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Is policy uncertainty the cause of anemic growth in nanotechnology innovation?

A Nanotechnology Now column by Skip Rung, President and Executive Director of ONAMI argues that the US is losing its manufacturing base and stifling nanotechnology innovation “with increasingly wrongheaded and costly regulatory barriers”, and recommends a focused regulatory approach to green nanotechnology to remedy the problem. From “Getting our Groove Back in Manufacturing Innovation: Nanomaterials, Green Nanotechnology and Policy Uncertainty“:

…Intel CEO Paul Otellini has said “it costs $1 billion more per factory for me to build, equip, and operate a semiconductor manufacturing facility in the United States.” He has also said that not long ago “our research centers were without peer. No country was more attractive for start-up capital. We seemed a generation ahead of the rest of the world in information technology. That simply is no longer the case.”

Capital markets (and with them our leadership in IPOs) are fleeing the U.S., with the latest development being the acquisition of the NYSE by Deutsche Börse. Having learned nothing from the impact of punishing the innocent with Sarbanes-Oxley, Congress has unleashed an open-ended rulemaking frenzy under Dodd-Frank. Who knows what that will bring, but it’s a safe bet it will work out well for large organizations like GE while entrepreneurs and real innovators are losers again. And as always, tighter environmental regulations and data requirements are promised (ostensibly to ‘crack down’ on polluters, though the more likely result is that better replacement innovations simply won’t even be attempted). …

So despite the Einsteinian insanity of arguing yet again for sensible innovation policy, let’s connect all of this with why nanotechnology (other than via Moore’s Law, a battery, three protein/liposome/polymer cancer drugs, and some low-impact consumer applications) has not yet lived up to its hype, at least as measured by venture capital investment, successful investor exits (A123 and ???) and high-wage job creation in the U.S. (A123 and ???). …

Except for the biggest and lowest risk opportunities (e.g. better drop-in replacement batteries with one new component, blockbuster drugs) the process can’t even get going when small companies have to pay big company prices for regulatory compliance to access a small initial opportunity (consistent with limited ability to ramp production), and both investors and customers find the cost, risk and uncertainty hurdles too high to overcome. This is compounded by the worsening U.S. environment for startups and investors. It is small wonder, really, that the two-year old ‘recovery’ certainly doesn’t feel like one in the hardware/materials manufacturing sector.

But nanotechnology and nanomaterials, along with the production techniques to deliver them, are still new compared to the chemical industry, and there is still hope that badly needed societal innovation might occur in support of enabling their economic and social benefits. One thing that is clearly required is a far more enabling regime for startups and low-volume first applications. One possible scenario for this is a fast-track, light-regulatory-touch path for green nanotechnology: nanomaterials and nanomanufacturing developments conducted according to the principles of green chemistry. Another way to say this is safe-by-design (to the extent possible, based on what we know) products produced by green-by-design manufacturing processes.

Progress has been made on this vision, and we’re ready to discuss concrete criteria for what constitutes green nanotechnology, standard/simplified characterization protocols and enabling policies. And that’s exactly what we intend to do at GN11, Greener Nano 2011, May 2-3 at Hewlett-Packard’s Cupertino site in the heart of Silicon Valley. We’re assembling a great program and attendance of the right people and organizations to “Advance Applications and Reduce Risks” – including the risk of not innovating in the first place.

There is no time to lose, because other countries (especially in Asia) seem determined to win the opportunity to lead in 21st century manufacturing.

