[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
                OVERSIGHT OF THE NATIONAL NANOTECHNOLOGY
                INITIATIVE AND PRIORITIES FOR THE FUTURE

=======================================================================



                                HEARING

                               BEFORE THE

             SUBCOMMITTEE ON RESEARCH AND SCIENCE EDUCATION

              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             April 14, 2011

                               __________

                           Serial No. 112-15

                               __________

 Printed for the use of the Committee on Science, Space, and Technology


       Available via the World Wide Web: http://science.house.gov



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              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY

                    HON. RALPH M. HALL, Texas, Chair
F. JAMES SENSENBRENNER, JR.,         EDDIE BERNICE JOHNSON, Texas
    Wisconsin                        JERRY F. COSTELLO, Illinois
LAMAR S. SMITH, Texas                LYNN C. WOOLSEY, California
DANA ROHRABACHER, California         ZOE LOFGREN, California
ROSCOE G. BARTLETT, Maryland         DAVID WU, Oregon
FRANK D. LUCAS, Oklahoma             BRAD MILLER, North Carolina
JUDY BIGGERT, Illinois               DANIEL LIPINSKI, Illinois
W. TODD AKIN, Missouri               GABRIELLE GIFFORDS, Arizona
RANDY NEUGEBAUER, Texas              DONNA F. EDWARDS, Maryland
MICHAEL T. McCAUL, Texas             MARCIA L. FUDGE, Ohio
PAUL C. BROUN, Georgia               BEN R. LUJAN, New Mexico
SANDY ADAMS, Florida                 PAUL D. TONKO, New York
BENJAMIN QUAYLE, Arizona             JERRY McNERNEY, California
CHARLES J. ``CHUCK'' FLEISCHMANN,    JOHN P. SARBANES, Maryland
    Tennessee                        TERRI A. SEWELL, Alabama
E. SCOTT RIGELL, Virginia            FREDERICA S. WILSON, Florida
STEVEN M. PALAZZO, Mississippi       HANSEN CLARKE, Michigan
MO BROOKS, Alabama
ANDY HARRIS, Maryland
RANDY HULTGREN, Illinois
CHIP CRAVAACK, Minnesota
LARRY BUCSHON, Indiana
DAN BENISHEK, Michigan
VACANCY
                                 ------                                

             Subcommittee on Research and Science Education

                     HON. MO BROOKS, Alabama, Chair
ROSCOE G. BARTLETT, Maryland         DANIEL LIPINSKI, Illinois
BENJAMIN QUAYLE, Arizona             HANSEN CLARKE, Michigan
STEVEN M. PALAZZO, Mississippi       PAUL D. TONKO, New York
ANDY HARRIS, Maryland                JOHN P. SARBANES, Maryland
RANDY HULTGREN, Illinois             TERRI A. SEWELL, Alabama
LARRY BUCSHON, Indiana                   
DAN BENISHEK, Michigan                   
RALPH M. HALL, Texas                 EDDIE BERNICE JOHNSON, Texas


                            C O N T E N T S

                        Thursday, April 14, 2011

                                                                   Page
Witness List.....................................................     2

Hearing Charter..................................................     3

                           Opening Statements

Statement by Representative Mo Brooks, Chairman, Subcommittee on 
  Research and Science Education, Committee on Science, Space, 
  and Technology, U.S. House of Representatives..................      
    Written Statement............................................    17

Statement by Representative Daniel Lipinski, Ranking Minority 
  Member, Subcommittee on Research and Science Education, 
  Committee on Science, Space, and Technology, U.S. House of 
  Representatives................................................      
    Written Statement............................................    19

                               Witnesses:

Dr. Clayton Teague, Director, National Nanotechnology 
  Coordination Office (NNCO)
    Oral Statement...............................................    21
    Written Statement............................................    22

Dr. Jeffrey Welser, Director, Nanoelectronics Research 
  Initiative, Semiconductor Research Corporation and 
  Semiconductor Industry Alliance
    Oral Statement...............................................    30
    Written Statement............................................    32

Dr. Seth Rudnick, Chairman, Board of Directors, Liquidia 
  Technologies
    Oral Statement...............................................    42
    Written Statement............................................    43

Dr. James Tour, Professor of Chemistry, Computer Science and 
  Mechanical Engineering, and Materials Science, Rice University
    Oral Statement...............................................    47
    Written Statement............................................    48

Mr. William Moffitt, President and Chief Executive Officer, 
  Nanosphere, Inc.
    Oral Statement...............................................    53
    Written Statement............................................    54

              Appendix: Answers to Post-Hearing Questions

Dr. Clayton Teague, Director, National Nanotechnology 
  Coordination Office (NNCO).....................................    74

Dr. Jeffrey Welser, Director, Nanoelectronics Research 
  Initiative, Semiconductor Research Corporation and 
  Semiconductor Industry Alliance................................    82

Dr. Seth Rudnick, Chairman, Board of Directors, Liquidia 
  Technologies...................................................    89

Dr. James Tour, Professor of Chemistry, Computer Science and 
  Mechanical Engineering, and Materials Science, Rice University.    91

Mr. William Moffitt, President and Chief Executive Officer, 
  Nanosphere, Inc................................................   100


                OVERSIGHT OF THE NATIONAL NANOTECHNOLOGY


                INITIATIVE AND PRIORITIES FOR THE FUTURE

                              ----------                              


                        THURSDAY, APRIL 14, 2011

                  House of Representatives,
    Subcommittee on Research and Science Education,
               Committee on Science, Space, and Technology,
                                                    Washington, DC.

    The Subcommittee met, pursuant to call, at 2:02 p.m., in 
Room 2318 of the Rayburn House Office Building, Hon. Mo Brooks 
[Chairman of the Subcommittee] presiding.


                            hearing charter

              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY

             SUBCOMMITTEE ON RESEARCH AND SCIENCE EDUCATION

                     U.S. HOUSE OF REPRESENTATIVES

                            Nanotechnology:

Oversight of the National Nanotechnology Initiative and Priorities for 
                               the Future

                        thursday, april 14, 2011
                          2:00 p.m.-4:00 p.m.
                   2318 rayburn house office building

Purpose

    On Thursday, April 14, 2011, the Subcommittee on Research and 
Science Education will hold a hearing to examine the National 
Nanotechnology Initiative (NNI) and address the Nation's research and 
development priorities for the future. Witnesses include a 
representative from the NNI, as well as researchers and other 
nanotechnology experts. The hearing will provide background on the 
science and applications of nanotechnology.

Witnesses

Dr. Clayton Teague, Director, National Nanotechnology Coordination 
Office (NNCO)
Dr. Jeffrey Welser, Director, Nanoelectronics Research Initiative, 
Semiconductor Research Corporation and Semiconductor Industry Alliance
Dr. Seth Rudnick, Chairman, Board of Directors, Liquidia Technologies
Dr. James Tour, Professor of Chemistry, Computer Science and Mechanical 
Engineering and Materials Science, Rice University
Mr. William Moffitt, President and Chief Executive Officer, Nanosphere, 
Inc.

Brief Overview

          Nanotechnology is the understanding and control of 
        matter at dimensions between approximately 1 and 100 
        nanometers, where unique phenomena enable novel applications. 
        (A nanometer is one-billionth of a meter. A sheet of paper is 
        about 100,000 nanometers thick.) Unusual physical, chemical, 
        and biological properties can emerge in materials at the 
        nanoscale. These properties may differ in important ways from 
        the properties of bulk materials and single atoms or molecules. 
        \1\
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    \1\ The National Nanotechnology Initiative Supplement to the 
President's FY 2012 Budget, p. 3

          In December 2003, the President signed the 21st 
        Century National Nanotechnology Research and Development Act 
        (P.L. 108-153). This Act provided a statutory framework for the 
        interagency National Nanotechnology Initiative (NNI), 
        authorized appropriations for nanotechnology research and 
        development (R&D) activities through fiscal year 2008 (FY08), 
        and enhanced the coordination and oversight of the program. The 
        U.S. House of Representatives passed bills in both the 110th 
        (H.R. 5940) and 111th (H.R. 554 and H.R. 5116) Congresses to 
        amend and reauthorize the Act; however, the Senate did not act 
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        in either Congress.

          Funding for the NNI has grown from $464 million in 
        fiscal year 2001 (FY01) to $1.9 billion in FY 10; 15 agencies 
        currently have nanotechnology R&D programs. Through FY 11, 
        Congress has appropriated approximately $14.2 billion in 
        nanoscale science, engineering, and technology, through the 
        NNI. \2\
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    \2\ Nanotechnology: A Policy Primer, CRS, p. 6: The Third 
Assessment of the NNI by PCAST denotes $12 billion spent on NNI since 
2001; that report was published before the 2011 funding was in place.

          The President's FY 12 budget request proposes a total 
        of $2.1 billion for the NNI, more than a $200 million or 11.3 
        percent increase over the FY 10 enacted levels \3\.
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    \3\ The National Nanotechnology Initiative Supplement to the 
President's FY 2012 Budget, p. 7 (Note: These amounts differ from the 
OSTP February 2011 Draft one-pager on the NNI used in previous budget 
hearings, as the Supplement had not yet been released.)

          It is estimated that in the U.S. the private sector 
        investment in the research and development of nanotechnology is 
        twice that of the public investment. \4\
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    \4\ Nanotechnology: A Policy Primer, CRS, p. 4

          Globally, the U.S. is the leader in this field but 
        foreign investments in nanotechnology continue to increase. In 
        2009, the U.S. continued to lead global public investments in 
        nanotechnology at over $2.5 billion (Federal, state and local 
        contributions). While Japan, France, China, South Korea, and 
        Taiwan grew their support, no other investment reached $1 
        billion. \5\
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    \5\ Ranking the Nations on Nanotech: Hidden Havens and False 
Threats, LuxResearch August, 2010, p. 3-4

          The very structure of materials can be improved 
        through nanotechnology, by developing nanomaterials that are 
        stronger, lighter, more durable or better conductors, among 
        other traits adding nanoparticles to plastics can make them 
        stronger, lighter and more durable. Nanoparticles are currently 
        used in baseball bats and tennis rackets, but someday may also 
        be used in bulletproof vests and light, fuel efficient 
        vehicles.Nanotechnology also holds the potential to 
        exponentially increase information storage capacity; soon [a] 
        computer's entire memory will be able to be stored on a single 
        tiny chip. \6\
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    \6\ Nano.gov, Applications and Products

          Varying estimates project nanotechnology product 
        revenues will reach between $2.95 billion and $3.1 trillion by 
        2015. \7\
---------------------------------------------------------------------------
    \7\ The National Nanotechnology Initiative: Overview, 
Reauthorization, and Appropriations Issues, CRS, p. 3

Background

    As described by the NNI:
      Nanotechnology is the understanding and control of matter at 
dimensions between approximately 1 and 100 nanometers, where unique 
phenomena enable novel applications. Encompassing nanoscale science, 
engineering, and technology, nanotechnology involves imaging, 
measuring, modeling, and manipulating matter at this length scale. A 
nanometer is one-billionth of a meter. A sheet of paper is about 
100,000 nanometers thick; a single gold atom is about a third of a 
nanometer in diameter. Dimensions between approximately 1 and 100 
nanometers are known as the nanoscale. Unusual physical, chemical, and 
biological properties can emerge in materials at the nanoscale. These 
properties may differ in important ways from the properties of bulk 
materials and single atoms or molecules. \8\
---------------------------------------------------------------------------
    \8\ Nano.gov, What is Nanotechnology
---------------------------------------------------------------------------
    Nanotechnology is an enabling technology and, as such, its 
commercialization does not depend specifically on the creation of new 
products and new markets. Gains can come from incorporating 
nanotechnology into existing products, resulting in new and improved 
versions of these products. Examples could include faster computers, 
lighter materials for aircraft, less invasive ways to treat cancer, and 
more efficient ways to store and transport electricity. Some less-
revolutionary nanotechnology-enabled products are already on the 
market, including stain-resistant, wrinkle-free pants, ultraviolet-
light blocking sunscreens, and scratch-free coatings for eyeglasses and 
windows.

National Nanotechnology Initiative (NNI)
    The National Nanotechnology Initiative (NNI) is a multi-agency 
research and development (R&D) program. The goals of the NNI, which was 
initiated in 2001, are to maintain a world-class research and 
development program; to facilitate technology transfer; to develop 
educational resources, a skilled workforce, and the infrastructure and 
tools to support the advancement of nanotechnology; and to support 
responsible development of nanotechnology.
    Currently, 15 Federal agencies have ongoing programs in 
nanotechnology R&D. Additionally, 10 other agencies, such as the Food 
and Drug Administration, the U.S. Patent and Trademark Office, and the 
Department of Transportation, participate in the coordination and 
planning work associated with the NNI (see Table 1).


    (Table 1: NNI Participating Agencies) \9\
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    \9\ The National Nanotechnology Supplement to the President's FY 
2012 Budget, p. 5


    The potential contributions of nanoscale science and technology to 
future U.S. economic growth were first raised to the level of a Federal 
initiative, known as NNI, in the FY 01 budget request to Congress.
    Legislatively, the NNI was originally authorized in 2003, through 
the 21st Century National Nanotechnology Research and Development Act 
(P.L. 108-153). The Act adds oversight mechanisms to provide for 
planning, management, and coordination of the program; encourages 
partnerships between academia and industry; encourages expanded 
nanotechnology research and education and training programs; and 
emphasizes the importance of research into societal concerns related to 
nanotechnology to understand the impact of new products on health and 
the environment.
    The Act authorized appropriations for nanotechnology research and 
development (R&D) activities through FY 08. While the programs and 
funding in the Act were only authorized through 2008 they have 
continued to receive funding through the annual Appropriations process. 
As is the case with numerous Federal programs, in order to maintain 
program integrity the Federal government continues to provide funding 
while the reauthorization process takes place.
    The U.S. House of Representatives attempted to reauthorize the NNI 
in both of the last two Congresses, passing H.R. 5940 in the 110th and 
H.R. 554 and H.R. 5116 in the 111th. The Senate did not act in either 
Congress.

    The management structure for the NNI is as follows:

    The National Nanotechnology Initiative is managed within the 
framework of the National Science and Technology Council (NSTC), the 
Cabinet-level council by which the President coordinates science and 
technology policy across the Federal Government. The Nanoscale Science, 
Engineering, and Technology (NSET) Subcommittee of the NSTC's Committee 
on Technology coordinates planning, budgeting, program implementation, 
and review of the initiative. The NSET Subcommittee is composed of 
representatives from agencies participating in the NNI. The National 
Nanotechnology Coordination Office (NNCO) provides technical and 
administrative support to the NSET Subcommittee, serves as a central 
point of contact for Federal nanotechnology R&D activities, and engages 
in public outreach on behalf of the NNI. The NNCO also serves as a 
liaison to academia, industry, professional societies, foreign 
organizations, and others to exchange technical and programmatic 
information. Additionally, the NNCO coordinates preparation and 
publication of NNI interagency planning, budget, and assessment 
documents. \10\
---------------------------------------------------------------------------
    \10\ Report to the President and Congress on the Third Assessment 
of the National Nanotechnology Initiative, PCAST, p. vii
---------------------------------------------------------------------------
    The NNI has also established eight program component areas (PCAs) 
that provide an organizational framework for categorizing NNI 
activities (see Table 2).


    (Table 2: Program Component Areas) \11\
---------------------------------------------------------------------------
    \11\ National Nanotechnology Initiative Strategic Plan, p. 5

---------------------------------------------------------------------------
NNI FY 12 Budget Request

    In February 2011, the NNI released a supplement to the President's 
FY 12 budget request. This supplement identifies the total amount of 
nanotechnology-related funding requested by each NNI participating 
agency.
    The FY 12 budget request for NNI is $2.1 billion, an increase of 
$216 million or 11.3 percent over the FY 10 actual levels. The 
Administration's budget request includes funding for three signature 
initiatives: Nanoelectronics for 2020 and Beyond; Sustainable 
Manufacturing: Creating the Industries of the Future; and 
Nanotechnology for Solar Energy Collection and Conversion. The DOE 
contribution will increase to $611 million, a $237 million or 63 
percent increase. Likewise, NASA sees a 64 percent increase, EPA an 
11.9 percent increase, NSF a 6.3 percent increase, HHS a five percent 
increase, and NIST a one percent increase. All other agency funding is 
reduced by a total of $88 million. (See Appendix A for more detail.)
    Each of the 25 participating agencies creates its own annual budget 
request, including its request for nanotechnology-related funding. 
``The NNI is an interagency budget crosscut in which participating 
agencies work closely with each other to create an integrated 
program.'' \12\ Of the 25 participating agencies, only 15 have funding 
dedicated to nanotechnology-related fields (see Table 3).
---------------------------------------------------------------------------
    \12\ The National Nanotechnology Initiative Supplement to the 
President's FY 2012 Budget, p. 4


    (Table 3: NNI Budget, by Agency, 2010-2012) \13\
---------------------------------------------------------------------------
    \13\  The National Nanotechnology Initiative Supplement to the 
President's FY 2012 Budget, p. 8

    The FY 12 budget request states the NNI's continued support for the 
Federal role in basic research, infrastructure development, and 
technology transfer, while renewing an emphasis on accelerating the 
transition from basic R&D into innovations that support sustainable 
energy technologies, healthcare and environmental protection. To 
achieve this, Advanced Research Projects Agency for Energy (ARPA-E) at 
the Department of Energy, the Environmental Protection Agency, and the 
National Institutes of Health each receive significant funding 
increases through the request. \14\ Further, environmental, health and 
safety (EHS) research remains a priority as identified by funding 
increases in the FY 12 budget request. NNI EHS funding for the Food and 
Drug Administration is increased over 100 percent, and the Consumer 
Product Safety Administration requests a 300 percent increase. 
Additionally, agencies like the Occupational Safety and Health 
Administration are strengthening their role in the NNI and EHS 
research. \15\ (See Appendix B, C, and D for FY 10--FY12 Agency 
investments by PCA.)
---------------------------------------------------------------------------
    \14\ The National Nanotechnology Initiative Supplement to the 
President's FY 2012 Budget, p. 7
    \15\ Ibid.

PCAST Third Assessment of the NNI
    The 21st Century National Nanotechnology Research and Development 
Act required that a National Nanotechnology Advisory Panel (NNAP) 
biennially report to Congress on trends and developments in 
nanotechnology science and engineering and on recommendations for 
improving the NNI. The President's Council of Advisors on Science and 
Technology (PCAST) acts as the NNAP, and as such conducts the biennial 
assessments. The latest assessment by PCAST was released in March 2010.
    The third assessment of the NNI utilized three overarching 
categories for its evaluation and recommendations. \16\
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    \16\ PCAST's Third Assessment of the NNI, p. viii-xiii

        (1) Program Management-An appraisal of how well NNI leadership 
        has performed with respect to the roles it has been tasked to 
---------------------------------------------------------------------------
        carry out. Recommendations include:

           NNCO broadened impact and efficacy and improved 
        ability to coordinate and develop NNI programs and policies 
        related to those programs;

           Focus on commercialization;

           Develop coordinated milestones, promote strong 
        educational components, and create public-private partnerships 
        to leverage the outcomes of the Signature Initiatives;

           Continue investments in innovative and effective 
        education

           NNCO consideration of the commission of a 
        comprehensive evaluation of the outcomes of the overall 
        investment in NNI education; and

           Develop a clear expectation and strategy for 
        programs in the societal dimensions of nanotechnology.

        (2) Nanotechnology Outcomes-An analysis of what the Federal 
        nanotechnology investment has delivered and recommendations to 
        enhance the outcomes, especially economic outcomes, as follows:

           Include a greater emphasis on manufacturing and 
        commercialization while maintaining or expanding the level of 
        basic research funding in nanotechnology;

           Launch at least five government-industry university 
        partnerships across the Federal government;

           Advise the NNI on how to ensure that its programs 
        create new jobs in the United States (Department of Commerce 
        and Small Business Administration);

           Take steps to retain scientific and engineering 
        talent trained in the United States; and

           Clarify the development pathway and increase 
        emphasis on transitioning nanotechnology to commercialization.

        (3) Environment, Health, and Safety (EHS)-An assessment of 
        NNI's performance in helping to orchestrate the identification 
        and management of potential risks associated with 
        nanotechnology, with particular attention paid to reviewing 
        progress the NNI has made in following through on 
        recommendations made in the 2008 NNAP review of the NNI. New 
        recommendations include:

           Develop clear principles to support the 
        identification of plausible risks associated with the products 
        of nanotechnology;

           Further develop and implement a crossagency 
        strategic plan that links EHS research activities with 
        knowledge gaps and decision-making needs within government and 
        industry;

           Develop information resources on crosscutting 
        nanotechnology EHS issues that are relevant to businesses, 
        health and safety professionals, researchers, and consumers; 
        and

           Foster administrative changes and communications 
        mechanisms that will enable the NNI to better embrace the EHS 
        issues associated with nanotechnology research, development, 
        and commercialization.


NNI Strategic Plan
    The National Nanotechnology Initiative Strategic Plan is the 
framework that underpins the nanotechnology work of the NNI member 
agencies.Its purpose is to facilitate the achievement of the NNI vision 
by laying out guidance for agency leaders, program managers, and the 
research community regarding planning and implementation of 
nanotechnology R&D investments and activities. \17\
---------------------------------------------------------------------------
    \17\ National Nanotechnology Initiative Strategic Plan, p. 2
---------------------------------------------------------------------------
    Released in February 2011, the NNI strategic plan is used by 
participating agencies to guide coordination of nanotechnology-related 
research, training programs and resources. The strategic plan builds on 
the four NNI goals by creating objectives to support each goal. (See 
Table 4.)




    (Table 3: NNI Strategic Plan Goals and Objectives) \18\
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    \18\ National Nanotechnology Initiative Strategic Plan, pp. 23-32

    The NNI strategic plan looks forward over the next ten years for 
areas to induce greater agency collaboration, such as the 
nanotechnology Signature Initiatives: Nanotechnology for Solar Energy 
Conversion; Sustainable Nanomanufacturing; and Nanoelectronics for 2020 
and Beyond. The strategic plan also calls for leveraging collaborative 
interagency opportunities and building an internet-based ``one-stop 
shop'' access point for nanotechnology information. ``Moving into the 
next decade, meaningful engagement with stakeholders and ongoing 
external assessments will strengthen the efforts of the NNI as the 
participating agencies move toward realizing the four NNI goals.'' \19\
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    \19\  National Nanotechnology Initiative Strategic Plan, p. 39
    
    
    
    
    
    
    
    
    Chairman Brooks. The Subcommittee will come to order. Good 
afternoon, everyone. Thank you. This is, as you can tell, this 
is my first time to chair a Subcommittee. I am a freshman from 
the state of Alabama, Mo Brooks. I am going to be needing some 
assistance from staff and also Mr. Lipinski from the state of 
Illinois.
    Welcome to today's hearing entitled Nanotechnology: 
Oversight of the National Nanotechnology Initiative and 
Priorities for the Future. In front of you are packets 
containing the written testimony, biographies, and truth in 
testimony disclosures for today's witness panel.
    Before we get started not only is this the first meeting of 
the Research and Science Education Subcommittee for the 112th 
Congress, but it is also, as I stated earlier, my first hearing 
as Chairman. It is an honor and a pleasure for me to Chair the 
Research and Science Education Subcommittee for this Congress 
and is a position I do not take lightly.
    As such, I look forward to working with you, Mr. Lipinski. 
I want you to know that I will endeavor to serve all Members 
fairly and impartially, and I will work to ensure that the 
Subcommittee on behalf of the American people performs its 
legislative oversight and investigative duties with due 
diligence with regards to matters within its jurisdiction 
throughout the 112th Congress.
    It is imperative that we take seriously our charge to make 
sure that the agencies and programs under our jurisdiction are 
worthy of the public support.
    I now recognize myself for an opening statement. First, let 
me thank each of our witnesses for joining us today, and in 
particular, I would like to give a special thank you to Dr. 
Clayton Teague. From what I understand tomorrow not only marks 
your eighth anniversary as Director of the National 
Nanotechnology Coordination Office, but it will also be your 
last day in that role. I am sorry I will not have the 
opportunity to work with you in this capacity but would 
certainly like to thank you on behalf of the Subcommittee for 
your dedication and service to this Nation. Thank you.
    Then into my statement. Nanotechnology represents a great 
deal of promise for the future of the U.S. economy, both in 
terms of leaps and bounds in the scientific knowledge base and 
in terms of potential products and employment opportunities as 
the technology continues to mature. Many believe it has the 
potential to be the next industrial revolution leading to 
significant social and economic impact. Nanotechnology is 
already prevalent in our lives. It is in sunscreens and 
cosmetics, batteries, stain-resistant clothing, eyeglasses, 
windshields, and sporting equipment. The development of 
nanomaterials that are stronger, lighter, and more durable may 
lead to better technology for items such as bulletproof vests 
and fuel efficient vehicles. Advances in nanomedicine to 
diagnose and treat diseases, as well as deliver drugs with 
fewer side effects, are literally just over the horizon. Many 
are already in clinical trials.
    The National Nanotechnology Initiative or NNI is the United 
States government's effort to coordinate the nanotechnology 
research and development activities of the Federal agencies. 
While nanotechnology is not a new scientific field, it remains 
an emerging technology. It is my understanding that neither 
this Subcommittee, nor the full Committee for that matter, has 
held a hearing focused on the NNI since early 2008, primarily 
because the House passed an NNI Reauthorization Bill in both 
the 110th and 111th Congresses, only to see them die in the 
United States Senate. Regardless, much has happened in the past 
three years, including a new PCAST Assessment and the issuance 
of a strategic plan. This hearing today provides us with an 
opportunity to get feedback on those documents and have a 
discussion about national priorities for this technology.
    In addition, we will also examine the President's fiscal 
year 2012 NNI Budget Supplement, which represents funding 
requests from the 15 federal agencies investing in 
nanotechnology. The request includes a more than an $11 
million, excuse me. More than a $200 million increase or 11 
percent from fiscal year 2010 enacted levels, including 
significant increases for environmental, health and safety 
areas, and nano-manufacturing. In these difficult budget times, 
Congress needs to be sure that all federal investments will 
work to strengthen the economy, including our investments in 
nanotechnology.
    I look forward to hearing the testimony to be presented 
today and to the beginning of what I hope is a fruitful 
discussion on U.S. nanotechnology investments and priorities.
    And, again, thank you for joining us today.
    [The prepared statement of Mr. Brooks follows:]
                Prepared Statement of Chairman Mo Brooks
    Good afternoon and welcome. Again, let me thank each of our 
witnesses for joining us today.
    Nanotechnology represents a great deal of promise for the future of 
the U.S. economy, both in terms of leaps and bounds in the scientific 
knowledge base and in terms of potential products and employment 
opportunities as the technology continues to mature. Many believe it 
has the potential to be the next industrial revolution leading to 
significant social and economic impact. Nanotechnology is already 
prevalent in our lives; it is in sunscreens and cosmetics, batteries, 
stain-resistant clothing, eyeglasses, windshields, and sporting 
equipment. The development of nanomaterials that are stronger, lighter, 
and more durable may lead to better technology for items such as 
bulletproof vests and fuel efficient vehicles. (With gas prices soaring 
isn't that a welcome thought?) Advances in nanomedicine to diagnose and 
treat diseases as well as deliver drugs with fewer side effects are 
literally just over the horizon; many are already in clinical trials 
(as we will hear today).
    The National Nanotechnology Initiative (NNI) is the U.S. 
government's effort to coordinate the nanotechnology research and 
development activities of the Federal agencies. While nanotechnology is 
not a new scientific field, it remains an emerging technology. It is my 
understanding that neither this Subcommittee, nor the full Committee 
for that matter, has held a hearing focused on the NNI since early 
2008, primarily because the House passed an NNI reauthorization bill in 
both the 110th and 111th Congresses, only to see it die in the Senate. 
Regardless, much has happened in the past three years, including a new 
PCAST Assessment and the issuance of a Strategic Plan. This hearing 
today provides us with an opportunity to get feedback on those 
documents and have a discussion about national priorities for this 
technology.
    In addition, we will also examine the President's fiscal year 2012 
NNI budget supplement, which represents funding requests from the 15 
federal agencies investing in nanotechnology. The request includes over 
a 200 million dollar (11 percent) increase from FY 10 enacted levels, 
including significant increases for environmental, health and safety 
areas, and nano-manufacturing. In these difficult budget times, 
Congress needs to be sure that all Federal investments will work to 
strengthen the economy, including our investments in nanotechnology.
    I look forward to hearing the testimony to be presented today and 
to the beginning of what I hope is a fruitful discussion on U.S. 
nanotechnology investments and priorities.Again, thank you for joining 
us today.

    Chairman Brooks. And now the Chair recognizes Mr. Lipinski 
for an opening statement.
    Mr. Lipinski. Thank you, Chairman Brooks, and I want to 
congratulate you on being made the Chair of this Subcommittee. 
I served as Chair of the Subcommittee last year. It is a very--
we do a lot of important work here. I really think that 
research is critical, our scientific research is critical to 
the future of our country, and science education clearly also 
is critical to our future. So I am looking forward to working 
with you on the committee, and I think that we can get a lot of 
good things done, starting today with one of my favorite 
subjects of nanotechnology.
    Not only are nanotech products and science fascinating in 
their own right, but investments in this area have already 
resulted in job creation in my state and across the Nation. I 
firmly believe the potential for return on a relatively modest 
federal investment is many times what we have already 
witnessed.
    I am fond of saying and have said this countless times here 
in this committee, that at one point I drank the nanotech Kool-
Aid to believe that it really is the next industrial revolution 
as the Chairman had mentioned. And it may have been when I 
visited Chad Mirkin's lab at Northwestern University about five 
years ago. Mr. Moffitt knows it very well. I was amazed by what 
could be done on the scale of a single atom. In nanotechnology 
there is now a branch of engineering that simply did not exist 
23 years ago when I was getting my degree in mechanical 
engineering at Northwestern.
    By controlling individual atoms we are creating new 
materials, products, companies, and jobs. It is not just 
material sciences or semiconductors. Companies like Mr. 
Moffitt's Nanosphere, which emerged from Dr. Mirkin's lab ten 
years ago, are succeeding because nanotechnology is helping us 
understand biology at the cellular level. We are now seeing 
applications that were not even imagined 11 years ago when the 
National Nanotechnology Initiative was first created.
    The range of potential applications is broad. It will have 
enormous consequences for electronics, energy transformation 
and storage, materials, and medicine and health to name just a 
few.
    The Science Committee recognized the problems of 
nanotechnology early on, holding our first hearing more than a 
decade ago to review federal activities in the field. The 
committee was subsequently instrumental in the development and 
enactment of a statute in 2003 that authorized the interagency 
National Nanotechnology Initiative, the NNI. As the Chairman 
said, we have passed three times since the House in 2008 a 
reauthorization of NNI, and we passed it in a bipartisan 
manner. Unfortunately, all three times they died in the Senate. 
Not the only things that did.
    But I hope that working together, Chairman Brooks, we will 
have the opportunity to take up a reauthorization once again 
this Congress and maybe the fourth time will be the charm.
    I do not think that the NNI requires major revisions, but I 
do think there are opportunities to formalize some of the 
recommendations we have received in the last few years from 
PCAST and the National Academies on how to strengthen the 
program even further without any additional costs.
    Our bill has been about making smarter use of the money we 
are already spending, not necessarily about spending more. I 
welcome recommendations from our witnesses today on how we can 
continue to improve upon the existing program.
    I am particularly excited about the Administration's 
Signature Initiative in sustainable nano-manufacturing, and I 
look forward to hearing how the agencies are responding to 
PCAST's recommendations to ensure that this initiative is 
successful, such as by developing coordinated milestones, 
promoting strong educational components, and creating public, 
private partnerships in nano-manufacturing.
    I would like to spend my last couple minutes talking about 
something else. In our invitations to the witnesses we did not 
ask you to submit testimony specifically on environmental, 
health and safety, or EHS research. That must be part of any 
comprehensive nanotechnology research strategy, but hopefully 
we can engage in some discussion on this topic during the Q&A.
    It is important for the successful development of 
nanotechnology that potential downsides can be addressed from 
the beginning in a straightforward and open way. We know too 
well that negative public perceptions about the safety of 
technology can have serious consequences for its acceptance and 
use.
    I hope to hear from our industry witnesses about their 
thoughts on this issue, and it is certainly not the purpose of 
fear mongering. It is for purposes of really clearing up any 
misconceptions that are out there and making sure that nothing 
new that we are doing here in nanotechnology is going to have a 
negative impact on the environment, health, or safety.
    The NNI has always included activities for increasing the 
understanding of these aspects of nanotechnology, but I believe 
that EHS research did not receive sufficient attention or 
funding for many years. I am concerned about the lack of a 
well-designed and executed EHS research program.
    I look forward to hearing from Dr. Teague about the 
strategy that is, I understand is scheduled to be released in 
the coming days on EHS, and I am looking forward to hearing how 
it incorporates the comments of experts from both academia and 
industry.
    And on that note I wanted to echo Chairman Brooks in 
thanking Dr. Teague for his work. He has been with NNI almost 
since the beginning, and I know that your expertise is going to 
be missed.
    Once again, I am very happy we are having this hearing 
today, and I look forward to all the witness testimony and the 
Q&A, and I think you all for being here today and thank you for 
the extra time here this week.
    Mr. Chairman, I yield back.
    [The prepared statement of Mr. Lipinski follows:]
           Prepared Statement of Ranking Member Dan Lipinski
    Thank you Chairman Brooks, for yielding, but more importantly, 
thank you for holding this hearing today. It's been exactly three years 
since the committee last held a hearing on nanotechnology, so I'm happy 
we're returning to one of my favorite topics. Federal investments in 
nanotechnology research have already led to job creation in my state 
and across the nation, and I believe the potential for return on our 
relative modest federal investment is many times what we've already 
witnessed.
    I'm fond of saying that I ``drank the nanotech kool-aid'' the first 
time I visited Chad Merkin's lab at Northwestern. I was amazed by what 
he could do at the scale of a single atom. In nanotechnology there is 
now a branch of engineering that simply did not exist 23 years ago when 
I was getting my degree in mechanical engineering. By controlling 
individual atoms we can create new materials, products, companies, and 
jobs.
    And it's not just materials science or semiconductors. Companies 
like Mr. Moffitt's Nanosphere, which emerged from Dr. Merkin's lab 10 
years ago, are succeeding because nanotechnology is helping us 
understand biology at the cellular level. We are now seeing 
applications that were not even imagined 11 years ago when the National 
Nanotechnology Initiative was first created. The range of potential 
applications is broad and will have enormous consequences for 
electronics, energy transformation and storage, materials, and medicine 
and health, to name just a few examples.
    The Science Committee recognized the promise of nanotechnology 
early on, holding our first hearing more than a decade ago to review 
Federal activities in the field. The Committee was subsequently 
instrumental in the development and enactment of a statute in 2003 that 
authorized the interagency National Nanotechnology Initiative - the 
NNI.
    We have passed a widely supported, bipartisan update to the NNI 
bill in the House three times since 2008. Unfortunately, all three 
times the bill died in the Senate. But I hope, Chairman Brooks, that we 
will have an opportunity to take up an NNI Reauthorization bill once 
again in this Congress. Maybe 4th time is a charm?
    I don't think the NNI requires major revisions. It seems to be 
working pretty well. But I do think there are opportunities to 
formalize some of the recommendations we have received in the last few 
years from PCAST and the National Academies on how to strengthen the 
program even further, without any additional costs. Our bill has been 
about making smarter use of the money we are already spending, not 
necessarily about spending more. I welcome recommendations from our 
witnesses today on how we can continue to improve upon the existing 
program.
    Today's hearing is a broad overview of the NNI program and its 
benefits to our economy and society. I am particularly excited about 
the Administration's signature initiative in sustainable 
nanomanufacturing, and I look forward to hearing how the agencies are 
responding to PCAST recommendations to ensure that this initiative is 
successful, such as by developing coordinated milestones, promoting 
strong educational components, and creating public-private partnerships 
in nanomanufacturing.
    But I would like to spend my last couple of minutes talking about 
something else. In our invitations to the witnesses, we did not ask you 
to submit testimony specifically on environmental, health, and safety - 
or EHS - research that must be part of any comprehensive nanotechnology 
research strategy. But hopefully we can engage in some discussion on 
this topic during the Q&A.
    It is important for the successful development of nanotechnology 
that potential downsides be addressed from the beginning in a 
straightforward and open way. We know too well that negative public 
perceptions about the safety of a technology can have serious 
consequences for its acceptance and use. I hope to hear from our 
industry witnesses about their thoughts on this issue. However, this is 
about more than just perception.
    The simple fact is the science base is not now available to pin 
down what types of engineered nanomaterials may be harmful. We don't 
yet know what characteristics of these materials determine their 
effects on living things or on the environment. Nor do we even have 
standards and measurement tools for the full range of relevant or 
potentially relevant characteristics.
    The NNI has always included activities for increasing understanding 
of the environmental and safety aspects of nanotechnology. But I 
believe that EHS research did not receive sufficient attention or 
funding for many years. While I applaud the current Administration's 
increased emphasis on EHS, I remain concerned about the lack of a well 
designed and effectively executed EHS research program. I understand 
that a new EHS strategy is days away from being released. I look 
forward to hearing from Dr. Teague about that strategy and how it 
incorporates the comments of experts from both academia and industry.
    Finally, before I yield back, I'd like to express my gratitude to 
Dr. Teague for his 8 years of service to the NNI and to our country. I 
learned yesterday that he will be retiring. Tomorrow, I believe. Dr. 
Teague has been with the NNI almost since its beginning, and I know his 
expertise will be missed.
    Once again, I am very happy we are having this hearing today. I 
look forward to all of the witness testimony and the Q&A, and I thank 
you all for being here today. I yield back.

