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Economic impacts (2002 – 2022) and the US National Nanotechnology Initiative (NNI)

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Lynn L. Bergeron’s and Carla Hutton’s December 27, 2023 posting on The National Law Review announced a new report from the US National Nanotechnology Initiative (NNI), Note: A link has been removed,

On December 5, 2023, the National Nanotechnology Initiative (NNI) released a report analyzing the economic impact of federal investment in nanotechnology from 2002 to 2022 [emphasis mine]. The report states that NNI selected this timeframe because it was codified by the 21st Century Nanotechnology Research and Development Act in 2003, and thus the range covers its entire existence. The report examines the impact of public investment, growth and trends of the market, and the evolving understanding and application of nanotechnology in the United States. It also provides key data for evaluating NNI’s ability to fulfill its mission and illustrates NNI’s successes to date.

NNI notes that in 2022, the U.S. Census Bureau released data from its 2017 Economic Census, and data in the classification code of Nanotechnology Research and Development (R&D) revealed that more than 3,700 companies, employing more than 171,000 people, reported $42 billion in annual revenue and $20 billion in employee salaries. According to NNI, these numbers “suffered from a limited scope, as the Bureau only included companies that self-identified as primarily being in the business of nanotechnology R&D.” To understand better the complete picture, NNI commissioned the Parnin Group to conduct a more complete economic impact analysis. [all emphases mine]

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You can find the more conservative claim of a $42 billion impact on the US economy in this November 28, 2022 NNI post by Mike Kiley. This year’s December 5, 2023 NNI post by Mike Kiley updates the numbers based on a new report,

An independent study focusing on the aggregated revenues of a select list of nanotechnology companies has estimated that the 2022 economic impact of nanotechnology on the U.S. economy was between $67 billion and $83 billion and close to a trillion dollars over the past two decades . This dwarfs the U.S. Government’s investment of around $40 billion over that same timeframe, which corresponds to the nation’s prioritization of the field through the National Nanotechnology Initiative (NNI).

The NNI investment has been used to explore the potential of nanoscale science, to capture societal benefits of nanotechnology, and to establish and sustain U.S. leadership in this critical field, both scientifically and economically. While it is difficult to fully capture the economic impact of the NNI’s sustained focus, these numbers hint at the tremendous multiplier effect that nanotechnology investments have had on the economy and the Nation.

As impressive as these numbers are, they only represent a relatively small number of companies that are clearly classified as nanotechnology. This limited approach ignores the field’s critical supporting role in several large commercial sectors. Therefore, the study also explored the impact of one closely related industry – microelectronics and semiconductors – to provide anecdotal evidence of the full magnitude of nanotechnology on the nation’s economy.

Examining the impact of the addition of the microelectronics and semiconductor industry to the study resulted in an estimate of $268 – 297 billion in 2022 alone. While significantly higher than the initial analysis, the authors recognized that this estimate still does not capture the full scope of the nano-economy, since microelectronics and semiconductors are only one of many commercial areas that substantially benefited from the nation’s leadership in the field.

Zooming in on the Not-So-Nano Numbers

In late 2022, the U.S. Census Bureau released data from its 2017 Economic Census. In the classification code of Nanotechnology Research and Development (R&D), the data revealed that over 3,700 companies, employing more than 171,000 people, reported $42 billion in annual revenue and $20 billion in employee salaries. As noted in a previous NNCO blog post , released on Nov. 28, 2022, these numbers also suffered from a limited scope, as the Bureau only included companies that self-identified as primarily being in the business of nanotechnology R&D. This limited scope led to a desire to better understand the full picture.