Skip Rung is certainly addressing an important problem. As someone who has followed nanotechnology closely since 1986, I have to say that, despite substantial advancements in nanoscience and nanotechnology, progress has been disappointing in two areas: (1) there has not been major investment in developing advanced nanotechnology (high throughput productive nanosytems) based on the Feynman vision as articulated by Eric Drexler, Ralph Merkle, and Robert Freitas; (2) advances in nanotechnology have not launched a large and rapidly growing nanotechnology industry in the way that advances in semiconductor manufacturing and integrated circuits launched the computer industry. A vibrant industry focused on near- and intermediate-term applications advances the technology base needed to develop advanced applications. Many early nanotechnology enthusiasts were drawn from the computer industry because they perceived the possibility of a parallel course for nanotechnology development. However, the anemic growth we have witnessed in nanotechnology reminds me more of the biotech industry. When I was in the early phase of my career as a molecular biology researcher 35 years ago, the development of recombinant DNA technology inspired the hope that learning to produce in bacteria otherwise difficult or impossible to obtain molecules like interferons would launch a huge biotech industry that would rival the size and importance of the computer industry. Actual growth, while real, was much more modest because it turned out we had only scratched the surface of the necessary underlying science. The immune system was much more complicated than we realized, the genome was a vast, unexplored frontier, and the existence of such crucial phenomena as epigenetic regulation and RNA interference was unsuspected. Has the growth of the nanotechnology industry been slow because we are still as ignorant of nanoscience as we were of biology in 1976? Or is Skip Rung correct that government policies are at fault? There are clearly significant environmental, health, and safety issues with some nanomaterials that need to be managed so that we do not create a public relations nightmare for the fledgling nanotechnology industry. Can government provide necessary regulation without strangling innovation?

13 Responses to “Is policy uncertainty the cause of anemic growth in nanotechnology innovation?”

  1. Dale B. Halling Says:

    “Having learned nothing from the impact of punishing the innocent with Sarbanes-Oxley, Congress has unleashed an open-ended rulemaking frenzy under Dodd-Frank. ”

    This cannot be emphasized enough.

  2. flashgordon Says:

    I’ve been telling myself for awhile now that the reason nanomanufacturing hasn’t happened in, first the nineties and then the last ten years, was the molecular simulation software. I don’t know all the developments on molecular simulation software; but, I do recall that problem has pretty much been cracked(there’s always room for improvement); and, now, things are happening.

    Nanomanufacturing might not be happening quite the way Eric Drexler envisioned it(Smalley was partly right; we have to go a bit more of a round about way to get there; i know Chris Phoenix just hates diffusion processes and soft nanotechnology). Basicaly, I think that basic research to find more tools(I’ve read everyone from Drexler to you Jim Lewis note this) is still pretty much where it’s at; you never know where the shortcut(and this is what Drexler is trying to argue for; otherwise, it’s easy to figure out when nanomanufacturing is going to happen; just follow moore’s law) is going to come from.

    I’m tempted to argue that you all are feeling the pinch of life(age); you all just lost somebody and your worried your next(this is the second article in like a week or two about nanotech funding).

  3. Jim Lewis Says:

    You are on target with respect to personal emotional motivation. If I were 30 years younger I would be less disappointed by the slow pace of progress (but if I were 30 years younger I would have been 10 years old when I first read Engines of Creation in 1986, instead of 40). But the question remains, does clumsy federal regulation punish the wrong people and stifle innovation, or is the problem simply that the technical barriers are larger than originally thought and therefore take longer to solve, or that investment has been insufficient?

  4. NanoMan Says:

    These are very good points, Jim, flash, and others, and, I think it could be a combination of all three issues. However, I think the human apathy aspect is big, too big. Yet, molecular nanotechnology IS “inevitable”, as long as human technology continues in the least.
    This is an issue that my friend and colleague, Steve Bridgers, of the INCA Naut Challenge, has been facing for years. And perhaps you all can stand with us on this issue, which is very good for Foresight to get behind.

    The essential information is all there, Bridgers has patented a universal building block, based on the carbon atom and the geodesic fullerene buckyball. With this system, we can construct materials that collapse and expand and yet are very strong, and, a whole range of new electro-mechanical machines and mechanisms.

    Please feel free to email me about this. This is not an ad, rather, this is an opportunity to help speed molecular manufacturing along, and I greatly enjoy donating to Foresight Institute, and working with you all. Thank you.

