NSIs has remained flat, and we further find that funding for Solar Energy Collection and Conversion, Nanomanufacturing, and Nanoelectronics – the first three NSIs, which were created in 2011 – actually decreased; the proposed FY2015 NSI budget is down 28% from the FY2011 budget.”

A big part of the decline is the 60% reduction in spending from the Department of Defense between 2012 and 2013, the result of sequestration and budget reconciliation. The report further explained that:

“…..funding peaked for nanotechnology in 2010 at approximately $1.9 billion, dropped slightly to approximately $1.85 billion in both FY2011 and 2012, then dropped nearly 17% to the 2013 level. American Recovery and Reinvestment Act funding injected over $500 million in additional funds into the NNI, primarily at the Department of Energy (DOE), the National Institutes of Health (NIH), National Institute of Standards and Technology (NIST), and the National Science Foundation (NSF). Nanotechnology funding levels for 2014 are $1.537 billion; essentially flat to 2013's $1.550 billion on a non‐inflation adjusted basis.”

While U.S. federal government funding has dipped, however, the U.S. is still ahead of other nations in its nanotechnology investments. The PCAST report found that in 2012, the four leading nations in nanotechnology investments were the U.S. (Federal and states $2.1 billion), Japan ($1.3 billion), Russia ($974 million), and Germany ($617 million).

Global Competition Grows

While the U.S. works through its challenges, other countries and companies are pursuing nanotechnology development with a sense of enthusiasm and urgency.

According to the PCAST report, China and the European Union are ahead of the U.S. in the number of nanotechnology publications. China led the world in publishing the most papers on nanotechnology for the first time in 2013.

On the manufacturing front, a report in China Daily revealed that Foxconn  Technology Group is expanding the development of nanotechnology in their factories and has signed cooperation contracts with Peking University and Tsinghua University to help in this effort. 

The European Union's Horizon 2020 program will allot nearly € 80 million into research and development initiatives during the period 2014 to 2020. A portion of that funding will go toward nanotechnology development, which the EU expects will have an impact in several areas including accelerating the commercialization of nano-enabled products to support European competitiveness, and enhancing manufacturing processes and industrial productivity. The EU also said its efforts will contribute to improving standardization and nanosafety.

Another significant initiative was signed last October when Rusnano, a company founded out of a reorganization of the state corporation Russian Corporation of Nanotechnologies, inked an agreement with China's Industrial Technology Investment Corporation and Singapore-based investment firm 360ip to form Trans Pacific Technology Fund (TPTF), a new technology investment fund.

TPTF has an initial capital commitment of $200 million, but the expectation is that future expansion from Asian investors will increase the fund to $400 million, according to a Rusnano press release. The statement went on to say that the goal of the TPTF is to help business and technology flourish in Russia and the Asia-Pacific region. To do this, TPTF will invest in high-tech companies in the field of robotics and automation, nanotechnologies, new materials and information and communications technology (ICT).

Moving Forward

The consensus is that nanotechnology can improve material performance, increase efficiency and reduce manufacturing costs, while at the same time develop new products, add good paying jobs, and support economic revitalization to the U.S. economy.

Providing more funding for nanotechnology R&D, participating in developing international standards for measurement and nomenclature, and, as the PCAST report recommends, encouraging greater collaboration between the public and private sectors, are all initiatives that can drive U.S. innovation and revolutionize commercial products. 

As we transition to large-scale commercial nanomanufacturing, federal and state governments, as well as high-tech industry leaders should quickly develop a sound national strategy designed to advance our nanomanufacturing capabilities and strengthen our international competitiveness in the years ahead.  

Let us know what you think about the best way to craft a grand strategy for U.S. nanomanufacturing in the comments section below.

5 comments on “The U.S. Nanotechnology Challenge

  1. Marianne
    April 1, 2015

    When building a strategy, always consider what existing nanotechnology standards are, what future standards should be and how risks to unintended health consequencies of nanotechnology should be addressed.

  2. Hailey Lynne McKeefry
    April 2, 2015

    @Marianne, great point! It seems like sometimes and even often, our technology moves more quickly than our ability to imagine and plan for the consequences.

  3. hitekmastr
    April 5, 2015

    Recommended Reading NANOINNOVATION: What Every Manager Needs to Know This is a great new book for anyone who wants to catch up on “what's really happening” in nanotechnology. Covers everything from materials to medicine to imaging, scientific breakthroughs, gadgets & gizmos, international initiatives…the most comprehensive update written to date.

  4. The Source
    April 8, 2015


    From my reading what I've noticed is that more needs to be done to set international standards for nanotechnology manufacturing. We should always keep in mind that any new nanotech products will require standards that address environmental, health and safety issues. This is a prerequisite for consumer trust which is essential for the success of new nanotech products.   

    Thanks for reading this article.

  5. The Source
    April 8, 2015


    Thanks for sharing this link. They'll be a lot more written about nanotechnology and its impact on a broad range of industries in the years ahead.


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