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United States Government Accountability Office: 
GAO: 

A capsule version of Nanomanufacturing: 
Emergence and Implications for U.S. Competitiveness, the Environment, 
and Human Health: 

GAO-14-406SP: 

Forum on nanomanufacturing: 

Participants: 

Gene L. Dodaro (Host), Comptroller General of the United States: 

George Allen, Former U.S. Senator, and former Governor of Virginia: 

Tina Bahadori, Environmental Protection Agency: 

Sarbajit Banerjee, University at Buffalo, State University of New York: 

Lynn L. Bergeson, Bergeson & Campbell PC: 

Bjorn Birgisson, KTH Royal Institute of Technology: 

Bill Canis, Congressional Research Service: 

Vicki L. Colvin, Rice University: 

Joseph DeSimone, University of North Carolina: 

Bart Gordon, Former Chairman, Committee on Science and Technology, 
U.S. House of Representatives, and Partner at K&L Gates LLP: 

John Ho, QD Vision, Inc. 

Hamlin M. Jennings, Massachusetts Institute of Technology: 

Brian David Johnson, Intel Corporation: 

Michael Liehr, College of Nanoscale Science & Engineering, State 
University of New York: 

Scott E. McNeil, Frederick National Laboratory: 

for Cancer Research, and Science Applications International 
Corporation: 

Manish Mehta, National Center for Manufacturing Sciences: 

Celia Merzbacher, Semiconductor Research Corporation: 

Michael F. Molnar, Advanced Manufacturing National Program Office, and 
the National Institute of Standards and Technology: 

Matthew Nordan, Venrock: 

Susan E. Offutt, U.S. Government Accountability Office: 

Timothy M. Persons, U.S. Government Accountability Office: 

James M. Phillips, NanoMech Corporation: 

Robert Pohanka, National Nanotechnology Coordination Office: 

David Rejeski, Woodrow Wilson International Center for Scholars: 

Mihail C. Roco, National Science Foundation: 

Sheila R. Ronis, Walsh College: 

Françoise Roure, Organisation for Economic Co-operation and 
Development: 

Paul Schulte, Centers for Disease Control and Prevention: 

Charles Wessner, The National Academies: 

This booklet is a capsule version of the report Nanomanufacturing: 
Emergence and Implications for U.S. Competitiveness, the Environment, 
and Human Health. That report is available as GAO-14-181SP at 
[hyperlink, http://www.gao.gov]. 

The cover image includes depiction of some of the widely ranging 
industrial sectors that may be enhanced or transformed by 
nanomanufacturing. 

Cover art source: GAO. 

[End of section] 

Capsule highlights of a forum convened by the Comptroller
General of the United States: 

Why GAO convened this forum: 

Nanotechnology is the control of matter in the size range of about 1 
to 100 nanometers. The U.S. National Nanotechnology Initiative, begun
in 2001, focuses primarily on R&D and represents a cumulative 
investment of almost $20 billion. As other nations increasingly invest 
in nanotechnology, the U.S. faces rising global competition. 
Additionally, there are concerns about EHS risks. In July 2013, the 
Comptroller General of the United States convened a Forum on 
Nanomanufacturing in response to a congressional request; in January 
2014, GAO issued a report to congressional requesters (GAO 2014; also 
identified as GAO-14-181SP). This booklet presents a capsule version 
of that report. 

View [hyperlink, http://www.gao.gov/products/GAO-14-406SP[. For more 
information, contact Timothy Persons, Chief Scientist at (202) 512-
6412 or personst@gao.gov. 

A capsule version of Nanomanufacturing: Emergence and Implications for 
U.S. Competitiveness, the Environment, and Human Health: 

What forum participants said: 

Participants expressed 10 key views about nanomanufacturing. Notably, 
participants saw nanomanufacturing as a future megatrend, and they 
anticipated continuing scientific breakthroughs. Although participants 
viewed the United States as likely leading in nanotechnology R&D 
today, they foresaw intense global competition. They also identified 
emerging challenges to U.S. competitiveness in nanomanufacturing. For 
example, U.S. funding/investment gaps (one of which is illustrated 
below) may undermine U.S. innovators' attempts to transition 
nanotechnology from R&D to full-scale manufacturing-—but such gaps do 
not apply to the same extent in some other countries or are being 
addressed. Participants also identified ways to enhance U.S. 
competitiveness in nanomanufacturing—and said that significant new 
efforts are needed in researching environmental, health, and safety 
(EHS) implications. 

Figure: Funding/Investment Gap in the Manufacturing-Innovation Process: 

[Refer to PDF for image: illustration] 

Vertical axis of graph depicts Investment from Low to High; 
Horizontal axis of graph depicts Manufacturing-innovation process. 

Manufacturing-innovation process: 
Basic manufacturing research: Government and universities; 
Proof of concept: Government and universities; 
Production in laboratory: Gap; 
Capacity to produce prototype: Gap;
Capability in production environment: Private sector; 
Demonstration of production rates: Private sector. 

Source: GAO adapted from Executive Office of the President. 

[End of figure] 

Participants suggested two main considerations going forward: 
specifically, the need to, first, continue a high level of U.S. 
investment in R&D, and second, address four key issues-—(1) challenges 
to U.S. competitiveness, (2) EHS implications, (3) uncertainty of 
available data on international investment, and (4) the current 
(potentially inadequate) level of U.S. participation in developing
international standards. 

[End of section] 

Contents: 

Preface: 

Introduction: 

Forum participants expressed 10 key views: 

1. Nanomanufacturing is a future megatrend: 

2. Nanomanufacturing has characteristics of a general purpose 
technology: 

3. The United States likely leads in nanotechnology R&D but faces
global-scale competition: 

4. Nano-innovation means devising (a) new technologies (or products) 
and (b) new manufacturing processes: 

5. Gaps in support may undermine U.S. nano-innovation efforts for
(a) technologies (or products) and (b) manufacturing processes: 

6. Potential barriers to widespread U.S. nanomanufacturing
illustrated by prior offshoring and loss of a key industry: 

7. The U.S. lacks a vision for nanomanufacturing—-while facing global 
competition and intellectual property threats: 

8. Varied approaches might enhance U.S. competitiveness in 
nanomanufacturing: 

9. An integrated framework could help assess and address EHS 
implications: 

10. Standards-development efforts are important: 

Forum participants suggested two main considerations going forward: 

1. Continue U.S. investment in nanotechnology research, possibly 
targeting nanomanufacturing research: 

2. Address challenges to U.S. competitiveness and other key issues: 

Appendixes: 

I. Capsules of four forward-looking profiles developed as background: 

II. A note on forum methodology: 

III. Transforming general purpose technologies: Examples: 

IV. The NASCENT Center: 

V. Abbreviations: 

List of references: 

[End of section] 

Preface: 

At the request of the Chairman of the Committee on Science, Space, and 
Technology, U.S. House of Representatives, the Comptroller General of 
the United States convened the Forum on Nanomanufacturing in July 
2013, bringing together experts from a wide range of relevant 
backgrounds. GAO conducted the forum with the assistance of the
National Academies. Expert participants discussed: 

* nanomanufacturing's future; 

* U.S. investments and competitiveness in nanotechnology R&D—-and 
challenges to U.S. competitiveness in nanomanufacturing; 

* ways to enhance U.S. competitiveness in nanomanufacturing; and; 

* environmental, health, and safety implications. 