  5. flashgordon Says:

    As Dale Holling quotes,

    “Having learned nothing from the impact of punishing the innocent with Sarbanes-Oxley, Congress has unleashed an open-ended rulemaking frenzy under Dodd-Frank. ”

  6. flashgordon Says:

    I would think you’ve(nanoman) have seen this; but, I thought I’d bring it up in relation to your work.

  7. NanoMan Says:

    Thank you for the link. That is exactly the type of thing that is needed! It just goes to show the wide range of possibilities in the nano realm.

  8. darwinian roadkill Says:

    I think Robin Hanson may have some insight about this.


    Although heretical, it really might be that Drexlerian molecular manufacturing is not the next big thing in the grand scheme of things and investment has been anemic because the powers that be and the market has implicitly decided that manufacturing technologies (whatever the level of sophistication) has reached the point of diminishing returns.

  9. NanoMan Says:

    Have you all seen this?

    Pick and place of nanotubes

  10. flashgordon Says:

    I’ve seen the picking and placing of nanotubes; it was at nanowerk. I don’t think I can recover the article there, as it is burried under so much news since then!

  11. Shopfloor | A Manufacturing Blog Reporting on Manufacturing Policy and Politics Says:

    [...] We always turn to Instapundit to catch up on the latest developments in the technology and policy, and in doing so this morning, spot this post: WELL, IT’S CAUSING A LOT OF OTHER PROBLEMS: Is policy uncertainty the cause of anemic growth in nanotechnology innovation? [...]

  12. John Tolley Says:

    There is one solution we have suggested the industry follow and that being to adopt the model of self-regulation particularly at the level of supply and procurement of nanomaterials. Our model here at INSCX (Integrated nano-Science & Commodity Exchange) is to structure the buying and selling process through security industry qualified brokers acting on behalf of trade customers who can bid (Purchase) or offer (Sell) nanomaterials and nano-enabled commodities over a live trading platform. The exchange also helps support suppliers and downstream users obtain SHE Accreditation, an EHS standard delevoped over in Europe and supported by global insurance syndicates. In addition every time a trade occurs on the exchange each trade generates a unique transaction ID which is then sequenced forward through the supply chain to end product. Regulators seeking to investigate a trade can apply like they do in the case of established commodity markets through the courts to order disclosure of the actual trade supplier or downstream user in the event there is a concern. This system of self-regulation has the support of the global investment community who understand the concept. Quite apart from the commercial benefits (price transparency, capital financing supports, trade flexibility etc.,) this system might help regulators see exactly what is going on in nanomaterials and regulate accordingly as opposed to engaging in blanket bans or curtailments based on innuendo or a percieved bias. So far some twenty global suppliers have joined the exchange since launch at the end of 2010 and interest from traditional commodity sectors of the economy (metals, mining, polymers, fuels etc) has been strong on the buy side. The supervisory board of the exchange combines experience in nanoscience with practical knowledge of commodity trading. All of this of course depends on how you view nanomaterials of course or more importantly how any potential industrial buyer will regard them.

    Of course the unique attributes are noted, but what of commercial usefulness? In the community we all trumpet the potential, but how do we expect to deliver it when the price difference between the high and low end in say 100nm Ni powder in % terms is some 50% across the supplier base, or where there is no independent inspection of supplied materials to prove quality? These are simple norms in the commercial world on which decisions are made to gear industry to depend on a raw material. That in our view is what will drive trade in NMs – industrial dependence based on clarity at the point of supply and procurement.

    We suggested and developed the exchange simply because we felt NMs needed an organised, structured process of trade to go anywhere in a commercial context. The process now in place enables the following;

    Open Price Discovery
    Independent Characterisation and Inspection
    Anonymous Trade
    Nominee reporting of trade
    Trade Finance and Project Finance to support supplier capacity

    Anyone interested can obtain more information. Simple e-mail:

    Kind Regards

    John Tolley
    INSCX exchange

  13. Devora Malango Says:

    Sorry, unfortunately I have to firmly oppose with this posting. But nevertheless, I fully understand that we all may have our unique position.

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