    Chairman Brooks. Thank you, Mr. Lipinski. If there are 
Members who wish to submit additional opening statements, your 
statements will be added to the record at this point.
    Now, before I introduce the witnesses, I would like to 
yield a few minutes to the distinguished Chairman of the 
Science, Space, and Technology Committee, Mr. Hall of Texas.
    Chairman Hall. Thank you very much, Mr. Chairman. I 
appreciate your good work and your hard work and your long 
hours of work and your subcommittee, and also I thank you for 
telling us about Clayton Teague and his history and the long 
service he has rendered. About 41 years ago I started in public 
service as a state senator and then 31 years ago I started up 
here, so we started out about the same time. You look a lot 
younger than I do, but we thank you.
    And this is a very important committee, and this is, I 
think, nanotechnology and the priorities and the initiatives 
and everything for the future is very important. It is much 
more important than these empty chairs here indicate, but we 
are at an urgent time in this Congress now when we are trying 
to decide whether to pass a budget or CRs to put the government 
off and keep them from shutting down. A lot of people just want 
to let them shut down and forget about it, but I think with the 
leadership of this Chairman and this Committee you are onto the 
subject and issue that is very vital to us, and that offers a 
great, great service to us for the future.
    Thank you, Mr. Chairman, for what you do, and thank you all 
for giving your time it takes to get here and to prepare for a 
hearing and to get back to your work. God bless you. Thank you.
    Chairman Brooks. Thank you, Mr. Chairman.
    At this time I would like to introduce our witness panel. 
Dr. Clayton Teague is Director of the National Nanotechnology 
Coordination Office for the National Nanotechnology Initiative.
    Dr. Jeffrey Welser is the Director of the Semiconductor 
Research Corporation's (SRC) Nanoelectronics Research 
Initiative, or NRI. The SRC conducts research on behalf of the 
semiconductor industry and the Semiconductor Industry 
Association or SA--SIA. Dr. Welser is on loan to the NRI from 
IBM.
    Dr. Seth Rudnick is a medical doctor and Chairman of the 
Board of Directors for Liquidia Technologies, a nanotechnology 
company located in Research Triangle Park, North Carolina--I 
might have to ask you about whether you are for NC State, North 
Carolina, or Duke, I am a Duke guy, so be ready--that develops 
highly-precise particle-based vaccines and therapeutics for the 
prevention and treatment of human disease.
    Dr. James Tour is a Professor of Chemistry, Computer 
Science, and Mechanical Engineering and Material Science at the 
Smalley Institute of Nanotechnology at Rice University.
    Mr. William Moffitt is the President and Chief Executive 
Officer of Nanosphere, Inc., a nanotechnology-based healthcare 
company offering diagnostic testing technologies housed in 
Northbrook, Illinois.
    As our witnesses should know, spoken testimony is limited 
to five minutes each, after which the Members of the Committee 
will have five minutes each to ask questions.
    At this point we recognize our first witness, Dr. Clayton 
Teague, the Director of National Nanotechnology Coordination 
Office. As I do so, please, everyone should be aware that we 
are scheduled to have votes before long, and at some point we 
will have to recess for those votes to be taken, at which point 
we will resume thereafter.
    So, Dr. Teague, the floor is yours.

STATEMENT OF CLAYTON TEAGUE, DIRECTOR, NATIONAL NANOTECHNOLOGY 
                   COORDINATION OFFICE (NNCO)

    Dr. Teague. Chairman Hall and Chairman Brooks, Ranking 
Member Lipinski, first of all, thank you for your kind words 
about my service. It is very much appreciated. It has been my 
distinct privilege and honor to serve as the NNCO Director.
    It is also my distinct privilege to be here with you today 
to discuss the NNI and the contributions of Federal agencies to 
sustaining U.S. leadership in nanoscale science, engineering 
and technology.
    For more than a decade, the NNI has set the pace around the 
globe for enabling ground-breaking interdisciplinary research, 
innovation, and infrastructure development in the 
scientifically and economically powerful domain of 
nanotechnology. As the primary interagency program for 
coordinating federal research and development in this field, 
the NNI has catalyzed remarkable advances in electronics, 
medicine, energy, manufacturing, and many other areas. 
Integrated with these R&D efforts to advance nanotechnology has 
been world-leading research by NNI member agencies to 
understand and address the environmental, health, and safety 
aspects of nanotechnology.
    Starting in 2001, the NNI has developed into an engine of 
innovation that has drawn 25 federal agencies into fruitful 
collaboration resulting in their investing a cumulative total 
of over $14 billion in this fast-moving area. The NNI Strategic 
Plan, which was delivered to you in February, provides a 
description of how the NNI adds value to all participating 
agencies.
    I want to note at least two things about the plan's 
inclusion of two new subjects. First, specific objectives for 
each of the plan's four goals, a first for this strategic plan, 
and second, three important signature initiatives for 
interagency focus and alignment of resources.
    Agencies are proposing about $300 million in the 2012 
budget drawn from their agency budgets for these signature 
initiatives in order to accelerate progress in areas of 
national importance.
    The President's 2012 budget provides $2.1 billion for the 
NNI. These investments will advance our understanding of 
phenomena and nanoscale and enhance many of the things that 
Chairman Brooks just laid out for us; our ability to engineer 
nanoscale devices and systems to address areas such as 
renewable energy, next generation electronics, and sustainable 
manufacturing.
    Let me briefly show you a few examples, and if the slide 
would come up, of how nanotechnology is revolutionary. One is 
carbon nanotubes. You can think of them as super-thin sheets of 
carbon, just one atom thick, rolled into microscopic tubes or 
straws. They are extremely strong and lightweight and are 
showing great potential in important structural and electronic 
applications.
    Shown here is an application of carbon nanotube-based 
materials, the second--go back to the first one, please, to 
build a large, lightweight, 52-foot long boat that can travel 
2.5 miles per gallon. Comparably-sized conventional boats can 
travel only one-fifth of that distance per gallon of fuel.
    In the next slide and in the sample being passed among the 
committee, you can see a test sample using similar 
nanomaterials for potential use in bullet-proof vests that have 
a high resistance to penetration, yet are far lighter than any 
other currently-available material. Note that in this case a 
test shot of a high-speed, nine millimeter metal jacketed 
bullet did not penetrate this sample that is only 1 millimeter 
thick.
    A third example comes from the medical domain where 
nanotechnology is showing great promise for disease diagnosis, 
cancer treatment, and drug delivery. This slide shows a novel 
nanotechnology-based method for revealing the amount of artery-
choking plaque inside a blood vessel. Red and yellow represent 
higher levels of plaque. Low levels are represented in blue and 
green.
    The before and after images illustrate the efficacy of not 
only the medical treatment but also the imaging tool. Such 
imaging tools can enable faster and cheaper development of 
life-saving drugs.
    Multiple sources have now come to the conclusion that these 
and other nanotechnology-enabled products will be valued at up 
to $3 trillion by the end of the decade with major 
ramifications for jobs. A study funded by the National Science 
Foundation projects that 6 million nanotechnology workers will 
be needed worldwide by 2020, with 2 million of those jobs in 
the United States.
    The United States is, however, not the only country to 
recognize the potential of nanotechnology. At least 60 
countries now have national nanotechnology strategies with the 
European Union 27 countries outspending the United States. 
Perhaps more important the spending increases in some countries 
such as Russia, China, and South Korea are considerably greater 
than here in the United States.
    A recent analysis of the number of nanotechnology patents, 
publications, and citations show that our leadership is being 
strongly challenged. This could put our national security at 
risk since technological superiority is a foundation of our 
national security strategy.
    I see us now at a crossroads. With continued support of the 
NNI the U.S. will play a major role in what is unfolding as the 
next economic and technological revolution. Without it, the 
United States could fall behind in this extremely important 
race.
    So while the U.S. is currently a global leader in this area 
of technology, it is crucial that our place--pace of investment 
be maintained.
    I would like to conclude on a personal note. I have 
interacted with this Committee since 2003, throw five 
Congresses and two different Administrations. As I leave this 
post I want to sincerely thank this Committee for all its 
strong leadership, commitment, and support of federal 
investments in nanotechnology that you have provided throughout 
this period.
    I will be pleased to answer any questions you may have, and 
thank you.
    [The prepared statement of Mr. Teague follows:]
    Prepared Statement by Dr. E. Clayton Teague, Director, National 
               Nanotechnology Coordination Office (NNCO)
    Chairman Brooks, Ranking Member Lipinski, and Members of the 
Committee, it is my distinct privilege to be here with you today to 
discuss the National Nanotechnology Initiative and the contributions of 
Federal agencies to sustaining U.S. leadership in nanoscale science, 
engineering and technology.
    For more than a decade, the National Nanotechnology Initiative or 
NNI has set the pace around the globe for enabling ground-breaking 
interdisciplinary research, innovation, and infrastructure development 
in the scientifically and economically powerful domain of 
nanotechnology. As the primary interagency program for coordinating 
Federal research and development in nanotechnology, the NNI has 
catalyzed remarkable advances in electronics, medicine, energy, 
manufacturing, and many other areas, enabling a broad spectrum of 
applications that range from the evolutionary to the extraordinary. 
Integrated with these R&D efforts to advance nanotechnology has been 
world leading research by NNI member agencies to understand and address 
the environmental, health, and safety aspects of nanotechnology, 
intended to simultaneously protect public health and the environment 
and to promote nanotechnology commercialization.
    Starting with a roughly $500 million investment by half-a-dozen 
agencies in 2001, the NNI has developed into an engine of innovation 
that has drawn 25 Federal departments and agencies into fruitful 
collaboration resulting in their investing a total of over $14 billion 
cumulatively (2001 to 2010) in one of the world's fastest-moving areas 
of science and engineering. As described in the 2011 NNI Strategic 
Plan, the NNI provides an excellent and effective platform for 
communication, coordination, and collaboration. It adds great value to 
the member agencies, their missions and responsibilities.
    The President's 2012 Budget provides $2.1 billion for the National 
Nanotechnology Initiative (NNI) in 15 agency budgets, an increase of 
$217 million over the 2010 funding level. These investments will 
advance our understanding of nanoscale phenomena and our ability to 
engineer nanoscale devices and systems that address national priorities 
and global challenges in such areas as renewable energy, next-
generation electronics, and sustainable manufacturing consistent with 
the President's A Strategy for American Innovation.
    At the same time, the NNI investment sustains vital support for 
fundamental, groundbreaking R&D and research infrastructure including 
world-class science centers, networks, and user facilities, as well as 
education and training programs that collectively constitute a major 
wellspring of innovation in the United States.

Nanotechnology 101

    Nanotechnology deals with the science of the very, very small. A 
nanometer is one-billionth of a meter, or roughly the width of ten 
atoms lined up in a row. A sheet of paper is about 100,000 nanometers 
thick. All told, nanotechnology is the understanding and control of 
matter at nanoscale dimensions-meaning approximately 1 to 100 
nanometers in width-including imaging, measuring, modeling, and 
manipulation.
    At those scales, quantum phenomena begin to dominate the behavior 
of materials and, unlike at larger scales, properties such as a 
materials size can determine its electrical, optical, magnetic, and 
thermodynamic behavior. As a result, ordinary materials may exhibit 
extraordinary properties, giving rise to materials that are far 
stronger than any other known material yet lighter than aluminum; self-
cleaning paint; lightning-fast electronic components; highly efficient 
devices for collecting and storing energy; molecular structures that 
can sense environmental contaminants; and injectable agents that can 
track and kill tumors.
    One last characteristic I'd like to note about nanotechnology: it 
is, by definition, an interdisciplinary area of study. Scientists 
across historically separate disciplines of chemistry, physics, 
materials science, biology, and engineering find themselves working 
shoulder to shoulder in this emerging field-the sort of cross-
fertilization and collaboration that helps drive some of the 
extraordinary innovation being generated in this field.
    Let me focus in a little more detail on two areas of application 
that are illustrative of nanotechnology's great potential: materials 
science and biomedicine.
    Nanotechnology has arguably demonstrated its most significant 
advances in the realm of materials technologies. The archetypal example 
is the carbon nanotube, discovered over two decades ago. These 
nanotubes are extremely light weight, strong man-made carbon molecules 
with many other useful mechanical, electrical, chemical, and optical 
properties. Carbon nanotubes-think of them as super-thin sheets of 
carbon, just one atom thick, rolled into microscopic tubes or straws-
exhibit unique structural properties (they are light and strong), 
electrical capacities (they can conduct electricity more efficiently 
than many metal wires), and optical quirks (they can be designed to 
photoluminesce when they detect tiny amounts of targeted materials). As 
such they are already showing great potential for a broad range of 
applications in the fields of materials science and electronics, and 
are already in use for radiation- resistant data storage devices.
    Application of carbon nanotube-based lightweight and strong 
materials have already produced large (52 foot long) boats that have 
fuel consumption rates of 2.5 nautical miles per gallon as opposed to 
the 2 gallons per nautical mile consumption rate of comparably sized 
conventional boats. Bullet proof vests with higher resistance to 
penetration and that are far lighter than any currently available are 
another example of using these materials. Other nanomaterials are 
resulting in commercially available quantum-dot based light-emitting 
diode light sources that have a light color comparable to incandescent 
lights yet have a light output efficiency six times that of 
incandescent lights.
    In the biomedical domain, nanotechnology is already helping medical 
researchers and clinicians develop real-time imaging and detection of 
biological targets at cellular and even molecular levels. But the goal, 
and the potential, is to go further than that. One of the ultimate 
goals of what is today being called ``nanobiotechnology'' research is 
the development of multifunctional nanoscale platforms that are able to 
simultaneously detect molecular changes in the body that are indicative 
of a disease; deliver a drug or a combination of drugs with 
unprecedented control and high specificity; and then monitor the 
effectiveness of the drug delivery through imaging or some other 
modality such as monitoring of a biomarker for the disease. Such 
multifunctional platforms can also lead to major developments in 
personalized medicine with individualized therapies (for example, by 
providing more effective treatments with minimal adverse reactions).
    Multiple sources have come to the conclusion that these and other 
nanotechnology-enabled products will be valued at up to $3 trillion by 
the end of the decade. \1\ Such potential economic growth will depend 
on developing the necessary workforce. A study funded by the National 
Science Foundation projects that 6 million nanotechnology workers will 
be needed worldwide by 2020, with 2 million of those jobs in the United 
States. NNI member agencies are responding to this need by sponsoring 
educational and training programs at universities, community colleges, 
and vocational schools.
---------------------------------------------------------------------------
    \1\ Lux Research, Nanomaterials State of the Market Q3 2008: 
Stealth Success, Broad Impact (Lux Research, Inc., NY, NY, July 2008) 
and Roco, Mirkin, and Hersam, Nanotechnology Research Directions for 
Societal Needs. (WTEC, 2010)

The State of the National Nanotechnology Initiative (NNI)

    As previously mentioned, nanotechnology R&D is inherently 
multidisciplinary and its rate of progress depends on strong 
interagency communication, coordination, and collaboration to leverage 
expertise throughout the Federal government. Since 2001, Federal 
agencies have been combining and coordinating their efforts to 
accelerate discovery, development, and deployment of nanotechnology to 
further both agency missions and the broader national interest. 
Congress recognized the importance of a coordinated Federal program for 
nanotechnology R&D in 2003 with its enactment of the 21st Century 
Nanotechnology Research and Development Act (Public Law 108-153), which 
authorized in law the structure of the NNI, its missions, and its 
responsibilities.
    Today the NNI involves the nanotechnology-related activities of the 
25 agencies shown below, 15 of which (in bold) have specific budgets 
for nanotechnology R&D, as described in the NNI Supplement to the 
President's 2012 Budget:

          Consumer Product Safety Commission (CPSC)

          Department of Defense (DOD)

          Department of Energy (DOE)

          Department of Homeland Security (DHS)

          Department of Justice (DOJ)

          Department of Transportation (DOT, including the 
        Federal Highway Administration, FHWA)

          Environmental Protection Agency (EPA)

          Food and Drug Administration (FDA, Department of 
        Health and Human Services)

          Forest Service (FS, Department of Agriculture)

          National Aeronautics and Space Administration (NASA)

          National Institute for Occupational Safety and Health 
        (NIOSH, Department of Health and Human Services/Centers for 
        Disease Control and Prevention)

          National Institute of Food and Agriculture (NIFA, 
        Department of Agriculture)

          National Institute of Standards and Technology (NIST, 
        Department of Commerce)

          National Institutes of Health (NIH, Department of 
        Health and Human Services)

          National Science Foundation (NSF)

          Bureau of Industry and Security (BIS, Department of 
        Commerce)

          Department of Education (ED)

          Department of Labor (DOL, including the Occupational 
        Safety and Health Administration, OSHA)

          Department of State (DOS)

          Department of the Treasury (DOTreas)

          Director of National Intelligence (DNI)

          Nuclear Regulatory Commission (NRC)

          U.S. Geological Survey (USGS, Department of the 
        Interior)

          U.S. International Trade Commission (USITC)

          U.S. Patent and Trademark Office (USPTO, Department 
        of Commerce)

    The NNI is managed within the framework of the National Science and 
Technology Council (NSTC), the Cabinet-level council by which the 
President coordinates science and technology policy across the Federal 
Government. The Nanoscale Science, Engineering, and Technology (NSET) 
Subcommittee of the NSTC's Committee on Technology coordinates 
planning, budgeting, program implementation, and review of the 
initiative. The NSET Subcommittee is composed of representatives from 
agencies participating in the NNI.
    The National Nanotechnology Coordination Office (NNCO), which I 
lead, acts as the primary point of contact for information on the NNI; 
provides technical and administrative support to the NSET Subcommittee; 
supports the subcommittee in the preparation of multiagency planning, 
budget, and assessment documents, including an annual supplement to the 
President's budget; develops, updates, and maintains the NNI website, 
http://www.nano.gov; and provides public outreach on behalf of the NNI.
    The NSET Subcommittee has established four working groups to 
support key NNI activities that the subcommittee recognizes will 
benefit from focused interagency attention:

          Global Issues in Nanotechnology (GIN)

          Nanotechnology Environmental and Health Implications 
        (NEHI)

          Nanomanufacturing, Industry Liaison, and Innovation 
        (NILI)

          Nanotechnology Public Engagement and Communication 
        (NPEC)

    The NNI Strategic Plan is the framework that guides the 
nanotechnology R&D and innovation efforts of the 25 NNI member 
agencies. The most recent Plan, released in February 2011, aims to 
ensure that advances in nanotechnology R&D and their applications to 
agency missions continue unabated in this emerging field. It 
facilitates achievement of the NNI vision by laying out targeted 
guidance for agency leaders, program managers, and the research 
community regarding planning and implementation of nanotechnology R&D 
investments and activities. Informed by feedback and recommendations 
from a broad array of stakeholders and extensive interagency 
deliberation, the Strategic Plan represents the consensus of the 
participating agencies as to the high-level goals and priorities of the 
NNI and specific objectives for at least the next three years. It sets 
out the vision of ``a future in which the ability to understand and 
control matter at the nanoscale leads to a revolution in technology and 
industry that benefits society.''
    The NNI was created to efficiently and effectively manage 
innovative research for economic benefit, national security, and the 
greater public good. Toward this overall NNI vision, the plan specifies 
four goals aimed at achieving that overall vision:

        1.  Advance a world-class nanotechnology research and 
        development program.

        2.  Foster the transfer of new technologies into products for 
        commercial and public benefit.

        3.  Develop and sustain educational resources, a skilled 
        workforce, and the supporting infrastructure and tools to 
        advance nanotechnology.

        4.  Support responsible development of nanotechnology.

    For each of the goals, the plan identifies specific objectives for 
achieving these goals. The plan also lays out eight NNI investment 
categories (``Program Component Areas'' or PCAs), each aimed at helping 
to achieve one or more of the above goals. Since the PCAs were 
established in 2004, they have helped to organize and track categories 
of NNI investments:

        1.  Fundamental nanoscale phenomena and processes

        2.  Nanomaterials

        3.  Nanoscale devices and systems

        4.  Instrumentation research, metrology, and standards for 
        nanotechnology

        5.  Nanomanufacturing

        6.  Major research facilities and instrumentation acquisition

        7.  Environment, health, and safety

        8.  Education and societal dimensions

    In addition, to accelerate nanotechnology development in support of 
the President's priorities and the recently revised A Strategy for 
American Innovation, OSTP and the NNI member agencies have identified 
three Nanotechnology Signature Initiatives that are part of a new model 
of specifically targeted and closely coordinated interagency, cross-
sector collaboration designed to accelerate innovation in areas of 
national priority. The three initial nanotechnology signature 
initiative topics are: Sustainable Nanomanufacturing; Nanotechnology 
for Solar Energy Collection and Conversion; and Nanoelectronics for 
2020 and Beyond. Agencies are proposing more than $300 million in the 
2012 Budget for these signature initiatives, drawn from their agency 
budgets. (More information on each of the initiatives can be found in 
the Strategic Plan and the FY 2012 NNI budget supplement.)
    The interagency task forces supporting each signature initiative 
have identified thrust areas within each of the proposed initiative 
topics and have identified specific agency programs that are involved. 
Finally, each nanotechnology signature initiative task force has 
selected key research targets for each thrust area associated with 
near-and long-term expected outcomes, to help evaluate progress on an 
ongoing basis. The NSET Subcommittee anticipates incorporating 
participation and input from industry and other stakeholders on current 
and future nanotechnology signature initiatives.
    In order to inform Congress, Federal agencies, and the American 
public about the Federal Government's interagency, coordinated efforts 
in nanotechnology, the NNCO annually publishes an NNI supplement to the 
President's budget and makes it publicly available soon after the 
February release of the President's budget. The NNI Supplement to the 
President's 2012 Budget summarizes NNI programmatic activities for 2010 
and 2011, as well as those proposed for 2012. NNI budgets for 2010-2012 
are presented by agency and by Program Component Area. NNI investments 
represent the sum of the nanotechnology-related funding allocated by 
each of the participating agencies. Each agency determines its budget 
for nanotechnology R&D in coordination with the Office of Management 
and Budget (OMB), the Office of Science and Technology Policy (OSTP), 
and Congress.
    The NNI Supplement to the 2012 President's Budget Request provides 
full details of agency proposals for their NNI investments, as well as 
information on the use of Small Business Innovation Research (SBIR) and 
Small Business Technology Transfer Research (STTR) program funds to 
support nanotechnology research and commercialization activities. The 
supplement also discusses activities that have been undertaken and 
progress that has been made toward achieving the four goals set out in 
the NNI Strategic Plan and highlights external reviews of the NNI and 
how their recommendations are being addressed.
    The NNI also benefits from extensive oversight by the Congress and 
by external groups. The recent March 2010 report by the President's 
Council of Advisors on Science and Technology (PCAST), functioning in 
its role as the National Nanotechnology Advisory Panel (NNAP), provides 
an objective overview of the effectiveness of the NNI to date and lists 
recommendations for strengthening the program and maintaining U.S. 
leadership in this field internationally. Many of these recommendations 
for the NNCO are already being implemented.
    OSTP and NNCO actions to respond to the NNAP recommendations 
include: 1) the FY 2011 NNCO Budget includes a new position for an 
Industrial and State Liaison with primary responsibilities to enhance 
communications between the NNI member agencies and the business 
community and between the NNI member agencies and the regional, state, 
and local nanotechnology initiatives; 2) the NNCO Director is 
negotiating with the National Research Council (NRC) to include some 
components of the NNAP recommendation that the NNCO should track 
relevant metrics to measure the outcomes and impacts of NNI programs 
into the next assessment of the NNI (the NRC is requested to: ``Assess 
the suitability of current procedures and criteria for determining 
progress towards NNI goals, suggest definitions of success and 
associated metrics.''); 3) OSTP has designated two new appointments at 
the NNCO--the NNCO Director to serve as the Coordinator for Standards 
and the NNCO Deputy Director to serve as Coordinator for EHS Research; 
and 4) as called for in the 2010 NNI Strategic Plan, the NNCO is 
working with NNI member agencies to create and maintain a database of 
resources available from the Federal government to public and private 
sectors.
    The NSET Subcommittee member agencies discussed but did not agree 
with the NNAP recommendation to fund NNCO at about $5 million annually, 
or 0.3 percent of agency contributions to the NNI. Instead, as NNCO 
Director I proposed staffing and actions to address those 
recommendations that are within the roles and responsibilities spelled 
out in the Memorandum of Understanding establishing the NNCO and in the 
21st Century Nanotechnology R&D Act.
    In closing, the United States must continue to lead the way in 
nanotechnology and emerging technology innovation. The Nation's 
economic growth and global competitiveness depend on it. The NNI 
reflects a firm Federal commitment to broad-based support of 
integrated, coordinated R&D on nanotechnology applications and 
implications, which will help America out-innovate, out-educate, and 
out-build the rest of the world.
    This concludes my general overview of the NNI, including the NNI 
Supplement to the President's 2012 Budget, the most recent assessment 
of the NNI by the NNAP, and the updated NNI Strategic Plan. I will now 
proceed to address the specific questions that were posed to me in the 
formal letter from the chairman inviting me to testify at this hearing:

Committee Invitation Letter Questions

    Question 1: Why are Federal investments in nanotechnology R&D of 
importance to the U.S.? What fields of science and engineering continue 
to present the greatest opportunities for breakthroughs in 
nanotechnology, and what industries are most likely to be affected by 
those breakthroughs in both the near-term and the longer-term?

    Nanotechnology has the potential to profoundly change our economy 
and improve our standard of living, in much the same way as information 
technology advances have revolutionized our lives and the economy over 
the past two decades. While some nanotechnology products are beginning 
to come to market, many major applications for nanotechnology are still 
5-10 years away. Private investors look for short-term returns on 
investment, generally in the range of 1-3 years. Consequently, 
Government support for nanotechnology research and development in its 
early stages is required to ensure that the United States can maintain 
a competitive position in the worldwide nanotechnology marketplace 
while realizing nanotechnology's full potential. Increasing investments 
in nanotechnology R&D by NNI participating agencies also reflect the 
potential for this research to support diverse agency missions and 
responsibilities.
    This funding has a remarkable return on investment when viewed in 
terms of expected job creation and the potential for significant 
economic growth. As mentioned earlier, a study funded by the National 
Science Foundation projects that 6 million nanotechnology workers will 
be needed worldwide by 2020, with 2 million of those jobs in the United 
States . Multiple sources have come to the conclusion that 
nanotechnology-enabled products will be valued at up to $3 trillion by 
the end of the decade . Nanotechnology will continue to create many 
jobs requiring college degrees and higher education, but it also will 
create jobs that can be filled through training and vocational 
programs, including community colleges and two-year degrees. In fact, 
many nanotechnology companies report that they are hiring Ph.D.s for 
routine characterization jobs, which could be more suitably filled by 
skilled technicians. In response to this growing need, community 
colleges across the country are launching nanotechnology programs, with 
currently around 60 such programs nationwide.Federal investments also 
mirror the efforts being made through regional, state, and local 
nanotechnology initiatives across the country. Since the inception of 
the NNI, a number of highly successful regional and state initiatives 
have been developed in the U.S. and continue to thrive today. There are 
currently more than 30 active regional, state, and local nanotechnology 
initiatives in the U.S. , many of which participated in a 2009 NNI 
workshop on regional programs. The consensus at the workshop was clear: 
regional and state initiatives are counting on the leadership of the 
NNI to help drive a nationwide effort in nanotechnology.
    The Federal Government does not single out any particular fields of 
science and engineering or industries that are most likely to benefit 
from the nanotechnology advances. However, in a study commissioned by 
the NNI, Lux Research has identified four industry sectors most likely 
to be impacted by nanotechnology in the near term:

          Advanced healthcare and pharmaceutical applications, 
        which are slowly entering the market

          The transportation sector--including automotive, 
        airplane, and shipping--which offers a huge potential for 
        nanotechnologies, particularly nanotechnology-enabled 
        composites and electrical materials

          Manufacturing, industrial materials, and consumer 
        products (including everything from nanotechnology-enabled 
        lubricants to nanoporous insulation to carbon nanotube-
        reinforced fishing rods)

          The electronics industry, which highlights some of 
        the most broadly adopted nanotechnology-enabled products and 
        processes, and where long-term research is underway (in close 
        cooperation with the NNI) that could enable major new advances 
        that are a decade or more away.

    Question 2: What is the position of U.S. research and development 
in nanotechnology relative to that of other countries? What key factors 
influence U.S. performance in the field, and what trends exist among 
those factors?

    The United States is not the only country to recognize the 
tremendous economic potential of nanotechnology. At least 60 countries 
now have national nanotechnology strategies and policies . Estimates 
from 2008 showed the governments of the European Union (EU) and Japan 
invested approximately $1.7 billion and $950 million, respectively, in 
nanotechnology research and development. The governments of China, 
Korea, and Taiwan invested approximately $430 million, $310 million, 
and $110 million, respectively . This compares to 2008 U.S. Government 
spending of $1.55 billion , placing us second to the E.U. countries. In 
a more recent report, Lux Research has estimated that government 
investments by the European Union and several of its member countries 
combined totaled more than $2.6 billion in 2010, compared to $2.1 
billion in the United States (Federal and state/local governments 
combined, presumably).
    More importantly, all the data now points to an undeniable trend. 
While U.S. funding for nanotechnology has been steadily increasing, 
other countries are significantly ramping up their investments. In the 
case of China, the increase in investments in nanotechnology is 
virtually exponential. Furthermore, recent analyses of the number of 
nanotechnology citations, patents, and publications show that we are 
very quickly being surpassed by other nations in an area where, until 
recently, we had a strong lead . This has the potential of putting our 
national security at risk, since technological superiority has been a 
foundation of our national security strategy since World War II. We are 
now at a crossroads; with the continued support of the NNI, the U.S. 
will play a major role in what is unfolding as the next economic and 
technological revolution; without it the U.S. is likely to fall behind 
in this race.

    Question 3: What is the federal government's role in facilitating 
the commercialization of nanotechnology innovations as compared to 
private industry? How would an early regulatory regime affect the 
growth of the nanotechnology commercial industry?

    A1:  Industry has the primary responsibility for commercialization 
of nanotechnology innovations. However, the Federal Government does 
have roles to play in facilitating this, including the following:

          TFunding basic research in nanoscale science and 
        technology, to keep the pipeline flowing with new innovations 
        for consideration by industry.

          TWorking closely with industry to accelerate the 
        development of applications of nanotechnology that are critical 
        to the national interest, particularly with respect to 
        manufacturing, energy, medicine, national defense and homeland 
        security. Hence mission agencies such as the Department of 
        Defense, the Department of Homeland Security, the Department of 
        Energy, and NASA are increasingly seeing opportunities for the 
        application of nanotechnology to their agency missions, and are 
        supporting both basic and applied research towards realizing 
        those opportunities. NSF and other agencies have developed 
        research and education programs to support nanotechnology 
        innovation and partnerships with industry, such as the 
        Nanoelectronics Research Initiative.

          TFunding research on the health and safety aspects of 
        nanomaterials and working with industry to facilitate safety in 
        the workplace.

          TProviding a clear regulatory pathway that industry 
        can follow in pursuing the commercialization of nanotechnology 
        innovations. To the extent practicable, Federal regulation and 
        oversight should provide sufficient flexibility to accommodate 
        new evidence and learning and to take into account the evolving 
        nature of information related to emerging technologies and 
        their applications. For example, NIH and FDA have a new 
        underway that is designed to move medical products through the 
        translational pipeline to the marketplace more rapidly and 
        efficiently.

          TPromoting fair international trade in 
        nanotechnology-enabled products and processes.

          TSupporting the protection of intellectual property 
        both domestically and internationally, i.e., through the U.S. 
        Patent and Trademark Office (USPTO).

          TProviding funds for small businesses to take 
        advantage of nanotechnology innovations, through the Small 
        Business Innovation Research (SBIR) and Small Business 
        Technology Transfer Research (STTR) programs.

          TServing as an ``early adopter'' of key 
        nanotechnology innovations, e.g., in the application of carbon 
        nanotubes to satellite power cables, ballistic protection, and 
        weight reduction, where initial purchases by the Government of 
        high-value-added nanotechnology products can help to create the 
        opportunity for later development of commercial markets for 
        similar products.

          TFunding the development of novel nanomanufacturing 
        technologies that could be applied to a wide variety of 
        commercial products, and where the lack of appropriate mass-
        production techniques would otherwise preclude large-scale 
        markets for these products.

          TWorking closely with industry to conduct joint 
        roadmapping and R&D activities targeted at key areas of 
        precompetitive nanotechnology research and applications, to 
        bring expertise from industry, academia, and government 
        laboratories collectively to bear on ``hard problems'' 
        currently impeding the development of large-scale national 
        security applications or commercial markets.

          TEstablishing and/or sustaining user facilities, 
        cooperative research centers, and regional initiatives to 
        provide industry, and in particular small business, with 
        opportunities to accelerate the transfer of nanoscale science 
        from discovery to commercial products.