Forum discussions in these areas were reported in Nanomanufacturing: 
Emergence and Implications for U.S. Competitiveness, the Environment, 
and Human Health (GAO 2014). This booklet encapsulates the findings of 
that earlier report, presenting key views expressed by forum 
participants, as well as their suggestions for considerations going 
forward. 

Appendix I presents capsules of four forward-looking profiles of nano-
industry areas, which were developed as background for the forum. 
Appendix II summarizes our methodology. Additionally, we note here 
that many forum participants are active in nanotechnology research or 
manufacturing—-and thus might benefit from increased government 
funding or other supportive efforts; therefore, we developed the forum 
with an emphasis on achieving a balance of views, to the extent 
possible. 

Signed by: 

Timothy M. Persons, Chief Scientist: 

[End of section] 

Introduction: 

Nanotechnology has been defined as the control or restructuring of 
matter at atomic and molecular levels in the size range of about 1 to 
100 nm (Roco et al. 2011, xv). To illustrate relative dimensions, the 
width of a hair is 75,000 to 100,000 nm. Many scientific fields-—such 
as chemistry, materials science, biology, physics, and engineering—-
study and apply nanotechnology. The goal is to create materials as 
well as devices and systems that have fundamentally new properties or 
functions. 

Nano-enhanced materials come in a variety of forms, based on chemical 
composition and physical structure, as illustrated below. Nanomaterials'
 varied characteristics can affect environmental, health, and safety 
(EHS) risks in potentially diverse ways. 

U.S. public investment in nanotechnology research and development 
(R&D) has grown substantially since 2001, as indicated by the funding 
of the federal interagency National Nanotechnology Initiative (NNI).
The amounts budgeted from 2010 to 2014, however, have not shown an 
increasing trend. (See figure on opposite page.) 

Figure: Some nanotechnology characteristics: 

[Refer to PDF for image: illustration] 

Size; 
Size distribution; 
Shape; 
Surface area; 
Agglomeration; 
Surface chemistry. 

Source: GAO analysis based on GAO (2010b; 2012), Hassellöv and Kaegi 
(2009), and Mazov et al. (2012). 

Note: Characteristics relevant to nanomaterials' properties and 
potential EHS risks include (1) particle size, (2) distribution of 
particle sizes in a group of particles, (3) particle shape, (4) 
surface area, (5) likelihood of forming agglomerates (clumps of 
particles bound together), and (6) surface chemistry (surface 
composition, shape, or chemical reactivity). 

[End of figure] 

Figure: U.S. National Nanotechnology Initiative funding, fiscal years 
2001–2014: 

[Refer to PDF for image: vertical bar graph] 

Fiscal year: 2001; 
Actual current dollars: $464 million. 

Fiscal year: 2002; 
Actual current dollars: $697 million. 

Fiscal year: 2003; 
Actual current dollars: $760 million. 

Fiscal year: 2004; 
Actual current dollars: $989 million. 

Fiscal year: 2005; 
Actual current dollars: $1.200 billion. 

Fiscal year: 2006; 
Actual current dollars: $1.351 billion. 

Fiscal year: 2007; 
Actual current dollars: $1.424 billion. 

Fiscal year: 2008; 
Actual current dollars: $1.555 billion. 

Fiscal year: 2009; 
Actual current dollars: $2.213 billion. 

Fiscal year: 2010; 
Actual current dollars: $1.913 billion. 

Fiscal year: 2011; 
Actual current dollars: $1.847 billion. 

Fiscal year: 2012; 
Actual current dollars: $1.857 billion. 

Fiscal year: 2013; 
Continuing resolution dollars: $1.650 billion. 

Fiscal year: 2014; 
Proposed dollars: $1.702 billion. 

Source: GAO, based on data from the U.S. National Science and 
Technology Council (2003, 2005 through 2013) and other sources. 

Note: NNI funding is focused primarily on research and development 
(R&D). Amounts for fiscal years 2009 and 2010 include funding from the 
American Recovery and Reinvestment Act of 2009. See also GAO (2014, 
figure 1, 6). 

[End of figure] 

Nanotechnology is increasingly moving beyond research and early-stage 
development into commercial production. Future developments will 
likely be affected by global economic dynamics, advances in science 
and technology, and policy shifts. There are also potential EHS 
concerns. Within this context, the Comptroller General's Forum on
Nanomanufacturing addressed: 

* the future of nanomanufacturing; 

* U.S. investments and competitiveness in nanotechnology R&D-—and 
challenges to U.S. competitiveness in nanomanufacturing; 

* ways to enhance U.S. competitiveness in nanomanufacturing; and; 

* EHS implications. 

Forum discussions, reported earlier (GAO 2014), are encapsulated here 
as 10 key views and two main considerations going forward. 
Additionally, appendix I presents capsules of profiles of four 
nanomanufacturing areas; we developed these profiles as background for
forum participants. 

[End of section] 

Forum participants expressed 10 key views: 

1. Nanomanufacturing is a future megatrend: 

Figure: Conceptualization of nanomanufacturing and digital technology 
as megatrends: 

[Refer to PDF for image: line graph] 

Level of economic importance and societal impact for Digital 
technology and Nanomanufacturing is depicted from low to high over a 
time span of: 
Earlier era; 
Current era; 
Future era. 

Source: GAO conceptualization based on participants' statements and 
the cumulative diffusion of innovation curve suggested by Rogers 
(1962). 

Note: The envisioned 'flattening' of the digital technology trend 
follows the 'diffusion of innovation curve' (Rogers 1962). Although 
not shown here, the two trends may interact; that is, each may 
influence the other, potentially heightening one or both curves; for 
example, carbon nanotubes are being explored as a basis for new, 
smaller, and more powerful transistors (Shulaker et al. 2013). 

[End of figure] 

Forum participants described nanomanufacturing as a future 
megatrend[A]-—now in its early, formative phases—-that will: 

* likely accelerate because scientists and engineers are beginning to 
design and control nanoparticles and devices to achieve specific, 
desired product characteristics (as opposed to previously discovering a
nanoparticle and then trying to find a use for the new particle); 

* eventually match or outstrip the digital revolution in terms of 
economic and societal impact (as illustrated); 

* bring a diverse array of new societal benefits and new 
opportunities; and; 

* potentially create jobs through “disruptive” and “empowering” 
innovation.[B] 

[A] In this report, we define a megatrend as a long-term, powerful,
and evidence-supported process with a formative and transforming 
impact on the future. The term megatrend may refer to technological, 
social, economic, demographic, or other developments. 

[B] In the terminology of Christensen (2012; see also Christensen
et al. 2000), innovations such as the Model T are both disruptive and 
empowering. They help create new markets, displace earlier 
technologies, and may create jobs. 

Forum participants said that future nanomanufacturing developments 
will likely be propelled by continuing breakthroughs and advancements 
in the science of nanomaterials, and by new enabling tools and 
techniques. 

Varied participants also anticipated: 

* added benefits from the convergence of nanotechnology and new 
developments in fields such as biological science (see Roco and 
Bainbridge 2013), and; 

* new national investments—for example, fundamental research on nano-
based concrete might yield advances that jumpstart major federal 
investments to renew infrastructure across the United States. 

2. Nanomanufacturing has characteristics of a general purpose 
technology. 

Stage 1: Evolving nanoscale materials, components, or devices: Nano-
transistors; 
Stage 2: Nano-enabled products or intermediates: further improved 
semiconductor chips; 
Stage 3: Improved or new nano-enhanced products: ever faster 
computers[A], smaller smartphones. 