In early 2023, the NNI commissioned the Parnin Group (Alexandria, VA) to conduct a more complete economic impact analysis of nanotechnology to the U.S. economy . To conduct this analysis, the report identified a variety of nanotechnology products, including nanomaterials, intermediate nanotechnology products, and finished products in the marketplace. These products were organized into four categories: (1) core nano (e.g., carbon nanotubes), (2) nano tools (e.g., nanoscale etching tools), (3) integrated nano (e.g., mRNA vaccines), and (4) nano-enabled (e.g., pharmaceuticals). Once products and their parent companies were identified, Parnin examined Bureau of Labor Statistics data, value-chain analysis, product categories, public companies’ Securities and Exchange Commission filings, and patent filings to establish the collective economic value produced by these companies.

Clearly, capturing the economic impact of nanotechnology is not trivial. Products used every day are enabled by nanotechnology, but “nanotechnology” is not seen in the packaging of some of the most ubiquitous items in our lives, like a smartphone, e-reader, or television. Companies and products seldom draw attention to nanomaterials used to make them, for various reasons, including protecting proprietary formulations and practices. As a result, many large companies and related commercial areas – including microelectronics and semiconductors, healthcare, pharmaceutical production, oil and gas refining, and cosmetic products – that have operations and products in the nanotechnology space, but not exclusively so, were excluded from this economic analysis, leading to conservative estimates of the economic impact of nanotechnology.

The report explored the omission of these major areas through an analysis of nanotechnology’s contribution in one of these sectors: microelectronics and semiconductors. While it represents one of the clearest examples of how nanotechnology is used to drive the U.S. economy, the microelectronics industry was mostly excluded in the initial analysis since, historically, it has been unclear what percentage of companies’ portfolios were related to nanotechnology. However, by 2022 every competitive product in the sector features nanoscale dimensions created through nanotechnology tools, creating confidence that this area can defensibly be included in an analysis of the nano-economy.

As indicated earlier, when the microelectronics and semiconductor segments were included, the estimated impact jumped to between $268 billion and $297 billion annually. While other sectors are not as clearly connected to the field of nanotechnology, they are a part of the story and this exploration provides a glimpse into how sizeable the field’s impact might be.

Caveats and nuances abound, because seeing the impact of nanotechnology to the U.S. economy would be like seeing a 10-nanometer object in the palm of your hand; it is there, but you need special tools to see it! And regardless of the exact number, the message is clear: The United States’ leadership in the field has certainly paid off.

Report: Assessing the Economic Impact of Nanotechnology in the United States

The report (title page: Economic Impact Analysis: 20 Years of Nanotechnology Investments) covering 2002-2022 is relatively short, 56 pp. in the print version or 57 pp. in the PDF.

Eye-opening to me, was that the NNI never included semi-conductors and micro-elecronics in its previous economic analyses. Pretty significant omission.

I have no background in economics and so, much of the report flew over my head. However, I am a long time (and experienced skeptic) and can’t help suspecting that everyone (especially the client, in this case, the US government) is much happier with these new numbers. Lest we forget, the NNI was signed into existence by a Democratic president, Bill Clinton and the administration is now led by another Democratic president, Joe Biden. As well, this report was released just in time for 2024, an election year.

While I think there might have been a little over enthusiasm in the estimates, the report seems to bear out the notion that nanotechnology is increasingly a foundational element of modern technology and products.

US National Nanotechnology Initiative publishes 2018 US President’s 2018 budget request

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The US National Nanotechnology Initiative has made its budget request for 2018 according to a Dec. 5, 2017 anouncement by Lynn L. Bergeson and Carla Hutton at the Nano and Other Emerging Chemical Technologies blog on the JD Supra website (Note: A link has been removed),

On November 30, 2017, the National Nanotechnology Initiative (NNI) published a supplement to the President’s 2018 budget.  The supplement also serves as NNI’s annual report and summarizes the progress made in achieving NNI’s goals, the research and development (R&D) activities and plans of the participating agencies, and the agency investments in each program component area.  The President’s 2018 Budget requests $1.2 billion for the NNI, “a continued investment in support of innovation promoting America’s competitiveness, economic growth, and national security.”  The NNI investments proposed for 2018 reflect an emphasis on broad, fundamental research in nanoscience to provide a continuing pipeline of new discoveries that will enable future transformative commercial products and services.  …

The November 30, 2017 NNI Supplement to the President’s 2018 Budget can be found here. Click on the download button (or go here) for the full supplement which includes explanations for the initialisms, e.g., PCA, STIR, etc. and sections such as this about key points,

Key Points about the 2016–2018 NNI Investments

• Reductions in overall NNI investments for 2018 relative to 2016–2017 and previous years are consistent with the goal of the President’s 2018 Budget to prioritize Federal resources on areas that industry is not likely to support, over later-stage applied research and development that the private sector is better equipped to pursue.