    A2: Transparent, consistent, and scientifically-based regulations 
decrease uncertainty about the economic opportunities. Well-designed 
regulations, which minimize uncertainty, promote product development 
and commercialization, a fact often confirmed by industry. Last month, 
March 2011, the White House Emerging Technologies Interagency Policy 
Coordination Committee (ETIPC) released a memorandum to the heads of 
executive departments and agencies outlining broad principles to guide 
the development and implementation of policies for oversight of 
emerging technologies at the agency level. In addition to ensuring that 
regulation and oversight of emerging technologies be based on the best 
available scientific evidence, the principles also state that where 
possible, regulatory approaches should promote innovation while also 
advancing regulatory objectives, such as protection of health, the 
environment, and safety.
    At present, the NNI regulatory agencies continue to review their 
existing authorities against our current scientific understanding of 
the human and environmental impact of size and emergent properties of 
nanoscale materials. They are employing existing product evaluation 
strategies where appropriate, and modifying them if necessary, to 
ensure the safety of the American people. Regulatory agencies are also 
working with their industrial stakeholders to assist them navigating 
the nanotechnology regulatory landscape.
    Additionally, the revised and soon-to-be-released NNI 
Environmental, Health, and Safety (EHS) Research Strategy was developed 
not only to protect public and occupational health and the environment 
but also foster technological advancements that benefit society. The 
regulatory agencies shared leadership for development of the EHS 
research framework with the research agencies. These actions, in 
combination, are designed to minimize scientific uncertainty, maximize 
regulatory authority, and promote growth of the U.S. nanotechnology 
commercial industry.

    Question 4: What is the workforce outlook for nanotechnology? What 
is the federal government's role and how can it, along with 
universities; help ensure there will be enough people with the relevant 
skills to meet the Nation's needs for nanotechnology research and 
development and for the manufacture of nanotechnology-enabled products?

    As mentioned above (Question 1), a recent study funded by NSF has 
concluded that approximately 6 million nanotechnology workers 
(researchers and manufacturing workforce) will be needed worldwide by 
2020, of which 2 million will be in the United States.
    The Federal Government's roles in helping meet these needs include 
the following:

          Funding research that in turn supports graduate 
        education. (Industry representatives have commented to us that 
        they view this as the primary way in which NNI-funded research 
        benefits industry, by filling the pipeline with future 
        nanotechnology researchers who will be available for industry 
        to hire when they are needed.) As the question implies, this 
        requires working in strong partnerships with universities.

          Including nanotechnology as part of a federal-wide K-
        12 and postsecondary STEM education strategy that includes 
        rigorous curriculum development, dissemination and evaluation.

          Working with the National Science Foundation and the 
        Department of Education to develop innovative nanotechnology 
        education approaches to disseminate this curriculum widely 
        across the United States, for local schools systems to consider 
        using in their classrooms.

          Conducting public outreach and education activities 
        that generate excitement about science and technology, from the 
        exciting advances in S&T that are currently being enabled by 
        nanoscale science and technology to advances in S&T in general, 
        thus encouraging students to take up careers in science and 
        technology. NSF will support ``Nanoscale Informal Science 
        Education'' and ``Nanotechnology in Society'' networks to reach 
        public and professional communities in the U.S.

          Working with the NSF, Department of Education, and 
        Department of Labor to create new approaches and disseminate 
        information about career opportunities specifically in 
        nanotechnology research and manufacturing, to attract students 
        to pursue these opportunities.

          Working with NSF and other agencies to support the 
        National Nanomanufacturing Network for nanomanufacturing 
        research and education; developing new nanoscale materials and 
        processes, and nanoinformatics.

          Expediting the issuance of visas to foreign students 
        and guest workers with specialized experience in 
        nanotechnology. (Industry representatives have cited this as 
        among their biggest issues in maintaining successful 
        nanotechnology R&D and manufacturing operations in the United 
        States.)

          Establishing clear guidelines for safe handling of 
        nanomaterials by both research and manufacturing workers. The 
        United States is a leader in this respect currently, especially 
        with the groundbreaking work of NIOSH in publishing voluntary 
        guidelines. It is vital that the United States continue to lead 
        in this area, as it does in many other areas of industrial 
        hygiene.
    I thank this Committee for its strong leadership, commitment, and 
support of Federal investments in nanoscale science and engineering. 
And I will be pleased to answer any questions you may have.
    Chairman Brooks. Thank you, Dr. Teague.
    Our next witness is Dr. Jeffrey Welser.

STATEMENT OF JEFFREY WELSER, DIRECTOR, NANOELECTRONICS RESEARCH 
      INITIATIVE, SEMICONDUCTOR RESEARCH CORPORATION AND 
                SEMICONDUCTOR INDUSTRY ALLIANCE

    Dr. Welser. Good afternoon. Thank you for inviting me today 
and for your continued commitment to advancing science and 
technology, especially as we struggle with difficult fiscal 
challenges.
    Semiconductor chips are in everything from computers and 
smart phones to medical devices and LED lights. They are making 
the world around us smarter and more efficient. They are also 
economically vital to the Nation. In 2010, U.S. semiconductor 
companies generated over $140 billion in sales, representing 
nearly half the worldwide market and making semiconductors the 
Nation's largest export industry.
    Our industry directly employs over 180,000 workers in the 
U.S. and another six million American jobs are made possibly 
semiconductors. Studies show that semiconductors and the 
information technologies they enable represent three percent of 
the economy but drive 25 percent of the economic growth.
    Remarkable success in the semiconductor industry is due to 
continuously technological advances built upon robust research 
and development. U.S. semiconductor companies invest on average 
17 percent of revenues in product-related research and 
development, among the highest of any industry.
    Just as critical, however, is long-term fundamental science 
research, which is largely performed at universities funded by 
the Federal Government. The university research supplies the 
knowledge from which all companies benefit and which no one 
company can afford alone. Publicly-funded long-term research 
and privately-funded product-related research are different, 
yet complimentary.
    We are now in the cusp of an exciting new era enabled by 
nanotechnology. NNI has played a key role over the past decade 
in accelerating progress in many scientific disciplines. In the 
coming decade the NNI should be called upon and authorized to 
maintain U.S. leadership by continuing the broad discovery work 
while coordinating federal efforts in areas of promise both for 
scientific breakthroughs and large economic impact. One of 
these areas, nanoelectronics, is key to the future of the 
semiconductor industry.
    We are quickly approaching the fundamental limits of 
current semiconductor technology. We need to find entirely new 
devices to continue advancing technology, and this will require 
new discoveries in the fundamental science that NNI supports.
    Hence, maintaining funding in nanoelectronics research has 
never been more important for the economy, for high-paying 
jobs, and for the Nation's ability to innovate and compete 
globally. The nation that is first to discover and develop the 
necessary nanotechnologies, that is the next switch, will lead 
the nanoelectronics era just as the U.S. has led the 
microelectronics era for the past 50 years. Countries around 
the world recognize this and are investing accordingly. 
Continued U.S. leadership is far from assured.
    To attack this challenge the SIA and SRC form the 
Nanotechnology Research Initiative (NRI), a public-private 
program that funds research at universities in partnership with 
federal and state agencies. NRI supports goal-oriented, 
fundamental research across many scientific fields and strives 
to harvest the results quickly. Two federal agencies, NIST and 
NSF, are key partners in NRI. Robust budgets of these agencies 
and other research agencies that support nanoelectronics are 
critical.
    Beyond the research breakthroughs, funding university 
scientific research educates our technology workforce. A 
pipeline of science and engineering graduates is critical to 
keeping and growing the businesses that will rebuild the 
economy. Indeed, several states are supporting NRI as 
nanoelectronics offers an opportunity to grow a new industry 
around their university base.
    I have a few recommendations for strengthening the NNI and 
ensuring U.S. leadership in nanoelectronics. First, Congress 
should reauthorize the NNI and in particular support the 
Signature Initiative on Nanoelectronics for 2020 and beyond. 
Congress should adequately fund the participating agencies and 
ensure they prioritize nanotechnology research when facing 
difficult budget choices.
    Second, NNI agencies should coordinate and leverage 
investments of industry consortia and states to get the most 
out of every dollar spent.
    Third, in other areas of nanotechnology research topics 
with broad, long-term economic potential should have priority. 
We also encourage NNI agencies to form additional public-
private initiatives like the NRI.
    I want to close with this point. NNI funding of 
nanoelectronic research produces the new ideas, as well as the 
talented scientists and engineers critical for driving 
America's innovation economy and for solving society's biggest 
challenge in medicine, security, and energy. The 
nanoelectronics industry will be in the U.S. only if we choose 
to support the research necessary to discover these new 
technologies first.
    Success will only come from the combination of the best 
science from the universities, the mission focus of the 
industrial and government labs, and consistent funding from the 
government for the fundamental science and from industry for 
translating these breakthroughs into new products.
    In the five minutes I have been talking to you the 
semiconductor industry made over 600 trillion transistors. 
Silicon Valley grew from innovation built on federal research. 
What companies will populate the new Nanoelectronics Valley? 
The question is not whether this place will exist but where it 
will be.
    I thank you and look forward to answering your questions.
    [The prepared statement of Mr. Welser follows:]
  Prepared Statement by Dr. Jeffrey Welser, Director, Nanoelectronics 
                          Research Initiative

Introduction

    My name is Jeffrey Welser and today I'm testifying on behalf of the 
Nanoelectronics Research Initiative (NRI), Semiconductor Research 
Corporation (SRC), and Semiconductor Industry Association (SIA). I'd 
like to thank Chairman Brooks, Ranking Member Lipinski, and other 
members of the Subcommittee on Research and Science Education for 
inviting me to testify before you. Thank you for your commitment to 
science and technology and nanotechnology advancement. Your Committee's 
role in providing a vision that ensures the technological leadership 
needed to drive economic growth to build America's future has never 
been more important than it is today, when we are faced with an 
unprecedented fiscal challenge which will require difficult decisions 
in every area of Federal spending.
    Your Committee fostered the ecosystem that enabled innovation-
driven economic growth and high tech job creation in the past. By 
insuring we are spending limited Federal resources wisely to maintain 
that ecosystem, you will also enable entire new industries for the 21st 
Century. The subject of today's hearing, nanotechnology research, is a 
foundation for those future industries.
    In a time of limited resources, it is crucial to insure adequate 
support for those areas of research that have proven to be drivers of 
the economy and job growth broadly and long-term. I come here today 
representing major organizations in the area that has arguably been the 
most important driver of the U.S. economy over the past half-century, 
built on America's world-leading research and university capability: 
semiconductor electronics--or as they are commonly referred to, chips.
    The Nanoelectronics Research Initiative (NRI), which I direct, is a 
consortium that supports university research in novel computing devices 
with the goal of enabling technology advances that will carry the 
semiconductor industry beyond the approaching limits of the current 
silicon-based technology. NRI leverages industry, university, and 
government funds (local, State, and Federal) to support research at 
U.S. universities, driven by industry needs, to ensure that the United 
States will be the world leader in the nanoelectronics revolution, 
reaping the economic and security benefits that leadership provides.
    Semiconductor Research Corporation (SRC) is the premier industry 
consortium that invests in university research to solve the technical 
challenges facing the semiconductor industry and to develop technical 
talent for its member companies. SRC and its subsidiaries manage 
several semiconductor research programs, including NRI. Since its 
founding nearly three decades ago, SRC has managed in excess of $1.2 
billion in research funds, supporting nearly 9,000 students and 2,000 
faculty at 257 universities, resulting in more than 50,000 technical 
documents and 373 patents. In 2007, SRC was awarded the National Medal 
of Technology with a citation recognizing the unique value of this 
organization: ``For building the world's largest and most successful 
university research force to support the rapid growth and 10,000-fold 
advances of the semiconductor industry; for proving the concept of 
collaborative research as the first high-tech research consortium; and 
for creating the concept and methodology that evolved into the 
International Technology Roadmap for Semiconductors.''
    The Semiconductor Industry Association (SIA) is the voice of the 
U.S. semiconductor industry, America's largest export industry over the 
last five years and a bellwether of the U.S. economy. Semiconductor 
innovations form the foundation for America's $1.1 trillion dollar 
technology industry affecting a U.S. workforce of nearly 6 million. 
Founded in 1977 by five microelectronics pioneers, SIA unites more than 
60 companies that account for 80 percent of the Nation's semiconductor 
production. SIA seeks to strengthen U.S. leadership in semiconductor 
design and manufacture by working with Congress, the Administration and 
other industry groups. SIA works to encourage policies and regulations 
that fuel innovation, propel business and drive international 
competition in order to maintain a thriving semiconductor industry in 
the United States.

Executive Overview

    The U.S. technology-based economy in general, and the semiconductor 
industry in particular, relies heavily on the pipeline of new 
scientific ideas, breakthroughs, and highly-trained students that can 
only come from the broad research enabled by consistent Federal funding 
of the U.S. university system. Within that spectrum of research, the 
National Nanotechnology Initiative (NNI) has played a key role in 
accelerating progress at the leading edge of nanoscale science and 
engineering-an area that is critical to the future of the semiconductor 
industry. As you consider the NNI and its future, the main points that 
I want to leave you with are as follows.

        1. Nanoelectronics is a priority for the economy, for high 
        paying jobs, and for the nation's ability to innovate and 
        compete in the future. As Congress works to reduce the Federal 
        deficit, it must give priority to those expenditures that 
        create the long term economic growth and jobs that will expand 
        our tax base and raise our standard of living.

        2. Strong university research correlates geographically with 
        leading edge technology development and flourishing technology 
        businesses. If the United States is to lead in nanoelectronics, 
        it needs a robust university research effort in 
        nanoelectronics. Government and private sector funded 
        university research should be done in a coordinated or, better 
        yet, collaborative manner.

        3. The electronics industry is facing a challenge similar to 
        the 1940s, when vacuum tubes were replaced by semiconductor 
        chips. The nation that is first to discover and develop the key 
        nanotechnologies-i.e., the next logic ``switch''-will lead the 
        nanoelectronics era, much like the United States has led the 
        microelectronics era for the past half century. This fact is 
        recognized by countries around the world and U.S. leadership is 
        far from guaranteed.

        4. NRI is an industry-driven consortium that funds a 
        coordinated program of university research in partnership with 
        Federal and State government agencies. Thanks in large part to 
        NRI, the United States is the current leader in nanoelectronics 
        at this early stage. But the challenges are great and the 
        global competition is growing.

        5. Funding university scientific research educates our 
        technology workforce. A pipeline of science and engineering 
        graduates is critical to growing and keeping the very 
        businesses that will help to rebuild the economy. Funding for 
        the NNI and other scientific research ensures the pipeline is 
        adequately filled. NRI-funded students also have meaningful 
        interactions with industry mentors, which enhance their 
        education, expose them to career opportunities, and allow them 
        to contribute productively once they graduate.
    Recommendations for strengthening the NNI and ensuring the United 
States' leadership in nanoelectronics:

        1. The Federal government should continue its support for the 
        National Nanotechnology Initiative, especially in the 
        ``Signature Initiative'' on long-term nanoelectronics research.

        2. Congress should reauthorize the NNI and the participating 
        agencies, to make clear its desire to see nanotechnology 
        research remain a priority by the agencies that fund science 
        and engineering research today.

        3. The NNI agencies that are part of the nanoelectronics 
        Signature Initiative should leverage each other's investments 
        and those of NRI, to get the most out of every dollar spent.

        4. The participating agencies should develop interdisciplinary 
        nanotechnology initiatives that are supported by multiple NNI 
        agencies and that support significant national priorities (as 
        outlined in the NNI Supplement to the President's Budget for 
        2012, the 2011 NNI Strategic Plan and as called for by PCAST in 
        its 2010 assessment of the NNI).

        5. In choosing research priorities, NNI agencies and the 
        interagency coordinating bodies should give strong 
        consideration to the potential long-term economic impact of the 
        research area, with key positive indicators being:

        (a)   Support of a broad research agenda that will create 
        enabling breakthroughs for a large market segment, rather than 
        choosing to focus on just one or two specific technologies

        (b)   SEarly engagement of industry to facilitate rapid 
        transfer of knowledge and ideas from university scientific 
        research into the hands of those who can use them in commercial 
        applications.

Federal investment in Nanoelectronics research is priority for 
                    continued U.S. economic growth

    Nanotechnology is the understanding and control of matter on the 
scale of atoms and molecules. Nanotechnology is making it possible to 
build machines on the scale of human cells and create materials and 
structures from the bottom up, building in desired properties.
    Nanotechnology and research supported by the NNI is impacting many 
industries, but I would like to highlight the enormous impact the 
investment in nanoelectronics in particular could have on the future of 
the semiconductor industry and the potential scale of that impact on 
the U.S. economy.

Semiconductor industry of today

    From its beginnings in the 1940s, the semiconductor industry has 
grown to become the largest U.S. exporter over the last five years (see 
Appendix 1a). In 1980, worldwide semiconductor revenues were under $20 
billion. This year that figure will exceed $300 billion. American 
semiconductor companies alone generated $144 billion in sales--
representing nearly half the worldwide market in 2010. In the United 
States, there are 182,200 jobs directly associated with the domestic 
semiconductor industry and the average annual salary is $99,622.
    The remarkable growth in semiconductor jobs and revenues through 
the years has been made possible by continuous technological advances 
based on the semiconductor transistor; it is the ``switch'' that 
creates the ones and zeros in our digital world and is the fundamental 
building block in electronics. Transistors are in the ``chips'' that 
permeate modern life, enabling computers, smart phones, the internet, 
national defense applications such as night vision goggles and unmanned 
aircraft, video entertainment, automobile systems such as antilock 
brakes and traction control, medical imaging devices, factory robotics, 
and countless other uses (see Appendix 2b). Advances over the last 60 
years have led to smaller and smaller transistors, which in turn have 
enabled dramatic increases in performance and function, and decreases 
in cost. The increase in the number of transistors per computer chip 
(or decrease in the size of an individual transistor) by a factor of 
two approximately every 18 months is known as ``Moore's Law''.
    The ability to make chips smaller, better, and cheaper has had 
enormous economic impact beyond the semiconductor industry itself. For 
example, semiconductors enable 6 million jobs in the U.S. including 
software engineers, network administrators, home entertainment system 
installers, medical imaging technicians, ATM service personnel, and 
desktop publishers. This figure does not include all of the jobs that 
are made more productive by IT-pharmacists who check drug interactions, 
real estate agents who use computer listings and virtual tours, and on-
line retailers, to name just a few. Harvard economist Dale Jorgenson 
has noted, ``The economics of Information Technology (IT) begin with 
the precipitous and continuing fall in semiconductor prices.'' 
Professor Jorgenson attributed the rapid adoption of IT in the United 
States to driving substantial economic growth in the nation's gross 
domestic product since 1995, concluding, ``*from 1995-2005], 
Information Technology industries have accounted for 25 percent of 
overall economic growth, while making up only three percent of the GDP 
(see Appendix 3b). As a group, these [IT] industries contribute more to 
economy-wide productivity growth than all other industries combined.'' 
\1\
---------------------------------------------------------------------------
    \1\ Dale W. Jorgenson. ``Moore's Law and the Emergence of the New 
Economy'' in ``2020 is Closer than You Think''; 2005 SIA annual report.
---------------------------------------------------------------------------
    The phenomenal advances in semiconductor technology and the ability 
of the U.S. industry to remain the world leader flows from the unique 
U.S. ``innovation ecosystem'', comprising university, industry, and 
government scientists and engineers performing a range of complementary 
research and development activities. On the industry side, U.S. 
semiconductor companies invest an average of 17% of revenues in 
product-related R&D, which totaled about $25 billion in 2010. This is 
one of the highest percentages for any industry. Coupled with capital 
expenditures of 11% of sales, our industry invests nearly 30% of its 
revenues to drive future growth. Even in the midst of decreasing 
revenues in the recession, SIA member companies sustained their R&D 
investments.
    Whereas industry carries out primarily near-term research and 
development, the long-term fundamental science research that underpins 
new technologies is largely performed at universities that are funded 
principally by the Federal government. University or ``basic'' research 
adds to the body of knowledge from which all companies benefit and 
which no one company can afford alone. In addition, university research 
is the means by which scientists and engineers are educated and trained 
for careers in technology. University research and education are 
inextricably linked; one would not exist without the other.
    The Federal government also funds scientific research to meet its 
own needs, for example in the area of national security, often paying a 
premium to be the first customer. But in multiple instances, such 
investments have led to whole new industries. As noted by the 
President's Information Technology Advisory Council, ``Since World War 
II, the Federal government has funded advanced information technology 
research to meet its own requirements, which have ranged from critical 
national-defense applications to weather forecasting and medical 
sciences. Federal funding has seeded high-risk research and yielded an 
impressive list of billion-dollar industries (the Internet, high 
performance computers, RAID disks, multiprocessors, local area 
networks, graphic displays, etc.).'' \2\ The Federal government played 
a similar role in the area of semiconductors, funding the development 
of early integrated circuits for missile and other space applications 
where the weight of the current electronic technology was prohibitive.
---------------------------------------------------------------------------
    \2\ Information Technology Research: Investing in Our Future, 
President's Information Technology Advisory Committee Report to the 
President, February 24, 1999.
---------------------------------------------------------------------------
    Unique among all industries, the semiconductor industry has taken 
steps to connect its internal science and engineering research to the 
academic sector by forming and funding the Semiconductor Research 
Corporation (SRC). Through SRC, the industry supports university 
research that is pre-competitive; totaling $240 million from 2005 to 
2010. SRC includes several research initiatives that address different 
aspects of the industry's long term research needs. SRC brings together 
industry and academic experts thereby insuring feedback during the 
course of the research and technology transfer. In the process, SRC 
supports 1500 students annually.

Nanoelectronics industry of tomorrow

    The semiconductor industry by any measure has been hugely 
successful. But today's transistor technology is approaching 
fundamental physical limits that will prevent further improvements; and 
technological and economic advancement that has been fueled by Moore's 
Law for the last fifty years could slow to a trickle. You might ask, 
``Why do we need even more capable technology?'' Imagine a future in 
which a child with diabetes no longer has to prick her finger to check 
her glucose or get insulin shots thanks to an implanted artificial 
pancreas; when smart tools and sensors enable a highly efficient 
electric grid that saves billions of dollars in wasted energy costs and 
avoids the need for new power plants based on non-renewable energy; or 
powerful systems to design and manufacture new materials for radically 
lighter, yet safer, cars and planes. Each of these is a grand challenge 
for science and engineering, but underlying them all are 
nanoelectronics-the devices that will make our future world smart and 
efficient, and without which many solutions will remain out of reach.
    In addition to commercial applications, there are countless 
benefits to U.S. national security. ``Taking nanotechnology seriously 
could single-handedly change the future for the better,'' wrote Dr. 
James Carafano of the Heritage Foundation in a recent op-ed. 
``Washington can build a military with cutting-edge capabilities at 
affordable cost, while laying the groundwork for a U.S. nanotechnology 
industry.''
    Many of today's IT products and infrastructure were enabled by 
early-stage research at the Department of Defense (DoD) decades ago. 
``Today's iPads and iPods are descendents of the chips created for the 
Minuteman,'' concludes Carafano.3 3 James Jay Carafano: U.S. must gird 
for war in very small places. Washington Examiner. December 12, 2010.
    In fact, we are in a race to find a replacement technology for the 
transistor-to address technological needs and challenges, and to do so 
first. U.S. researchers made the discoveries that led to the 
microelectronics industry, thanks to early support for research and 
development by the Federal government. The United States continues to 
dominate the development of new technology, due in large part to 
continued Federal support for scientific research. But today, many 
other countries have made it a goal to attract and build semiconductor 
businesses. When faced with generous financial incentives to locate not 
only manufacturing but also research facilities overseas, one factor 
that is in favor of locating operations in the United States is access 
to the best university faculty and student researchers.
    Cutting funding for agencies that participate in the NNI 
neutralizes one of the main reasons why companies that will rely on 
nanotechnology advances stay in the United States. It cuts funding for 
current students and discourages future ones. And it threatens American 
leadership in an industry that seemingly every nation is doing its best 
to see take root within their own borders.

Nanoelectronics will create future jobs, contribute to budget deficit 
                    reduction

    As Congress works to create high-paying jobs and reduce the Federal 
budget deficit it must give priority to expenditures such as 
nanoelectronics research that create long term economic growth and 
greater productivity. As mentioned above, today's semiconductor 
technology enables 6 million U.S. jobs directly and many more 
indirectly. Semiconductor technology has made computing and 
communications faster and less expensive, and nanoelectronics will 
continue these trends. Leadership in nanoelectronics research will 
allow U.S. companies to be first to market, creating entirely new 
industries and categories of jobs throughout the manufacturing and 
service economy. If the past is an indication of the future, 
nanoelectronics will contribute significantly to GDP, thereby expanding 
the tax base and helping to reduce Federal deficits.
    While it may be tempting to cut Federal nanotechnology research 
budgets as part of an overall reduction in the Federal deficit, such 
across-the-board, arbitrary reductions would be shortsighted. Continued 
support for nanoelectronics research should instead be seen as an 
important element in any long-term Congressional Federal budget deficit 
reduction strategy.

NRI is leading the way in collaborative research in nanoelectronics

    The Nanoelectronics Research Initiative (NRI) is a consortium 
within the SRC that leverages contributions from industry, 
universities, and governments (local, State and Federal) to fund 
collaborative research at thirty-five U.S. universities (see Appendix 
4d). NRI is focused on the key challenge for continuing the progress in 
semiconductor electronics which has fueled the world economy for the 
past 50 years: finding the next ``switch'' and thereby keeping the 
United States at the forefront of the nanoelectronics revolution.
    NRI funds multi-disciplinary research in physics, chemistry, 
materials science, and engineering that addresses fundamental problems 
standing in the way of progress toward ``real world'' applications. The 
consortium is open to any U.S.-based company and potentially useful 
technologies that emerge are efficiently shared with all team members. 
NRI not only funds the university research, it coordinates among the 
universities and between industry and academia, avoiding duplication 
and encouraging collaboration.
    NRI research is extremely early stage, and like most scientific 
research, it is unlikely to become part of a commercial product for ten 
years or more. Such long-term, high-risk research is typically funded 
by the Federal government. Yet NRI industry members (GLOBALFOUNDRIES, 
IBM, Intel, Texas Instruments, and Micron Technology) contribute 
millions of dollars each year because of the importance of the research 
to their long-term future. They also dedicate company researchers to 
work alongside the university researchers, helping to accelerate 
progress even at the beginning stages of the research and to insure 
strong technology transfer paths are in place for the future.

NRI is partnering with the Federal government

    In addition to having members from industry, NRI partners with 
Federal agencies whose missions align with NRI's. The National 
Institute of Standards and Technology (NIST), which has a mission to 
promote U.S. innovation and industrial advancements, co-funds the 
university research and contributes in-house resources (staff and 
facilities). The National Science Foundation (NSF) is the primary 
funding agency of physical science and engineering university research 
and funds a number of Nanoscale Science and Engineering Centers related 
to nanoelectronics. NRI provides additional support and engages Center 
researchers in annual reviews and web-based workshops and seminars. In 
2011, NSF and NRI will jointly fund about 10 nanoelectronics research 
teams that meet the selection criteria of both organizations. All of 
these partnerships have been enabled by the strong support and focus 
the NNI has brought on to nanoelectronics.
    The NRI partnerships with NIST and NSF make sense. Without Federal 
funding for scientific research, there would be devastating 
consequences for the NRI mission. And bringing together industry, 
university, and government scientists and engineers benefits all 
parties. University researchers are more aware of the diverse, longer-
term challenges faced by industry. Industry stays abreast of academic 
research and develops relationships with top-notch faculty. Government 
scientists and program managers understand future industry needs and 
can thereby enhance the value of their own research missions.
    In addition to jointly funding research with NRI, the Federal 
government has built and maintained the world's best university system 
through the NNI and its broader research initiatives. American research 
universities produce graduates with advanced degrees who lead the world 
in innovation-creating new products, new businesses, and even new 
industries. NRI's modest and targeted investments are effective-and in 
fact are only possible-because of the ongoing Federal support for 
university research broadly. Sustained Federal support for science and 
engineering research is absolutely vital if government-university-
industry initiatives like NRI are to succeed.

Technology transfer is built into NRI

    A benefit of NRI is the seamless transition of research results 
from the university researchers to NRI member companies. Because 
industry has ``skin in the game'', industry representatives are more 
engaged-providing feedback during the course of the research and taking 
results back to others in the company. In addition, as students 
graduate and are hired, they bring with them detailed understanding of 
the research. This approach has worked well. NRI is hopeful that 
agencies that support nanoelectronics research in addition to NIST and 
NSF will also elect to join.

Supporting research supports education and workforce development

    In fact, NRI has two primary outputs, both of which are valuable to 
member companies and to the greater science and technology enterprise. 
One output is the research results, which researchers are allowed to 
make public and disseminate broadly. The other is the students who 
perform the research as part of their studies and who are highly sought 
after as employees upon graduation. Graduates are well prepared and are 
able to contribute to nanoelectronics research and development once 
hired.
    NRI-funded students are not obligated to take a position with a 
member company, although many do. NRI graduates also take positions as 
university or government researchers, or in other parts of the private 
sector. Through its publications, presentations, and graduates, NRI is 
benefiting a much larger segment of the U.S. economy than just its 
members.

NRI and NNI leading edge science and engineering research produces new

ideas and people that are critical to American innovation in the

critical area of nanoelectronics.

SRC and SIA applaud the NNI Signature Initiative on ``Nanoelectronics

for 2020 and Beyond''

    NNI has taken steps to focus some of its investments in areas of 
potentially high impact. The 2011 NNI Strategic Plan includes a goal 
to, ``develop at least five broad interdisciplinary nanotechnology 
initiatives that are each supported by three or more NNI member 
agencies and support significant national priorities.'' In addition, 
NNI identified nanoelectronics as one of its Signature Initiatives in 
the 2011 and 2012 budget requests.
    We are pleased that the NNI agencies recognize that the field of 
nanoelectronics has the potential for significant economic 
contributions. As the leading nanoelectronics research entity, we look 
forward to working with other ``target agencies'', in addition to NSF 
and NIST, to coordinate and collaborate on research that will provide 
the greatest value and lead to the greatest progress.
    Finally, we appreciate the recommendation by the President's 
Council of Advisors on Science and Technology (PCAST) in its 2010 
assessment of the NNI that the, ``Federal Government should launch at 
least five government-industry-university partnerships, using the 
Nanoelectronics Research Initiative as a model.'' We trust that this is 
also a recommendation for continued participation in NRI.

Other factors influencing the U.S. semiconductor industry's ability to

compete internationally

    While providing Federal funding for pre-competitive nanoelectronics 
research will enable the industry to compete tomorrow, there are a 
number of additional immediate challenges to maintaining U.S. 
leadership in semiconductors today. The industry depends on a highly 
skilled workforce and therefore improvements to the STEM education 
system are necessary in the long-term. In the short-term, we must 
reform our immigration system to allow bright foreign nationals that 
graduate from U.S. universities in STEM fields to stay here after they 
graduate. These innovators create jobs for Americans as they develop 
small businesses or create entire new product lines. Tax and regulatory 
policies are equally important factors that businesses consider when 
deciding to expand operations and add jobs.
    Throughout the world, governments have identified the semiconductor 
industry as a strategic industry because of its implications on 
economic growth, societal welfare, and national security (see Appendix 
5e). These same governments have implemented policies and structured 
investment incentives with the aim of significantly growing 
semiconductor manufacturing and R&D in their countries.

Conclusion

    Our nation faces a challenge that can be compared with the 
transitions that occurred from vacuum tubes to the transistor and on to 
integrated circuits and to large scale semiconductor systems. The 
United States led the semiconductor industry through these challenging 
transitions. We led because of our public and private research 
strengths and our formidable university research infrastructure. It 
required substantial investment of Federal funds to create the first 
semiconductor diode, initially for military use. Those investments 
launched the entire IT industry, which has driven the economy ever 
since. We led because entrepreneurs incorporated this research into 
products that created new industry segments. And the Federal government 
played a critical role all along the way.
    Today, the U.S. semiconductor industry has nearly fifty percent of 
the $298 billion worldwide market share. Sustained research funding, 
along with sensible tax, trade, workforce, education, and regulatory 
policies are all factors that influence the semiconductor industry's 
ability to compete internationally.
    In a globalized economy, research must begin far in advance of the 
technological transitions we will encounter. Luckily, we know the broad 
outline of some of these challenges, and by funding research in 
nanoelectronics, Congress will lay the bedrock for new U.S. jobs and 
industries of the future, much like those that were enabled by the 
transistor age. We are creating something wholly new with untold 
potential, and this research is taking place here in this country 
through the NRI and other SRC programs, our public-private 
partnerships, and nanoelectronics focused programs at NSF, NIST, DoD 
and the Department of Energy.
    Future nanoelectronics-enabled products will be designed and 
manufactured in the United States if we choose to be the region that 
discovers and markets these new technologies first. The latter is 
largely dependent upon making strategic choices today and acknowledging 
that nanoelectronics infrastructure and scientific research provide our 
nation the best return on its tactical and strategic economic 
investments.
    In the middle of the last century, Silicon Valley grew from 
innovation built on Federal research. What are the names of the 
companies that will dot the horizon of the new ``Nanoelectronics 
Valley?'' The question is not whether this place will exist, but rather 
where will it be.






    Chairman Brooks. Thank you, Dr. Welser.
    Next we have Dr. Seth Rudnick.

   STATEMENT OF SETH RUDNICK, CHAIRMAN, BOARD OF DIRECTORS, 
                     LIQUIDIA TECHNOLOGIES

    Dr. Rudnick. Mr. Brooks, Mr. Lipinski, thank you very much 
for allowing me the opportunity to address the committee and 
talk about nanotechnology and as you can guess as a physician I 
am going to direct most of my discussion to medicine.
    You have heard that substantial funds have been addressed 
to many different agencies which have, in turn, affected many 
different companies and products around the United States and 
the world. It is a huge and growing part of our economy, and I 
am going to talk about that little red corner that is medicine.
    In nanotechnology medicine has transformational impact, and 
by that I mean the ability to change the way we address 
disease, the way we treat disease, the way we diagnose it, and 
the way we prevent it. Therapeutics that ran from targeted 
delivery of drugs, to cancer, to avoiding particular toxicities 
of drugs by changing the way they traffic through the body, all 
of that has been already proven by new nanotechnology drugs, 
some of which are actually on the market today. Ultimately our 
goal is always to increase safety in efficacy, and 
nanotechnology is a lever, a very important lever in doing 
that.
    There are other areas, including the prevention of disease, 
that I think are equally well addressed, vaccines being a 
primary example of that. Nanoparticles are synthetic carriers. 
They allow particular areas of the body to be inoculated with 
antigens and adjuvants, potent ways of getting the body to 
recognize a particular viral or bacterial disease and treat it. 
This is a next generation of biotechnology. It is, again, 
already in the clinic and, in fact, my company, Liquidia, has 
had its first safe clinical trial completed late last year.
    We believe that not only will we be able to be safer and 
more effective, but the ease of manufacturing using 
technologies that, in fact, derived from microelectronics are 
an important part of driving the costs down such that vaccines 
will be far more useful to the third world and not just the 
first world.
    You will hear more about diagnostics and imaging from one 
of the other speakers, but the ability to rapidly detect new 
disease, to multiplex, to look at large numbers of population 
markers, and to identify the risk of disease early is something 
that is critical to medicine and is being transformed by 
nanotechnology.
    The reason that nanotechnology has become so useful in 
medicine is because the scale of nanotechnology is now 
addressing biologically-relevant sizes. In the 1970s 
nanotechnology, which is microelectronics at that point, was 
addressing scale at the red blood cell size. Today we are 
already down to the molecular size, and we have passed through 
bacterial and viral sizes during this last two decades.
    By being able to address and traffic those areas we now 
understand mechanisms of disease that were heretofore 
untouchable. But not only did we need to address these, we 
needed to be able to manufacture something that could address 
these at the proper scale, and that ability to take the etching 
off a semiconductor plate, put it onto a film, and manufacture 
at the scale that a newspaper press operates at or a photo film 
press operates at, which is many thousands of feet per hour, 
has led to Liquidia's manufacturing. And again, I was going to 
use the hundreds of trillions analogy, but that one piece of 
film that is in the lower right corner actually represents 
hundreds of trillions of vaccine particles that can be used 
that are treating disease.
    I would like to tell you that we, in fact, now have the 
ability to address almost every size and shape based on the 
microelectronics etching of particles down to 30 nanometers, 40 
nanometers, right at the edge of what microelectronics can 
etch. This is a representation of a series of shapes that we 
use in research, or in treatment, or in diagnostics. You can 
see that many of these shapes actually incorporate multiple 
colors, and those represent different drugs, different 
adjuvants, or different antigens that are being administered 
for a particular disease.
    We can change the softness or hardness, the modulus or the 
porosity. We can change how particles actually float into the 
lung. You can see over in the right-hand side of that slide 
particles that look just like pollen. All of this is enabled by 
technology that has actually originated out of the NNI.
    There is one regulatory agency that is quite used to 
handling nanotechnology. You may be aware that the Food and 
Drug Administration (FDA) has approved drugs in this field, has 
looked at diagnostics in this field, and has had an incredibly-
positive interaction with not only our company but many 
companies in trying to move this technology forward, and as an 
example, the recent clinical trial that we completed was done 
in a year and a half from concept to first therapeutic 
intervention. I think the FDA has shown its ability to handle 
the technologic challenges of nanotechnology and done so in a 
very positive fashion with industry.
    I would like to thank all of the agencies out of NNI that 
have contributed to the University of North Carolina. To answer 
your question I am a heel, but we appreciate greatly the 
opportunity to speak here today and to have--answer questions 
as they arise.
    [The prepared statement of Dr. Rudnick follows:]
Prepared Statement by Seth Rudnick, M.D., Chairman, Board of Directors, 
                         Lsiquidia Technologies

Key Points of Testimony

Commercialization of Nanotechnology

          The investment in nanotechnology by the NNI and 
        private industry has confirmed that nano-enabled products are a 
        means to solving some of humanity's most vexing challenges and 
        a critical driver of future economic growth.