Stage 1: Evolving nanoscale materials, components, or devices: Copper 
nano-wires[B]; 
Stage 2: Nano-enabled products or intermediates: lithium-ion batteries; 
Stage 3: Improved or new nano-enhanced products: more powerful battery-
powered vehicles. 

Stage 1: Evolving nanoscale materials, components, or devices: Carbon 
nanotubes; 
Stage 2: Nano-enabled products or intermediates: concrete additives 
that conduct electricity; 
Stage 3: Improved or new nano-enhanced products: road pavement with 
remote sensing. 

Stage 1: Evolving nanoscale materials, components, or devices: Protein 
nanoparticles; 
Stage 2: Nano-enabled products or intermediates: carriers of 
chemotherapeutic drugs; 
Stage 3: Improved or new nano-enhanced products: chemotherapy targeted 
to cancer cells (only). 

Source: Forum presentation (Persons 2013). 

Note: We define a value chain, for purposes of reporting on the forum, 
as a series of key steps starting with the processing of raw materials 
and continuing to the production of a finished consumer product; each 
step adds value-—and may or may not involve a different company or 
intermediate product. The figure uses three main stages, drawn from a 
conceptualization by Lux Research (see Bradley 2010 and Holman 2007), 
to summarize four examples of nanotechnology value chains. 

[A] With respect to “ever faster computers,” digital development has 
generally followed “Moore's law” (briefly, a doubling of processing 
power every 18 months) in part by utilizing chips with nano-features; 
however, further advances and more innovations in nanotechnology-—such 
as the use of a new generation of nanomaterials in conjunction with 3D 
chip architecture and optical interconnects-—or other novel approaches 
may be needed for continuous improvement in future decades. 

[B] Copper nano-wires represent one example of how nanotechnology 
might be used to enhance lithium-ion (Li-ion) batteries for vehicles. 
The figure on p. 15 of this report illustrates a related example. 

[End of table] 

Nanomanufacturing currently affects diverse industrial sectors. Varied 
participants said that nanomanufacturing is setting the pace for 
improvements across a broad range of industrial sectors with an 
extensive array of important societal benefits. As shown in the
figure (opposite page), nanomanufacturing's impacts are already 
beginning to occur across diverse industrial sectors such as: 

* computers and smartphones, 

* new batteries to power hybrids and electric vehicles, 

* road pavement with sensing capabilities, and, 

* anti-cancer drugs designed to maximize uptake by cancer cells, while 
minimizing uptake by other cells. 

Advances in applied research are continuing; for example, a recent 
nano-research article described a new bone-enhancing therapy that 
would be carried directly to the small cracks associated with 
osteoporosis (Yadav et al. 2013). As one participant said: “Everything
will become nano.” 

Nanomanufacturing may induce “spillover effects.” Varied participants 
said that nanomanufacturing might approach the significance of 
electricity or computers. Such statements suggest that, like 
electricity and computers, nanomanufacturing might have not only (1) 
direct uses in numerous industries but also (2) indirect “spillover 
effects.”[A] 

General purpose technologies. Economists term innovations “general 
purpose technologies” or GPTs when they have the characteristics 
discussed above. Appendix III lists several historical examples of GPTs,
including, for example, the smelting of ore and the internal 
combustion engine, as well as electricity, computers, and 
nanotechnology. (The importance of whether nanomanufacturing is seen 
as a GPT is indicated in Key View number 8 of this booklet; 
specifically, see approach 3 in the table on p. 19.) 

[A] To illustrate a spillover effect: “the computer... enabled the 
development of...precisely controlled robots, which... enabled the 
restructuring of...highly automated [factories]” (Lipsey et al. 2005, 
98). 

3. The United States likely leads in nanotechnology R&D but faces 
global-scale competition: 

Figure: Public investments in nanotechnology R&D in 2013-—U.S. 
compared to selected leading investor nations: 

[Refer to PDF for image: vertical bar graph] 

Dollars in billions (public investment only): 

U.S. federal budget for fiscal year 2013 (continuing resolution): 
United States[A]; 
Projected investments by U.S. state governments in 2013. Comparability 
to other information in this figure is somewhat uncertain: 
United States[A]: $1.66 billion; 

Projected public investments by Germany and Japan in 2013. 
Comparability to other information in this figure is somewhat 
uncertain. 

Germany: $0.79 billion. 

Japan: $0.65 billion. 

Projected public investments by Russia and China in 2013. Overall 
validity is uncertain (given limitations of available information) as is
comparability to other information in this figure: 

Russia: $2.33 billion. 

China: $2.18 billion. 

Source: GAO based on a forum presentation (Roure 2013), Cientifica 
Ltd. (2013), and the U.S. National Science and Technology Council 
(2013). 

Note: This bar chart is based on (1) the U.S. Federal Budget; (2) 
available projections for other government investments; and (3) 
recognition of the uncertainty associated with these projections. The 
shading characterizes uncertain levels of available projections for 
2013, based on two key participants' opinions. The lighter the color 
of a bar, the greater the uncertainty. Use of fading on the upper 
portion of bars is also intended to convey uncertainty. Our intent is 
to avoid conveying an unwarranted level of precision, which might be 
associated with a specific data point for each nation; see GAO (2014, 
105-106). Importantly, this figure excludes estimates of private-
sector R&D investments. Overall—-that is, combined public and private—
R&D funding/investment is discussed in the text on the opposite page. 

[A] Public investments shown for the United States include both state 
investments (projection) and the federal investment represented by the 
2013 budget (continuing resolution) for the NNI, which focuses 
primarily on R&D. 

[B] The projected public investment for Germany does not include its 
contribution to the European Commission's effort in nanotechnology R&D. 

[End of figure] 

R&D funding/investments. While recognizing the uncertainty associated 
with cross-nation comparisons, participants viewed the United States 
as currently appearing to lead in overall funding-—that is, combined 
public and private funding—-of nanotechnology R&D, based on publicly
available information. However, two participants selected in part for 
their expertise in this area said that: 

* one or more nations' overall R&D investment might be greater than the
United States, because some nations' R&D investments might be 
underreported, and; 

* the United States is likely surpassed by some nations when public 
R&D funding alone is considered (as shown opposite). 

Additionally, one participant emphasized that (1) the nanotechnology 
R&D public investment made by Western European governments (combining 
funding by the European Union with that of individual nations) is 
larger than any single nation's and (2) U.S. public funding (as 
represented by NNI's budget) has not increased from 2012 to 2014. 

Publications. Turning to publications, the United States dominates in 
numbers of nanotechnology publications in three highly cited journals, 
based on an analysis by Roco (2013).[A] Participants saw this as an 
indication of U.S. competitiveness in quality research. However, China 
overtook the United States in 2010 through 2012 (the most recent year 
reported) in terms of the quantity of nano-science articles published 
annually (a comparison made without controlling for quality of 
publication vehicle). 

A possible “moon race.” All things considered, participants see the 
United States as—-currently—-likely leading in nanotechnology R&D. At 
the same time, they foresee intense global-scale competition, which
one participant characterized as a “moon race.” Participants see it as 
essential that the U.S. continue a high level of investment in 
fundamental research. 

