	Background and Discussion of How the United States Compares with Other Countries

According to forum participants, nanomanufacturing is an emerging  megatrend that will bring diverse societal benefits and new  opportunities—potentially creating jobs through disruptive innovation. Comparison for Nanotechnology R&D: Two Indicators

According to experts, the United States likely leads in nanotechnology  R&D today but faces global-scale competition—which one forum  participant described as a “moon race.” Two indicators of how the U.S.  compares with other countries are R&D funding levels and scientific  publications. semiconductors. Key Challenges Facing U.S. Nanomanufacturing

According to forum participants and experts interviewed, challenges to  U.S. competitiveness in nanomanufacturing include U.S. funding gaps,  significant global competition, and lack of a U.S. vision for  nanomanufacturing, among others. 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 an approach to manufacture the  new product at scale). The Missing  Middle occurs during analogous stages of the manufacturing-innovation  process, as illustrated below (fig.2). Vision for Nanomanufacturing

Multiple forum participants said that the United States lacks a vision or   However, one explained  strategy for a nanomanufacturing capability.that such a strategy could be designed by (1) proceeding from a vision or  goal to the examination of the social, technological, economic,  environmental, and political elements of the relevant systems and their  interactions with one another; (2) understanding the basic science,  engineering, and manufacturing involved; and (3) consulting the full range  of stakeholders. Other Competitiveness Challenges

Forum participants described further challenges to U.S. competitiveness  in nanomanufacturing, including  the earlier loss of an industry, as discussed above for lithium-ion  batteries—or even extensive prior offshoring in some industries, which  can be important, in part because, as one participant said: “when we  design here  ship  abroad, we lose this shop- floor-innovation kind of mentality” and  threats to U.S. intellectual property on the part of some other  countries or entities within those countries—which occur with respect  to both university research and private R&D on, for example,  manufacturing processes. Some Key Policy Issues Concerning Nanomanufacturing

Forum participants suggested the need to address policy issues in U.S.  research funding, challenges to U.S. competitiveness in  nanomanufacturing, and other areas, including environmental, health, and  safety (EHS) issues. CNSE is designed as a unique research,  development, prototyping, and educational public-private partnership for  advancing nanotechnology. The United States leads in  some areas of nanomanufacturing, but faces increasing international  competition. Challenges specific to U.S. competitiveness include, among  others: possible weaknesses associated with prior extensive offshoring in  the U.S. funding gap known as the Missing Middle,  some U.S. industries, and  the lack of a national vision and strategy for the United States to lead  or sustain a high level of competitiveness in global nanomanufacturing  markets in the years ahead. (Based on the Lux Research  report, The Recession’s Ripple Effect on Nanotech: State of the Market  Report. 2014. GAO-14-181SP. Persons, Timothy M. 2013. “Global Investment Profile in Nanotechnology— Comparing U.S. to Selected Economies.” Slide presentation at the  Comptroller General Forum on Nanomanufacturing.
Why GAO Did This Study

Nanotechnology has been defined as the control or restructuring of matter at the atomic and molecular levels in the size range of about 1–100 nanometers (nm); 100 nm is about 1/1000th the width of a hair.
The U.S. National Nanotechnology Initiative (NNI), begun in 2001 and focusing primarily on R&D, represents a cumulative investment of almost $20 billion, including the request for fiscal year 2014. As research continues and other nations increasingly invest in R&D, nanotechnology is moving from the laboratory to commercial markets, mass manufacturing, and the global marketplace. Today, burgeoning markets and nanomanufacturing activities are increasingly competitive in a global context—and the potential EHS effects of nanomanufacturing remain largely unknown.
GAO was asked to testify on challenges to U.S. competitiveness in nanomanufacturing and related issues. Our statement is based on GAO's earlier report on the Forum on Nano-manufacturing, which was convened by the Comptroller General of the United States in July 2013 (GAO 2014; also referred to as GAO-14-181SP ). That report reflects forum discussions as well as four expert-based profiles of nano-industry areas, which GAO prepared prior to the forum and which are appended to the earlier report.

What GAO Found

Forum participants described nanomanufacturing as an emerging set of developments that will become a global megatrend: a technological revolution that is now in its formative phases but that many knowledgeable persons—in science, business, and government—expect to burgeon in the years ahead, bringing new opportunities, “disruptive innovation,” jobs creation, and diverse societal benefits. They said that the United States likely leads in sponsorship and overall quality of nanotechnology R&D today as well as some areas of nanomanufacturing—for example, nanotherapeutic drug development and the design of semiconductor devices. But they cautioned that the United States faces global-scale competition and is struggling to compete in some industry areas (notably, advanced batteries). Challenges facing U.S. nanomanufacturing include (1) a key U.S. funding gap in the middle stages of the manufacturing-innovation process, as illustrated below; (2) lack of commercial or environmental, safety, and health (EHS) standards; (3) lack of a U.S. vision for nanomanufacturing; (4) extensive prior offshoring in some industries, which may have had unintended consequences; and (5) threats to U.S. intellectual property.
Key actions identified by our experts to enhance U.S. nanomanufacturing competitiveness include one or more of the following: (1) strengthen U.S. innovation by updating current innovation-related policies and programs, (2) promote U.S. innovation in manufacturing through public-private partnerships, and (3) design a strategy for attaining a holistic vision for U.S. nanomanufacturing.
Key policy issues identified by our experts include the development of international commercial nanomanufacturing standards, the need to maintain support for basic research and development in nanotechnology, and the development of a revitalized, integrative, and collaborative approach to EHS issues.