          To translate this investment into viable products and 
        new industries, manufacturing R&D must go hand-in-hand with 
        scientific discovery to ensure that U.S. manufacturers can 
        quickly transform innovations into processes and products.

          Due to the historic emphasis on funding and 
        commercialization of inorganic nanomaterials, there is an even 
        larger gap to commercialization for nanotechnology in life 
        science applications.

          Nanomedicine technologies have tremendous potential 
        for transformational results--disruptive changes over and above 
        current methods and strategies for healthcare, with wide-
        ranging implications on how we detect, prevent and treat 
        disease. To maintain the dominant position of the U.S. in 
        healthcare innovation and quality of life, we must close the 
        gap from proof-of-concept to commercial viability for 
        nanomedicine platforms.

          Nanotechnologies must be brought to market 
        responsibly; meaningful nanoparticle standards to assess 
        physio-chemical properties of nanomaterials for environmental 
        and health implications are necessary for sustainable product 
        development.

Recommendations

          Increase the support of nanomanufacturing 
        initiatives. We are in strong agreement with the PCAST 
        recommendation to increase the focus on nanomanufacturing to 
        accelerate technology transfer to the marketplace.

          Ensure that nanomedicine platforms are included 
        within the Signature Initiatives of the NNI.

          Support the development of reference materials, test 
        methods, and other standards that provide broad support for 
        industry production of safe nanotechnology-based products. We 
        strongly support the establishment of a ``particle foundry'' to 
        meet these needs.

          Strengthen the NNCO to ensure the breadth of 
        investments and advancements in nanotechnology R&D are 
        translated into viable commercial products.

Liquidia's PRINTr nanotechnology platform

          The proprietary PRINT nanofabrication technology was 
        pioneered at the University of North Carolina and is being 
        commercialized by Liquidia Technologies, a small venture-backed 
        company in Research Triangle Park, North Carolina.

          The PRINT technology offers unprecedented control of 
        particle size, shape and chemistry in a highly consistent and 
        scalable roll-to-roll manufacturing process.

          Liquidia is currently focused on commercializing 
        applications in vaccines, inhaled therapeutics and oncology. 
        The company's first product was successfully introduced into 
        Phase 1 clinical trials in Q4 2010.

Written Statement

    We are in strong agreement with the general recommendations by 
PCAST focused on Program Management, Outcomes and EH&S. In particular, 
strong leadership through the National Nanotechnology Coordination 
Office (NNCO) is needed now more than ever to coordinate the broad 
investments and outcomes and to ensure the investments in 
nanotechnology innovation can be successfully transformed into 
commercial products. Liquidia's current efforts towards commercial 
implementation of our nanotechnology platform is the direct result of 
the strong support that the NNI has received to date.
    Let us summarize what we have been able to accomplish as a direct 
result of our previous support from various agencies through the NNI as 
well as provide some thoughts and refinements regarding specific 
aspects of the PCAST recommendations.

Introduction to Liquidia's PRINT Nanotechnology Platform
    Many innovations have emerged from the NNI to date, especially at 
the interfaces between disciplines. Indeed our particular 
nanofabrication innovation has been to co-opt the lithographic 
manufacturing technologies from the microelectronics industry and apply 
them to making new vaccines and medicines. This work was pioneered in 
the Department of Chemistry at the University of North Carolina at 
Chapel Hill (UNC) and Liquidia Technologies, Inc., a start-up company 
spun out of UNC (www.liquidia.com). The technology trademarked as PRINT 
(Particle Replication in Non-wetting Templates) marries the slow, yet 
highly precise batch based process used to make integrated circuits 
with the volume production of the film and printing industry. This 
creates a proprietary, US-based roll-to-roll manufacturing process 
useful for making vaccines and therapeutics that are in nanoparticle 
form. The PRINT manufacturing platform offers unprecedented control of 
particle size, shape and chemistry in a highly consistent and scalable 
roll-to-roll manufacturing process. The UNC team is funded by NIH, NCI, 
NSF, DOE, DARPA and ONR and the Liquidia Team has been largely venture 
financed (Canaan, NEA, and others) with a few significant grants 
awarded from NIST ATP and TIP programs. Just recently, Liquidia 
received the first ever equity investment by the Bill and Melinda Gates 
Foundation in a for-profit biotech company. Liquidia has a focus in 
vaccines (influenza, malaria, cancer, etc), respiratory diseases (COPD, 
PHT, CF, Asthma) and oncology, and successfully introduced its first 
product into Phase 1 clinical trials in Q4 2010. As such, we believe 
PRINT is the first nanotechnology platform that is now cGMP compliant.
    Specifically for nanomedicine, the ability to manipulate size, 
shape, chemistry and modulus of nanomaterials can have wide-ranging 
impact on how we diagnose and treat disease. New abilities to tune 
these features can provide researchers with a more thorough 
understanding of ``how'' and ``why'' cellular and organ systems react, 
allowing scientists to build highly efficient tools that can safely 
operate inside the body. New technologies that have the power to 
control size, shape, and other functionalities are currently being 
developed and have shown remarkable promise, but significant investment 
in scaling-up and producing engineered nano-structures in a cGMP 
environment is necessary to bring innovations to commercial reality. 
What the latest advances in the field brings is the precision necessary 
to improve safety and to engineer new products with enhanced 
capabilities. This is exactly what the regulatory agencies have asked 
for: Increased reproducibility and precision, which is readily 
accomplished via Liquidia's PRINT technology.

Recommendations and Refinements to the PCAST Report
    With this perspective and background, we have the following 
comments that we would like to make:


Unmet needs to advance the field of nanoscience and technology

          Nanotechnologies must be brought to market 
        responsibly; meaningful nanoparticle standards to assess 
        physio-chemical properties of nanomaterials for environmental 
        and health implications are necessary for sustainable product 
        development.

          There is a need for ``qualified'' nano- and micro-
        materials with control in particle size, shape and chemical 
        composition and that are available at a scale useful for a 
        broad range of scientific studies. The need for such 
        ``qualified'' materials is different than the need being 
        fulfilled by the nano-standards being developed by NIST which 
        are mainly useful for very high-end technology needs, like the 
        calibration of measurement instrumentation. Rather, 
        ``qualified'' materials are materials that are almost of the 
        same quality as the standards being developed by NIST but meet 
        additional specifications to allow for utility across 
        differentiated industries, including larger quantities at lower 
        costs than that associated with NIST calibration standards.

          Additionally, a set of well characterized materials 
        (environmental and health studies) that accurately represent 
        the types of nanomaterials that are incorporated into products 
        is needed to address many of the concerns voiced by the public. 
        While EH&S research has always been a focal point for the NNI, 
        we need to ensure that the nanomaterials used for this research 
        are the same classes of materials used for consumer products 
        and are tested in a relevant context.

          Liquidia's PRINT technology is one example of a 
        breakthrough in particle manufacturing (40 nm in size and 
        greater) that allows complete control in particle size, shape 
        and chemical composition. The PRINT technology is particularly 
        useful for generating a host of organic nanomaterials, a unique 
        capability that is crucial for evaluating life science 
        applications. Because of the roll-to-roll nature of the PRINT 
        manufacturing process, one can allow researchers to have access 
        to materials in meaningful volumes useful for many real world 
        studies that NIST calibration standards are not suitable for. 
        For example, important studies are needed and could be 
        accomplished if ``qualified nano-standards'' were available 
        such as aerosol standards (for inhalation studies, particulate 
        distribution studies in cities and buildings, etc); 
        environmental standards (for ground water fate studies, etc) 
        and organic materials for in vivo biodistribution studies.

          It is recommended that the NNCO consider the 
        establishment of a Nanoparticle Foundry much in the way that 
        the Department of Energy through Lawrence Berkeley National 
        Laboratory established the Molecular Foundry. The establishment 
        of the Nanoparticle Foundry would address a key bottle neck for 
        the generation of ideas and would play an important role in 
        establishing our Nation's preeminence in nanomanufacturing 
        which is crucial to establishing and growing jobs in the U.S.


Unmet needs for commercialization of nanoscience and technology

          Nanomanufacturing is the means through which the 
        Nation will realize the benefits of nanotechnology. A major 
        opportunity exists to leverage the past ten years of NNI 
        research platforms and establish programs to translate this 
        knowledge into viable products through the advancement of 
        nanotechnologies. Nanomanu-facturing R&D must go hand-in-hand 
        with scientific discovery to ensure that U.S. manufacturers can 
        quickly transform innovations into processes and products and 
        that the investments made to date can be realized in the form 
        of revenue and job creation

          Currently, private investment in nanotechnology is 
        hesitant, weighing the risks of this relatively new field where 
        considerable investment has already taken place in academia, 
        which has yet to fully validate and deliver cost-effective and 
        commercially viable platforms. Government funding in 
        Nanomanufacturing is needed to realize the investments that 
        have already been made. Bridging the gap from proof-of-concept 
        to commercial viability will provide the risk mitigation needed 
        to encourage the private sector to support and further develop 
        nanomedicine platforms.

          Nanomanufacturing developments need to strongly focus 
        on manufacturing issues unique for the applications in the life 
        sciences. Based on the current recommendations and NNI 
        strategic plan, the nano manufacturing foci are largely devoid 
        of materials and processes destined for use in life sciences.

          Targeted, government-driven funding can make a 
        crucial difference in the scale, breadth, and time horizon of 
        industry-driven R&D for nanomanufacturing. In the US, the 
        largest funding opportunities that seed commercialization 
        activity are the Small Business Innovation Research (SBIR) and 
        Small Business Technology Transfer (STTR) programs. These 
        programs are extremely limited in the terms of time and budget 
        needed to support innovation in technology infrastructure. 
        Transitioning a prototype process to a viable commercial scale 
        is an effort that requires capital expenditure and timelines 
        well beyond that of the SBIR and STTR programs, which in most 
        cases offer a $100K phase I effort for a 6-month to one year 
        effort. In addition, many nanotechnology based businesses are 
        venture backed, requiring significant capital for pre-clinical 
        or proof-of-concept studies prior to revenue. These companies 
        are often not eligible for SBIR and STTR programs due to 
        ownership requirements.

          The regulatory pathways for nanomaterials should be 
        made explicit; the pathways should be scientifically based and 
        it should be made clear which of the current regulatory 
        pathways are already adequate for commercial approval. The 
        issue is particularly applicable to therapeutics by the FDA but 
        are inclusive of other agencies as tools become available

          One of the more important non-nano specific issues 
        that need to be addressed to facilitate the development of such 
        industries of the future is the U.S. Patent Office. The USPTO 
        is bogged down, with timelines to patent issuance being longer 
        than ever in history. Such delays cause uncertainties and 
        uncertainties inhibit private and corporate investments in new 
        companies. This inefficiency is in stark contrast to recent 
        announcements in China and other foreign competitors who are 
        massively increasing the funding of their patent offices for 
        rapid turnaround and issuance.

    In conclusion, nanotechnology has the undeniable potential to 
create entirely new industries and products that will positively impact 
our environment as well improve the quality of life and prevent 
disease. But we cannot just innovate, we need to scale our inventions 
to realize this potential, creating jobs and economic prosperity. 
Perhaps no one has stated this more clearly than Andy Grove recently in 
an op-ed in Bloomberg News:
    Startups are a wonderful thing, but they cannot by themselves 
increase tech employment. Equally important is what comes after that 
mythical moment of creation in the garage, as technology goes from 
prototype to mass production. This is the phase where companies scale 
up. They work out design details, figure out how to make things 
affordably, build factories, and hire people by the thousands. Scaling 
is hard work but necessary to make innovation matter. Andy Grove, July 
1, 2010
    Thank you for considering our comments.
    Chairman Brooks. Thank you, Dr. Rudnick. Better luck to 
both of us next year.
    Up next we have Dr. James Tour. Dr. Tour.

   STATEMENT OF JAMES TOUR, PROFESSOR OF CHEMISTRY, COMPUTER 
SCIENCE AND MECHANICAL ENGINEERING AND MATERIALS SCIENCE, RICE 
                           UNIVERSITY

    Dr. Tour. Thank you. I have the good fortune of being able 
to teach in the Departments of Chemistry, the Department of 
Mechanical Engineering and Material Science, and also Computer 
Science because nanotechnology bridges across all of those 
areas. I have over 400 research publications and 50 patents on 
diverse nanotechnology products, ranging from high performance 
materials to ultra small electronic devices, targeted 
chemotherapy delivery agents, and nanomachines.
    Today I will underscore the threat of foreign competition, 
the need for continued support to basic nanotechnology, and 
continued support for transitions into nano-manufacturing to 
ensure U.S. jobs and preeminent global competitiveness.
    Nanotechnology is about the study of the very small, a 
range between the molecular size and the cellular size. Some 
examples from my own lab are on the slide. A light-powered 
nano-car is in the lower left box. Thirty thousand of these 
cars can fit on the diameter of a human hair. They are for 
manufacturing in the future, 50 years from now, where we will 
do bottom-up manufacturing.
    For example, if we want to make the table, we go down, we 
find a big tree, we cut it down, and we make a table. That is 
not the way we will be manufacturing 50 years from now, but we 
will be able to build bottom up, just like nature's enzymes do 
it. Machines bringing in molecules for direct construction of 
the table.
    We need to work now to be the leaders in 2060, but 
nanotechnology is also upon us today. The top middle box shows 
an oil well blowout preventor that are eight times tougher than 
the typical ones because they have carbon nanotubes in them. I 
founded a company in Houston that now makes these toughened 
rubber materials so that nano-manufacturing is with us today.
    I am the son of immigrants who came to the U.S. right after 
World War II. My parents instilled in their children a love for 
this country. My father used to tell us that the U.S. was the 
greatest country in the world, and I still believe he is 
correct.
    I say to tell you what is now at risk. With governing 
bodies rightly seeking to trim budgets, there is consideration 
of deep cuts in basic research for nanotechnology. Some are 
unaware that nano-manufacturing is about to spawn entirely new 
segments that will rise from the current 150,000 American jobs 
to 800,000 jobs by 2015. The U.S. has benefited from the best 
brains in the world coming to our shores for the past many 
years. People's intellects are our best asset, and by God's 
grace we have been the recipients of the world's top brains. 
Those brains have caused us to win the nuclear race, the space 
race, and the Cold War. U.S. higher education and research is 
the apple of America's eye and the envy of the world.
    Alarmingly, however, foreign competition is now on our 
shores, successfully wooing the best and brightest away with 
assurances of funding for basic research and support for 
transitions to manufacturing. In the past 14 months I have been 
invited to Singapore with a second trip planned this summer, 
and I have had more than a dozen visits from Singaporean 
representatives interested, including twice from the Economic 
Development Board of Singapore, interested in building me a lab 
in Singapore, funding my lab there, and having some of the new 
nanotechnology companies founded there with their capital 
backing and a much lower tax burden than offered in the U.S.
    I have also been approached by Russian, Chinese, and 
Japanese officials. Welcome to my world of global competition.
    American researchers are industrious and self-driven. We 
have been trained that way. If we cannot get our science 
funding and transition into the--in the U.S., we will go 
abroad, and top researchers will not wait for a decade for 
recovery. The brain drain has already begun, and it will 
continue at an alarming pace within the next 1 to three years 
if access to research and development funds become sparse.
    If American researchers start going abroad, the impact of 
the brain drain would be devastating to near and long-term 
economic development in the U.S. Federal funding for 
nanotechnology beyond the discovery phase is also needed to 
spawn the transitions from the laboratory to the manufacturing 
stage. This can be done using a competitive grants process that 
keeps the government from choosing its favorites and permits 
competition through grants applications analogous to the 
competitive SBIR and STTR Programs.
    In closing, let me underscore we are not finished with 
basic research and translational development in nanotechnology. 
The programs must continue. Foreign competition is at our 
doorsteps to capitalize upon and divert the country's lead in 
nanotechnology that will underpin the manufacturing of this 
century.
    And I want to thank you for your service to this country, 
and I would be honored to answer any questions.
    [The prepared statement of Mr. Tour follows:]
Prepared Statement by James M. Tour, Ph.D. Richard E. Smalley Institute 
          for Nanoscale Science and Technology Rice University
    Chairman Brooks, Ranking Member Lipinski and Members of the 
Subcommittee on Research and Science Education; I appreciate the 
opportunity to testify before you today on three aspects of 
nanotechnology of great importance to the nation, Rice University and 
myself. My name is James Tour. I am the T.T and W.F. Chao Professor of 
Chemistry, Professor of Computer Science and Professor of Mechanical 
Engineering and Materials Science in the Richard E. Smalley Institute 
for Nanoscale Science and Technology at Rice University in Houston, 
Texas. I have over 400 research publications and 50 patents on 
nanotechnology topics ranging from high performance materials, ultra-
small electronic devices, targeted cancer delivery agents, and 
nanomachines.
    I come before you today to address three critical concerns:

        1.  Foreign competition,

        2.  Federal funding beyond the discovery phase, and

        3.  Paths to commercialization.

Overview of the Smalley Institute

    Rice University is the location where C60, known as 
Buckminsterfullerene, was discovered in 1985 by Richard Smalley, Robert 
Curl and Harold Kroto and their team of students. That discovery, more 
than any other single discovery, is credited with the genesis of 
nanotechnology, and that single discovery led to three Nobel Prizes in 
Chemistry. The Smalley Institute at Rice University is now one of the 
premier research facilities in the world that supports and promotes 
researchers who use nanotechnology to tackle civilization's grand 
challenges--energy, water, environment, disease, education--by 
providing experienced and knowledgeable leadership, a solid 
administrative framework, world-class scientific infrastructure, and 
productive community, industry, and government relations. Rice 
University owns more licensed nanotechnology patents than any other 
university in the world.
    The Smalley Institute interacts with the private sector at several 
levels. We interact with major corporations (such as Lockheed Martin 
Co.) directly at a high level by forming centers (such as the Lockheed 
Advanced Nanotechnology Center of Excellence at Rice, or LANCER) to 
perform basic research in multiple projects which address significant 
technical challenges faced by the corporate scientists and engineers. 
LANCER, now in its fourth year, has funded six initial projects, at an 
overall level of funding of about $1.5 million per year. The Rice/
Lockheed partnership has resulted in over 200 Lockheed engineers and 
scientists being trained at Rice during week-long courses on 
nanotechnology. The Smalley Institute is currently working on two or 
three additional corporate relationships that have the potential to 
reach the same funding and partnership level as LANCER.
    The Advanced Energy Consortium (AEC) is a second example of 
corporate funding that the Smalley Institute helps to foster, 
independent of any government support. The Smalley Institute and the 
University of Texas at Austin started the AEC, joining ten major oil 
and gas companies together at a level of funding of $10 million per 
year, starting in January 2008. Rice has benefited from AEC funding at 
about $2 million year for direct research projects to explore the use 
of nanotechnology down hole in characterizing oil and gas formations 
and increasing production from those fields. In addition to the above 
examples, the Smalley Institute assists in connecting individual 
companies with individual Rice researchers to perform sponsored 
research projects .These projects range from a few thousand to 
$500,000, and cover a wide range of nanotechnology fields.
    In the area of philanthropic funding, the Smalley Institute also 
serves as the advocate for fund-raising from both individuals and 
foundations to support Rice's infrastructure of research as well as 
direct funding of research, especially in terms of undergraduate, 
graduate student, and postdoctoral fellow funding, both immediate use 
and endowed funds. We have raised funds to build buildings (Dell 
Butcher Hall, the first dedicated nanotechnology building in the world 
that was completed in 1997), help hire and endow talented new faculty 
members, buy research equipment, support meetings and workshops and 
seminars, and encourage nanotechnology education. We also provide 
local, national and international outreach activities to advance 
nanotechnology through lectures, short courses, and even classes in our 
continuing studies department.

Key Nanotechnology Issues

    As our country struggles to emerge from the recession, the most 
important issue to the public is jobs. Nanotechnology is an enabling 
technology that, if supported and developed adequately, will usher in 
the next industrial revolution and create hundreds of thousands of new 
jobs and make products that are more competitive globally. According to 
a presentation by Clayton Teague, Director of the federal National 
Nanotechnology Initiative, the nanotechnology industry currently 
employees over 150,000 Americans and that number is expected to grow 
significantly. It is estimated that there could be as many as 800,000 
direct jobs in nanotechnology by 2015. That is less than four years 
from today. These are highly skilled, highly paid jobs that result in 
long-term sustainable economic development for the countries that 
support them. As the Internet revolution propelled our economy in the 
early 90s, nanotechnology can be the major driver of economic growth 
over the next two decades. The U.S. needs to make important decisions 
now to ensure that this growth occurs in the United States where it can 
be of greatest benefit to U.S. citizens who provided the resources to 
fund this technology.
    When we talk about nanotechnology, we are not talking about 
something in the future, but something that exists today. 
Nanotechnology is used now in electronics, energy, medicine, cosmetics 
and materials. At Rice University, we incorporate carbon nanomaterials 
into high-strength composites that produce lighter and more conductive 
materials that can be used as lightweight body armor for our troops or 
in electrical wiring. We inject gold nanoparticles directly into the 
bloodstream of patients to target and kill cancer cells. Carbon 
nanoparticles are also being used to make printable radio frequency 
tags that will displace barcodes and permit real-time inventory in 
warehouses. Nanofilament-based silicon will also usher in the post-
flash electronic memories that will drive handheld communication and 
entertainment devices used today. Graphene, single-atom-thick sheets of 
carbon grown from table sugar and a nanotechnology application can be 
used for touch-screen displays on, for example, cell phones. This would 
allow the entire phone to be rolled up like a pencil to insert in your 
pocket. These are not technologies expected in the future. These 
technologies are being used today and U.S. workers, the same ones whose 
taxes paid for the technology development, can manufacture and produce 
these products if the U.S. government continues to support and fund 
nanotechnology research and commercialization at an adequate level. My 
personal life story testifies to the positive impact of federal funding 
for education, research and commercialization of technology. I am the 
child of immigrants who came to the U.S. seeking a better life and, as 
we worked for it, we found it. My Ph.D. and laboratory research was 
subsidized by federal research grants. While I am thankful for a 
government that has created opportunity for me and many others to make 
world-changing and life-saving discoveries, I am gratified that these 
discoveries also create a demand for high quality education, produce 
high-paying jobs, attract global talent, revolutionize manufacturing 
and solve difficult problems. All of these benefits to the U.S. will be 
lost if we fail to address the following three issues:

        1.  Foreign competition,

        2.  Federal funding beyond the discovery phase, and

        3.  Paths to commercialization.

Foreign Competition

    Foreign governments compete for nanotechnology human talent, 
research and manufacturing because these things are the key to global 
competitiveness. The primary areas of competition are:

          Basic research discoveries that lead to scientific 
        papers and then to Intellectual Property, such as patents,

          Hiring and funding of nanotechnology researchers, and

          Commercializing and investing in nanotechnology 
        enterprises.
    The U.S. leadership role in each of these areas is threatened 
because other countries are aggressively implementing national 
strategies to acquire this technological advantage and then compete 
against us.
    The U.S. is currently the intellectual leader for nanotechnology--
representing close to 30 percent of all patents held and 23 percent of 
all scientific papers published internationally. In addition, the U.S. 
government is also the largest investor in nanotechnology, investing 
close to $5.7 billion in 2008. However, other nations are beginning to 
close the gap. According to the March 2010 P-CAST report, from 2003 to 
2008, U.S. public and private investments in nanotechnology grew at 18 
percent annually, while global investment grew at 27 percent annually. 
In addition, U.S. government investments in nanotechnology R&D were 
overtaken by European Union in 2005 and by Asia in 2008 (primarily 
Japan, China and South Korea). In fact, the executive summary of the P-
CAST warns:

       ``..the United States stands to surrender its global lead in 
nanotechnology if it does not address some pressing needs. Key among 
those is a need to increase investments in product commercialization 
and technology transfer to help ensure that new nanotech methods and 
products make it to the marketplace, and the need to strengthen 
[National Nanotechnology Initiative] commitments to explore in a more 
orderly fashion environmental, health, and safety issues.''

    Foreign interests will continue to invest in both the basic science 
and application of nanotechnology. Now is not the time for the U.S. to 
surrender its leadership position just as the results of our research 
investments are moving to commercialization.

Federal Funding Beyond the Discovery Phase

    In order to preserve our leadership role, we must support federal 
nanotechnology funding beyond the discovery phase. Federal funding of 
basic research must continue because many companies are no longer 
conducting basic research. In order to continue this basic research, we 
must pay students because we have to pay them-they do not line up 
outside science and engineering departments as they do for medical and 
law schools. This federal support for scientists and engineers has a 
successful track record over the past 50 years as evidenced by the U.S. 
superiority in the Cold War, agricultural advances, energy development 
in the ultra deepwater and in shales and the space program to name just 
a few achievements.
    It is an exciting time for nanotechnology because we are now moving 
from the initial discovery stage to corporate development labs, 
nanomanufacturing and emerging markets. This is the stage in technology 
development when the U.S. can begin to realize a return on our 
nanotechnology investment if we continue to support and fund 
nanotechnology research and commercialization at an adequate level. The 
Federal Government has a specific role in two major areas of 
nanotechnology: nano-manufacturing and the environment.
    The key to a successful shift to commercialization of 
nanotechnology is through nano-manufacturing. Nano-manufacturing takes 
the basic science of nanotechnology and uses it in the production of 
nanoscaled materials. If we do not adopt and deploy an aggressive 
strategy to encourage the growth of nano-manufacturing immediately, we 
will find ourselves losers to China, India, Russia, Singapore and other 
places where government funds and supports the use nano-manufacturing 
to create jobs and wealth. As the U.S. manufacturing sector continue to 
shed jobs and as these jobs move abroad, nano-manufacturing is one 
bright spot of opportunity where the U.S. has the potential to be a 
world class global competitor.
    In the past 18 months, I have been invited to Singapore once with a 
second trip planned this summer (both business class flights). I have 
had more than a dozen visits from Singaporean representatives, 
including two visits from their Economic Development Board. The purpose 
of these visits was to encourage me to do my work in Singapore. I have 
been promised a lab and funding to do my work there. In addition, I 
have been promised capital backing and a lower tax burden than the U.S. 
if I launch new nanotechnology companies there. I have also been 
approached by Russian, Chinese and Japanese representatives. In the 
past two weeks alone, officers from both Toshiba and Mitsubishi have 
been in my office. This is global competition and it is the realm in 
which we nanotechnology researchers work. I do not say this to add a 
threatening tone to this testimony. Rather, I share this information to 
provide some context in which to view my recommendations. American 
researchers are industrious and self-driven. If they cannot get our 
science funded and transitioned here, they will go abroad. And top 
researchers will not wait a decade for recovery. The brain-drain has 
already begun, and it will continue at an enormous pace within the next 
1-3 years if access to research and development funds are reduced. 
Progress will continue, and it is my hope that the U.S. will be the 
beneficiary of that progress. If American researchers start going 
abroad, the impact of the brain-drain would be devastating to near and 
long-term economic development in the US.
    Environmental stewardship is also an area where the Federal 
Government needs to play a role in the post-discovery phase of 
nanotechnology development. Uniform and transparent environmental 
regulations are critical to the future growth of this industry. The 
government needs to encourage commercialization with sound science-
based environmental stewardship, without creating unnecessary 
regulatory hurdles that are not supported by sound science. Nothing can 
stifle economic growth faster than regulatory uncertainty. Universities 
and companies need a framework to address this uncertainty. Without it, 
, we will struggle through this next stage. The NNI helps to provide 
this guidance across the 25 different agencies that touch 
nanotechnology. As nano-manufacturing develops rapidly worldwide, there 
is a need for a reasonable regulatory framework that protects human 
health and the environment.
    The Federal Government has been a crucial partner in the discovery 
of nanotechnology. We must now use the nanotechnology tools funded by 
U.S. citizens to provide U.S. jobs and make U.S. products more 
competitive in the global market. This can be done through federal 
support for the commercialization of nanotechnology through support to 
universities and the private sector to move these technologies to the 
market and to the consumer.

Paths to Commercialization

    Federal funding for nanotechnology beyond the discovery phase is 
needed to spawn the transitions from the laboratory to the 
manufacturing stage. This can be done through Private-Public 
partnerships where a competitive grants process keeps the government 
from choosing its favorites, and permits competition through grants 
applications analogous to the competitive Small Business Innovation 
Research (SBIR) and the Small Business Technology Transfer (STTR) 
programs that merge universities with small companies for the 
transition from research to development and manufacturing.
    We only need to look at Texas for a few examples of some successful 
efforts in business -government nanotechnology partnerships. One 
company that I founded is NanoComposites Inc. NanoComposites make 
tougher elastomeric materials using carbon nanotube composites for 
items such as oil-well blowout preventors that are eight times tougher 
than existing systems. The development was funded, in part, through the 
Emerging Technologies Fund (ETF) of the State of Texas. That funding 
saw the Company though a period of transitional research where the 
application of the basic science to real systems was too risky to be 
considered for private sponsorship. Now, a major oil service support 
company has seen the efficacy of the process and invested heavily in 
NanoComposites. This is an example of a Private-Public partnership. 
Outside of the ETF, the State of Texas also helps fund cutting edge 
research through the Cancer Prevention and Research Institute (CPRIT). 
CPRIT began with $3 billion in bonds to fund groundbreaking cancer 
research and prevention programs and services in Texas. CPRIT's goal is 
to expedite innovation and commercialization in the area of cancer 
research and to enhance access to evidence-based prevention programs 
and services throughout the State. This is a model that is working 
successfully in Texas and something the Federal Government should 
review to build upon its success.
    Federal and state competitive funding for nanotechnology research 
has been wildly successful. We attract the best researchers in the 
world to our universities and these researchers, their institutions, 
and U.S. companies hold the largest number of nano patents in the 
world. We are now equipped as a country to deploy these technologies to 
make our businesses more competitive globally. However, continued 
federal funding in the post discovery phase is necessary to capture the 
value of what we have achieved thus far. If we reduce funding and 
commitment to nanotechnology during this critical juncture, this 
decision would be the equivalent of dropping out of a race voluntarily 
when you are in first place.

The Way Forward

    In order to achieve these goals, the National Nanotechnology 
Initiative (NNI) should be reauthorized to help guide the industry 
through transition. Currently, the NNI budget supports nanoscale 
science, engineering, and technology research and development (R&D) at 
15 agencies with 10 additional participating agencies. NNI helps to 
align these agencies so that they can work in a coordinated way to move 
this technology from discovery to commercialization. A new 
reauthorization will allow the Federal Government, universities, and 
the private sector to work to find creative ways to bring these 
promising technologies to the market more quickly and economically. In 
the absence of reauthorization, these agencies will be focused in 
different directions and the industry will struggle to transition into 
the next stage while other countries continue to close the existing 
gap.

Conclusion

    As Congress and the country wrestles with ways to encourage job 
growth in a global economy, nanotechnology is moving from basic 
discovery to commercialization. It is in this transition that we can 
begin to realize significant economic development and job creation. Our 
country is no longer the manufacturing leader in the world--we now 
outsource most of our manufacturing jobs overseas -but this does not 
have to be the case with nanotechnology. The U.S. is currently the 
intellectual leader in this promising field of discovery, but if we 
fail to make the investments needed today, then other countries will 
and we will begin to see the outsourcing of nano-manufacturing jobs 
overseas. Our government has made significant investments into this 
promising technology and now is not the time to walk away or diminish 
our financial commitment. I know that during these times of tight 
budget priorities must be made with funding. We have the opportunity to 
reclaim our manufacturing base that helped to build this great country. 
There is too much at stake to do nothing and other countries are 
already closing the gap. The issue before you is about economic 
development and a commitment to ensure that the United States remains 
the intellectual leader, driver and recipient of the economic benefits 
of this growing technology I close with the three priorities I urge the 
Subcommittee to address:

        1.  Foreign competition,

        2.  Federal funding beyond the discovery phase, and

        3.  Paths to Commercialization.
    Thank you for your time. I would be honored to answer your 
questions.

    Chairman Brooks. Thank you, Dr. Tour.
    We have received a notice of votes, and this is our game 
plan. Mr. Moffitt, if you are comfortable that you can make 
your remarks in five minutes, I have been informed that we have 
got a series of two votes, and as soon as your remarks 
conclude, we will go into a recess. We will vote, and then we 
will resume the hearing 10 minutes after the beginning of the 
last vote.

  STATEMENT OF WILLIAM MOFFITT, PRESIDENT AND CHIEF EXECUTIVE 
                   OFFICER, NANOSPHERE, INC.