[A] The three highly cited journals are Science, Nature, and 
Proceedings of the National Academy of Sciences. One participant 
cautioned that these journals might have favored U.S. authors; see GAO 
(2014, 21). 

4. Nano-innovation means devising (a) new technologies (or products) 
and (b) new manufacturing processes. 

According to forum participants, nanoinnovation involves devising and
developing both: 

* new technologies (or products), and; 

* new processes to manufacture those products. 

Thus, nano-innovators may face dual challenges: one for technology 
innovation, the other for manufacturing innovation—-although the two 
efforts may be intertwined. 

Using the example of nanotherapeutics for drug delivery, innovators at 
the University of North Carolina (UNC) had to: 

* advance the maturity of specific nanotherapeutics approaches, and; 

* create ways to manufacture or produce the new nanotherapeutics—-
first, in the laboratory and later, in a production environment. 

That is, scientists must specially design differently shaped and sized 
particles to maximize their uptake by different kinds of targeted 
cells, such as specific types of cancer cells (and minimize uptake by 
other cells). Then, the particles are manufactured using a process 
devised by the UNC innovators (the PRINT® production process).[A] The 
figure opposite shows (1) an example of a specific particle shape 
required for a certain type of nanoscale drug delivery and (2) the 6-
step method developed to produce particles of this shape and other 
specifically shaped particles. 

According to a forum participant involved with the start-up company 
that developed PRINT®, this process was launched with three seminal 
patents in 2004. Many subsequent applications and processes were needed
(approximately 80 patents pending thus far) to fully implement the new 
technology. 

[A] PRINT® is based, in part, on earlier approaches used to produce 
semiconductors. 

Figure: Example of specially designed particles and overview of the 
PRINT® technology process that produced them: 

[Refer to PDF for image: illustration] 

Source: University of North Carolina at Chapel Hill (DeSimone Research 
Group) and Liquidia Technologies. 

Note: Each of the specially designed particles, shown magnified above 
left, is roughly one-tenth the width of a hair, or less. The production
process, shown at right, begins with the nanoscale, lithographic 
patterning of a template, which is illustrated as a grey plate in (1) 
above. The template defines the size and shape of the particles to be 
produced. A liquid polymer illustrated as a green drop, see (1) above, 
is spread across the patterned template, filling the space around all 
the nanosize features. The polymer is then cured and becomes a solid 
inverse, which is used as a mold, illustrated as the green plate in 
(2) above. The mold is filled with a nanoparticle material, as 
illustrated in red; see (2), (3), and (4) above. A harvesting film, 
illustrated as a clear strip shown in (5) above, is used to extract 
the particles from the mold. Each resulting particle, illustrated in 
(6) above, is of the same size and shape; each also has the same 
chemical composition. 

[End of figure] 

The distinction between technology (or product) innovation and 
innovation in manufacturing processes is further discussed in the 
following section, which concerns participant views about U.S. gaps in 
funding. 

Specifically, a funding gap can occur during the middle stages of both: 

* efforts to develop a new nanotechnology product, and; 

* efforts to develop a new nanomanufacturing process (designed to 
produce the new product). 

5. Gaps in support may undermine U.S. nano-innovation efforts for (a) 
technologies (or products) and (b) manufacturing processes: 

Participants said that in the United States, government often funds 
research or the initial stages of development, whereas industry 
typically invests in the final stages. As a result, U.S. nano-
innovators may find it difficult to obtain either public funding or
private investment during the middle stages of innovation. Further, a 
support gap can characterize the middle stages of: 

* developing a new technology, and/or; 

* developing a new manufacturing process. 

Thus, U.S. innovators may encounter two support gaps, which 
participants termed: 

* the Valley of Death (the lack of funding or investment for the 
middle stages of developing a technology or product), and; 

* the Missing Middle (a similar lack of adequate support for the 
middle stages of developing a process or approach to manufacture the 
new product). 

The Valley of Death begins once a new technology or product has been 
validated in a laboratory environment; it continues through prototype 
demonstration in a non-laboratory environment (before industry 
acquires it as a commercial technology or product). The Missing Middle 
occurs during analogous stages of the manufacturing-innovation 
process, as illustrated on the opposite page. 

Participants said (1) that substantial amounts of funding/investment 
are needed to bridge the Valley of Death and the Missing Middle, (2) 
that high costs can be a barrier to commercialization, especially for 
small and medium-sized U.S. businesses, and (3) that there has been a 
“draining away” of venture capital (VC) funding from physical science
areas like nanotechnology to fund new ventures in Internet services 
that may provide larger and faster returns on investment. 

Figure: Missing Middle: Funding/investment gap in the U.S. 
manufacturing-innovation process: 

[Refer to PDF for image: illustration] 

Depicts funding investment from low to high for: 

Government and Universities; and Private Sector, showing a gap between 
the two. 

Manufacturing-innovation process: 

Basic manufacturing research; 
Proof of concept; 
Production in laboratory; 
Capacity to produce prototype; 
Capability in production environment; 
Demonstration of production rate. 

Source: GAO adapted from Executive Office of the President (2012, 21). 

[End of figure] 

Additionally, participants noted that in some cases, there is a lack 
of a supportive regional ecosystem or infrastructure to help overcome
challenges in areas such as engineering and establishing efficient 
supply chains. 

Some counterpoints were voiced by forum participants. First, some 
large corporations (for example, General Motors) provide VC for 
innovations they see as enhancing their own future business endeavors. 
Second, the current VC focus on new Internet services may be 
temporary. Third, some agencies participating in the Small Business 
Innovation Research (SBIR) program have found ways to indirectly 
support the pursuit of commercialization (for nanotechnology and other 
areas)—-thus extending SBIR's goal of helping small businesses 
establish the potential for commercialization; see also GAO (2011a). 

Still, participants said that some nations do more than the United 
States to support commercialization-—and that other nations which may 
have had middle-stage gaps are now addressing them (see Key View number
7 on pages 16-17). 

6. Potential barriers to widespread U.S. nanomanufacturing illustrated 
by prior offshoring and loss of a key industry: 

Multiple participants gave examples of potential barriers to 
establishing widespread nanomanufacturing in the United States. Two 
examples are described below. 

Example 1: Prior offshoring-—the semiconductor industry. 

A key U.S. strength is designing semiconductors. Moreover, the actual
manufacturing of semiconductors is automated, and engineers are the key
employees at a fabrication plant. Some fabrication takes place in the 
United States, and a fabrication plant in upstate New York employs 
about 1,000 engineers. Nevertheless, most fabrication of computer 
chips with nanoscale features takes place abroad. A participant 
explained that unskilled labor is needed to package semiconductors-—and
said that it is important for the United States to establish more 
fabrication plants in this country.[A] 

[A] One company is now developing advanced robotics for semiconductor 
packaging—-a technology that logically would lessen the need for 
unskilled labor. 

Figure: View of a semiconductor-manufacturing facility: 

[Refer to PDF for image: photograph] 

Source: College of Nanoscale Science & Engineering, State University 
of New York. 

[End of figure] 

A major problem with offshoring in an innovative area such as 
nanomanufacturing was described by a participant who said that when 
“we design here [and] ship [manufacturing] abroad, we lose this shop-
floor-innovation kind of mentality.” (See appendix I of this report, 
especially profile 1 on p. 26.) 

Example 2: Loss of a potentially important industry-—lithium-ion 
batteries. 