• The actual NNI investments reported by the participating agencies for 2016 ($1.56 billion) are significantly larger than 2016 estimated investments published in the 2017 Budget ($1.43 billion) and 2016 requested investments published in the 2016 Budget ($1.50 billion). This change is due largely to the fact that an increasing proportion of agencies’ nanotechnology investments are coming from “core” R&D programs, where the high success rate of nanotechnology-related proposals cannot be anticipated in advance.

• Total funding for PCA 1, Nanotechnology Signature Initiatives and Grand Challenges, for 2018 (nearly $200 million, representing over 16% of the NNI total) reflects the emphasis on focused investments in R&D that advances interagency cooperation and public/private partnerships in support of national priorities, as a key part of the overall NNI funding strategy.

• The NNI’s Nanotechnology-Inspired Grand Challenge for Future Computing is a new investment category in the President’s 2018 Budget, included for the first time under PCA 1. This challenge helps to address renewed international competition for U.S. leadership in semiconductor manufacturing and downstream information technology industries. For 2016, agencies are reporting over $140 million in investments under the NNI budget crosscut (including related research under the Nanoelectronics NSI) in this sector, which is critical for both national security and economic competitiveness.

• The increase in the percentage of total NNI investments in PCA 2, Foundational Research (from 36% in 2016 to nearly 40% in the 2018 Budget) reflects the Budget’s focus on supporting early-stage R&D, and is consistent with calls by NNI advisory bodies to maintain a pipeline of basic research that will lead to the innovations of the future.

• Proportional NNI investments in PCA 3 (Nanotechnology-Enabled Applications, Devices, and Systems) hold steady at about 24% of the total NNI investments for 2016–2018, down slightly from 25% in 2015.

• NNI agencies continue to provide consistent, proportional funding for PCA 4 (Research Infrastructure and Instrumentation) for 2016–2018, at 15–16% of the NNI total. The 2018 request ($179 million, representing about 15% of the NNI total investment) includes sustained support for NSF’s National Nanotechnology Coordinated Infrastructure network of university-based nanotechnology user facilities. The President’s 2018 Budget for DOE requests continued support for three of the original five Nanoscale Science Research Centers. PCA 4 also includes research to develop novel or improvedinstrumentation, which is critical to continued progress in nanotechnology and to maintain U.S. competitiveness internationally.

• PCA 5 (Environment, Health, and Safety—EHS) investments are a key element of the NNI’s strategy to ensure responsible development of nanotechnology. For 2016–2018, the proportional research investments reported under PCA 5 (see Appendix A for definitions) are approximately 6% of the NNI total for 2016 and 2017, and 5.5% in the 2018 Budget. In addition to the PCA 5 investments, some research reported under other PCAs (e.g., PCA 1 and PCA 4) also contributes to the overall EHS research portfolio.

• The return of the Department of Justice’s National Institute of Justice (NIJ) to the NNI budget crosscut in the 2018 President’s Budget is another example of where nanotechnology innovations initially funded by basic research agencies are now coming to fruition in R&D programs focused on applications, devices, and systems that directly contribute to national priorities.

• Investments in SBIR and STTR funding by the participating agencies, reported outside of the formal NNI funding crosscut tabulated in the budget tables shown above, play a critical role in transitioning nanotechnology innovations into products for commercial and public benefit (NNI Goal 2), as discussed below. [pp. 14-17 (print) pp. 22-25 [PDF)]

Happy reading!