    Mr. Moffitt. Thank you, Mr. Chairman. I am comfortable that 
I can do that in five minutes or less. So thank you, Chairman 
Brooks, Ranking Member Lipinski, and distinguished Members of 
the committee.
    I am here today to speak with you about your health. Your 
health, the public health, and the health of our economy, all 
underwritten by nanotechnology.
    I appreciate the opportunity to testify before this 
committee and to stress upon you the importance of NNI and how 
crucial that has been to the success and the commercial success 
of my company. I am the President and Chief Executive Officer 
of Nanosphere, Incorporated. I am also a member of the 
NanoBusiness Commercialization Association on whose behalf I 
testify as well. In full disclosure, I am a former science 
teacher and a Duke Blue Devil.
    Nanosphere is an 11-year-old company formed about the same 
time as the origination of NNI. We are a company that 
manufactures, develops, and markets an advanced molecular 
diagnostics platform for testing both in human health or 
infectious diseases, pharmacogenetics or personalized medicine, 
if you will, and in the area of ultra-sensitive protein testing 
for the earliest detection of advanced diseases such as 
cardiovascular disease and cancer. We also manufacture a bio-
security system that detects the slightest trace of bio-
terrorist threat agents in water and is field deployable around 
the globe, anywhere that it is needed, on a moment's notice.
    It is the extraordinary properties of nano-particle 
technology that enable us to achieve these breakthroughs in 
human genetic testing, pharmacogenetics, and ultra-sensitive 
protein testing. We created life-saving tests for tens of 
dollars. It could be sold for tens of dollars as opposed to the 
hundreds and thousands of dollars we hear today about genetic 
tests. All of this is in the format of a system that can be 
moved right to the patient's side, can be installed in the 
average community hospital or any medical setting, and be used 
when and where the physician needs results to these crucial 
tests.
    I want to spend a second and acquaint you with a couple of 
these. One of these is a test that is based on an established 
bio-marker. A bio-marker is the fingerprint of a disease. It is 
the earliest telltale sign of heart disease. It has been used 
to diagnose heart attacks in emergency rooms for 25 or 30 
years. Through nanotechnology we have found two new uses for 
this tried and true marker.
    One is the earliest detection of early-onset cardiovascular 
disease, and the other just discovered in the last 6 months is 
the use of this same marker to be able to monitor the progress 
of chronic heart failure patients and adjust their therapy more 
appropriately, therefore, improving their health and also 
reducing re-hospitalization, re-hospital admissions for them. 
So all of these lifesaving technologies can be brought right to 
the bedside in the hospital, if you will, by virtue of 
nanotechnology.
    We also has the ability to test for septic shock, the 
bacteria and the organisms that cause sepsis, not in three days 
as would take today, but in two hours, therefore, moving a 
critical diagnosis farther much faster so that the appropriate 
therapy can be started earlier. This also have implications for 
exposure of antibiotics to the rest of the organisms in the 
world and resistant strains that are continuing to be a problem 
for public health.
    I could go on and on with the things that we have done, but 
let me tell you this would not exist if it had not been for 
NNI. The efforts that have funded those agencies and the 
coordination there have helped tremendously in funding our 
company. The leverage in our company has been tremendous. Five 
or $6 million in federal grant aid was put into Nanosphere, 
which has augmented that with another $200 million plus in 
private and public equity financing. A 40 to one leverage ratio 
for the government dollar invested.
    This has been a success story so far, and we believe it 
will continue to be one. We would not have crossed that Valley 
of Death, if you will, had it not been for the NNI and 
government funding, which supports the transition of core 
science into commercializable technologies.
    This company has created jobs. We are small but growing. We 
are 115 strong today, but in years to come we will be hundreds, 
and we will be thousands in size, and these are high-tech jobs. 
Eighty-five percent of our employees have college degrees or 
advanced degrees. The average salary in our company is over 
$85,000, and that is if you take the top level off.
    So we are creating the kinds of jobs that underwrite the 
economy in this country. Our greatest challenge is employees, 
workers. I think we all are aware of the crisis we face in STEM 
education, the crisis in this country, and we cannot underscore 
that enough.
    Let me by-- let me close, I know I am going over here, by 
simply saying that we also realize and recognize that the 
competition we get from foreign investments and nanotechnology, 
they are closing the gap on us rapidly. We cannot stress that 
enough.
    Thank you, again, for the opportunity to speak, and I look 
forward to answering your questions.
    [The prepared statement of Mr. Moffitt follows:]
  Prepared Statement of William Moffitt, President & Chief Executive 
                       Officer, Nanosphere, Inc.
    SUMMARY

          The National Nanotechnology Initiative provides 
        crucial funding to revolutionary ideas and enables private 
        enterprise to find and invest in promising technologies and 
        companies.

          These technologies can represent important 
        breakthroughs in crucial industries such as healthcare and 
        defense.

          The market is efficient at funding and 
        commercializing viable technology into useful products, so long 
        as those technologies have sufficient funding to make it 
        through the ``valley of death.''

          The National Nanotechnology Initiative is the primary 
        tool that Congress has available to make sure that promising 
        technologies like these make it through the ``valley of death'' 
        and into the marketplace.

          The National Nanotechnology Initiative is also a 
        direct investment in high-paying, highly-skilled American jobs.

          Companies like Nanosphere can bring their technology 
        to the marketplace relatively quickly--in our case, we went 
        from research laboratory to marketplace in only ten years.

          The U.S. nanotechnology industry faces challenges in 
        the U.S. labor pool as well as other countries' aggressive 
        investments in nanotechnology, particularly healthbased 
        research.

          Nanosphere is committed to the responsible 
        development of nanotechnology, particularly with regard to any 
        environmental, health and safety issues related to the 
        development of this new technology, and will leverage 
        nanotechnology research to solve potential challenges.

    Chairman Brooks, Ranking Member Lipinski, and distinguished Members 
of the committee, thank you for allowing me the opportunity to testify 
before the House Science, Space and Technology Committee's Subcommittee 
on Research and Science Education, regarding how the National 
Nanotechnology Initiative has been crucial to my company's success.
    I am the President and CEO of Nanosphere, Inc., which is a member 
of the NanoBusiness Commercialization Association, on whose behalf I am 
also testifying. Nanosphere is an eleven yearold company based in 
Northbrook, Illinois, that is revolutionizing the way diseases are 
diagnosed and bio-security risks are discovered using nanotechnology. 
Nanosphere develops, manufactures and markets an advanced molecular 
diagnostics platform, the Verigene System, for ultra-sensitive protein, 
human genetic and infectious disease detection. This easy-to-use and 
cost-effective platform enables simple, low cost, highly sensitive 
testing on a single platform available to any medical setting anywhere 
in the world. Nanosphere has also developed mobile bio-security systems 
that can detect biological agents--such as anthrax, plague and other 
pathogens--in a local water supply. This system is field-deployable to 
any potentially threatening hotspot or U.S. embassy anywhere in the 
world.
    Both of these systems rely on nanotechnology to make these 
breakthroughs possible. For instance, one of the greatest benefits 
nanotechnology has delivered to the market is speed to diagnose a 
patient. Our technology, which enables tests to be performed right at 
the site of patient care as requested by the patient's physician, 
generates critical diagnostic information when and where it is 
required. We have eliminated the high cost and complexity of genetic 
tests for human inherited disease, pharmacogenetics (or personalized 
medicine) and infectious diseases through the use of breakthroughs in 
nanotechnology. Nanotechnology has enabled us to develop a molecular 
diagnostics platform that operates in a very simple format that 
eliminates the need for highly specialized labor. Moreover, the 
underlying cost of the consumable test cartridge is very inexpensive, 
which allows for pricing that is in line with any number of other 
routine diagnostic tests. This means that a life-saving test can now 
cost a patient tens of dollars as opposed to hundreds or even thousands 
of dollars and these new, more sophisticated molecular diagnostic tests 
can be easily integrated into mainstream medical care without 
additional financial burden on our health care system.
    Nanotechnology also allows for earlier detection of life-
threatening diseases. Harnessingnanotechnology, we have developed a 
diagnostic procedure that provides advanced detection for human protein 
biomarkers--or the ``fingerprints'' of disease--that is simply not 
possible using other technologies. For example, we have in development 
a test for cardiovascular disease which has already proven to be far 
more sensitive in detecting heart attacks and acute coronary syndromes 
than traditional technology. Recent data also suggest that this assay 
has great value in monitoring patients with chronic heart failure, 
allowing doctors to more accurately adjust a patient's therapy for this 
life threatening condition. Nanosphere has also developed the ability 
to detect recurrent prostate cancer following treatment years earlier 
than tests available without using nanotechnology. Today, the best 
weapon to fight cancer is early detection. Our products using 
nanotechnology make early detection possible and affordable.
    The National Nanotechnology Initiative is the primary tool that 
Congress has available tomake sure that promising technologies like 
these make it to the marketplace. This Initiativeprovides crucial 
funding to revolutionary ideas and enables private enterprise to find 
and investin promising technologies and companies.
    Simply stated, without the National Nanotechnology Initiative, 
Nanosphere might not exist. Nanosphere is a product of university-based 
research funded by NSF, NIH, and DARPA, among others. Since its 
inception the company has received approximately $5-6 million in 
government grant funding, which has been leveraged to an additional 
$200 million in private and public equity financing, a 40 to 1 
investment ratio. Early government funding was critical to the long-
term future and success of Nanosphere and the realization of 
significant advances in medical diagnostics.
    The market is efficient at funding and commercializing viable 
technology into useful products. However, in order for forward-thinking 
companies with promising technologies such as ours to succeed, the 
basic technology must be nurtured until it reaches a market-sustainable 
level. And once federal funds support a technology to the point where 
it is ready to commercialize, the marketplace provides venture capital 
to the best products. Our company has raised about forty dollars of 
private venture capital and public institutional equity investment for 
every one dollar of public funding to commercialize our molecular 
diagnostics platform. That one public dollar, though, was provided at a 
crucial time for any product trying to make it past the so-called 
``valley of death'' for new technology. Venture capitalists are ready 
to invest in technologies that can get across the ``valley of death'' 
and be commercial successes. But economies built on basic research, 
such as the U.S. technology economy, cannot be sustained without robust 
government support for promising new technologies.
    The National Nanotechnology Initiative is also a direct investment 
in American jobs. NNI-supported technologies are often commercialized 
by small businesses that excel at making those technologies useful in 
the marketplace. These companies employ highly-paid researchers, 
scientists and technology experts in order to develop their new 
products. As these companies grow, their workforces expand to include 
sales professionals and administrative personnel.
    We have brought our technology from the university research bench 
to commercial reality in less than ten years. As our company continues 
to grow, we generate incremental jobs. Today we employ over 115 people 
and expectations are that we will grow to several hundred over the 
coming years. These are high tech jobs with more than 85% of our 
employees holding college and advanced degrees. Our average salary 
exceeds $85,000. Companies like Nanosphere are a key growth factor in 
the nation's economy. These high-paying jobs employing professionals 
here in the U.S. simply would not exist without basic support for 
nanotechnology being developed in laboratories across America.
    In this regard, one of our greatest challenges is the available 
labor pool. This Committee is well-aware that we face a STEM education 
crisis. The NNI provides a strategy to help address that crisis and 
generate the highly skilled workforce that companies like Nanosphere 
need in order to compete in the global marketplace.
    The U.S. nanotechnology industry also faces the challenge of 
foreign competitors making significant progress in nanotechnology 
research. Large foreign companies as well as start-up enterprises are 
capitalizing on major advances in nanotechnology to create new products 
and new economic growth opportunities for their respective countries in 
the health-care arena. We face stiff competition from China, Germany, 
Korea, and Japan. Competitors in those countries are patenting at a 
furious rate, and the investments of these four countries in 
nanotechnology, especially as it applies to human health, exceeds total 
investment by the U.S. The governments are proactively investing in key 
areas like nanomaterial-enabled diagnostics and therapeutics because 
they know these advances have a chance to define their economy for 
decades to come.
    In addition, these countries are strategically finding ways to 
decrease the gap between invention and commercialization. Indeed, they 
are generating central arteries of development and commercialization by 
establishing institutes and centers of excellence in key subareas of 
nanotechnology, including energy, materials, electronics, bio-
nanotechnology, and many subareas of medicine. Learning from the best 
practices of these competing countries could prove valuable to further 
refining the NNI.
    Like the other members of the Nanobusiness Commercialization 
Association, Nanosphere is committed to the responsible development of 
nanotechnology, particularly with regard to any environmental, health 
and safety issues related to the development of this new technology. 
One of the key components of the National Nanotechnology Initiative is 
learning how nanoparticles interact with the environment around us. As 
our company's success with developing new health technologies 
demonstrates, nanotechnology more often than not provides the solution 
to environmental, health and safety problems. However, as we make these 
new discoveries, we can learn more about the impact of nanoscience, 
identify any risks that may develop, and determine solutions 
accordingly.
    Thank you again for the opportunity to address the committee today. 
I look forward to responding to any questions you may have.

    Chairman Brooks. Thank you, Mr. Moffitt. Based on our 
conversations with Mr. Lipinski, the Ranking Member, and 
myself, we are going to recess. I would anticipate we will be 
back somewhere in the neighborhood of 15 to 25 minutes. It is a 
series of two votes. The Members should be back 10 minutes 
after the last vote starts to be cast.
    We are in recess.
    [Recess.]
    Chairman Brooks. My wife is a math teacher. She would have 
loved to have had that kind of response using a gavel.
    Well, I thank the panel for their testimony, reminding 
Members that committee rules limit questioning to five minutes. 
The Chair will at this point open the round of questions, and 
the Chair recognizes himself for five minutes.
    Before I begin my five minutes, though, I have the consent 
of the minority to go ahead and resume. From what I understand 
Congressman Lipinski is on the way back and should be with us 
shortly.
    The first question for Dr. Welser, in your testimony you 
state that nanoelectronics can contribute to deficit reduction 
in three ways; increasing jobs, wages, and expanding the tax 
base, lowering the cost of computing to the government, and 
increasing economic productivity, and as you can imagine in the 
context of the battle that we are now in Washington, we have 
unsustainable budget deficits, we have basically three 
approaches or a combination of those three that we can use. One 
is to cut spending dramatically, one is to increase taxes 
dramatically, or a third way is to grow the economy, which 
naturally will generate additional revenue.
    So if you would, can you please expand on these ideas? How 
can Congress build on these concepts?
    Dr. Welser. Yeah. Thank you very much for the question. I 
think that obviously the most important factor that the 
nanoelectronics provides is the ability to grow the economy, 
and it is not just the chip industry but everything else that 
gets enabled around it.
    One of the reasons the exponential increase in revenues has 
occurred at the semiconductor chip level is because when 
something gets smaller, it doesn't just get faster. We can make 
whole new products, so you have smart phones or GPS or embedded 
sensors or drug delivery systems in the body, all enabled, new 
markets and industries enabled by increasing the scale of 
nanoelectronics.
    So I think that is the number one thing that happens, and 
then the jobs, of course, that go with that continue to then 
grow the economy as well.
    On the other side, for productivity and efficiency, if you 
look at the cost of computing over time, the iPad that we have 
today has the computing power of basically a super computer 
from the late '90s, so if you would try to do the kind of 
calculations and things that we want to do with the super 
computer then, you can now do it by buying an iPad.
    So there is a huge increase in productivity that you get 
for your dollars and computation. I think these two are 
probably the main ways that we can contribute, but obviously, I 
think just having more electronic capability also ends up 
assisting people in their jobs in all sorts of fields.
    Chairman Brooks. And on the chance that any of the other 
witnesses would also like to address that question, you are 
free to.
    Seeing none, Dr. Tour, your testimony discusses the 
importance of federal investments in nano-manufacturing and 
public-private partnerships. In addition, you state that the 
continued federal commitment to basic research at universities 
and companies helps to mitigate the investment risk for those 
looking to enter the marketplace.
    Certainly you are aware of the budget and deficit decisions 
facing Congress. In looking at the fiscal year 2012 budget and 
what is already a finite pot for federal investment and will 
likely be even smaller the next year, which area do you believe 
is more important for federal investment; basic research or 
nano-manufacturing, and if your answer is both, which it may 
very well be, then where in this field do you recommend we find 
the savings that we absolutely must find in order to enhance 
our expenditures in other areas?
    Dr. Tour. Well, if the number is X number of dollars would 
be committee, a portion of that X should go to both. So there 
should be a portion of X in the transition in nano-
manufacturing, but we have got to have the basic research, 
because basic research is not done, but we have got to be able 
to have the funds also to transition them. And there are 
mechanisms to do that, SBIR, STTR grants, which are already in 
place, these sort of mechanisms to do that. But if we just take 
X and we take a portion and we put it into both.
    Chairman Brooks. And this question is for, first for Dr. 
Teague, but if anyone else wants to chime in afterwards, feel 
free.
    Dr. Teague, I believe it was your testimony that related to 
us what other nations were spending on nanotechnology research 
and development, basic research, things of that nature. In your 
judgment how much does the United States need to commit to this 
field in order to remain competitive?
    Dr. Teague. I wish I had an immediate answer to that. I can 
tell you that we have looked at the amount of funding that is 
going into nanotechnology R&D by other countries. Probably the 
one that currently is in the lead is the overall European Union 
and the member states of the European Union. Rough estimates 
are that in 2010, they will be investing something like $2.6 
billion in nanotechnology R&D. This is one year of their new 
framework that they are investing.
    So I think that they are certainly the leaders in the world 
as of major economy in investing in nanotechnology R&D. The 
other countries are coming up very strong. It is really quite 
difficult to estimate how much funding is really in place in 
places like Korea, Japan, and China because one of the biggest 
reasons it is difficult to estimate how much they are investing 
is typically they don't publish a lot of numbers in terms of 
the labor costs of what--when you see estimates of funding. You 
will see mainly what they invest in equipment, new research, 
and things of that nature. So the numbers that you often see 
for China, Korea, and Japan, they often do not reflect labor, 
because that is assumed that it is just there.
    So if we wanted to keep competitive with the European 
Union, which I think is frankly one of the fastest-moving 
economies in the world, our estimate this year with the request 
for 2012 is 2.1 billion. European Union already had in 2010, 
2.6 billion. That would be the comparison that I would look at, 
and I think, my judgment is when you start looking at 
publications, publication citations, and things of that nature 
the fastest-growing countries there are probably--is probably 
China. If you look at the graphs of our publications and our 
publication citations, and you look at those of China, ours is 
leveling off some, and theirs are growing exponentially.
    So those are the two countries that I would really look at 
as very, very competitive if I were trying to make an estimate. 
I would hesitate to give you a hard number, but I would look at 
those two comparisons very carefully.
    Chairman Brooks. Does anyone else wish to share an opinion 
or a judgment concerning how much you believe we should be 
investing in nanotechnology in order to be competitive?
    Dr. Tour. I think in light of the current budget and where 
we are, we certainly don't want to decrease what we have been 
coming in at. I think that that would be devastating to the 
progress of nanotechnology to suffer with any decrease.
    Chairman Brooks. Thank you. Now I recognize Ranking Member, 
Mr. Lipinski.
    Mr. Lipinski. Thank you, Mr. Chairman. Mr. Moffitt, I want 
to commend you on the remarkable success of Nanosphere in just 
11 years, and I noted in your testimony you talked about 
receiving $5 to $6 million in government grant funding, I 
believe, in those 11 years, which was a leverage of an 
additional $200 million in private and public equity financing, 
giving a 40 to one investment ratio.
    I just wanted to ask all of our panelists, throw this out 
there, the--what type of--what has been your experience with 
leveraging grant money in order to have further--getting 
private investment into business?
    Anyone want to--Dr. Rudnick.
    Dr. Rudnick. So I think it is of great interest from the 
perspective of international health that the Gates Foundation 
invested $10 million in Liquidia this past month, and they did 
so because of the drive to be able to supply populations of the 
world that can't have vaccines today with new and more 
importantly improved vaccines.
    I think the ability to get that Gates money to be stemmed 
directly back to the initiative and the funding that came 
through NIST and other agencies to Liquidia over this last five 
years, I think it is imperative to have that kind of leverage 
and to continue to have that kind of leverage, at least in 
healthcare.
    Mr. Lipinski. Anyone else? Dr. Tour.
    Dr. Tour. What I have seen with the companies that I have 
started, it is, for example, with Nano Composites, it has been 
around seven years, the company. The company was just, a large 
part of it was bought by a major party now, and it has been 
about eight to one ratio, but, again, this is seven years. I 
heard you mention with Mr. Moffitt 11 years, and this is part 
of the problem with nanotechnology. It doesn't come 
immediately. This transition takes time, and without the 
government standing behind us to bear this, it is very hard to 
get the investment that will ultimately come, and for us it was 
seven years before a major player come in. Seven or eight 
years.
    Mr. Lipinski. Mr. Moffitt.
    Mr. Moffitt. Thank you for the kind comments. I think I 
would remiss if I didn't point out to the committee while there 
is a 40 to one leverage in the money that has been invested 
into Nanosphere, the ultimate return on investment here is the 
cost savings that we get in our public health system and the 
costs that we eliminate or reduce in our--in the healthcare 
system in this country, and indeed, ultimately, others will 
benefit around the world.
    But I can even point already to some examples of where our 
products are sitting in a position to be able to cut hospital 
readmissions simply by better treatment of the patient when 
they are in the first place, or pharmacogenetics, the term we 
use in this industry, personalize medicine, the ability to 
ensure that the drug that is being given to the patient is, in 
fact, the right drug, one that is not going to be harmful to 
them or one that is going to be effective for them.
    And there are already examples there of where a simple 
genetic test before somebody goes on the drug Coumadin, a blood 
thinner, Warfarin-based material, if you will, and there were 
about six million people in this country that are on it, and it 
has a significant adverse side effect in the first few days on 
a certain percentage of that population. A study that was done 
two years ago by a Mayo Clinic in Medco, showed that you could 
reduce hospital admissions by 30 percent after taking that drug 
if you simply performed this simple, little, inexpensive 
genetic test before dosing it.
    So I think the long-term payback here is much, much greater 
than 40 to one.
    Mr. Lipinski. Thank you, and I want to throw out one more 
quick question here.
    Mr. Moffitt, you stated we face stiff competition from 
China, Germany, Korea, Japan, and others who have strategically 
found ways to decrease the gap from invention to 
commercialization, and that is a big issue that we face, not 
just in nanotechnology but in other technologies and other 
research that we are conducting here.
    What are some of the best practices, just whoever wants to 
comment, some best practices we can take from other countries 
to refine our NNI?
    Mr. Moffitt. I think one of the best practices I have seen 
has been the formation of, I guess our term in this country 
would be centers of excellence, but I would call it more like 
arteries or pipelines, centers that are charged not only with 
the basic research but moving it onto translational development 
of products that are focused on specific industries, such as 
healthcare and perhaps even more focused on specific niches in 
healthcare.
    For example, the nano-cancer centers that have been funded 
in this country. I think more of that kind of effort where we 
not only just fund the basic research, but we fund the ultimate 
development and application of it, focused on core problems in 
our country.
    Mr. Lipinski. Anyone else want to comment on that?
    Dr. Welser. Just make a brief comment from the 
nanoelectronics side. When we were setting up the NRI, one of 
the things that determined where we were putting some of these 
centers was the willingness of the states to putting in money, 
not just for the research and infrastructure of the 
universities but your neighboring innovation parks, incubator 
labs, that could then take results that come out and rapidly 
try to put them into products, which is particularly important 
when you are doing basic research because it doesn't always 
impact the industry or the area you thought it was going to. So 
certainly our companies are very rapidly picking up the results 
that come out that can affect us on the nanoelectronics side, 
but you can have other collateral results in sensors or 
communication areas that perhaps startups would want to go 
after instead.
    So I think having that kind of environment around 
universities makes a big difference.
    Mr. Lipinski. Thank you. Anyone else? Okay.
    Thank you very much. I yield back, Mr. Chairman.
    Chairman Brooks. Thank you, Mr. Lipinski.
    Next we have Congressman Harris from Maryland.
    Mr. Harris. Thank you very much, Mr. Chairman, and thanks 
to all the Members of the panel for being patient with us to go 
and make those votes and come back and let me just--and this is 
a fascinating topic because obviously a lot has changed in 
medicine since I went to medical school, Dr. Rudnick and Mr. 
Moffitt. The--but I have to ask, the first question is at some 
point you have to move the basic science. At some point 
industry will be ready to pick this up, and for instance, in 
the electronics industry, I mean I know the balance sheet of 
some of the large semiconductor companies. I mean, why aren't 
they--there are so many benefits to them of doing this, why 
does the government have to fund any of that anymore?
    I mean, at some point you have to push--you cut the 
umbilical cord, and you know, industry should do this, and 
maybe Dr. Welser and Dr. Rudnick, I mean, at what point do we--
can we cut the umbilical cord on these things?
    Dr. Welser. Well, we certainly do pick up the research in 
the R&D. As you heard, we put about 17 percent of our revenue 
into product-related R&D, and if you look back over time, 
certain areas that we used to rely on university research and 
breakthroughs to go through we no longer rely on that. We do it 
ourselves.
    My area of research and my Ph.D. in the early '90s was 
strain silicon, and that was a lot of very fundamental research 
on materials. We didn't understand how to use it, and now it is 
in our production lines, and we are constantly making 
improvements on it, and we don't fund research in that back in 
the universities for a large extent or ask the government to do 
it either, because it is an area that we can now handle on our 
own.
    I think the reason that the government needs to be involved 
still at the basic level for even something like 
nanoelectronics is we constantly need to move to the next 
device, the next material, and that requires screening huge 
number of potential materials and ideas and structures that 
maybe aren't even in the materials that we use today.
    So that requires an investment that no company on its own 
can afford to do, and although we ourselves in industry put 
about $60 million a year into industrial, into university 
research on this, that is not enough to go after all the 
different materials that are possible. We have to focus those 
dollars on those things that we think can have the most promise 
going forward.
    Dr. Rudnick. On the medical front I think it is interesting 
to look at what happened at Liquidia. About five years ago the 
company was started. It was started with an idea that a little 
piece of film could have these nano-sized pores etched into it, 
and literally you could rub another piece of film over it, fill 
those pores, get drug substance out that was appropriately 
sized and shaped.
    To take that from that concept that started the company and 
developed manufacturing that now can literally produce hundreds 
of thousands of feet of film per month filled with particles 
was about $25 million and about four years.
    If the government hadn't stepped in and supplied some of 
the money through NIST to get that manufacturing ramped up, I 
doubt that venture capital would have been attracted to it. It 
would have been too early, too difficult, and there was no 
other place to go and get that level of resource to move it 
along except for that NIST funding for nano-manufacturing.
    Mr. Harris. I have just a follow up on that but now that 
industry I think is going to realize the value of this, again, 
at some point, and I don't know. I mean, it could be a broad 
enough field that we should just always spend the same amount 
of money and look into different areas, but with regards to 
screening products the pharmaceutical industry which also has a 
pretty good balance sheet, I mean, they do the screening of 
their drugs on their own. I mean, they do the same thing. They 
screen hundreds and hundreds of chemical compounds to find the 
one that is the next blockbuster drug.
    So,that is the only question I have, and very briefly, 
because Mr. Moffitt, you actually suggested that, I think in 
one of your answers that we should go actually beyond basic 
science and actually fund some of these things and get it 
further out, but I would say that--is that correct? Is that 
kind of what you had suggested, because to me the appropriate 
role of the government is to do something that no private 
individual would do, and to be honest with you, I had a little 
reticence. You know, the trouble with academic research, I love 
it, I did it, is that it is public domain. I mean, the Chinese 
have the access to the academic research that we fund, to be 
honest with you, which is different when industry does it, and 
it becomes something that is intellectual property that stays 
here in the United States.
    So, Mr. Moffitt, if you could just follow up on that?
    Mr. Moffitt. It is a comment about crossing what I think 
everyone refers to as the Valley of Death. Once the basic core 
academic research is done, how do you translate that into 
something? If the folks doing the basic research don't have a 
vision and idea for what this could become, then there needs to 
be a vehicle for making that happen.
    I think the venture capital community in this country is 
very efficient at picking the winners from the losers, and they 
are ready to put the significant, at-risk capital to work in 
the earliest stages, but there is a gap between those two. And 
what I refer to there, and I think it is a best practice that 
is occurring in some of our competitors around the world, 
competitive countries around the world, is they are finding a 
way to close that gap up, and they are doing it with either 
partnerships, private and public, or additional funding from 
government resources.
    Again, targeted to very specific problems that are there. 
But--so it is all about getting the technology to the point 
where industry, the venture capital community can recognize the 
pathway forward from there. And then I think at those points 
they are happy to take it forward.
    Mr. Harris. And if I could just, Mr. Chairman, just briefly 
follow up, just very briefly, observation is that some of the 
states, Maryland included, have said that is fine, but we could 
provide some of that venture capital to do that bridging to 
conventional venture capital, the difference being is when it 
becomes successful Maryland is making back some money, because 
we are actually bridging the venture capital.
    Mr. Moffitt. And there are good examples of that. Maryland 
is one state. There are other states where there are programs 
in place to help connect that link, if you will, and the 
payback is in the economies of those states.
    Mr. Harris. Well, not only payback in the economy but also 
a true physical dollar payback.
    Mr. Moffitt. Sure. Return on investment.
    Mr. Harris. Thank you, and I don't know, Chairman, Dr. Tour 
I think wants to follow up a little, and then I will yield back 
the balance.
    Dr. Tour. Could I make one comment?
    Mr. Harris. Please.
    Dr. Tour. The reason why we need to pay students to do 
research is because we have to pay them. Students line up at 
medical schools and law schools to pay their way through. They 
don't do that with science. They haven't done that with science 
for 50 years. We do that as a Nation because we feel it is 
valuable to train students in science and engineering. We pay 
them because we have to.
    I will give you an example. We were doing pure basic 
science, didn't know where it was going, graphene oxide. As 
soon as we saw the way it plugged filters, then we talked with 
our friends in the oil industry in Houston and starts going 
down hole to make cleaner drilling holes so that we get less 
infiltration.
    So it is the basic science that has to be done to spawn the 
new ideas that are then going to be transitioned, and it is not 
all in the public domain. I have 50 patents all through the 
university. So that--because of the Bi Dole Act is given to the 
university. The university then has the power to license that 
out, and I agree with you. We first file the patent, then, 
boom, we publish the paper. So we do both.
    Chairman Brooks. Thank you. The Chair next recognizes 
Congressman Clarke from Michigan.
    Mr. Clarke. Thank you, Mr. Chair. I want to pick up on the 
line of questioning especially those issues raised by the good 
gentleman from Maryland, but I just want to preface my 
questions that I do not have an ideological agenda or position 
I am trying to push right now through this questioning.
    I am going to ask you the questions for one reason. I would 
like to know the answers, and anyone can respond, but I am from 
metro Detroit. I am acutely aware of the fact that we need to 
create more jobs, and we got to do it faster. So how can we 
accelerate the commercialization of nanotechnology, and what do 
you think would be the most, not necessarily proper role but 
effective role for us to invest our tax dollars in this 
process?
    And the reason why I ask this, especially in light of Dr. 
Tour's written testimony and verbal here, that outlined the 
strong global competition for U.S. researchers, that truly 
concerns me, on top of the fact that you have a lot of foreign 
students who are graduating from our great research 
universities, one of which is in the area that I represent, 
Wayne State University, yes, I am plugging them. And then those 
graduates end up going back home and not staying in the U.S. We 
want to try to keep them here, but that is a matter of 
immigration policy.
    But still also for the same objective so that we can be 
truly competitive, and I want us to be number one in this area 
of commercialization, creating jobs in nanotechnology.
    That is the end of my speech in essence. My question is 
genuine, though. How do we best leverage federal tax dollars to 
create more jobs in nanotechnology and create them quicker?
    Dr. Rudnick. May I start to answer that question? I don't 
know that I can fully answer it.
    Chairman Brooks. I think he left it up to any of the five 
who want to jump at the mic first.
    Dr. Rudnick. One thing that I think can be extremely 
helpful is for the government to recognize that there are 
positive and negative influences that they exert, and the 
setting of standards for the development of nanotechnology I 
think is a critical area, and whether you call them 
environmental and health standards or you call them 
manufacturing standards or whatever you choose to put behind 
them, the government can through NNI help to set positive 
standards to frame the types of examination that nanotechnology 
particles, for example, will have to make sure that there are 
standards available to people if they need to test and 
investigate.
    And that is something that if it doesn't happen, if the 
national standards are not set and enforced in a reasonable and 
functional, the way the FDA practically does it for drug 
products, I think there is always the risk that things will 
slow down, and I would hate to see that happen, and so that is 
just one perspective and one small corner.
    The idea of having foundries that can manufacture these 
particles for anyone to use and test and know that they are 
getting the same thing time after time, I think is a very 
useful NNI response.
    Dr. Welser. I would also like to add I think there is value 
to having these for the public-private partnerships. The NRI in 
particular when we started it was sort of an experiment for the 
industry in that this was research that was really quite far 
out for us, something that we normally didn't get involved 
with, but we saw the urgent need with this transition coming up 
in the industry to start doing some funding on it, and we found 
that even though we were funding chemists, physicists, material 
scientists doing very basic work, having the industrial 
assignees working with them, we could identify ideas much more 
quickly that looked that they might actually solve a problem we 
would have or look like it could actually go do something 
different.
    So rather than having that be just a pure science result, 
we could more rapidly say, well, let's take the science, learn 
the science, and also think about how you would apply it.
    Mr. Clarke. This is at the basic research level?
    Dr. Welser. Very basic research level.
    Mr. Clarke. Okay.
    Dr. Welser. So, for example, graphing material, there was a 
physicist down at U.T. Austin who had come up with an idea for 
making room temperature excitons, I am sorry, made excitons, 
great idea, didn't mean a whole lot. We asked him, well, could 
it ever be done at room temperature, he never even though of 
that, went and looked at it and said, actually, it could. It 
could be one of the first room temperature excitons. It is a 
great science result. If it is true, it actually could make a 
device that would be a thousand times less energy than our 
current CMOS transistors. So obviously of clear interest to us.
    So we are hoping that that kind of interaction, even at the 
early stages, can identify things that we could move more 
rapidly.
    Dr. Tour. I think that money is always a great incentive, 
and if we want to push these out faster, one of the things that 
we could do is to say, when I am speaking to an industrial 
entity to say, look what I have got, if you start to invest in 
this to do this transition of this nano-material into your 
business, there are certain laws that would give you different 
tax structure during this phase that are particularly enhancive 
to, would particularly enhance this system, this particular 
type of research.
    And whether it be 15 cents that the U.S. Government would 
put in on the dollar that the company would put in or if it 
would be some other type of incentive in this way.
    Mr. Clarke. Dr. Tour, I know my time is up, this is very 
important. Is there a way that you could get me some bullet 
points of these types of proposed incentives that could work at 
different stages of the process?
    Dr. Tour. Absolutely.
    Mr. Clarke. I really appreciate it, and I am Hansen Clarke 
from Detroit.
    Dr. Tour. Okay.
    Mr. Clarke. Thank you.
    Dr. Teague. May I add a few comments from the federal 
program, please? Yes. All right. I just wanted to point out 
that within the new NNI Strategic Plan that there are two 
aspects of it that I think move in the direction that several 
of the Congressmen has spoken about.
    One is the three signature initiatives that I talked about. 
These signature initiatives are really aimed at moving maybe 
towards slightly the next stage but still being in basic 
research, but they are really aimed to focus upon a number of 
common areas that are seen as being of high economic importance 
and national importance, and trying to align the resources of 
all the 25 federal agencies, at least those that have interest 
in those signature initiatives, to move towards the direction 
of maybe not, certainly not commercialization, but certainly to 
try to make the next stage, moving towards the application 
areas and to some degree trying to move the technology that 
came out of exploratory research into some of the next stages 
that Dr. Welser and some of the other ones have spoken about.
    That is their principle aim is to align the resources of 
those interested federal agencies toward common thrust areas 
and toward common targets that identified and all the agencies 
that are working, agencies working on it have agreed.
    The second thing that I would point out is that within the 
EHS Research Strategy the principle goal of that EHS Research 
Strategy is to both look at simultaneously the safety as far as 
human health is concerned and as far as the environment is 
concerned, but also to make sure that the commercialization of 
things are not limited and are actually boosted by this trying 
to focus on environmental health and safety aspects of 
nanomaterials.
    Many people have said that one of the potential greatest 
barriers to commercialization of nanotechnology products is 
concern about the environmental health and safety. So I think 
that this focus by the agencies, particularly those in the 
regulatory community, to focus on both the safety aspects of it 
as well as the advancement of the technology and the 
commercialization of the technology, it is really quite an 
important move by the agencies to assist and to aid 
commercialization and technology advancement.
    So I would encourage you to really take some look hard at 
all three of the signature initiatives and to the new EHS 
Research Strategy once you have it in your hands.
    Chairman Brooks. Before we get to our next member, 
Congressman Tonko, I am going to add that we have a little bit 
of time for additional questions, so should any member want to 
ask some more, just let me know, and we will have a second 
round.
    With that we have Congressman Tonko of New York.
    Mr. Tonko. Thank you, Chairman, and thank you and our 
ranker for what I think is a very important discussion. Let me 
thank our panel for the guidance that you are providing.
    I represent the capital region of New York, which is the 
third fastest growing hub of science and tech jobs, high-tech 
jobs, a lot of it driven by the investment we have made in 
nanoscience. So I totally respect the impact that it can have 
favorably on our economy.
    Dr. Welser, in your testimony you mentioned that the NRI 
research is extremely in early stage, and like most scientific 
researches it is unlikely to become part of a commercial 
product for ten years or more. Is there any concern that that 
ten-year delay in a commercial product will have a negative 
impact on the semiconductor industry?
    Dr. Welser. Yes, certainly. I think that we are after this 
right now because we know in about ten years we will have no 
other alternatives, but there is a long way to go in the next 
ten years. Just making the current technology we are constantly 
struggling to make things smaller and smaller, and that is 
really, of course, what scaling has all been about.
    And particularly in the patterning side of things, this 
is--there are some huge roadblocks ahead. We have been using 
what they call 193 nanometer light for quite awhile. We really 
need to move to smaller wavelengths. We are making features now 
in the order of 30 nanometer, so EUV, extended UV is a major 
focus right now of work within industry consortia and with 
government partners. Semi Tech in your area, of course, is a 
leader on this as well, and that--the solutions are not there 
yet. It is not only just making it work, but there is still 
materials work that needs to be done, understanding how to get 
light sources that can work, and on top of that we also think 
ultimately we need to think about patterning with other methods 
and combining that with things like directed self-assembly or 
other mechanisms.
    So there is a long way to go just to make sure our current 
technology continues forward.
    Mr. Tonko. And what role, I mean, what can we best do to 
move the EUV concepts along? I mean, it seems as though it is 
going to be a very pricy investment, but there obviously should 
be a partnership with the government I would hope.
    Dr. Welser. I absolutely agree. I think that, particularly 
if you consider the competition out there, the other countries 
already, of course, are striving to get more and more of the 
FABs over there. Very fortunately, of course, Global Foundries 
has recently chosen to put a FAB in the U.S., which is, I think 
points to the fact that all of our companies really would like 
to have FABs in the U.S. if the business environment is right 
and if we can be close to hubs where the R&D is going on.
    So having a partnership with the government for this 
incredibly expensive development that needs to go on and 
research on the basic materials that are there is the only way 
we will remain competitive with the other countries that are 
putting that money in.
    Mr. Tonko. It frightens me that whoever gets that 
investment as a nation will be controlling the job count out 
there, and while everyone is bulking up with investment, we are 
talking about de-funding, which is a frightening thought.
    Dr. Teague, do you agree with those recommendations made by 
Dr. Welser, and could you also incorporate your comments on the 
signature initiative in terms of how it could help us pull us 
into the right direction here toward that effort?
    Dr. Teague. I definitely agree with Dr. Welser's comments 
on the need for that, and I think that if you look at, 
particularly the signature initiative on nanoelectronics for 
2020 and beyond, these are, I think, quite well aligned with 
some of the directions and the emphasis and the needs that are 
needed for advancing these next electronics.
    I might just point out that we have four thrust areas 
within the Nanoelectronics Signature Initiative, and I think 
that they are quite well aligned with a lot of the directions 
that the Nanoelectronics Research Initiative by the SRC and the 
electronics industry is taking.
    If I may just read those, and he might, Dr. Welser might 
comment on them, the first one of the thrust areas is exploring 
new and alternative state variables, architectures, and modes 
of operation for computing. I know this--I am quite confident 
this is very parallel to what the NRI is doing.
    Merging nanoelectronics with nanophotonics and exploring 
carbon-based nanoelectronics, exploring nanoscale processes and 
phenomena for quantum information systems, and national 
nanoelectronics research and manufacturing infrastructure 
network that is university based in their overall 
infrastructure.
    We currently are trying to, as I say, align the activities 
of the main agencies which are concerned with this, the 
National Science Foundation, the National--NIST, DOE, and DOD 
in these areas.
    The next step that I think will be taken with the signature 
initiatives is to start interacting more with private industry 
for a possible public-private partnerships but mainly to try to 
make sure that what the agencies are doing, what they are 
funding is aligned with, to some degree, what is happening out 
in industry.
    Mr. Tonko. I note that I am running out of time, but if you 
could get back to me personally or to the committee about how 
to grow the public drive, the general public, to push 
nanoscience. So many times that is what is needed in our 
culture. You have other cultures that are pushing investment in 
science and technology. We seem to be concentrated on 
entertainment and sports cultures and are lulled, we are 
somewhat lethargic about investing in science and technology. 
If any of you as panelists here could advise us on how we can 
engage the public to drive the advocacy for investment in this 
area, I would love to hear that.
    Dr. Teague. I couldn't agree with you more on that. After 
working with it, as I indicate, for the past period that I have 
been, the engagement of the public and mounting their interest 
in the nanotechnology, both in terms of its potential and in 
terms of the knowledge of it, efforts are being made to make it 
be a safe technology right from the start is something that I 
think we truly need to make sure the public fully understands 
and hopefully accepts rather than being potentially afraid of 
it.
    Mr. Tonko. Uh-huh. Well, as a kid I saw that general 
passion of the Nation to be the first to land a person on the 
moon. I would love to see that sort of passion again for 
nanoscience.
    Thank you, Mr. Chair.
    Chairman Brooks. Thank you, Mr. Tonko.
    I have got three questions. The first one is to Dr. Teague, 
the second one would be all witnesses, and the third one would 
be for you all to digest and get back to us on.
    Dr. Teague, what continues to be the primary concerns about 
the environmental health and safety impacts of nanotechnology?
    Dr. Teague. I think in terms of the general concern, if you 
are talking about the general concern sometimes of the public 
or the particular genuine concerns that are held by the 
scientific community, people that are involved in toxicology 
and the health aspects of nanotechnology, as well as the 
potential hazards that might it be posing for the environment, 
much of it is still remaining lack of knowledge of how some of 
the nanomaterials may potentially cause harm to human health 
and to the environment.
    The investments by the National Nanotechnology Initiative 
member agencies, and I am pleased to say that we have had 
joining this year the Food and Drug Administration, as well as 
the Consumer Product Safety Commission in investing some in R&D 
for nanotechnology.
    Our focus and I would say they have been pretty measured, 
as well as targeted, and trying to answer these questions and 
to come up with increased knowledge about the potential hazards 
of nanomaterials is the greatest concern. There has been much 
growth, much effort in this direction. I think the NNI and the 
NNI member agencies are making great progress. Our investments 
in the United States are far beyond any other country in the 
world, including the entire European Union, in this area, 
trying to understand it.
    We have for the entire period of the NNI led the world in 
trying to understand these potential hazards of nanomaterials.
    The--and I think the EHS strategy lays out a wonderful path 
forward in terms of how we will try to address this. The--all 
the agencies that have worked on the EHS strategy has really 
been laying out a great program to achieve the goals of making 
it safe and also being able to advance the technology of nano.
    They call it their risk management research framework, and 
this overall framework of trying to take account simultaneously 
of safety concerns as well as those that are needed for 
advancing the technology is, I think, an excellent path that 
they have laid out. It has been developed with huge inputs from 
the entire community. We have had four different workshops over 
the past year to get great input from the experts in the field 
of toxicologists to help especially the fields that might be 
concerned about environmentalists, to lay out this path.
    And so I hope that we can address this particular concern.
    Chairman Brooks. This one is for all the witnesses. Are 
current federal and private research efforts adequate to 
address concerns about environmental health and safety impacts 
of nanotechnology, and why does the Federal Government need to 
increase spending of EHS activities in the White House budget 
fiscal year 2012 by 36 percent over fiscal year 2010 which was 
44 percent over fiscal year 2011 continuing resolution?
    And that is for whomever of you may wish to address that 
issue as to why the need is so great for increased funding on 
EHS activities.
    Dr. Tour. I don't agree that we need that increase. I would 
rather see that increase be put into the basic research because 
as basic researchers we are already doing a lot of the EHS. 
When we are studying nanoparticle toxicity in our animal models 
for therapeutics, we are already gathering a lot of that data. 
I have been in companies that are thinking about incorporating 
nano, and they already have a lot of the testing that they are 
doing as part of their normal regulatory work that they are 
doing.
    So I am not sure that there needs to be that increase.
    Chairman Brooks. Anyone else have any judgment to share?
    Mr. Moffitt. I am not an expert. I can't speak to the 
increase itself and the detail of the budget, but I would say 
this. I do think it would be irresponsible of us in our--in 
this industry to continue to develop these products without 
understanding the long-term downstream implications of them and 
the impacts on these materials that we are making.
    And I think if I think about Congressman Tonko's question 
about how to engage the public, I think this is an example of 
how we help engage the public, which is by reassuring them that 
these materials are not dangerous or, in fact, getting the 
answers if they are and how to handle them.
    Chairman Brooks. Any other insight?
    Dr. Teague. May I just add a few comments on that in 
response?
    Certainly the percentage of increase is from the continuing 
resolution in 2011, and from the actual amounts expended in 
2010. I think your--I wouldn't question your figures on that, 
but I would make sure that everybody is understanding that 
these increases still bring the total investment by all the NNI 
agencies and the environmental health and safety research still 
remains at something like five percent of the overall NNI 
investment.
    This seems to be quite, as I say, that--and even that level 
has been very carefully looked at through a lot of consultation 
across the federal agencies, through all the input that I 
mentioned through workshops outside, through PCAST 
recommendations, through recommendations from the National 
Academy of Sciences.
    So the current investments and these increases still by 
many people in the field think that that is too small, but I 
think because of the careful consideration of inputs from a 
broad range of stakeholders and from, as I say, PCAST and the 
Academy of Sciences, those increases are really quite justified 
in consideration of the hazards which many people think need to 
be addressed and better understood.
    Chairman Brooks. Dr. Welser, excuse me, Welser or Dr. 
Rudnick, do you all have an opinion you wish to share? If not, 
that is okay.
    Dr. Welser. I think I would like to reinforce the two 
opinions to the left in the following fashion. I think that I 
can't judge the overall amount and the value of that amount, 
but I can say that there is a great deal of work that is 
already going on in terms of safety of these particle-like 
products, and it is being done as part of the medical 
development of them, and not sharing that information across 
agencies would be a mistake.
    And I think that has been one of the great strengths of NNI 
which is the sharing of information across agencies has been 
strong. I would hope that however the budget is constructed and 
however the workshops are constructed going forward that that 
continues to be the case.
    Chairman Brooks. Thank you. If we provide each of you with 
a copy of the text of House Resolution 554, the NNI 
Reauthorization Bill from the last Congress, would you please 
provide us with feedback for the record? Share with us your 
insight on the verbiage that is used and the scope of that 
legislation?
    All right. We will do that.
    Next, Mr. Lipinski, Ranking Member, do you have some 
follow-up questions?
    Mr. Lipinski. Thank you, Mr. Chairman, and one area that I 
was going to go down, and you did a good job covering in the--
in your questions there, and I certainly just want to echo the 
sentiments that we have heard from some of our witnesses about 
the importance of environmental, health, and safety research 
and the need to be investing in that.
    The question I had about computer chips, our current chips 
are 32 nanometers. The next generation, maybe next year or 
maybe sooner, 22 nanometers. As we approach 10 nanometers, 
everything changes, quantum mechanics.
    I want to ask Dr. Teague and Dr. Welser what is being done 
for research as to what we do next given the importance of 
rising computational power, and is there anything more that 
needs to be done, anything more that the--can be done by the 
Federal Government in helping industry deal with this issue?
    Dr. Welser. So I will start if you don't mind since this is 
exactly where the NRI is focused. I think we all realize that 
while we see a roadmap around 10 nanometers, and no one wants 
to predict exactly whether it is 10 or 8 or 5, but somewhere in 
along that line, but the current devices, we know that in the 
next ten years the reason the NRI is looking out beyond that is 
because we know it needs to be completely different at that 
point.
    At that point it doesn't become about shrinking anymore but 
actually about finding a different device, which probably means 
different materials, certainly means different physics needs to 
be involved because we understand the limits that we are 
reaching with our current physics, and it is actually all about 
energy and power it turns out. The problem isn't necessarily 
that you couldn't go maybe slightly smaller, but the energy 
these things utilize, the power density on the chip is just too 
large at that point. So finding physics that can reduce that 
energy is huge.
    So all the things I am listing there and you heard the five 
areas that the NNI has also targeted all are about finding 
basic new physics and materials to carry this forward, and I 
think that it is so critical to do it early because although we 
can take it eventually to industry and actually do something 
with it that makes it into a product, we have to have a firm 
basis that has already been done at the research lab level 
before we can really take that in.
    Mr. Lipinski. Dr. Teague.
    Dr. Teague. I am not sure that I can add a lot to what Dr. 
Welser said. I am not an expert by any means on quantum 
information systems. What I do hear much and I read much about 
the great promise that people see in moving to quantum 
information, computing quantum information, communication 
systems, and overall quantum logic devices.
    For many people these seem to be the long, long range of 
what people hope to do. As we run upon the barriers of quantum 
mechanic tunneling at the distances that we are talking about, 
10 nanometers and below, much of the classical way that we have 
looked at building electronic devices, electronic computing 
systems, we will run into barriers that we cannot overcome 
because we have run into the ends as far as the basic physics 
of those kind of systems.
    Even there as indicated by these five different ways in 
which the agencies have laid out their path forward on 
nanoelectronics for our 2020 and beyond, that is one of the 
paths that is to be followed and to try to pull together all of 
the--and align the efforts of the agencies along those 
directions.
    The other one is the one that I think the NNR, NRI, and as 
well as the agencies are going to be pursuing is looking at 
other state variables other than electronic charge. This seems 
to be one of the paths that is looking at, looks a lot 
promising. For instance, spin systems, using spin as the state 
variable rather than the electronic charge is one option that 
people are looking at. I am not an expert in this field and 
would hesitate to say that that is one of the more promising 
ones. There are a lot of others. I think Dr. Welser could maybe 
speak much more knowledgably about that, so I would be 
interested in his thoughts on that.
    Dr. Welser. Well, I am not going to pick a winner here 
today. If we knew that, we would go after it, but I will say 
the spintronics in the area of carbon electronics clearly show 
huge advantage.
    I realize one other part of your question was what--are we 
doing enough? What more could we be doing? I think one of the 
things that does concern me is because of the fact we have been 
very careful in terms of where we focus this, we are looking at 
just the main transistor switch right now, and that is, of 
course, the building block that the entire chip industry is 
built on, but going along with that, if we move to spin or if 
we move to something completely different, you need to figure 
out how you are going to interconnect that, how you are going 
to build memory devices that go with that, the architectures 
and circuits that go along.
    One of the important things about the signature initiative 
is it pulls together people who think about circuits and 
architecture and memory devices with the people who do 
transistors and then the people who do physics and chemistry, 
and in getting those people altogether and a critical amass of 
funding to enable them to do their research in their areas is 
something that I think is crucial to actually finding a 
technology and rapidly moving it in rather than waiting until 
we find the perfect device and then suddenly say, wait, now we 
got to figure a circuit that is going to be used.
    So I think that is a real value to these signature 
initiatives in these areas.
    Mr. Lipinski. Thank you.
    Dr. Teague. Just one last comment on that. Dr. Welser 
mentioned the spin and also with new carbon-based electronics. 
The one thing that I think that is very, very much overlapping 
between what the government agencies are doing, hopefully there 
is great communication with industry, but all of them are 
looking at how do the architectures, the basic overall 
architecture of the computer change as you move into these new 
systems.
    Much, much thought to be given to how do you completely 
restructure the electronics, reconstruct the entire way that 
logic is done in--as you do computing.
    Another one that should be considered is the coupling 
between nanoelectronics and nanophotonics. Light-based aspects 
of the computing architectures are also beginning to play a 
major role in even current computing systems.
    Mr. Lipinski. Very good. Thank you.
    Chairman Brooks. Well, there go those bells again.
    I thank the witnesses for their valuable testimony and 
Members for their questions. The Members of the Subcommittee 
may have additional questions for the witnesses, and we will 
ask you to respond to those in writing. The record will remain 
open for two weeks for additional comments from the Members.
    The witnesses are excused, and this hearing is now 
adjourned.
    [Whereupon, at 4:09 p.m., the Subcommittee was adjourned.]
                               Appendix I