Although the United States developed the underlying technology for 
lithium-ion (Li-ion) batteries, most such batteries—-including nano-
enhanced batteries used to power hybrids and electric vehicles (EV)—
are manufactured in Asia. According to one participant: (1) smaller 
lithium-ion batteries for consumer electronics have long been 
manufactured in Asia because the United States “gave up on [that 
industry] some time ago,” and (2) Asian firms appear to have a 
competitive advantage in the manufacturing process, which is similar
for small lithium-ion batteries and the larger ones manufactured for 
vehicles. 

However, looking to the future, one forum participant said that “the 
jury is still out” on U.S. competitiveness in this area. Another 
expert (interviewed prior to the forum) said that some future versions 
of nano-engineered batteries for vehicles will require different
manufacturing processes and thus might represent a new opportunity for 
U.S. manufacturing. The example shown above right is a new type of 
battery that requires a different type of manufacturing process; it is 
now in the research or idea stage for hybrids and EVs. (See also 
appendix I of this report, profile 2, p. 27.) 

Figure: Illustration of a lithium-ion battery requiring a new 
manufacturing process. 

[Refer to PDF for image: illustration] 

3D Li-ion battery: 
Cathode and anode are interdigitized. 

Source: Prieto Battery, Colorado, USA. 

Note: Briefly, the term interdigitated refers to an interlocked or
interwoven design in which the anode is (1) is composed of a copper 
foam current collector coated with a copper antimonide anode (shown in 
dark purple); (2) coated with an ultra-thin lithium-ion electrolyte 
(illustrated in light purple); and then (3) surrounded by a cathode 
slurry (illustrated in dark gray). The green figures represent the 
ease of diffusion of ions in the 3D battery design. For a fuller 
explanation, see Johnson (2013). 

[End of figure] 

See GAO (2014, 32-33; 35) for discussion of other possible barriers to 
widespread U.S. nanomanufacturing. 

7. The U.S. lacks a vision for nanomanufacturing—-while facing global 
competition and IP threats: 

Lack of U.S. vision. A forum participant said that the United States 
lacks a vision for a nanomanufacturing capability. Although four 
centers, funded by the National Science Foundation (NSF), focus on new 
concepts and development of methods for nanomanufacturing (that is, 
these centers conduct research primarily at “early manufacturing 
readiness levels”), our post-forum communications with an NSF official 
indicated (1) that funding for three of the centers will end in 2014, 
and for the fourth, in 2015, and (2) that there is currently no 
program devoted to supporting nanomanufacturing centers. 

A fifth NSF-funded center-—the NASCENT center at the University of 
Texas at Austin—-addresses the commercialization of nanotechnology 
rather than conducting early-stage research on nanomanufacturing. 
(That center is described in appendix IV.) 

Global competition. According to participants, the funding and 
investment gaps that hamper U.S. nano-innovation (the Valley of Death 
and Missing Middle) do not apply to the same extent in some other
countries-—for example, China and Russia—or are being addressed. 
Varied participants made statements to the effect that other nations
do more than the United States in terms of government investment in 
technology beyond the research stage. 

Multiple participants referred to the European Commission's upcoming 
Horizon 2020 program, specifically mentioning a key program within 
Horizon 2020 that is termed the European Institute of Innovation and
Technology (EIT). As illustrated in the “Knowledge Triangle,” EIT 
emphasizes the nexus of business, research, and higher education. The 
2014-2020 budget for the EIT portion of Horizon 2020 is €2.7 billion
(or close to $3.7 billion in U.S. dollars as of January 2014). 

Figure: Knowledge triangle: 

[Refer to PDF for image: illustration] 

Triangle consists of EIT in the center, surrounded by the following 3 
corner triangles: 
Higher Education; 
Business; 
Research. 

Source: "Knowledge triangle" illustrating the European Commission's 
European Institute of Innovation and Technology principles. [hyperlink, 
http://ec.europa.eu/geninfo/legal_notices_en.htm] (accessed April 29, 
2014). 

[End of figure] 

With respect to foreign competition, multiple participants referred to 
the previously mentioned example of lithium-ion batteries (in which 
the underlying R&D was funded by the United States, but other countries
dominate mass production). Multiple participants also said that 
certain other countries are purchasing struggling U.S. nanotechnology 
companies and making significant offers to U.S. nanoscience 
researchers and nanotechnology innovators. 

Threats to intellectual property. Several participants discussed 
threats to intellectual property (IP) associated with global 
competition: 

* One participant described an IP challenge to research at U.S. 
universities: a culture of openness, especially among students, which
results in ideas and research “leaking out” before they have been 
patented or fully pursued by the initial researchers. 

* A second participant noted, when interviewed prior to the forum, 
that one country targeted specific research projects at U.S. 
universities-—and then required its own citizen-students to apply for 
admission to the targeted universities and seek work on the targeted 
projects. 

* A third participant described persistent attempts by some other 
countries (or elements in these countries) to breach information 
systems at his company; this participant summed up the current IP 
situation as approaching “technological war.” 

8. Varied approaches might enhance U.S. competitiveness in 
nanomanufacturing: 

Challenges to U.S. competitiveness (see Key Views numbered 5, 6, and 
7) could threaten realization of U.S. economic benefits commensurate 
with public and private investments. Participants therefore considered
ways to enhance U.S. competitiveness in nanomanufacturing. Three main 
approaches emerged from these forum discussions (see table below). 
Logically, the three approaches can be seen either as representing
alternatives—or as complementing each other. Each approach is more 
fully described in GAO (2014, 42-54). 

Table: Three approaches to enhancing U.S. competitiveness—-proposed 
actions: 

Approach: 1. Strengthen innovation across the U.S. economy; 
Proposed actions: Continue or update federal policies and programs 
that help strengthen innovation generally (i.e., across all sectors of 
the economy). 

Approach: 2. Promote innovation in U.S. manufacturing (including 
nanomanufacturing); 
Proposed actions: Establish U.S. centers, encourage clusters, or 
design programs to address the Valley of Death or the Missing Middle—
that is, the gaps in investment or resources discussed earlier. 
Participants identified two centers that focus specifically on 
nanomanufacturing and a pilot program that more generally promotes 
innovation in manufacturing.[A] 

Approach: 3. Design a grand strategy for U.S. nanomanufacturing; 
Proposed actions: Define a vision for U.S. nanomanufacturing. Design a 
grand strategy for achieving this vision—using a systems approach and 
a collaborative process that might be led by the federal government. 

Source: GAO analysis of statements made by forum participants. 

[A] One center is described in appendix IV. For the other center and 
the pilot program, see GAO (2014, 46-48). 

[End of table] 

We note that strong proponents of certain approaches objected to the 
others-—saying, for example, that approach 1 would be insufficient by 
itself; that the effectiveness of approach 2 had not been firmly 
established; and that approach 3 would not necessarily create 
significant numbers of well-paying jobs in the United States. However,
each approach has a specific rationale (see table below). 

Table: Rationale for each approach to enhancing U.S. competitiveness 
in nanomanufacturing: 

Approach: 1. Strengthen innovation across the U.S. economy; 
Rationale: The U.S. government acts to supply goods and services 
critical to innovation when private markets fail to do so, often 
because firms cannot capture the full benefits of providing them. 
Beyond these measures, which include providing education and building 
infrastructure, firms are in a better position than government to make 
decisions about how to allocate resources to the most promising 
innovations. 

