Nanotech's Pitch for Megabucks

Worried that venture capitalists might balk at investing in new technologies that may not bear fruit for at least a decade, nanotech lobbyists enter D.C. with their hands out. Declan McCullagh reports from Washington.

WASHINGTON -- The U.S. nanotechnology industry may be young, but it's fast becoming an old hand at demanding its share of the federal pork barrel.

During one of the first nanotech policy events ever in Washington, an industry trade association clamored for billions of tax dollars in new spending.

For a bit of insider help, the Nanobusiness Alliance has turned to one of the savviest politicians around, who also happens to be a self-described futurist: former House Speaker Newt Gingrich. Gingrich, the politico who once wanted to hand laptops to poor kids, will serve as the group's honorary chairman.

Nanotechnology is the umbrella term for constructing materials at the molecular level. As another sign of the industry's increasing seriousness about lobbying Washington, the Nanobusiness Alliance, currently based in New York, will soon open an office in the nation's capital.

The Nanobusiness Alliance already has learned one of the most important lessons of Washington politics: When asking for money, stay relevant. In an announcement of the event, it played up an anti-terrorist theme: "Nanotechnology is already having a major impact on homeland security (and) disease detection...." (The event was co-sponsored by the Progressive Policy Institute, a centrist Democratic Party group whose parent organization was once headed by Sen. Joseph Lieberman of Connecticut.)

One person whom the Nanobusiness Alliance invited to speak at Thursday's panel discussion was Meyya Meyyappan, director of the Nanotechnology Research Center at NASA Ames and -- no surprise -- a big fan of more federal spending.

"If (corporations) know it's going to take 15 years, why are they going to invest?" Meyyappan said. "The role has traditionally come through government funding. That's a role, knowledge creation."

No critics of more government spending were invited to speak at the Nanobusiness Alliance panel discussion, held in the Capitol building, but that didn't stop them from slamming the idea.

David Williams, a vice president at watchdog group Citizens Against Government Waste, said in an interview: "We would consider that sort of thing corporate welfare. It's research the government is undertaking and spinning off to the private sector."

Williams said that government funding tends to flow to agencies such as NASA and private universities, which then patent technologies, and cash in by selling these patents to corporations.

Other critics say there's no need for Congress to spend tax dollars when there's overwhelming interest from venture capital firms and tech companies. The Nanobusiness Alliance website says, "Some of the world's largest companies, including IBM, Motorola, Hewlett Packard, Lucent, Hitachi, Mitsubishi, NEC, Corning, Dow Chemical and 3M have launched significant nanotech initiatives through their own venture capital funds or as a direct result of their own R&D."

The Foresight Institute, a nonprofit group in Palo Alto, California, that says it was "founded to help society prepare for nanotechnology," applauds more government spending.

Foresight President Christine Peterson said in an interview: "The fraction of federal funding going to the universities that result in products in the marketplace is not high. Even though the fraction is not high, it may be an excellent investment in the sense that the payoff is high."

Looking toward the future, Peterson said, "Eventually nanotechnology will bring up unique regulatory challenges." But she added: "It's not necessary today. There is no need to be concerned either way, if you're afraid of the regulation or if you want it."

Ben Polen contributed to this report.