                              ----------                              


                   Answers to Post-Hearing Questions




                   Answers to Post-Hearing Questions
Response by Dr. Clayton Teague, Director, National Nanotechnology 
        Coordination Office (NNCO)

Questions Submitted by Chairman Mo Brooks

Q1.  What impacts are environmental, health, and safety concerns having 
on the development and commercialization of nanotechnology-related 
products and what impact might these concerns have in the future.

A1. The introduction of new technologies and substances into commerce 
should be not only economically and socially beneficial, but also have 
minimal impact on humans and the environment. Our goal is to avoid 
problems that can arise when inadequate attention is given to 
environmental, health, and safety (EHS) concerns.
    If we are slow to develop the information needed to ensure that we 
are producing nanomaterials with minimal adverse impact, there are two 
primary ways in which EHS concerns may affect the development and 
commercialization of nanotechnology-related products: uncertainty 
whether some nanotechnology-enabled products may harm human health and 
the environment, and perceptions that regulatory uncertainty is harming 
the business environment.
    Uncertainty Whether Nanotechnology-enabled Products May Harm Human 
Health and the Environment. EHS concerns arise when there is a lack of 
scientific knowledge to guide the assessment of the potential risks and 
proposed benefits of a new technology on human health and the 
environment. To create that scientific knowledge base for 
nanotechnology, the NNI agencies whose missions encompass health and 
the environment began research to understand the interactions of 
nanomaterials with biological systems in parallel to fundamental 
materials research and product development as early as 2001. This EHS 
research is guided by the NNI Strategy for Nanotechnology-Related 
Environmental, Health, and Safety Research. \1\ This strategy 
identifies, targets, and accelerates the research needed for risk 
assessment, risk management, product development, and science-based 
regulation. As research data accumulate and are transferred into 
knowledge, design and engineering of nanomaterials is improved and an 
increasingly stable climate for development and commercialization of 
nanotechnology-related products is established, outcomes that may 
increase consumer confidence and product use. The NNI agencies 
understand the need to communicate safety information as research data 
are developed. The 2011 nanoEHS research strategy, now in final review, 
identifies research needs for risk communication. \2\ The NNI Strategic 
Plan outlines several 3--5-year objectives under Goal 4: Responsible 
Development of Nanotechnology that provides agencies with concrete 
steps to develop effective means to engage the public in ongoing 
dialogue on nanotechnology.
---------------------------------------------------------------------------
    \1\ http://www.nano.gov/node/254
    \2\ The draft of the 2011 strategy is available at http://
strategy.nano.gov/blog/generic/page/draft-nni-ehs-strategy.
---------------------------------------------------------------------------
    Perceptions that Regulatory Uncertainty is Harming the Business 
Environment. There is concern about the potential for safety 
regulations to slow economic growth. However, transparent, consistent, 
and scientifically---based regulations decrease uncertainty about the 
regulatory and economic climate.
    The NNI regulatory agencies have reviewed their existing 
authorities against our current scientific understanding of the human 
and environmental impact of size and emergent properties of nanoscale 
materials and have determined existing regulatory authorities to be, 
for the most part, appropriate to ensure the safety of the American 
people. Modifications to existing rules and safety evaluation 
procedures will be made only where necessary to ensure product safety. 
Regulatory agencies are also working with their industrial stakeholders 
to assist them in navigating the nanotechnology regulatory landscape.
    US nanotechnology regulatory policy is coordinated through the 
White House Emerging Technologies Interagency Policy Coordination 
Committee (ETIPC). The committee has developed a set of broad 
principles to guide the development and implementation of policies for 
oversight of emerging technologies at the agency level and additional 
guidance specific to regulatory oversight of nanotechnology is to be 
issued. \3\
---------------------------------------------------------------------------
    \3\ http://www.whitehouse.gov/sites/default/files/omb/inforeg/for-
agencies/Principles-for-Regulation-and-Oversight-of-Emerging-
Technologies-new.pdf
---------------------------------------------------------------------------
    In combination, these components of a science-based research and 
regulatory approach to nanomaterials and nanotechnology-enabled 
products will promote the positive economic climate necessary for U.S. 
technological and industrial leadership while protecting public health 
and the environment.

Q2.  In your testimony, you state that the ``NSET Subcommittee 
anticipates incorporating participation and input from industry and 
other stakeholders on current and future nanotechnology signature 
initiatives''. How will the Subcommittee obtain this input? Will they 
target specific industries or use input from a broad sample of nano-
related industries? Was industry and outside stakeholder input utilized 
when developing the current signature initiatives?
2a.   How will the NSET Subcommittee incorporate participation & input 
from industry and other stakeholders on current & future NSIs? How will 
the Subcommittee obtain this input? Was industry and outside 
stakeholder input utilized when developing the current signature 
initiatives?
    The Nanotechnology Signature Initiatives (NSIs) mechanism and the 
initial NSI topics are the result of an extensive internal Executive 
Branch process. The mechanism and three initial topics received strong 
endorsement from industry and other stakeholders when they were 
publicly released. As this new NSI process enters its next phase of 
development, processes for seeking input and participation from 
industry and other stakeholders on future signature initiatives are 
being explored.
    Previous stakeholder input. The NSET Subcommittee's charter 
formally designates the President's Council of Advisors on Science and 
Technology (PCAST) as the NNI private sector interface. PCAST, in its 
capacity as the designated National Nanotechnology Advisory Panel 
(NNAP), has reviewed the NNI three times. In its most recent review, 
completed in March 2010, PCAST endorsed the concept of the NSIs and the 
three initial NSI topics, and then called for development of at least 
five such initiatives over the next 2-3 years. The NSET Subcommittee 
charter also specifies that the subcommittee may also interact with and 
receive ad hoc advice from other Federal advisory bodies and private 
sector groups, consistent with the Federal Advisory Committee Act. 
Accordingly, the NSET Subcommittee established three additional 
channels for external stakeholder input during 2010, as it was 
formulating its updated NNI Strategic Plan (released in February 2011): 
(a) an NNI Strategy Portal website (http://strategy.nano.gov), (b) a 
formal Request for Information published in the Federal Register, and 
(c) an NNI Strategic Planning Stakeholder Workshop, held in July 2010. 
The NSIs were regarded positively by participants in all three venues.
    Options for future stakeholder input. Several options are under 
consideration. First, PCAST (or the NNAP) will continue to serve as the 
NSET Subcommittee's primary private-sector interface, and future NNAP 
reviews of the NNI will carefully evaluate the NSI process and the 
topics that have been selected through it. Second, the NNI Strategy 
Portal remains active, and may be re-tooled to seek specific 
stakeholder input on the NSI activity and suggestions for future NSI 
topics. Third, the February 2011 NNI Strategic Plan states that NNI 
will work with industry across sectors to develop technology roadmaps, 
or long-term R&D plans, as appropriate, in support of new public/
private partnerships and signature initiatives. This input may take the 
form of roadmapping workshops at which industry views will be sought 
out, and at which other stakeholders will also be welcome. NIST \4\ and 
NSF \5\ have already held two such workshops in support of the 
sustainable nanomanufacturing signature initiative. Finally, NNCO has 
just created a new Industry and State Liaison (ISL) staff position. The 
ISL staff member at NNCO will be tasked with seeking stakeholder input 
on signature initiatives as well as other aspects of the NNI.
---------------------------------------------------------------------------
    \4\ http://www.nist.gov/cnst/thenewsteel.cfm
    \5\ http://www.internano.org/nanosystems

2b.   Will they target specific industries or use input from a broad 
---------------------------------------------------------------------------
sample of nano-related industry?

2b. The NSIs are targeting issues of national importance, not specific 
industries. For the three existing signature initiatives:

    The ``Nanoelectronics for 2020 and Beyond'' initiative is focused 
on maintaining the economic and national security benefits that 
resulted from the sustained improvements in performance and 
affordability of semiconductor electronics described by Moore's Law. 
Naturally, this has involved working closely with the semiconductor and 
electronics industries. The
    ``Solar Energy Collection and Conversion'' initiative targets 
improvement in U.S. energy security, which in turn has major 
implications for national security. It also supports research on new 
sources of energy that have the potential for reduced environmental 
impact.
    The ``Sustainable Nanomanufacturing'' initiative endeavors to 
retain within the United States a significant portion of the economic 
``value added'' from nanotechnology innovations by assuring that these 
innovations are not just invented here, but also made in the United 
States. A good case in point is the semiconductor industry, which 
involves manufacturing at the nanoscale, and which provides many high-
paying jobs in the United States, not just for scientists and engineers 
but also for skilled technicians and other manufacturing workers. In 
order to establish a realistic scope, this initiative targets 
production-worthy scaling of three classes of materials that have the 
potential to affect multiple industry sectors with significant economic 
impact (carbon nanomaterials, cellulosic nanomaterials, and optical 
metamaterials).
    For future signature initiative topics, there are no pre-conceived 
target industries. The criteria for signature initiative topics are:

          They address an area of high national priority, e.g., 
        national security, energy independence, or health or are 
        supportive of other Presidential priorities or the President's 
        A Strategy for American Innovation.

          TThey are ripe for significant advances through 
        accelerated, targeted research.

          Achievement of the research goals requires multiple 
        agency participation at the programmatic level.

Q3.  The FY 12 Budget Request highlights three signature initiatives 
related to solar energy, nanomanufacturing, and nanoelectronics. Why is 
there a need for signature initiatives? Will a focus on these areas 
take away from other much needed nano-related research? Based on the 
budget charts for these activities, it appears that this is a new line 
item for many agencies, as they are showing zeroes in FY 11 funding. I 
feel certain that most of these agencies have been investing in these 
areas for years. Can you please explain the discrepancy?
Q3a.   Why is there a need for signature initiatives?

A3a. The NNI has been successful at increasing communication and 
coordination among U.S. Government agencies involved in nanotechnology 
R&D, including multi-agency Funding Opportunity Announcements. The 
signature initiatives build on this success by developing a more 
integrated and focused mechanism for interagency collaboration. Through 
this enhanced coordination, existing agency resources will be leveraged 
more effectively, duplication of efforts will be minimized, and goals 
accomplished more expeditiously.
    Restricted budgets provide a second rationale for an NSI mechanism. 
While the NNI has, by most accounts, been a very successful basic 
research initiative with numerous NNI-funded innovations entering the 
market place, prioritization of the NNI investments into key areas of 
significant benefit to the American people will leverage funding more 
effectively and structure investments to maximize tangible returns.
    We also note that one of the three major issues that the 2010 PCAST 
review of the NNI addressed was ``Nanotechnology Outcomes-An analysis 
of what the Federal nanotechnology investment has delivered and 
recommendations to enhance the outcomes, especially economic 
outcomes.'' \6\ PCAST's recommendations in this regard include that the 
NNI should ``increase its emphasis on nanomanufacturing and commercial 
deployment of nanotechnology-enabled products, and that the agencies 
within the NNI must interact and cooperate more with one another to 
ease the translation of scientific discovery into commercial 
activity''. \7\ The Signature Initiative on Sustainable 
Nanomanufacturing directly addresses these recommendations. The other 
two initial signature initiative topics also address them; the 
objective is to accelerate the development of novel nanoelectronics and 
solar energy technologies to the point at which they have the potential 
to be competitive in the marketplace and commercially viable. Because 
the magnitude of the effort needed to make each initiative successful-
multiple agencies funding both basic and applied research in close 
cooperation with industry-and because the expected returns on the 
investment are large but difficult for any one company to appropriate, 
it is reasonable for the government to support the NSIs.
---------------------------------------------------------------------------
    \6\ President's Council of Advisors on Science and Technology, 
Report to the President and Congress on on the Third Assessment of the 
National Nanotechnology Initiative, 2010, p. viii. (http://
www.nano.gov/node/623)
    \7\ Ibid., p. ix.

Q3b.  Will a focus on these areas take away from other needed nano-
---------------------------------------------------------------------------
related research?

A3b. No. The NNI retains a core of fundamental research that is 
essential to maintaining the flow of new ideas into the innovation 
pipeline. While PCAST recommended increased NNI emphasis on 
manufacturing and commercialization, it also indicated that this should 
be done ``while maintaining or expanding the level of basic research 
funding in nanotechnology.'' The FY 12 NNI budget request is consistent 
with this recommendation: Program Component Areas (PCAs) 1 and 2 
(fundamental phenomena and processes and nanomaterials, respectively) 
combined still account for a majority of the NNI funding request, while 
increased investments in nanomanufacturing (PCA 5) and devices and 
systems (PCA 3) are requested.

Q3c.  Based on the budget charts for these activities, it appears that 
this is a new line item for many agencies, as they are showing zeros in 
FY 11 funding. I feel certain that most of these agencies have been 
investing in these areas for years. Can you please explain the 
discrepancy?

A3c. Yes, some of these agencies have had substantial investments in 
areas related to the signature initiative topics for years, however 
none of the participating agencies have line items in their budgets for 
the Nanotechnology Signature Initiatives. The numbers that are reported 
for the signature initiatives in the NNI Supplement to the President's 
2012 Budget are crosscuts on other line items. The reason that some 
agencies report no funding for FY 11 in this report is that as of the 
time the report was prepared, none of the agencies had received their 
FY 11 appropriations and therefore many agencies had not allocated 
funding to that level of detail. Others interpreted the guidance 
differently, and re-allocated funds within their interim FY 11 budgets 
towards these priority areas. What is new for the NSIs is the focused, 
targeted, interagency collaboration, the specific ``expected 
outcomes,'' and the focus on exploiting advances in nanotechnology to 
achieve those outcomes.

Q4.  With regard to the Signature Initiatives in the FY 12 Budget 
Request ( solar energy, nanomanufacturing, nanoelectronics ), why is it 
appropriate for the Federal government to identify specific issue areas 
for research focus ? How do we not pick technology winners and losers 
by doing this? Are these the most critical areas that the Federal 
government should be focusing its limited resources? What critical 
areas are missing? What other grand challenges do we face with 
nanotechnology? What role should the government play in setting ``Grand 
Challenges''? What are some examples of ``Grand Challenges'' in 
nanotechnology and are we ready to tackle them yet?

Q4a.  With regard to the Signature Initiatives. why is it appropriate 
for the Federal government to identify specific issue areas for 
research focus?

A4a. The U.S. Government has historically prioritized basic research 
topics, especially when budgets are restricted. Following the PCAST 
recommendation to maintain the NNI's basic research funding, a large 
portion of the total NNI investment remains devoted to funding of 
investigator-initiated research topics: anyone with a new idea for a 
nanoscience or nanotechnology research topic can propose that idea for 
funding through the NNI agencies' core programs. However, it is also 
appropriate for a portion of the investment to be targeted to national 
priorities, especially in areas where the extensive internal NNI review 
process has concluded that there is potential for nanotechnology to 
have a significant impact on these national priorities, and where the 
efforts of multiple agencies are needed to realize this potential.

Q4b.  How do we not pick technology winners and losers by doing this?

A4b. Ultimately, the marketplace will pick the technology winners and 
losers. The task of the Federal Government is to 1) prioritize research 
investments that may have particular promise for commercial or military 
applications; 2) support pre-competitive basic and applied research 
that will help to mature technologies, products, and services; and 3) 
structure investments in a manner that maximizes the potential for U.S. 
industry to take advantage of nanotechnology-enabled opportunities.

Q4c.  Are these the most critical areas that the Federal government 
should be focusing on with its limited resources?

A4c. Yes. As described above under 2d, the three current signature 
initiative topics were chosen because the nanotechnology basic research 
had matured to the point where materials, platforms, tools, and 
approaches are ripe for significant advances through close and targeted 
program-level interagency collaboration. Additionally, and as discussed 
previously, the potential applications in each NSI topic areas address 
major national priorities, and plans are under development to engage 
industry and other stakeholders.

4d.  What other grand challenges do we face with nanotechnology? What 
role should the government play in setting ``Grand Challenges?'' What 
are some examples of ``Grand Challenges'' in nanotechnology and are we 
ready to tackle them yet?

4d. ``Grand Challenges'' were topics of national importance included in 
the original NNI Implementation Plan of 2000. \8\ The NNI investment 
strategy no longer includes separately identified ``Grand Challenges'', 
in part because many of the original ``Grand Challenges'' fell within 
the mission of a single agency. The 2004 NNI Strategic Plan introduced 
the seven Program Component Areas (PCAs) to organize and track NNI 
investments. The PCAs were revised in the 2007 NNI Strategic Plan to 
break the previous ``societal dimensions'' PCA into separate PCAs for 
environment, health, and safety (EHS, PCA 7) and education and societal 
dimensions (PCA 8). The Nanotechnology Signature Initiatives that were 
initially proposed in the NNI Supplement to the President's FY 11 
Budget have some elements in common with the original NNI ``Grand 
Challenges.'' For example, both mechanisms direct a portion of the NNI 
investment portfolio to basic and applied research that targets 
specific objectives of national importance. Unlike ``Grand 
Challenges'', the new Nanotechnology Signature Initiatives outline more 
specific expected outcomes, plans to achieve those outcomes through 
multi-agency collaborations, and identification of topics that clearly 
fall within the missions or needs of more than one agency.
---------------------------------------------------------------------------
    \8\ National Nanotechnology Initiative: The Initiative and its 
Implementation Plan, NSTC/NSET Report, July 2000, pp 47-68 (available 
at: http://nano.gov/sites/default/files/pub--resource/nni--
implementation--plan--2000.pdf.)

Q5.  It is clear that nanotechnology promises many amazing 
breakthroughs while also being surrounded by a great deal of hype, 
mostly positive, a little negative. Help me put this in perspective and 
get a better sense of the real potential--over the next five to ten 
years, how do each of you think nanotechnology will impact our lives 
---------------------------------------------------------------------------
and our economy?