Approach: 2. Promote innovation in U.S. manufacturing (including 
nanomanufacturing); 
Rationale: The United States needs a strong manufacturing base because 
it is essential to the economy and to innovation itself. Assuring this 
base means 'leveling the playing field' in the global economy-—by 
directly addressing the Valley of Death and the Missing Middle, 
especially as these apply to innovative manufactured products or 
innovative manufacturing processes. Moreover, structures separating 
manufacturing from design (e.g., too much offshoring) can have 
significant adverse results. 

Approach: 3. Design a grand strategy for U.S. nanomanufacturing; 
Rationale: Nanomanufacturing is a megatrend that will significantly 
affect future U.S. competitiveness in global markets and provide 
societal benefits. Nanomanufacturing may be a future general purpose 
technology (GPT) akin to digital technology or electricity, and thus 
classifiable as a public good with anticipated benefits for the entire 
economy—potentially justifying targeted federal support. Moreover, 
nanomanufacturing may become an engine of job creation in the U.S. 
economy. 

Source: GAO analysis of statements made by forum participants. 

[End of table] 

9. An integrated framework could help assess and address EHS 
implications: 

Forum participants offered a range of perspectives on the 
environmental, health, and safety (EHS) implications of nanotechnology,
nanomanufacturing, and nanomaterials. 

The participants presented information on what is currently known 
about these implications and expressed frustration about the lack of 
progress in understanding the risks from potential exposure to 
nanomaterials. Some also noted a current dilemma related to 
identifying or determining EHS risks: because few nanomaterials have 
been studied and no long-term or chronic data are available, the risks 
of new nanomaterials are difficult to predict or manage. 

Forum participants identified significant research needs to discern 
EHS implications and discussed the need to fully communicate the 
benefits and risks of nanotechnology to the members of the public, to 
help them distinguish between perceived and real risks. See GAO (2014, 
55-63). 

Multiple participants suggested developing an integrated EHS framework 
for thinking about nanotechnology, nanomanufacturing, and 
nanomaterials. One participant explained that the framework would be 
based on incorporating assessments of EHS implications into the design 
phase of the product-—not at the end of life, not at disposal, and not 
after problems or health impacts to consumers or workers have already 
occurred. Participants characterized this concept as “safer by
design.” One participant explained the idea as capturing the 
functionality of the product while addressing safety concerns. 

Participants also discussed the importance of considering the life 
cycle and conducting life-cycle material assessments. Such an 
assessment would consider not only the use of the material, but all 
stages of the product's life cycle from production and development
through disposal and recycling. The following figure illustrates an 
example of a life-cycle assessment. 

Figure: Illustration of product life cycle and issues posed: 

[Refer to PDF for image: illustration] 

Raw materials production: 
Could workers or the environment be exposed during the production of 
the nanomaterial? 

Product manufacturing: 
Could workers or the environment be exposed when the nanomaterial is 
incorporated into a final product? 
Could the nanomaterial be designed to reduce or avoid risks? 

Use, reuse, and maintenance: 
What happens to the nanomaterial during the lifetime of the product? 
Could the product be designed to reduce or avoid risks? 

Recycling and disposal: 
Could workers or the environment be exposed to the nanomaterial at the 
end of the product's life? 

Source: GAO. 

[End of figure] 

Varied participants made three points. They said (1) that the United 
States lacks a coherent governance and oversight system for 
nanomaterials and nanotechnology, a lack they saw as potentially 
problematic for U.S. industry and innovation; (2) that the first 
nations to complete standards and risk-management systems will have an
advantage in supporting development of new nanotechnology products and 
companies; and (3) that the European Union's precautionary approach 
and required labeling reduces uncertainty in how such products are 
regulated in that market. 

One participant noted personal experience in international or global 
cooperative efforts over the past 8 years. These efforts included
participation in about 10 different efforts for nanotechnology. 
Another participant discussed one international effort at the 34-nation
Organisation for Economic Co-operation and Development's (OECD) 
Working Party on Nanotechnology: developing approaches for the 
responsible development of nanoscience and nanotechnology. We previously
reported (GAO 2013) that early and ongoing coordination with foreign 
governments in emerging areas before regulations are in place might 
facilitate international regulatory cooperation. 

10. Standards-development efforts are important: 

Lack of a unified system. Varied forum participants said that the 
current lack of a unified system to describe nanomaterials—-including 
naming conventions, definitions, and standards—-is a possible 
limitation on innovation efforts. Participants noted that a unified 
system: 

* is needed to create a database of nanomaterials, and if developed, 

* might enhance “capacity to scale up innovation ... [creation of] 
revenue downstream ... [and] conditions for international trade [and] 
security—-which are important [for] investors, citizens, and consumer 
groups.” 

Need for basic international standards. Additionally, participants 
said that basic standards can greatly facilitate the accumulation of a 
knowledge base that is necessary for greater transparency in markets—-
and can also facilitate progress in addressing EHS aspects of 
nanomanufacturing. One participant said that nanotechnology standards
have been issued by American standard-setting organizations for 
nomenclature and measurement, but that international standards-
development efforts have been more challenging. This participant was 
referring to developing International Organization for Standardization 
(ISO) standards. (see also inset on opposite page).[A] 

[A] As noted in Key View number 9, one forum participant mentioned 
having participated in about 10 different international or global 
standardization efforts for nanotechnology during the past 8 years. 

Some pointed to the risk that U.S. nano-innovators might have to contend
with other countries' taking the lead in developing international 
nanotechnology standards, leaving the U.S. behind. Negative outcomes 
could include (1) the development of international standards with 
relatively little input from the U.S. nanotechology community or (2) 
the development of a patchwork quilt of diverse national standards.
Such outcomes could make it harder for U.S. producers to compete in 
foreign markets. 

Lack of funding-—and a need to increase U.S. participation in 
international standards development. Participants stressed a lack of 
U.S. funding and time needed to participate in standards-development 
efforts-—in particular, international travel. 

Governments as well as the scientific community and the private sector 
have important roles to play in this regard because international 
standards can facilitate expanding international trade in 
nanotechnology-enhanced products. While the U.S. model of developing 
and setting standards reserves a larger role for leadership from non-
government stakeholders, U.S. government support for the scientific and
business communities' efforts can help avert negative outcomes. 
Importantly, multiple forum participants said that there is now a need 
to increase U.S. participation. 

Examples of international standards-developing organizations: 

* The International Organization for Standardization (ISO) describes 
itself as an independent network consisting of the national standards 
bodies of 162 countries—-and as the world's largest developer of 
voluntary international standards. 

* The International Electrotechnical Commission (IEC) provides a 
platform to companies, industries, and governments for developing 
international standards for electrical, electronic, and related 
technologies; each country has one vote. 

* The International Telecommunication Union (ITU) is the United 
Nations specialized agency for information and communication 
technologies. Its Telecommunication Standardization Sector produces 
ITU-T Recommendations (ITU-T Recs), which are standards defining how 
telecommunication networks operate and interwork. 

* The IEEE[A] Standards Association (IEEE-SA) brings together a wide 
range of individuals and organizations from over 160 countries to 
facilitate standards development and collaboration. 

[A] IEEE refers to the Institute of Electrical and Electronics 
Engineers. 

