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Home > Nanotechnology Columns > ONAMI > Getting our Groove Back in Manufacturing Innovation: Nanomaterials, Green Nanonotechnology and Policy Uncertainty

Skip Rung
President and Executive Director
ONAMI

Abstract:
The U.S. is losing its advanced manufacturing base and also stifling new technology innovation with increasingly wrongheaded and costly regulatory barriers. This is part of the reason nanotechnology has not been the commercial and job-creating success it should be. A focused enabling regulatory approach to green nanotechnology is a possible means of "bending the nano innovation curve up".

March 2nd, 2011

Getting our Groove Back in Manufacturing Innovation: Nanomaterials, Green Nanonotechnology and Policy Uncertainty

Recent news stories (e.g. "US Manufacturing Posts Strong Gains", WSJ 3/1/2011) report that manufacturing employment and output are rising rapidly in the U.S. and most European countries, with growth in China lagging. Maybe that is so, and maybe it is an inevitable correction, but when high-tech industry people look at what they know (e.g. all but the highest performance semiconductors, most semiconductor equipment, almost all displays and display glass, most electronic consumer products and components, most batteries, most solar cells, most advanced materials) the impression is sobering and consistent with the persistent US trade deficit.

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).

Post-November 2010, Washington DC swears it recognizes how vitally important entrepreneurs and innovation are, and that regulations will be reviewed for costs vs. benefits (if you believe for even a femtosecond that anything useful will come of that, call me about investing in my new flubber company). And of course, the crowd-pleasing soundbite "staple a green card to science and engineering advanced degrees" continues to be heard from politicians of both major flavors. Anyone currently attempting to keep a key PhD employee here (rather than be sent back to China to compete with them) is thoroughly sick and tired of hearing that empty promise.

If all that and the spectacle of politicians doing everything, anything, except address the impending public insolvencies hasn't made you suicidal, then I guess you're like the optimist in me that says 'policy uncertainty' in the face of what often seems like firm determination on the part of the U.S. government to undermine its own economy.

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 ???).

The A123 case fits a general science-based innovation paradigm (Fig. 1) that is important to understand. University materials research of a path-breaking nature is more easily transferred to startup/spinout companies, which are willing to take a risk (new technology * new application) on initial opportunities that are too small to interest large companies. Large companies come in later (and may pay well) when an opportunity is substantially de-risked and poised to grow rapidly, and they are indispensable for manufacturing scale-up and global market intelligence and distribution. The small company entrepreneur is willing to fail in order to win big, but the large company division manager is less willing to bet his career on something that could go wrong in many ways, including regulatory blockage.

Figure 1: Critical roles and needs in the nanomaterials innovation ecosystem


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.

Figure 2: At GN11 we're going to make a run at truly enabling green nanotechnology innovation


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.

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