A5. While we cannot predict the future, the potential of nanotechnology 
to revolutionize a variety of industrial sectors and to profoundly 
affect our economy and our lives is a near certainty. As Dr. Teague 
stated in his testimony, there are a number of breakthroughs and 
advances that are already available or will be commercially available 
in the near term. For example, nanotechnology-based medicines are now 
in clinical trials. Some use nanoparticles to deliver toxic anti-cancer 
drugs targeted directly to tumors, minimizing drug damage to other 
parts of the body. Nanotechnology is helping scientists make our homes, 
cars, and businesses more energy-efficient through new fuel cells, 
batteries, and solar panels, as well as through new nanomaterials that 
are stronger, lighter, and more durable than the materials we use today 
in buildings, bridges, and automobiles.
    Nanotechnology has the potential to improve our standard of living, 
in much the same way as information technology advances have 
revolutionized our lives and the economy over the past two decades. To 
frame this more broadly in terms of impact, it hard to quantify the 
potential of the emerging field of nanotechnology, just as it is hard 
to accurately explain the tremendous impact of the IT revolution. 
Consider this: the fact that we have much faster computers, and that we 
can quantify exactly how much faster they are, is not in and of itself 
an accurate assessment of the impact of the field on our lives or the 
economy. It is in what we can do with these faster computers and how 
that has changed virtually every part of our society that truly 
illustrates that point.
    The bottom line is that nanotechnology is expected to be as 
ubiquitous as IT. Nanotechnology, by definition, is an enabling 
technology that is applicable to virtually every field of science, 
technology, and engineering, and as such, it is quickly providing the 
ability to fundamentally change the way we create and utilize 
everything around us. This case is already true in the electronics 
field; if you are not currently using nanotechnology, you are simply 
not a competitor in the field.
    Nanotechnology funding has a remarkable return on investment when 
viewed in terms of expected job creation and the potential for 
significant economic growth. A study funded by the National Science 
Foundation projects that 6 million nanotechnology workers will be 
needed worldwide by 2020, with 2 million of those jobs in the United 
States. \9\ A variety of sources have come to the conclusion that 
nanotechnology will be between a $1-3 trillion business by 2015. \10\In 
fact, just one NNI agency program-the National Science Foundation's 
Nanoscale Science and Engineering Centers (NSECs)-has contributed to 
175 nanotechnology-related startup companies and collaborations with 
more than 1200 other companies. This is an indicator of the potential 
of NNI investments to stimulate economic activity, and shows a clear 
desire on the part of industry to actively collaborate on NNI projects.
---------------------------------------------------------------------------
    \9\ Roco, Mirkin, and Hersam, Nanotechnology Research Directions 
for Societal Needs in 2020, Springer, Boston and Berlin, 2010. (http://
wtec.org/nano2/)
    \10\ Lux Research, Nanomaterials State of the Market Q3 2008: 
Stealth Success, Broad Impact (Lux Research, Inc., NY, NY, July 2008) 
and Roco, Mirkin, and Hersam, Nanotechnology Research Directions for 
Societal Needs. (WTEC, 2010)
---------------------------------------------------------------------------
    Government support for nanotechnology research and development is 
required to ensure that the United States can maintain a competitive 
position in the worldwide nanotechnology marketplace while realizing 
nanotechnology's full potential.

Q6.  Per my request at the hearing and as you are aware, the House 
passed legislation to reauthorize the NNI once in the 110th Congress 
and twice in the 111th Congress, only to see it die in the Senate. I 
would hope that the nanotechnology research world has changed somewhat 
in the past three years since this Committee last held a hearing on the 
topic and drafted legislation. Using H.R. 554 from the last Congress as 
a basis (attached), please provide feedback by commenting on the merits 
of that bill and any areas that you see room for improvement or 
changes.

A6. The responses below were developed principally by the NNCO staff in 
cooperation with Dr. Teague, OSTP, and the NNI agencies. We thank the 
Committee for this question and appreciate the opportunity to comment 
on provisions within H.R.554. Our staff is well aware of previous 
legislative attempts to reauthorize the NNI, and have performed 
periodic analyses of them as these bills have progressed. These 
analyses are somewhat lengthy and cannot be fully covered here. Below 
we will provide only a summary of the most important points.
    In general, H.R.554 contains many positive updates and improvements 
to the original NNI authorizing legislation. In particular, we point to 
the provisions aimed at enhancing cooperation and partnering of the NNI 
with industry and State nanotechnology initiatives, and also the 
topical emphases supporting education, commercialization, and 
infrastructure.
    However, we also feel that many of the provisions establish 
programmatic reporting requirements which may prove very burdensome to 
NNI agencies, and thus provide a disincentive to continue participating 
in the NNI. Specific examples include an expansion in the number and 
scope of strategic planning documents and the creation and maintenance 
of extensive databases, which may prove costly and have no specific 
funding dedicated to them. Additionally, the statement in a number of 
provisions of specific topic areas to be researched or reported on may 
hinder the evolution of NNI priorities over the coming years.
    More specific issues which we have identified with the previous 
legislation include:

          Recommendation of an independent Nanotechnology 
        Advisory Panel: The last two Administrations have strongly 
        recommended that this panel remain a subcommittee of the PCAST, 
        to keep it integrated with the rest of the scientific advisory 
        process which advises the OSTP and the President, and to 
        minimize costs. The previous three PCAST reviews have proven 
        very valuable and have significantly improved the functioning 
        of the NNI.

          TIP focus on Nanotechnology: This provision requires 
        the National Institute of Standards and Technology (NIST) to 
        encourage the Technology Innovation Program (TIP) to fund 
        nanotechnology programs, and report the details of these 
        efforts. This statutory emphasis on nanotechnology does not 
        exist for other technology sectors, and in fact the TIP 
        emphasis on funding areas of national importance might be 
        skewed by such a singular provision.

          Research in Areas of National Importance: While this 
        provision may be valuable in principle, the specific phrase 
        ``The Program shall include.'' could impinge on the planning of 
        a balanced portfolio of research topics in the future. We 
        recommend the alternate phrasing ``The Program may include.''

          Nanomanufacturing Research Program Component Area: As 
        with the previous bullet, the specific phrasing that the 
        Nanomanufacturing PCA ``shall contain'' the list of specific 
        research topic areas may restrict planning of a balanced 
        portfolio of research topics in the future. Again, we recommend 
        the alternate phrasing ``The Program Component Area may 
        include.''

    OSTP staff would welcome the opportunity to discuss their views 
with the Committee members and staff in greater detail as future re-
authorization legislation is developed.

Questions from Ranking Member Daniel Lipinski

Q1.  During his oral testimony, Dr. Tour stated that there is no need 
to increase federal investments in environmental, health, and safety 
(EHS) risk research because, in his experience, the private sector 
already does sufficient testing on their products to meet regulatory 
requirements. Do you agree with this statement ? Is industry investing 
sufficiently in EHS risk research and testing to protect the public, 
the environment, and workers from potential downsides of nanotechnology 
? Please elaborate on your answer. Why are federal investments in EHS 
risk research under the National Nanotechnology Initiative (NNI) so 
important, and why has the Administration increased those investments 
over the last couple of years ? How will the new NNI EHS Strategy help 
guide the Agencies to integrate and leverage their EHS research ?

Q1a.    Do you agree with Dr. Tour's statement?

A1a. Dr. Tour's statement suggests that safety assessment of individual 
nanotechnology-enabled products and platforms is sufficient testing for 
all aspects of nanoEHS research. This is true if all products fall 
under the purview of U.S. regulatory authorities, however many products 
and commercial uses of nanotechnology fall outside this scope.
    For nanotechnology---enabled products that fall under the 
regulatory auspices of FDA, CPSC, USDA, and EPA, existing regulatory 
authorities help to ensure the safety of the American people and their 
environment. If questions about the adequacy of regulatory oversight 
are identified, agencies are able to review those regulations and 
testing requirements and modify them, as necessary, to ensure safety. 
However, there are many consumer products that fall outside of these 
regulatory authorities. Examples include children's toys, air 
filtration devices, clothing, and a myriad of electronic devices. The 
market for nanotechnology-enabled commercial products is estimated at 
up to $3 trillion by 2015, a figure that suggests that many 
nanomaterials and nanotechnology-enabled products will fall outside of 
the safety testing authorities of U.S. regulatory agencies. \11\
---------------------------------------------------------------------------
    \11\ Lux Research, Nanomaterials State of the Market Q3 2008: 
Stealth Success, Broad Impact (Lux Research, Inc., NY, NY, July 2008) 
and Roco, Mirkin, and Hersam, Nanotechnology Research Directions for 
Societal Needs. (WTEC, 2010)
---------------------------------------------------------------------------
    Numerous research studies have demonstrated that a change in the 
location of a single surface modification on a nanomaterial can alter 
its physical and chemical properties, and hence, its behavior in 
biological systems. Therefore, there is a need for more generalizable, 
basic research about classes of nanomaterials and categories of 
biological responses, as well as product-specific safety testing. EHS 
research funded by the NNI research-mission agencies includes basic 
research that is critical to the development of the nanotechnology 
knowledge base that will simultaneously promote product development as 
well as applied product-specific testing, to protect public health and 
the environment.

Q1b.   Is industry investing sufficiently in nanoEHS research?

A1b. Because of intellectual property and confidential business 
information rules, it is not possible to estimate with any accuracy the 
industrial investment in nanoEHS research. Furthermore, industry 
addresses safety issues for its product line and gaps in research 
between product lines would develop, thus impeding the development of a 
robust knowledge base. Industry has expressed repeated support for EHS 
research and for clarity in the regulatory landscape; several 
industries have developed hazard assessment programs; and many have 
instituted worker protection programs. These programs may have 
generalizable components, but they are developed to address a specific 
industry's issue and address very specific risk considerations.

Q1c.  Why are federal investments (in EHS) important and why have they 
been increasing?

A1c. Federal investments in nanoEHS research are critical to the 
development of the vast data and knowledge base necessary to perform 
the risk assessment and risk management that promotes a positive 
nanotechnology business climate and facilitates the responsible 
development of nanotechnology. This scope of research--both applied 
(product or process specific) and basic--is beyond the scope of what 
can be achieved and publicly shared by industry. It is critical to the 
successful achievement of all NNI goals-from R&D to tech transfer, 
workforce development, as well as use of nanomaterials in green 
chemistry and manufacturing, and remediation of the environment, and 
for global acceptance of U.S. nanotechnology-enabled solutions and 
products, and to U.S. global leadership.
    The NNI investment in nanoEHS research has been increasing as 
agencies built an early foundation of research that can now be expanded 
to achieve the objectives for EHS research laid out in Goal 4 of the 
Strategic Plan: Responsible Development of Nanotechnology.

Q1d.  How will the new NNI EHS Strategy help guide the Agencies to 
integrate and leverage their EHS research ?

A1d. The 2011 NNI nanoEHS research strategy, now in final review before 
public release, contains guiding principles to assist agencies' 
development of their mission-specific nanoEHS research strategies, and 
frameworks within which to shape their implementation plans. \12\ These 
principles and frameworks were developed by trans-agency writing teams 
and are based on integration of the well-established scientific 
constructs of risk assessment and product life cycle assessment, 
constructs that cut across agency missions and identify critical 
research needs that are shared across agencies.
---------------------------------------------------------------------------
    \12\ The draft final nano EHS research strategy is available at 
http://strategy.nano.gov/blog/generic/page/draft-nni-ehs-strategy
---------------------------------------------------------------------------
    The nanoEHS research strategy also contains principles to target 
and accelerate research, such as criteria to select which nanomaterials 
to study, guidance to maximize data quality, and mechanisms to partner 
with industry and international stakeholders. To promote the continuous 
coordination that is essential to ensure the integration of agency 
implementation plans, the NSET Nanotechnology Environment and Health 
Implications (NEHI) working group established an implementation and 
coordination framework that includes: increasing agency participation 
in NNI EHS research, refocusing the NEHI Working Group monthly 
meetings, coordinating existing and fostering expanded agency efforts 
to address priority EHS research needs and identified gaps, and 
adaptively managing the NNI EHS Research Strategy as new data and 
research needs become apparent.
Response by Dr. Jeffrey Welser, Director, Nanoelectronics Research 
        Initiative, Semiconductor Research Corporation

Questions Submitted by Chairman Mo Brooks

Q1.  What impacts are environmental, health, and safety concerns having 
on the development and commercialization of nanotechnology related 
products and what impact might these concerns have in the future?

A1. The semiconductor industry has been building products with nano-
sized features (e.g. the nanoscale junctions of transistors which are 
involved in transmitting, processing, and storing information) for some 
time with a proven track record of strong environmental, occupational 
health and safety commitment and results. These nano-sized features are 
etched or otherwise modified into the semiconductor matrix, e.g., a 
silicon wafer, and are not discrete engineered nanomaterials, and do 
not pose a unique or novel health risk. Today, the use of nanomaterials 
in the semiconductor industry is limited to the use of slurries 
containing nano-sized particles in chemical mechanical polishing (CMP), 
a manufacturing step in the production of semiconductors. However, 
these particles are not incorporated into the product, but instead are 
used to ``polish'' or ``smooth'' the surface of the semiconductor wafer 
during manufacturing.
    Although nanomaterials are not used today, the semiconductor 
industry and its members are engaged in active research programs to 
explore the role of engineered nanomaterials in future semiconductor/
ICT innovations and applications. The semiconductor industry 
understands that there are environmental, health, and safety concerns 
related to the use of discrete engineered nanomaterials in consumer 
products, and that because of the limited information available, there 
are uncertainties regarding the potential risks associated with the use 
of discrete engineered nanomaterials. The semiconductor industry has 
taken proactive steps to respond to this uncertainty. Members of the 
semiconductor industry are among the first companies to create safe 
work practices and health and safety training for its employees who 
work with engineered nanomaterials. The semiconductor industry and its 
members are actively supporting and partnering with governmental 
agencies, academic institutions, and other organizations to develop the 
necessary environmental, health, and safety information that lead to 
greater human health and environmental protection, and we are committed 
to the responsible and sustainable development of nanotechnology and 
use of engineered nanomaterials.

Q2.  Are current federal and private research efforts adequate to 
address concerns about environmental, health, and safety impacts of 
nanotechnology? Why does the federal government need to increase 
spending on EHS activities in FY 12 by 36 percent over FY 10 (44 
percent over FY 11 CR)?

A2. In light of the potential significance of nanotechnology in future 
technological advancement and economic growth, federal support for 
research in this area, including EHS impacts, should continue to be a 
priority of federal spending. Continued and increased federal support 
for EHS activities related to nanotechnology is warranted because the 
promise of this technology will be influenced, in part, by the 
scientific community's understanding of the EHS impacts of this 
technology. The ultimate acceptance by the consumer and the public of 
this technology, both in the U.S. and globally, will also be dependent 
on the perception of EHS impacts.
    The key question for NNI, however, is not simply on the magnitude 
of the EHS spending, but rather whether that spending is targeted at 
the right areas. Priority should be given to high quality research that 
addresses broad needs and nanomaterials with the greatest potential for 
impacting health or the environment. NNI also should support efforts to 
advance best practices and standards that remove barriers to 
commercialization and use.

Q3.  It is clear that it is important to improve our understanding of 
any environmental, health, and safety issues associated with 
nanotechnology and resolve uncertainties related to the regulatory 
regime that will govern nanotechnology-related products. What should 
our priorities be for research on environmental, health, and safety 
issues? How should these priorities be set? What role should the 
federal government, academia, and industry, respectively, play in 
conducting such research?

A3. Examples of areas that NNI should prioritize include:

          Development of tools and methods for accurate 
        measurement and testing of nanomaterial interactions with 
        biological systems and the environment. Research on rapid 
        screening methods (that may both use nanotechnology and can be 
        applied to characterization of nanomaterials) to reduce the 
        time, cost, and need for animal testing. The Nanotechnology 
        Characterization Laboratory is a valuable resource for 
        evaluation of cancer nanotechnology that advances 
        characterization techniques broadly.

          Engaging in international standards activities 
        related to nanomaterials definition, characterization, and risk 
        assessment.

          Promoting wide dissemination of information, such as 
        the Nano Registry of nanomaterials supported by NIH and the 
        workplace information available from NIOSH.

          Focusing implications research (toxicology, 
        environmental fate and transport, etc.) on materials that are 
        most likely to find application. Many materials that are the 
        subject of NNI university research will not transition into 
        practical application.

Q4.  Your testimony states ``with more federal money focused on near-
term--rather than long-term--research projects, the country runs the 
risk of under-funding the scientific research pipeline which our 
industries rely on for future innovation.'' Please explain the risk 
associated with near-term research over long-term research. How can we 
ensure dollars are best being utilized in terms of project subject 
matter, not simply duration of project?

A4. In general, technology industries invest a large amount into R&D 
each year--the semiconductor industry, for example, invests 17% of 
revenue on average. The majority of this is necessarily focused on 
areas that will have near-term impacts on new products and innovations, 
but given the nature of technology research, it has never been able to 
fund the scientific research that is needed to form the basis of new 
technology innovations. Even when there were more large industrial 
labs, such as Bell Labs, it still required almost $5B (2004 dollars) in 
mostly government investment over ten years to deliver the first 
prototype of a semiconductor diode. DoD funded this with a partnership 
between the government, university, and industry labs in order to 
insure technical superiority in air missile technology. Bell then 
invested an additional $25M--a very large investment by an individual 
company's perspective--to create the first commercial version that 
launched the IT revolution.
    To understand the underlying public benefits associated with 
nanotechnology creation and diffusion, one must be cognizant of the 
complex relationships between basic and applied science, innovation, 
market and systemic failures, and technologically enabled economic 
progress. Individual firms have an incentive to perform near-term, 
applied nanotechnology research that can ultimately be commercialized 
and profitable. While this is understood, it's helpful to take a step 
back and look at the larger, comprehensive picture--a picture that is 
enabled by government funded basic research. This phenomenon is well-
supported by economic theory and case studies.
    Economic theory provides solid justification for a government role 
in helping to form the bedrock of the nano-enabled future. Market 
failure analysis demonstrates that, without government intervention, 
nations will ultimately result in a less than optimal level of research 
and knowledge. Such is the case with the nanotechnology sector. The 
``perfect competition'' model assumes no uncertainty in production and 
utility functions, and that all the factors relevant to production and 
societal welfare are traded openly on the market. The very nature of 
nanotechnology R&D embodies uncertainty, especially at the nascent 
stages we find ourselves in.
    Arrow cites three classical economic reasons, based heavily upon 
welfare economic theory, behind the failure of the market to allocate 
resources at the optimal level. They include indivisibilities, 
inappropriability, and uncertainty. Firms, operating under normal 
market conditions, depend upon the government to fund pre-competitive 
scientific knowledge that spawn and enable new industries. These new 
industries or processes can represent major new technological shifts, 
evidenced by the progression from vacuum tubes to the transistor era. 
Nanotechnology basic research will foster the ecosystem that forms pre-
existing, underlying knowledge. This knowledge serves as the precursor 
to widespread industrial production and commercialization approximately 
ten years down the road or more.
    The second issue that brings about market failure is the 
``inappropriability'' factor. When producers cannot realize the 
benefits of knowledge in the short-term, they in turn have little 
incentive to invest in basic research. Such is the case with advanced 
nanoelectronics and the nation's quest to discover the next logic 
switch. While the semiconductor industry widely recognizes that a 
nanotechnology solution is the only way to surpass the physical limits 
of current scaling technology post-2020, no one company or even groups 
of companies possess the infrastructure or the funds to invest in the 
basic research associated with this broad, national innovation 
challenge. Therefore the government must play a central role.
    Nanotechnology firms or companies that use nano-applications, 
invest heavily in the near-term, applied research, especially if 
anticipated breakthroughs are production relevant and there are 
probable opportunities for private profit driven by market forces. 
Therefore, it is basic research (the type of nanotechnology research 
that is arguably the most beneficial to society and that significant 
advances affecting many industries will stem from) that suffers from 
market failure in the biggest way. Basic research explores fundamental 
questions and concepts. ``The goal of scientific activity is discovery, 
the goal of technological effort is productive results,'' states 
Rosegger. Firms specializing in nanotechnology and applications have 
little incentive to carry out such-long term research, due mostly to 
the third factor Arrow and Nelson highlight: uncertainty. Basic 
research results may not be applicable or pay off in the end. The long 
timeframe between the commencement and the creation of something worth 
selling is often beyond the outlook of firms looking to maximize 
profits in the short-run. The inability of the market to embrace 
substantial long-term risks leads to this overall under-investment. 
Insurance firms will not insure research results, unlike a farmer whose 
crop is damaged due to storms or floods. Research is risky. Some 
investments in nanotechnology will yield dead ends, while others will 
pay off beyond imagination. Society benefits either way, as the 
research is conducted by people. These people attain a first rate 
education, experience and valuable tacit knowledge that will later be 
used in the marketplace.
    Several recent case studies highlight the economic impact of the 
federal investment in scientific research. Shultz documents how early 
government investment in nanotechnology research has helped the 
University at Albany's College of Nanoscale Science and Engineering 
(CNSE) serve as the center of a cluster of over 250 industrial 
affiliates in upstate New York. The program has attracted over $6 
billion in public and private funds over the course of the past decade. 
``Since 2001, there has been qualitative and quantitative evidence of 
the emergence of a nanotechnology cluster in the Capital Region of NY. 
Upstate NY has become home to multiple nanotechnology firms and 
experienced growth in the employment in nanotechnology related 
industries,'' states Shultz. For instance, private semiconductor 
manufacturing investments in the region are skyrocketing with the 
addition of a new chip foundry ($5-$6 billion initial investment, with 
the possibility of future expansion) being erected nearby CNSE. In a 
separate study of the economic impact of the federal investment in the 
Human Genome Project, the authors found that $3.8 billion in government 
funding ``helped drive $796 billion in economic impact.'' These are 
good examples of fundamental research that has produced a host of new 
capabilities, businesses and jobs. There are many others.
    In order to find new breakthroughs, early-stage research on 
nanoelectronics (or other nano areas) must look broadly at many 
different potential paths; some of the discoveries will lead to 
breakthroughs for the semiconductor industry, some will lead to 
breakthroughs for other industries--or even create new industries--and 
all will add to the scientific knowledge needed to build our innovation 
future, sometimes in ways we can't foresee yet. Therefore the 
proportion of funding done by government and industry needs to follow 
this same ``funnel'' flow: At the early stage, government must invest 
in many broad ideas to feed into the funnel; as the potential of 
specific ideas because more apparent, industry should be more closely 
involved and contribute more funding; when the ideas look like they 
could impact a specific product area in the relatively near-term (3-5 
years), the majority of funding and direction should come from 
industry.
    And by having industry consortia involved throughout this funnel 
process--even at the beginning when the work is more exploratory and 
predominantly funded by the government--the identification and 
acceleration of good ideas towards products can be achieved. Early 
interest from industry also serves as a good verification that the 
project subject matter is likely to have large impact on future 
innovations, leading to higher economic impact and job growth.

Q5.  With regard to the Signature Initiatives identified in the FY 12 
Budget Request (solar energy, nanomanufacturing, and nanoelectronics), 
why is it appropriate for the Federal government to identify specific 
issue areas for research focus? How do we not pick technology winners 
and losers by doing this? Are these the most critical areas that the 
Federal government should be focusing its limited resources? What 
critical areas are missing? What other grand challenges do we face with 
nanotechnology? What role should the government play in setting ``Grand 
Challenges?'' What are some examples of ``Grand Challenges'' in 
nanotechnology and are we ready to tackle them yet?

A5. In times of limited resources, it is especially critical that the 
Federal government balance supporting a broad range of basic science 
research with focusing on areas of research most likely to result in 
future economic impact. The Signature Initiatives are a good attempt to 
do this by picking areas where there is a clear national need for new 
technological breakthroughs and where the new capabilities offered by 
nanotechnology could result in relevant scientific discoveries. While 
it is never possible to predict exactly where the next breakthrough 
will occur, setting Grand Challenges helps to focus limited resources 
in areas of high potential, and the three areas currently chosen for 
Signature Initiatives all seem to be appropriate. Moreover, by 
specifying that these Initiatives should be pursued by multiple 
agencies, and in conjunction with industry consortia as appropriate, 
the limited resources are better coordinated across the government and 
better leverage private investments--avoiding redundancy and 
accelerating the overall progress. They also encourage students to 
enroll in STEM fields related to these Signature Initiatives and spur 
academia to perform research, knowing they are a priority for the 
nation.
    To avoid picking ``winners and losers'', it is important that the 
Grand Challenge areas are all broadly defined, so that they do not 
force researchers in to looking at just one solution area. For example, 
the Nanoelectronics Signature Initiative has as its primary goal the 
discovery of new technology--an alternate state variable device--that 
can advance the entire semiconductor and electronics industry, but it 
does not specify what that state variable or device should be. It does 
highlight several areas that currently appear promising (e.g. carbon 
electronics, nanophotonics, and quantum information processing), but it 
does not limit the potential research directions in any way. It also 
emphasizes increased investments in the research infrastructure at 
universities, necessary both to keep the U.S. at the forefront of 
nanoelectronics research and maintain the pipeline of relevantly-
educated students.
    This approach is similar to the way the Nanoelectronics Research 
Initiative (NRI) structures its own public-private partnership program. 
The NRI vision is to maintain a ``goal-oriented, basic-science 
research'' mission, where academics are made aware of the high-level 
challenges and needs of the nanoelectronics industry, but allowed to 
explore a broad range of research topics that could potentially address 
these challenges--or create whole new approaches that would circumvent 
them entirely. In choosing other areas for Grand Challenges or 
Signature Initiatives, this same vision is appropriate, and three 
criteria in particular should be met:

        1.  The basic research that is funded is top-notch and leading 
        edge.

        2.  The researchers who are proposing research are aware of 
        potential applications and of relevant industry needs.

        3.  To the extent possible, ``potential future customers'' of 
        the basic research (i.e. industry and other developers of 
        practical applications down the road) should be connected to 
        the Federally funded research.

Q6.  It is clear that nanotechnology promises many amazing 
breakthroughs while also being surrounded by a great deal of hype, 
mostly positive, a little negative. Help me put this in perspective and 
get a better sense of the real potential--Over the next five to ten 
years, how do each of you think nanotechnology will impact our lives 
and our economy?

A6. While nanotechnology has the potential to revolutionize everything 
from medical care to energy production, predicting exactly where the 
next breakthroughs will occur and what their impact will be is very 
difficult. However, the area of electronics stands out historically as 
having had outsized impacts on the economy, as well as enabling 
breakthroughs in many other areas of science and technology. As 
mentioned in my testimony, U.S. semiconductor companies generated over 
$140 billion in sales--representing nearly half the worldwide market, 
and making semiconductors the nation's largest export industry. The 
industry directly employs over 180,000 workers in the U.S., and another 
6 million American jobs are made possible by semiconductors. Moreover, 
studies show that semiconductors, and the Information Technologies they 
enable, represent three percent of the economy, but drive 25 percent of 
economic growth. This remarkable impact has largely been due to the 
power of scaling to increase the function / dollar of semiconductor 
chips each year, and hence there is an urgent need to find 
nanoelectronic devices that will continue to drive this economic 
engine. At the same time, future nanoelectronic semiconductors will be 
crucial for solving many of the other major challenges facing society 
today.
    Why do we need even more capable technology? Imagine a future in 
which a child with diabetes no longer has to prick her finger to check 
her glucose or get insulin shots thanks to an implanted artificial 
pancreas; when smart tools and sensors enable a highly efficient 
electric grid that saves billions of dollars in wasted energy costs and 
avoids the need for new power plants based on non-renewable energy; 
where cell phones automatically translate your conversation into any 
language required; or powerful systems to design and manufacture new 
materials for radically lighter, yet safer, cars and planes. In 
addition, nanoelectronics is crucial to maintaining the U.S. leadership 
in High Performance Computing (HPC). HPC has been behind nearly every 
major scientific advance and innovation in the past decade, in energy, 
materials science, engineering, life sciences, and defense and 
security. In biology in particular, the sequencing of the human genome 
was arguably as much a triumph of computing technology as it was of 
medical science. And increased computational capability is crucial for 
advancing microbiology and chemistry, from the study of protein folding 
to new drug discovery.
    While we don't know exactly what all the new breakthroughs in 
nanotechnology will bring in the next decade, we do know that almost 
all of them will rely on breakthroughs in advanced nanoelectronics to 
be realized.

Q7.  Per my request at the hearing and as you are aware, the House 
passed legislation to reauthorize the NNI once in the 110th Congress 
and twice in the 111th Congress only to see it die in the Senate. I 
would hope that the nanotechnology research world has changed somewhat 
in the past three years since this Committee last held a hearing on the 
topic and drafted the legislation. Using H.R. 554 from the last 
Congress as a basis (attached), please provide feedback by commenting 
on the merits of that bill and any areas that you see room for 
improvement or changes?

A7. Passage of legislation authorizing activities for support of 
nanotechnology research and development would send a clear message to 
the Federal research agencies that nanoscale science and engineering is 
a priority of the Congress and to the private sector, including 
investors, that nanotechnology has the potential to provide significant 
benefits. The latest bill (H.R. 554) clearly strives to build upon the 
original act (PL 108-153), which put into law the framework for what 
has been a highly successful multi-agency program. Various amendments 
appear to clarify issues, for example related to the support of the 
National Nanotechnology Coordination Office (NNCO), however, there are 
some concerns about H.R. 554.
    The bill requires that the NNI strategic plan include a description 
of research in areas of national importance, encourages Federal-State-
industry-university partnerships, and establishes a process to ensure 
that our research facilities have the equipment and operating funding 
necessary to support the needed research. These are all good attributes 
of the legislation and will further research in nanoelectronics and 
other areas that are useful to the semiconductor and other industries.
    In its current form, the bill calls for a significant number of new 
management and oversight activities that are notable in their extent, 
specificity, and detail. We do not know of any other Federal research 
program that has such detailed spelling out of activities in the 
authorizing legislation. A concern is that the time and cost of 
fulfilling all of the specified activities and reports takes away from 
resources that would otherwise go toward accomplishing the research 
goals of the program. Moreover, given the program is primarily about 
interagency coordination and collaboration, one wonders if agencies 
will be disincentivized from participating, thereby decreasing the very 
activities that are intended to be encouraged. By funding 
nanotechnology research, an agency must, for example:

          Report information about each project on EHS, other 
        societal dimensions, or nanomanufacturing;

          Participate in development of multiple research 
        plans, one on EHS that is updated annually, and a detailed 
        annual report;

          Fund the NNCO and periodic reviews of the program by 
        the National Research Council; and

          Provide detailed information annually on 
        nanotechnology-related SBIR and STTR proposals received vs. 
        funded.
    The bill also requires a new Presidential advisory panel, rather 
than allowing for an existing body to be designated. Currently the 
duties of the National Nanotechnology Advisory Panel are being carried 
out by the President's Council of Advisors on Science and Technology 
(PCAST), the highest level Presidential science and technology advisory 
body. Requiring a separate body loses the benefit/option of having such 
high level attention and scrutiny and adds considerable cost.In 
addition to the extensive prescribed management, the tone and emphasis 
of H.R. 554 seems skewed toward activities related to ``societal 
dimensions'' of nanotechnology, particularly the planning, overseeing, 
and tracking of research on the environmental, health, and safety (EHS) 
risks that may be associated with nanotechnology. For example, a 
separate subpanel of the advisory panel is required to evaluate the EHS 
and other societal aspects. All informal, precollege, or undergraduate 
nanotechnology education must include education regarding EHS of 
nanotechnology. The NNCO is to maintain a public database of 
information about individual projects on EHS and other societal 
dimensions, as well as nanomanufacturing. Why single out these areas? 
We have heard that efforts are underway to develop publicly accessible 
information for research in all areas (via research.gov), thereby 
making this provision unnecessary.
    Section 3(a) creates a Coordinator for Societal Dimensions of 
Nanotechnology at the level of an Associate Director in the Office of 
Science and Technology Policy. The individual is responsible primarily 
for overseeing implementation of various planning, reviewing, and 
reporting activities called for in the bill. This new position is not 
necessary; these functions seem more appropriate for the NNCO and we 
have learned that the current NNCO Deputy Director has been named EHS 
Coordinator for the program. It appears that in order to accomplish the 
level of planning, coordination, and reporting already called for has 
led to the development of a well-organized, functioning interagency 
management structure. The saying, ``If it ain't broke, don't fix it'' 
comes to mind.
    Section 5, entitled Research in Areas of National Importance, 
directs that agencies identify and support those areas of greatest 
potential benefit in collaboration with each other and with the private 
sector so as to ensure efficient uptake. We feel this is a valuable 
addition to the program; in fact, it is the section of the bill that is 
most clearly focused on the benefits of nanotechnology and therefore 
would provide some balance to bill if it were moved to follow Section 
2. As the Nanoelectronics Research Initiative has demonstrated, such 
approaches can be extremely effective at focusing research, easing 
technology transfer, and promoting joint/leverage support for 
fundamental scientific research.
    As Congress works to reauthorize the NNI, it should continue to 
highlight nanoelectronics to ensure the U.S. will lead in this area 
which is essential to economic growth and societal progress:

        1.  Continue to include specific authorization for support in 
        research areas of national importance and explicitly note that 
        nanoelectronics research is one such area;

        2.  Request that the National Academies include a 
        nanoelectronics study as part of its triennial external review 
        of the NNI;

        3.  Address the need for nanoelectronics research 
        infrastructure, i.e. equipment and equipment operating funds, 
        at universities and national laboratories;

        4.  Specifically encourage direct industry-government 
        partnerships--including state government involvement--in 
        support of nanoelectronics research at universities and 
        national laboratories.

    In addition to the above overarching comments, we offer the 
following specific recommendation.

          In Sec. 2 (8), we strongly encourage inserting 
        ``engineering'' in the definition of Nanotechnology so that it 
        reads, ``The term `nanotechnology' means the science, 
        engineering, and technology that will enable.'' This is more 
        complete and engineering connects science and technology 
        through practical application of discovery research.

Question Submitted by Ranking Member Daniel Lipinski

Q1.  Do you agree that current federal investments in environmental, 
health, and safety (EHS) risk research are important to industries, 
such as your own, that do or will benefit from developments in 
nanotechnology? Why? What specific aspects of EHS research are of 
primary importance to the semiconductor industry? Does the 
semiconductor industry invest in those areas of research? If so, at 
what level relative to federal investments? What do you see as the 
relative roles of the government and industry related to EHS risk 
research? Are there specific areas of EHS research in which the federal 
government should increase its investments? Does the new NNI EHS 
Strategy address those areas adequately? By what mechanisms could 
government and industry work more collaboratively to address risk-
research needs for nanotechnology?

A1. Federal investment to address EHS concerns associated with emerging 
technologies, such as nanotechnology, is a critical part of a robust 
and complete research program. Broadly, there is general awareness that 
nanoparticles can behave differently from their larger scale 
counterparts. These differences can lead to beneficial applications, 
such as more efficient catalysts for cleaner combustion and other 
processes. The federal investment in EHS research is contributing to 
the widespread understanding of how nanoparticles interact with 
biological systems and helping all stakeholders--researchers, 
regulators, environmental groups and public health officials, workers, 
consumers, and others--to be informed. This is critical to realizing 
maximum benefits from nanotechnology while at the same time assessing 
any risks.
    Whereas the Federal EHS research should focus on providing broad 
understanding of potential risks and the tools with which to measure 
and assess those, industry focuses on materials and processes related 
to specific products. The semiconductor industry has made, and 
continues to make, significant investments into addressing EHS concerns 
associated with our industry. For example, the industry funds the SRC/
SEMATECH Engineering Research Center for Environmentally Benign 
Semiconductor Manufacturing based at the University of Arizona 
specifically to do research on EHS issues important to our industry 
(not just related to nanotechnology). This Center is constantly looking 
at the materials and processes that are relevant to the industry to 
identify potential concerns early on, and to find ways to mitigate 
these and improve our processes overall. Based in part on its work, the 
industry has an accomplished record of success in reducing emissions, 
phasing out the use of potentially harmful chemicals, and minimizing 
risks to workers.
    It is important to note that this Center was originally started in 
1996 with joint funding from NSF and SRC/SEMATECH, and since 2006 when 
NSF funding ended industry has continued to support the program. This 
experience illustrates the vital role that federal funding plays in 
initiating key initiatives and leveraging the support of private 
industry. It also is an example of industry and government working 
together to support research to address industry-related EHS research 
needs. It should be noted that SRC has implemented this type of 
federal-private partnership with NSF and NIST for research in a number 
of fields in addition to EHS aspects of nanotechnology.
Responses by Dr. Seth Rudnick, Chairman, Board of Directors, Liquidia 
        Technologies

Questions for the Record submitted by Chairman Mo Brooks

Q1.  What impacts are environmental, health and safety concerns having 
on the development and commercialization of nanotechnology-related 
products and what impact might these concerns have in the future?