[End of section] 

Forum participants suggested two main considerations going forward: 

1. Continue U.S. investment in nanotechnology research, possibly 
targeting nanomanufacturing research: 

Continuing U.S. investment in fundamental nanotechnology research. 
Forum participants said that it is essential for the United States to 
maintain a high level of investment in fundamental nanotechnology 
research. This is because, as explained earlier: 

* while participants view the United States as the likely overall 
leader in nanotechnology R&D, certain other countries are now making 
significant investments in R&D–-and one is publishing large numbers of
research papers; and • ongoing research breakthroughs will drive the 
future of nanomanufacturing. 

Targeting some funding to early-stage research on nanomanufacturing 
processes. One participant emphasized that as nanotechnology 
increasingly moves into manufacturing, it may be important to
consider both (1) continuing funding for fundamental nanotechnology 
research and (2) targeting some funding to early-stage research on 
nanomanufacturing. 

As explained earlier, nano-innovators may need to both (1) develop a 
new technology or product—-an effort that typically begins with
fundamental research (or “early technology readiness levels”),[A] and 
(2) devise a new and potentially innovative process to manufacture
(and mass-produce) that product—an effort that may begin with basic 
engineering research (or “early manufacturing readiness levels”).[B] 

These two research efforts may often be intertwined. Early-stage 
research on nanomanufacturing processes would include conceptualizing 
innovative processes for eventually testing and mass-producing new
nanomaterials and nano-enabled products—-as well as developing these 
processes in a laboratory environment. 

[A] Early technology readiness levels describe the transition from
scientific research to applied research and proof-of-concept
validation; see GAO (2011b, 36). 

[B] Early manufacturing readiness levels range from identifying
basic manufacturing implications through developing a manufacturing 
proof of concept; see GAO (2010a, appendix II). 

2. Address challenges to U.S. competitiveness and other key issues: 

Challenges to U.S. competitiveness. As described earlier, participants 
identified challenges to U.S. competitiveness in nanomanufacturing—-
for example, gaps in U.S. support for innovation and lack of a U.S.
vision for a nanomanufacturing capability. Participants suggested that 
pursuing one or more of the following approaches might enhance U.S. 
competitiveness: (1) strengthen innovation across the economy, (2) 
promote innovation in U.S. manufacturing, and (3) design a grand 
strategy to achieve a U.S. vision for nanomanufacturing. 

EHS issues. Participants noted (1) limited EHS research, which makes 
predicting and managing risks difficult; (2) an underlying tension 
between advancing innovation and adopting regulation; and (3) the need 
for a revitalized, integrative, and collaborative approach. 

Uncertainty of data on R&D investment. Although forum participants 
viewed the United States as likely the current lead R&D-investor 
nation, two participants cited concerns about the reliability of 
international investment information. According to one of them, a 
pathway forward might include convening international conferences on 
public investment and other related data. 

International standards development. Forum participants said there is 
insufficient effort by the United States to participate in 
international standards development. They noted restricted budgets and 
an apparent low priority on international travel—and said that it is 
important to remedy this situation for conferences on international 
nanotechnology standards. 

Finally, the areas recapped here-—and future efforts to address them, 
if made-—may overlap; for example, achieving basic international 
standards could help in achieving more comparable international R&D-
investment data. Such overlap could serve as the basis for developing 
a coordinated framework for nanomanufacturing-related issues. 

[End of section] 

Appendix I: Capsules of four forward-looking profiles developed as 
background: 

We created four profiles, presented here in capsule form, as 
background reading for forum participants. Full profiles are presented 
in GAO (2014, 79-98; see also 75-78, 101-102). 

Capsule of profile 1: Nanotechnology and the future of the 
semiconductor industry. 

Semiconductors represent “the foundation of the electronics industry,” 
and semiconductor chips with nanoscale features (see figure below) are 
now pervasive. This technology is continuing to evolve. Global sales,
totaling $292 billion in 2012, may rise to $333 billion in 2016. 

Figure: Glass wafer with multiple semiconductor chips: 

[Refer to PDF for image: photograph] 

Source: Rensselaer Polytechnic Institute, Troy, New York. 

[End of figure] 

Semiconductor-industry tools are expensive; some cost, for example, 
$100 million each. 

As a result, some companies (U.S. as well as other nations' companies) 
partner with the College of Nanoscale Science and Engineering (CNSE) 
of the State University of New York. CNSE is a unique research, 
development, prototyping, and educational cluster for nanotechnology. 
Varied experts said that: 

* the United States is dominant in the design of new advances in 
semiconductors; 

* U.S. manufacturing in this area has declined (although some plants 
are located here); 

* U.S. policy changes to counter the trend might be initiated in areas 
such as tax policy and environmental regulation; and; 

* the United States does not have a strategy to assure U.S. leadership 
in the semiconductor industry. 

Some experts also expressed concerns about worker safety and the need 
to carefully manage waste products. 

Capsule of profile 2: Nanotechnology and the future of battery-powered 
vehicles. 

Nanotechnology is improving the advanced batteries that power hybrids, 
plug-in hybrids, and fully electric vehicles (EV). Such vehicles now 
represent about 3 to 4 percent of U.S. and worldwide auto markets, but 
some experts anticipate (1) a fast increasing market share (see figure
below), and (2) intense international competition. 

Although U.S. research developed the underlying technology, almost all 
such batteries are manufactured in Asia. Experts said that new U.S. 
policies could improve future U.S. competitiveness in this area—-
perhaps especially for new types of nano-batteries requiring new 
manufacturing processes. 

Experts also said little research has been conducted on potential EHS 
concerns associated with nano-enhanced batteries designed to power 
hybrids, plug-in hybrids, and EVs 

Figure: One view: Future market expansion for battery-powered vehicles: 

[Refer to PDF for image: illustrated line graph] 

Hybrids, plug-in hybrids, and fully electric vehicles, combined: 

Innovators: Up to 2.5%; 
Early adopters: 3% to 15%; 
Early majority: Over 15%, up to 50%; 
Late majority: Over 50%, less than 85%
Pervasive: 85% or higher. 

2013: 3-4%; 
2020: 10-15%. 
2030-2035: 50-70%. 

Source: GAO analysis based on (a) varied estimates and predictions 
from expert interviews and literature (Hirsh 2013; Price Waterhouse 
Coopers 2013), and (b) the cumulative diffusion of innovation curve 
suggested by Rogers (1962). 

[End of figure] 

Capsule of profile 3: The future of nano-enhanced concrete: 

Nano-enhanced concrete can potentially build longer lasting, better 
functioning roads, bridges, and buildings—-and may also be designed to 
convert polluting gases into less harmful substances by converting 
nitrogen oxides to nitrate ions, as illustrated below. Research is 
being conducted on the use of nano-materials to produce concrete with 
self-sensing, self-healing properties that would, for example, allow 
engineers to monitor bridges and roads remotely. 

Looking to the future, experts anticipated an expanding global 
construction market, but expressed differing views on U.S. global
competitiveness in nano-enhanced concrete. Positive signs for U.S. 
competitiveness include (1) a well-established U.S. research capacity
and (2) the competitiveness of the U.S. chemical industry, which can 
produce nanoadmixtures designed to strengthen concrete or otherwise 
enhance its properties. 

EHS issues are of concern for nano-enhanced concrete, in part because 
construction is labor intensive and performed outdoors. 

Figure: Nano-enhanced concrete in sculpture removes harmful pollutants: 

[Refer to PDF for image: illustrated photograph] 

Sources: GAO analysis (inset). Minnesota Department of Transportation 
(photo). 

[End of figure] 

Capsule of profile 4: The future of nanotherapeutics in medicine. 

Nanotherapeutics target drug delivery to specific cells, thereby 
reducing negative side effects. Few such drugs are currently on the 
market, but experts anticipate an increasing trend over the next 7 to 10
years—with more drugs for cancer and the introduction of drugs for 
infectious diseases, vascular disorders, and degenerative diseases. 
According to a recent research report (BCC 2012), the anticancer 
segment of the global nanomedicine market is expected to reach $12.7 
billion in 2016. 

Experts said that the United States is currently dominant in 
nanotherapeutic research, commercialization, and manufacturing, but 
added a caution about the future. Specifically, experts said that in 
the United States, R&D for nanotherapeutics is generally carried out
by small companies without the resources needed to support the drug 
development process of discovery, pre-clinical testing, clinical 
trials, and regulatory review-—which can average 15 years (see figure 
below). Thus, future U.S. competitiveness in this area will be 
affected by whether the nanotherapeutic industry, including small 
firms, (1) can secure sufficient funding, particularly for 
commercialization and manufacturing, and (2) will have clear 
regulatory guidelines. 

Turning to EHS issues, experts expressed somewhat differing views: 

* On one hand, nanotherapeutics experts did not see nanotechnology 
products as warranting more concern than other new technologies. 

* On the other hand, EHS experts emphasized the need to assess risks 
across the life cycle of nanotherapeutics. 

Figure: Drug development process: 

Drug discovery; Preclinical testing: 6.5 years; 
Clinical trials: 7 years; 
Regulatory review: 1.5 years. 

Source: GAO based on industry estimates. 

[End of figure] 

[End of section] 

Appendix II: A note on forum methodology: 

Our earlier report on the July forum (GAO 2014) was produced through a 
multiphase process. Three main phases included: 

1. selecting and inviting forum participants, who had a wide range of 
expertise and views, with the assistance of the National Academies; 

2. developing a pre-forum reading package that included four 
nanomanufacturing industry profiles (based primarily on expert 
interviews), and sending this to participants in advance of the forum; 
and; 

3. holding the forum, preparing an initial post-forum summary of the 
forum's discussions and submitting that summary to participants for 
review—then considering and, as appropriate, incorporating the 
participants' responses and comments. 

Regarding (2), above, we recognized that the profiles reflect the 
views of interviewees in positions to benefit from increased 
government funding (as well as government interviewees). We therefore 
encouraged forum participants to be aware of the interviewees' 
perspectives when considering these profiles, and our pre-forum 
communications to forum participants included a disclaimer to this 
effect. 

The Preface to this capsule report similarly highlights this issue 
with respect to forum participants' interests. Additionally, we
took steps to exercise due diligence and to understand forum 
participants' potential conflicts of interest. 

With respect to our presentation of international public investments in
nanotechnology R&D (see the figure on p. 8), available information did 
not meet our usual criteria for a conventional bar chart—partly 
because different countries use different definitions and partly 
because not all countries report such data publicly. However, 
consulting firms projected relevant figures, and notwithstanding 
quality issues, we felt it was important to convey the relative 
magnitude of public investments by some countries. We therefore used 
shading techniques to convey the lack of precision in the projections. 

We conducted our work in accordance with relevant sections of GAO's 
quality assurance framework. Additional information on our methodology 
is presented in GAO (2014, appendix V). 

[End of section] 

Appendix III: Transforming general purpose technologies: Examples 

Era: 9000–8000 BC; 
Event: Domesticated plants. 

Era: 8500–7500 BC; 
Event: Domesticated animals. 

Era: 8000–7000 BC; 
Event: Smelting of ore. 

Era: 4000–3000 BC; 
Event: Wheel. 

Era: 3400–3200 BC; 
Event: Writing. 

Era: 2800 BC; 
Event: Bronze. 

Era: 1200 BC; 
Event: Iron. 

Era: Early Medieval; 
Event: Waterwheel. 

Era: 1400s; 
Event: Three-masted sailing ship. 

Era: 1500s; 
Event: Printing. 

Era: Late 1700s–early 1800s; 
Event: Steam engine; Factory system. 

Era: 1800s; 
Event: Railway; Iron steamship; Internal combustion engine; 
Electricity. 

Era: 1900s; 
Event: Motor vehicle; 
Airplane; 
Mass-production, continuous-process factory; 
Computer; 
Lean production; 
Internet; 
Biotechnology. 

Era: Early 2000s
Event: Nanotechnology[A]. 

Source: Lipsey et al. (2005, 132). 

Note: Lipsey et al. (2005, 98) define a general purpose technology as 
“a single generic technology, recognizable as such over its whole 
lifetime, that initially has much scope for improvement and eventually 
comes to be widely used, to have many uses, and to have many spillover 
effects.” 

[A] “Nanotechnology has yet to make its presence felt as a general 
purpose technology, but its potential is so obvious and developing so 
quickly that we [Lipsey et al.] are willing to accept that it is on 
its way to being one of the most pervasive general purpose 
technologies of the 21st century” (Lipsey et al. 2005, 132). 

[End of table] 

[End of section] 

Appendix IV: The NASCENT center: 

The Center for Nanomanufacturing Systems for Mobile Computing and 
Mobile Energy Technologies (NASCENT) was founded at the University of 
Texas at Austin in 2012, with funding from NSF. Two key objectives are: 

* to create processes and tools for manufacturing nano-enabled 
components for mobile computing, energy, healthcare, and security-—as 
well as simulations for testing potential nanomanufacturing 
approaches; and; 

* to provide an ecosystem with computational and manufacturing 
facilities—for example, large-area wafer-scale and roll-to-roll
nanomanufacturing (see Morse 2011), as well as the university's 
resources, including faculty, staff, and students. 

The overall goal is to facilitate the rapid creation and deployment of 
new products and to mitigate the risks associated with the Valley of 
Death and the Missing Middle. 

A co-director of NASCENT told us that another goal is to use “10 years 
of NSF funding to develop the center infrastructure so it will ... 
(become] self-supported from industrial partnerships and other [non-NSF]
funding sources.” 

Center partners include: 

1. industrial partners—-such as toolmakers, materials suppliers, and 
device makers—-that will provide both technical and financial support; 

2. companies ranging from start-ups to well-established firms that 
will implement or adopt technology created by the center; and; 

3. “translational research partners” such as technology incubators and 
technology funds. 

[End of section] 

Appendix V: Abbreviations: 

CNSE: College of Nanoscale Science and Engineering (State University 
of New York, Albany): 

EHS: environmental, health, and safety (issues or implications): 

EIT: European Institute of Innovation and Technology (of the
European Commission): 

EV: electric vehicle: 

GPT: general purpose technology: 

IP: intellectual property: 

Li-ion: lithium-ion (batteries): 

NASCENT: Center for Nanomanufacturing Systems for Mobile Computing and 
Mobile Energy Technologies (The University of Texas at Austin): 

NIST: National Institute of Standards and Technology: 

nm: nanometer (one billionth of a meter or 10-9 m): 

NNI: National Nanotechnology Initiative: 

NNMI: National Network for Manufacturing Innovation: 

NNN: National Nanomanufacturing Network: 

NSF: National Science Foundation: 

OECD: Organisation for Economic Co-operation and Development: 

R&D: research and development: 

SBIR: Small Business Innovation Research: 

UNC: University of North Carolina: 

VC: venture capital: 

[End of section] 

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