A1. In our (life science) business, the existing EH&S policies and 
procedures are being rigorously applied to our products, and 
appropriately so through the FDA. We feel these existing policies and 
procedures are indeed adequate as they exist and we would hope that 
additional resolutions only be instituted if proven to be needed; 
however, it is not obvious that regulatory changes need to be made in 
the life science arena.

Q2.  It is clear that it is important to improve our understanding of 
any environmental, health and safety issues associated with 
nanotechnology and resolve uncertainties related to the regulatory 
regime that will govern nanotechnology-related products. What should 
our priorities be for research on environmental, health and safety 
issues? How should these priorities be set? What role should the 
federal government, academia and industry, respectively, play in 
conducting such research?

A2. Clearly current policies and procedures for the approval of 
vaccines and drugs seem to be adequate as presently crafted and 
implemented. However, there may be needs for updated EH&S rules and 
regulations for products outside of FDA jurisdiction. It is worth 
noting that nanomaterials are often heterogeneous systems; as stated in 
another way, they are intrinsically ``mixtures.'' Current EH&S policies 
and procedures, as well as the basic science of EH&S, are inherently 
structured to deal with uniform or singular entities. As such, we 
believe two things are needed: (1) calibration-quality standard 
nanomaterials and (2) new, fundamental approaches to the EH&S study of 
mixtures. Calibration-quality particles that are cost-effective and 
readily available to researchers to perform their studies are 
desperately needed. Such nanomaterial samples are different in scale 
and cost to that which is provided by NIST, which are primarily 
intended to calibrate instrumentation.

Q3.  With regard to the Signature Initiatives identified in the FY 12 
Budget request (solar energy, nanomanufacturing, and nanoelectronics), 
why is it appropriate for the Federal government to identify specific 
issue areas for research focus? How do we not pick technology winners 
and losers by doing this? Are these the most critical areas that the 
Federal government should be focusing its limited resources? What 
critical areas are missing? What other rand challenges do we face with 
nanotechnology? What role should the government play in setting ``Grand 
Challenges?'' What are some examples of ``Grand Challenges'' in 
nanotechnology and are we ready to tackle them yet?

A3. It is hard to imagine that nanomedicines, vaccines and diagnostics 
(the life sciences) are not specifically called out as a Signature 
Initiative. The application of nanosystems in the life sciences is 
poised make some of the most important and most immediate impacts on 
our society and our economy. The U.S. needs to continue to lead this 
important area which not only paves the way for more efficient and 
safer vaccines and therapeutics, but earlier detection which will save 
an enormous number of lives and drive down costs, having extraordinary 
impact on global health. Our company is poised to release better 
vaccines which may be 100x cheaper than the current multibillion dollar 
products. We have been able to accomplish this by co-opting the top-
down nanomanufacturing tools of the computer industry to enable 
entirely new concepts in the design of vaccines. Indeed this has 
enticed the Bill and Melinda Gates Foundation to make their first 
equity investment ever in a biotech company.

Q4.  It is clear that nanotechnology promises many amazing 
breakthroughs while also being surrounded by a great deal of hype, 
mostly positive, a little negative. Help me put this in perspective and 
get a better sense of the real potential--over the next five to ten 
years, how do each of you think nanotechnology will impact our lives 
and the economy?

A4. In our field, consider that within the timeframe you suggest we 
expect to see a new, superior influenza vaccine with high response in 
the elderly (the elderly are currently underserved by today's vaccine 
technologies); a next generation malaria vaccine; a dramatically 
cheaper pneumococcal vaccine-so much cheaper that it has the potential 
to drive down costs in the developed world and enable global access in 
a way that currently is not possible; more effective inhaled medicines 
to treat asthma, COPD, PHT, and cystic fibrosis; and perhaps most 
importantly, effective cancer therapeutics that have fewer side effects 
and next generation cancer vaccines which harness the body's own immune 
system to fight the cancer.

Q5.  Per my request at the hearing and as you are aware, the House 
passed legislation to reauthorize the NNI once in the 110th Congress 
and twice in the 111th Congress only to see it die in the Senate. I 
would hope that the nanotechnology research world has changed somewhat 
in the past three years since this Committee last held a hearing on the 
topic and drafted the legislation. Using H.R. 554 from the last 
Congress as a basis (attached), please provide feedback by commenting 
on the merits of that bill and any areas that you see room for 
improvement or changes?

A5. Our primary comment is that the life science arena needs to be a 
significant focus along side of solar energy, nanomanufacturing and 
nanoelectronics.
Responses by Dr. James Tour, Professor of Chemistry, Computer Science 
        and Mechanical Engineering and Materials Science, Rice 
        University

Questions Submitted by Chairman Mo Brooks

Q1.  What impacts are environmental, health, and safety concerns having 
on the development and commercialization of nanotechnology-related 
products and what impact might these concerns have in the future?

Q2.  It is clear that it is important to improve our understanding of 
any environmental, health, and safety issues associated with 
nanotechnology and resolve uncertainties related to the regulatory 
regime that will govern nanotechnology-related products. What should 
our priorities be for research on environmental, health, and safety 
issues? How should these priorities be set? What role should the 
federal government, academia, and industry, respectively, play in 
conducting such research?

A1-2. Nanotechnology stands alone for one reason in particular: it is 
extraordinarily broad. That breadth allows nanotechnology to bring 
together formerly separate fields of study to maximize the strengths 
and utility of each. It has also enhanced the education of a new 
generation of students. But breadth also has its disadvantages: chief 
among these is that researchers and manufacturers are becoming 
overwhelmed with calls for compliance to unclear safety regulations \1\ 
while regulators are becoming frustrated because noncompliance is the 
inevitable consequence.
---------------------------------------------------------------------------
    \1\ http://www.rsc.org/chemistryworld/News/2009/June/16060901.asp 
Accessed Feb 1, 2010.
---------------------------------------------------------------------------
    We acknowledge and respect the efforts of our colleagues working 
across a broad array of organizations when they devise protocols that 
encourage prudence and safety. This is laudable and worthwhile, and as 
nanotechnologists ourselves, we are pleased to be part of a community 
that is attempting to avoid the environmental and human disasters that 
have blemished other areas of research. We echo here the occasional 
frustrations of those experts who find that the generalities in 
nanotechnology can make compliance to recommendations exceedingly 
difficult noting, for instance, that attempts to implement voluntary 
reporting have generally failed \2\. Clearly, regulations are needed to 
keep the practice of science safe. At the same time, nanotechnology 
must not be regulated out of existence. Prudence motivates us to 
practice our science safely, but also to refrain from stifling 
overreaction, or what others have termed, ``paralysis by analysis 
\3\,'' in the calls for fences around nanotechnology.
---------------------------------------------------------------------------
    \2\ Maynard, A. & Rejeski, D. Nature 460, 174 (2009).
    \3\ Hansen, S., Maynard, A., Baun, A. & Tickner, J.A.. Nature 
Nanotech. 3, 444-447 (2008). Quoting recommendations originally 
published by the European Environmental Agency. Harremoes, P. et al. 
European Environmental Agency, Copenhagen, 1896-2000 (2001).
---------------------------------------------------------------------------
    Oftentimes things are most easily demonstrated by view of an 
analogy. Let us consider the field of ``metertechnology.'' 
Metertechnology is defined here as research and technology development 
at the length scale of approximately 0.1-1 meters. If regulatory 
demands on nanotechnology were mirrored in this new field, the 
metertechnologist would be required to:

          ``provide long-term environmental and health 
        monitoring and research into early warnings,''+&

          ``systematically scrutinize claimed benefits and 
        risks,''+

          ``identify and work to reduce scientific `blind 
        spots' and knowledge gaps,''+and

          ``account fully for the assumptions and values of 
        different social groups''+
    +footnote below1A\3\

    \3\ Hansen, S., Maynard, A., Baun, A. & Tickner, J.A.. Nature 
Nanotech. 3, 444-447 (2008). Quoting recommendations originally 
published by the European Environmental Agency. Harremoes, P. et al. 
European Environmental Agency, Copenhagen, 1896-2000 (2001).
---------------------------------------------------------------------------
    How do metertechnologists follow such directives? Are they 
adequately specific? Or would proper compliance paralyze the research 
and manufacture of metertechnology-based items? It is clear that 
properties and hazards of materials for a given size domain are often 
not generalizable across length scales. However, ill-defined calls, 
such as those identified above, are too broad to provide meaningful 
input to an individual or manufacturer seeking to ensure the safety of 
their particular research or products. How have other fields of science 
dealt with these issues?
    The organic chemist well-appreciates that each new organic compound 
must be studied for its own set of toxicities. Changing the orientation 
of a single methyl group, for example, can cause a steroid to change 
from being a highly beneficial pharmaceutical to something of no 
utility or even frighteningly toxic. Some polychlorinated biphenyls 
(PCBs) are toxic, but that does not encompass all organic compounds, 
and not even all phenyl-containing compounds or chlorine-containing 
compounds. Vinyl chloride is a potent carcinogen, but its 
polymerization product, poly(vinyl chloride), is used to make pipes 
that deliver drinking water. These facts come as no surprise to the 
organic chemist, who studies each compound individually, and restricts 
any generalizations so that they apply only to a well-defined and 
specific class of materials. The product of a chemical reaction is not 
the sum of its parts.
    For nanomaterials, the effects of size scaling can be just as 
significant as that of manipulating chemical side groups. For example, 
a long multi-walled carbon nanotube has been identified to be toxic in 
inhalation experiments, acting much like asbestos in its interactions 
with biological organisms \4\. But it has also been observed that the 
body is able to clear foreign objects whose lengths are comparable to 
or less than the diameter of phagocytic cells (10--20 microns) 1A\5\. 
If one chemically cuts a nanotube so that it is 30 nm long, and also 
renders its surface hydrophilic so that it dissolves readily in blood 
plasma, is it still toxic? Unfortunately, media reports of the 
conclusions of individual research studies relevant only for specific 
conditions could lead to inappropriate extrapolations regarding 
nanomaterial safety by the public and even other scientists who are not 
toxicity experts \6\.
---------------------------------------------------------------------------
    \4\ Poland, C.m Duffin, R., Kinlock, I., Maynard, A., Wallace, W., 
Seaton, A., Stone, V., Brown, S., MacNee, W. & Donaldson, K. Nature 
Nanotech. 3, 423-428 (2008).
    \5\ Guo, L., et al. Mater. Sci. Forum 544-545, 511-516 (2007).
    \6\ http://www.azonano.com/details.asp?ArticleId=2448 Accessed Feb 
1, 2010.
---------------------------------------------------------------------------
    In contrast to the simplified views at times promulgated by the 
media6, within the scientific communities working in this area, there 
is a growing understanding that details of individual nanoparticles 
need to be considered, rather than generalizations. A 2008 review of 
the nanotoxicity literature includes numerous studies demonstrating 
that modifications in nanomaterial surface properties yield significant 
alterations in their biological responses \7\. These conclusions are 
similar to those of a recent Toxicological Sciences review, which 
highlight the importance of ``an overall picture of material-specific 
rather than nanogeneralized risk'', and state that ``generalities with 
regard to biocompatibility do not appear to be valid'' \8\.
---------------------------------------------------------------------------
    \7\ Lewinski, N., Colvin, V., & Drezek, R. Small 4, 26-49 (2008).
    \8\ Stern, S.T., & McNeil, S.E. Toxicological Sciences 101, 4-21 
(2008).
---------------------------------------------------------------------------
    Recent challenges in Europe surrounding regulation of carbon 
nanotubes illustrate this gulf between regulation and scientific 
understanding as well as the difficulties of overly broad terminology. 
Companies must provide safety data for nanomaterials as part of the 
2008 Registration, Evaluation, Authorization, and Restriction of 
Chemicals (REACH) agreement regulating chemicals in the EU. But it is 
unclear how nanotubes should be classified, and what protocols should 
be used to evaluate possible hazards1. This ambiguity has led one group 
of companies to pursue a strategy based on treating nanotubes as new 
types of chemicals, while a separate and larger collection of companies 
plan to treat and regulate nanotubes as a form of bulk graphite1. At 
the same time, and in contrast to the nanotube classification 
strategies being considered to meet REACH requirements, a series of 
publications on the safety of carbon materials in Carbon9 came to the 
conclusion that ``carbon nanomaterial samples are typically complex 
mixtures and.that their toxicity depends on the specific formulation, 
in particular: (i) hydrophilicity . . . (ii) metals content and 
bioavailability, and (iii) state of aggregation . . . ''
    We offer several general suggestions to assist recommendations and 
decisions:

        1.  When making safety and handling recommendations to 
        nanotechnologists, use calls that are realistic to execute. 
        Apply the ``metertechnology'' test, and if it makes little 
        sense to apply it to the meter-scale, then reconstruct the 
        recommendation so that it would be sensible regardless of the 
        size-domain.

        2.  Use toxicity standards that are understood in other fields 
        of science such as chemistry or drug development. It is 
        particularly important to recognize that broad generalizations 
        could simultaneously unfairly stigmatize new innovations and 
        miss new hazards.

        3.  Help stakeholders identify the highest quality 
        nanotoxicology studies. An important recent step towards this 
        goal is the International Council on Nanotechnology (ICON) 
        nanoEHS virtual journal10, an online repository of health and 
        environmental literature that allows the rating of papers. This 
        helps to communicate the most critical new knowledge to 
        stakeholders such as academic nanotechnologists and relevant 
        funding agencies facilitating development of appropriate risk 
        assessment methods specific to new nanomaterials.

        4.  Consider sectioning ``nanotechnology'' into a number of 
        narrowly defined fields when drafting recommendations rather 
        than applying a single set of recommendations to all 
        nanomaterials. These might include (a) C60 and related small 
        fullerenes which are pseudo 0 D carbon materials, (b) carbon 
        nanotubes which are pseudo 1 D carbon materials, (c) graphene 
        which is a 2 D carbon material, (d) gold nanoparticles (e) 
        silver nanoparticles, and so on. Each of these fields would 
        then further need to consider features such as particle size, 
        surface coatings and charges, aggregation states and typical 
        trapped impurities such as exogenous metals or solvent.

        5.  Avoid confusing ``nanotechnology'' as an idea that drives 
        discovery and innovation with ``nanotechnology'' as something 
        that is best regulated as an entity itself. Given the 
        challenges created by the breadth of the field and the limits 
        of current scientific understanding, regulation might be better 
        focused on the specific materials used and particular products 
        created rather than on an underlying scientific regime or 
        rubric.

    The industry and scientific researchers understand that even though 
we are still indentifying the EHS issues surrounding nanotechnology, 
the government still has a vital function to play. The federal 
government needs to partner with researchers and the nanotechnology 
industry to ensure that adequate rules and regulations are promulgated 
which are realistic while protecting the environment, health and 
safety. In addition, with so many governmental agencies having a role 
in the development of this emerging industry, it is imperative that any 
rules and regulations be coordinated across all agencies and done so 
with scientific input. In this regard, here are further recommendations 
and needs for consideration:

        1.  There does not appear to be a primary U.S. trade 
        association, based in DC that represents the interests of the 
        U.S. nanotechnology community (or coordinates nanotechnology 
        interests across industry segments/industry trade associations) 
        to U.S. politicians and regulators. This presents a major 
        challenge to members of Congress and to regulators since they 
        are accustomed to working with key trade associations that 
        serve the important role of unifying the industry around 
        standards, best practices, responses to legislation/regulation 
        and relationships with members of Congress and regulators. In 
        the absence of a primary trade association, regulators are 
        required to sort through a far more complex and conflicting web 
        of relationships within the nanotechnology community than is 
        required for other industries with an established ``presence'' 
        in DC (represented by groups such as the American Petroleum 
        Institute or the Chemical Manufacturers Association, etc.) This 
        is an inherent weakness of an industry that is only now moving 
        into the commercialization phase with the entire attendant 
        infrastructure needs such trade associations. It is not a role 
        of Congress to create such a trade association, but it is 
        something that the NNI and OSTP can encourage industry to 
        formulate. In the absence of such an association, it will be 
        extremely difficult, if not impossible, for regulatory agencies 
        to hire and retain technical professionals who are capable of 
        regulating this technology in its various applications. A good 
        example of this type of knowledge gap occurred during the 
        Deepwater Horizon incident last year. Government regulators 
        conceded that industry knew far more about how to respond to 
        the emergency than did government regulators. This created an 
        awkward situation for regulator and business alike and 
        contributed to the broad shut down of all drilling in the Gulf 
        out of a fear of public outrage over the perceived weakness of 
        the regulators.

        2.  As more U.S. regulatory agencies deal with the testing of 
        nanotechnology, congress needs to ensure that NNI works with 
        NIST to create uniform standards for testing to reduce 
        duplicative and inconsistent testing. If we look at just the 
        EPA, OSHA and FDA, there is a high likelihood that as these 
        agencies get more heavily involved in the regulation of 
        nanotechnology, they will request funding for duplicative 
        reasons. A uniform testing standard will help to avoid 
        unnecessary testing.

        3.  Nanotechnology is being developed at a time when the 
        pressure to regulate is shifting away from nation-states to 
        international standard-setting bodies that may or may not be 
        connected to government structures. As manufacturing shifts 
        overseas into countries without a mature regulatory 
        infrastructure, manufacturers increasingly seek to create 
        voluntary or globally implemented standards that will allow 
        them to operate seamlessly across international boundaries. 
        This may make countries with strong regulatory structures, that 
        are not harmonized globally, less attractive for the businesses 
        spawned by nanotechnology precisely because its regulation is 
        not consistent with or appreciative of the need for a global 
        standard. If nanotechnology has the potential to revolutionize 
        manufacturing, it might also drive a similar revolution in the 
        way we think about regulation in a global economy. As I answer 
        below, we also need to review international organizations with 
        which the U.S. regulators should coordinate concerning global 
        standards.

        4.  The comments presented to the Subcommittee herein mention 
        the important work of the EU's REACH agreement; however, it is 
        less clear whether REACH should or should not be adopted in the 
        U.S. We recommend an international collaborative work between 
        EPA, for example, and its counterpart in the EU responsible for 
        EHS regulation of nanotechnology to create standards that 
        encourage global competition, but are not overly burdensome on 
        the development of new technologies.

        5.  The lack of end-user/consumer education and the safety of 
        nanotechnology is quickly becoming a major issue for marketers 
        of products that utilize nanotechnology. It is critical for 
        regulators to define what is safe and inform the public so that 
        marketers can avoid the legal liabilities associated with 
        ambiguous or misleading product claims. Government can play an 
        extremely valuable role in the education of the American public 
        on EHS issues related to nanotechnology.

        6.  When we say in the response (below) that ``Nanotechnology . 
        . . could permeate 50% or more of our materials, electronics 
        and medical products . . . '' we are not confident that our 
        current regulatory structure will even allow this revolution to 
        occur. The U.S. regulatory system is not known to be efficient 
        and if there is a lack of qualified regulators to regulate, and 
        a lack of urgency to ensure the competitiveness of U.S. 
        manufacturers, then sluggish or draconian regulation in this 
        area could contribute to a decline in the U.S. nano-
        manufacturing base.

        7.  As I discuss below, there should be a study on the impact 
        of U.S. tort law on the commercialization of nanotechnology. 
        This represents a major area of uncertainty for U.S. 
        manufacturers, especially in the absence of proactive 
        government regulation. Regulators must regulate in a manner 
        that protects human health, the environment and the ability of 
        U.S. businesses to compete globally.

        8.  Federal and state agencies have constitutional mandates 
        that require them to protect human health and the environment. 
        While there is much EHS work being done by the industry, we 
        should not expect regulators to feel that this work satisfies 
        their mandate. While companies are indeed doing their own EHS 
        work, the agencies themselves cannot accept this practice 
        without certifying it through some form of regulation. In 
        addition, we must recognize that agencies are motivated 
        oftentimes by broad application of the ``precautionary 
        principle'' that may not be shared by business. The scientific 
        community should acknowledge that there are public perceptions 
        that agencies are required to manage that have nothing to do 
        with the science of the issue. This is an area where 
        researchers and regulators can work together to educate the 
        public.

    While a decade ago academics jockeyed to label their work as 
``nano'', in part to maximize funding opportunities or embrace the 
excitement of a new field, now some are foregoing that title to avoid 
burdensome scrutiny, especially when the work appears to have 
commercial potential11. Unless we modify the way that nanotechnology is 
regulated, not only will future consumer product boxes proudly bear the 
label, ``Nano-Free!,'' but researchers will abandon the nano label in 
favor of old banners such as ``Chemistry,'' ``Electronics'' and 
``Biology.'' This would negatively impact innovation, safety, 
education, and the future of the field.

                              References:

    [1] http://www.rsc.org/chemistryworld/News/2009/June/16060901.asp 
Accessed Feb 1, 2010.
    [2] Maynard, A. & Rejeski, D. Nature 460, 174 (2009).
    [3] Hansen, S., Maynard, A., Baun, A. & Tickner, J.A.. Nature 
Nanotech. 3, 444-447 (2008).Quoting recommendations originally 
published by the European Environmental Agency. Harremoes, P. et al. 
European Environmental Agency, Copenhagen, 1896-2000 (2001).
    [4] Poland, C.m Duffin, R., Kinlock, I., Maynard, A., Wallace, W., 
Seaton, A., Stone, V., Brown, S., MacNee, W. & Donaldson, K. Nature 
Nanotech. 3, 423-428 (2008).
    [5] Guo, L., et al. Mater. Sci. Forum 544-545, 511-516 (2007).
    [6] http://www.azonano.com/details.asp?ArticleId=2448 Accessed Feb 
1, 2010.
    [7] Lewinski, N., Colvin, V., & Drezek, R. Small 4, 26-49 (2008).
    [8] Stern, S.T., & McNeil, S.E. Toxicological Sciences 101, 4-21 
(2008).

Q3.  With regard to the Signature Initiatives identified in the FY 12 
Budget Request (solar energy, nanomanufacturing, and nanoelectronics), 
why is it appropriate for the Federal government to identify specific 
issue areas for research focus? How do we not pick technology winners 
and losers by doing this? Are these the most critical areas that the 
Federal government should be focusing its limited resources? What 
critical areas are missing? What other grand challenges do we face with 
nanotechnology? ole should the government play in setting ``Grand 
Challenges?'' What are some examples of ``Grand Challenges'' in 
nanotechnology and are we ready to tackle them yet?
A3. Federal funding for nanotechnology beyond the discovery phase is 
also needed to spawn the transitions from the laboratory to the 
manufacturing stage. This can be done using a competitive grants 
process that keeps the government from choosing its favorites, and 
permits competition through grant applications analogous to the 
competitive SBIR (Small Business Innovative Research) and STTR (Small 
Business Technology Transfer) programs. As in the SBIR/STTR programs, 
let governing science agencies decide the hot areas to fund, which 
ensures that the government is not picking the winners and losers. Let 
those at the NSF and DoD program manager level, for example, work with 
their teams to decide where the science shall be led. This is often 
done by those parties in consultation with the scientists.
    As the budget debate continues to unfold in Congress, it is now 
more important than ever that we set funding priorities. Despite these 
funding challenges, the government still plays a vital role in creating 
incentives for private industry. The government can do so by setting 
``Grand Challenges'', but should do so with significant input from both 
industry and the scientific community. These challenges should be 
transformational to our society, but still realistic. For example:

        1.  The government should set a challenge to develop a system 
        for a wireless transmission of energy. Years ago it was 
        unthinkable that you could transmit gigabytes of data across a 
        wireless network, yet today one can wirelessly share a photo of 
        a newborn child across the globe.

        2.  Another grand challenge for nanotechnology would be the re-
        wiring of the grid with a low electrical loss system that would 
        permit the efficient transfer of electronics around the globe. 
        If we had an efficient wiring system, then distribution of 
        energy becomes simple and it need not involve barges filled 
        with oil.

        3.  Another grand challenge would be the efficient sunlight-
        based splitting of water into hydrogen (H2) and either oxygen 
        (O2) or hydrogen peroxide (H2O2). If this could be done more 
        efficiently than we do today, then there would be an 
        inexhaustible supply of fuel (H2) and the burned byproduct 
        would be simply water and not the greenhouse gas 
        CO2.

        4.  Yet another key grand challenge would be the efficient 
        conversion of CO2 into small organic liquids such as 
        methanol using sunlight-generated H2.

        5.  And finally, an efficient and inexpensive solar cell 
        technology and light weight batteries (not based upon scare 
        elements such as lithium) still represent grand challenges for 
        nanotechnology.

Q4.  It is clear that nanotechnology promises many amazing 
breakthroughs while also being surrounded by a great deal of hype, 
mostly positive, a little negative. Help me put this in perspective and 
get a better sense of the real potential--Over the next five to ten 
years, how do each of you think nanotechnology will impact our lives 
and our economy?

A8. Nanotechnology, over the next decade, could permeate 50% or more of 
our new materials, electronics and medical products. Almost every new 
manufactured product in these domains can benefit from some level of 
nano enhancement. The new product might not be labeled as containing 
nano, for reasons stated above. Nonetheless, nano will be in there. 
Science education already involved a healthy dose of nano, and it will 
likely rise to reach 25% of the course content of science classes at 
the undergraduate college level over the next decade.

Q5.  Per my request at the hearing and as you are aware, the House 
passed legislation to reauthorize the NNI once in the 110th Congress 
and twice in the 111th Congress only to see it die in the Senate. I 
would hope that the nanotechnology research world has changed somewhat 
in the past three years since this Committee last held a hearing on the 
topic and drafted the legislation. Using H.R. 554 from the last 
Congress as a basis (attached), please provide feedback by commenting 
on the merits of that bill and any areas that you see room for 
improvement or changes?

A8. As I said during my verbal testimony: if the funding for 
nanotechnology research is not renewed, the U.S. will suffer from an 
enormous brain drain as it has never seen before. The U.S. has 
benefited from the best brains in the world coming to our shores for 
the past many years. People's intellects are our best asset. And by 
God's grace, we have been the recipients of the world's top brains. 
Those brains have caused us to win the nuclear-race, the space-race and 
the Cold War. U.S. higher education and research is the Apple of 
America's eye and the envy of the world.
    Alarmingly, however, foreign competition is now on our shores 
successfully wooing the best and the brightest away with assurances of 
funding for basic research and support for transitions to 
manufacturing. American researchers are industrious and self-driven-we 
have been trained that way. If we cannot get our science funded and 
transitioned in the US, we will go abroad. And top researchers will not 
wait a decade for recovery. The brain-drain has already begun, and it 
will continue at an alarming pace within the next 1-3 years if access 
to research and development funds becomes sparse. If American 
researchers start going abroad, the impact of the brain-drain would be 
devastating to near- and long-term economic development in the US.
    I cannot comment on all the specific provisions of H.R. 554, but I 
strongly support the goal of reauthorizing the NNI. The absence of a 
reauthorization can be detrimental to the progress we have achieved 
thus far--risking our global competitive advantage. The 25 different 
federal agencies with nanotechnology-related activities need to work 
towards the same strategic plan, and without this reauthorization it 
makes the coordination amongst these agencies more complicated. In 
addition, H.R. 554 also sets out to achieve many of the goals laid out 
in the P-Cast reports, especially with regard to the development of 
public-private partnerships. However, while I understand you must be 
sensitive to the budget debate, I would recommend moving the NNI 
reauthorization from a three-year to a five-year plan. Having to renew 
this fight again in just three years adds uncertainty to an industry 
that needs stability.
    As mentioned above, another area to consider addressing is how the 
current U.S. tort law on commercialization is impacting nanotechnology. 
This represents a major area of uncertainty for U.S. manufacturers, 
especially in the absence of a clear rules and regulations from the 
government. Regulators must regulate in a manner that protects human 
health, the environment while ensuring that U.S. business can compete 
in a growing global market.

Question Submitted by Ranking Member Daniel Lipinski

Q1.  In your oral testimony, you stated that there is no need to 
increase federal investments in environmental, health, and safety (EHS) 
risk research because companies that you have been a part of ``already 
have a lot of the testing that they are doing as part of their normal 
regulatory work that they are doing.'' Can you explain how federally 
funded EHS research duplicates what is being done by the private 
sector? With respect to all nanoparticles currently being used or being 
proposed for medical, industrial or other commercial use, are there any 
gaps in our knowledge of reactions that can occur between nanoparticles 
and the human body and /or environment? If yes, what companies are or 
will be addressing them? Can you quantify the private sector 
investments in EHS risk research? Do you believe that there are 
existing federal investments in EHS risk research that industry is not 
doing, but that are important to industries that do or will benefit 
from developments in nanotechnology? Would your answers vary across 
different industry sectors? If so, how? If not, why not?

A8. As I mention in my answer to question one, I still believe that the 
government can play a vital role in the EHS of nanotechnology. It is 
important that during these times of fiscal restraint, we set funding 
priorities accordingly and the continued funding of the basic research 
of nanotechnology will yield results that will help with the 
development of EHS standards, the two are not mutually exclusive. The 
industry of nanotechnology cannot fulfill this role alone--the federal 
government can play a crucial role in working with scientists and 
researchers to develop a clear set of rules and guidelines that 
industry can follow and adopt as we move into the nano-manufacturing 
stage.
    For example, at Bayer MaterialScience (BMS), they have developed 
clear safe handling guidelines for carbon nanotubes. Attached to this 
document is an example of a brochure BMS has published for the use of 
such nanotubes. Additional information on nanotechnology stewardship 
can be found on their website at: http://www.BayCareOnline.com. I have 
also attached numerous other publications and papers from DuPont 
Corporation (references 1-8) that have looked at the toxicity and 
safety of nanoparticles. These should serve as a resource that shows 
the depth of research that is currently being performed on EHS of 
nanotechnology. The last two citations (references 9-10) are from our 
own work here at Rice University where we studied the toxicity of 
nanoparticles and the environmental fate of nano-sized graphene oxide.
Response by Mr. William Moffitt, President and Chief Executive Officer, 
        Nanosphere, Inc.

Questions Submitted by Chairman Mo Brooks

Q1.  What impacts are environmental, health, and safety concerns having 
on the development and commercialization of nanotechnology-related 
products and what impact might these concerns have in the future?

A1. Nanosphere's products actually have a positive impact on human 
health by providing for earlier detection of disease and low-cost, 
genetic testing in virtually any medical setting. To date, the company 
has experienced only minor requests regarding the ultimate safety of 
the nanoparticle components of the assays. The FDA has asked the 
company to validate that nanoparticles manufactured into the disposable 
test cartridges do not cross-contaminate other products produced in the 
same manufacturing environment. The company is in the process of 
conducting such tests, but there can be no assurance the FDA will find 
the company's tests sufficient. For the future, the greatest risk we 
face is the current lack of clear direction in the regulatory process 
as to how to handle risk assessment associated with nanotechnology. If 
this becomes overly burdensome, the company's costs will escalate and 
pricing will have to be increased to cover the costs of such additional 
testing. This, in turn, creates a competitive risk from foreign-
manufactured products and creates potential cost barriers to use of 
these new diagnostic tools.

Q2.  It is clear that it is important to improve our understanding of 
any environmental, health, and safety issues associated with 
nanotechnology and resolve uncertainties related to the regulatory 
regime that will govern nanotechnology-related products. What should 
our priorities be for research on environmental, health, and safety 
issues? How should these priorities be set? What role should the 
federal government, academia, and industry, respectively, play in 
conducting such research?

A2. Nanoparticles exist throughout the world. Indeed, the magnificent 
colors of the stained glass windows in many of the cathedrals in Europe 
are achieved through the use of colloidal gold, i.e. nanoparticle size 
gold. There is no evidence to date to suggest that such particles and 
technology will cause harm to the environment, but the use of in vivo 
(within the body) nanotechnology is new. The highest priority should be 
given to understanding the impact of nanotechnology for in vivo 
applications (drug carriers, imaging particles, etc). The second 
highest priority should be given to understanding the longer term 
potential impact on the health of workers involved in nanotechnology 
research and production. Environmental impact should likely follow as a 
third priority, only after the first priority above has been adequately 
addressed. It is possible the greater impact to the environment may 
arise from the technologies used to produce nanotechnology-based 
products as opposed to the nanotechnology itself (chemical processes, 
waste disposal, etc).

Q3.  With regard to the Signature Initiatives identified in the FY12 
Budget Request (solar energy, nanomanufacturing, and nanoelectronics), 
why is it appropriate for the Federal government to identify specific 
issue areas for research focus? How do we not pick technology winners 
and losers by doing this? Are these the most critical areas that the 
Federal government should be focusing its limited resources? What 
critical areas are missing? What other grand challenges do we face with 
nanotechnology? ole should the government play in setting ``Grand 
Challenges?'' What are some examples of ``Grand Challenges'' in 
nanotechnology and are we ready to tackle them yet?

A3. Nanotechnology holds the potential to make meaningful impact on 
virtually every industry. As such, it should be viewed as a potential 
source for resolution of some of our country's greatest problems, 
energy, health and global competitiveness. Directing resources and 
funding to solving our greatest problems does not necessarily default 
to picking the winners and losers. Rather, it represents appropriate 
allocation of fiscally tight resources to those areas that are causing 
the greatest economic strain. Ensuring that the US remains globally 
competitive and retains a leadership position in nanotechnology can 
protect jobs and improve our economy. At the same time, focus on our 
greatest needs, energy and health, will enable us have the highest 
possible impact on our greats problems with the scant resources 
available.
    Following from the above paragraph, the critical initiative that is 
missing from the Signature Initiatives is health care. Nanosphere is a 
good example of the potential impact. Earlier detection of disease can 
lead to lower cost of care. Newly developed genetic tests are proving 
to make a significant impact on the safety and efficacy of some of the 
most prescribed drugs in the world, yet the high cost of such testing 
has historically been a barrier to adoption. Through nanotechnology we 
have reduced the cost of such testing to a level that makes the 
economic equation a positive gain for the health care system. We are 
only one example.

Q4.  It is clear that nanotechnology promises many amazing 
breakthroughs while also being surrounded by a great deal of hype, 
mostly positive, a little negative. Help me put this in perspective and 
get a better sense of the real potential- Over the next five to ten 
years, how do each of you think nanotechnology will impact our lives 
and our economy?

A4. The hype has been generated from all of the potential that lies in 
this new science, with a little boost from Wall Street. But, the 
potential is real. As with all new areas of science, proven practical 
products that solve problems take a bit longer. Over the next 5-10 
years I would expect to see meaningful progress in health care arising 
from nano-based products. Nanotechnology will enable more efficient 
energy systems as well. In short, over the next 5-10 years we will see 
the reality of the earliest advances in these key areas of concern to 
our economy. Real impact as measured against projections should be the 
measure of our success.

Q5.  Per my request at the hearing and as you are aware, the House 
passed legislation to reauthorize the NNI once in the 110th Congress 
and twice in the 111th Congress only to see it die in the Senate. I 
would hope that the nanotechnology research world has changed somewhat 
in the past three years since this Committee last held a hearing on the 
topic and drafted the legislation. Using H.R. 554 from the last 
Congress as a basis (attached), please provide feedback by commenting 
on the merits of that bill and any areas that you see room for 
improvement or changes?

A5. The greatest area for improvement in H.R. 554 is the use of pre-
established metrics for measuring the success of the bill and its 
underlying funding. How will we know we have a return on our 
investment? How will we justify continued expenditures? How will we 
know where to redirect funding, if and as required? Perhaps I am a 
naive guy from the business world, but I believe in measuring 
performance as a means of underwriting future decision making.

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