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High-Tech Trends Have Global Effect

It seems that nanotechnologies are becoming integrated into every U.S. industry - but the nation does not have a corner on the "high-tech" market.

Oct/Nov 07
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The hottest emerging technology by far right now is nanotechnology, which isn't actually an industry but rather a multidisciplinary specialization that overlaps many industries, including most if not all of the 49 North American Industrial Classification System (NAICS) codes that AeA uses to define "high tech," plus many others not included in AeA's list. Nanomaterials (such as nanospheres, nanofibers, and nanotubes) are already being used in a growing number of consumer products as well as industrial applications. Development and initial commercialization of nanotools, which allow measurement and manipulation of matter at the nanoscale (one billionth of a meter), and nanodevices, which perform specific functions at the nanoscale, are already well under way.

A recent study by Lux Research, a New York-based market research and consulting firm specializing in nanotechnology and the physical sciences, found that U.S. corporations directly employed about 5,300 "white-coat" nanotech developers at the end of 2006, predicting that this number will grow to 30,000 in the next two years. In addition, the National Science Foundation (NSF) forecasts that nanotech will indirectly affect at least two million blue-collar jobs within a decade.

Lux Research also found that $12.4 billion was invested in nanotech R&D worldwide in 2006, and more than $50 billion worth of nano-enabled products were sold. The U.S., Japan, Germany, and South Korea were the leaders in nanotech, but China, India, and Russia are beginning to close the gap.

The Project on Emerging Nanotechnologies, a nonprofit group funded by various foundations and private donors, recently produced a mashup Google map of the United States showing the cities with the highest concentrations of companies, organizations, universities, and government agencies involved in nanotech. The top-two "NanoMetros" identified by the group were San Jose and Boston. Three other California cities - San Francisco, Oakland, and San Diego - and one other Massachusetts city - Middlesex-Essex - also made the list, along with Denver, Austin, Houston, and Chicago.

The National Nanotechnology Initiative (NNI), a U.S. government program that coordinates the nanotech-related work of 26 federal agencies, has seen its R&D budget increase every year since it began in 2001, now up to $1.4 billion for FY2008. NSF is the lead federal agency for NNI, overseeing operations of the National Nanotechnology Infrastructure Network, which includes more than a dozen partner universities throughout the country that provide access to nanotech R&D facilities for both academic and industry users.

Also part of NNI are five nanoscale science research centers operated by the Department of Energy at Brookhaven (NY), Sandia/Los Alamos (NM), Oak Ridge (TN), Argonne (IL), and Lawrence Berkeley (CA) national laboratories; plus intense nanotech research being conducted by the Department of Defense primarily through its Defense Advanced Research Projects Agency (DARPA) and through the research offices of the service branches. All military branches are undergoing technology modernization programs, investing in advanced communication technologies and weapons systems in which nanotech will inevitably play a major role.

The Joint Economic Committee report on nanotech predicts that as early as 2010, there will be "nanosystems" - assemblies of nanotools or nanodevices that function together to perform tasks; by 2015, actual manipulation of atoms to design molecules will be possible; and by 2020, nanotech could possibly reach what some scientists call "singularity" and take on a life of its own, using artificial intelligence far beyond the capabilities of its human creators.

"Since the path from initial discovery to product application takes 10-12 years, the initial scientific foundations for these technologies are already starting to emerge from laboratories," notes the report, which was signed by Senior Economist Joseph Kennedy. Since "as we go forward, an increasing proportion of investment in nanotechnology will come from the private sector," the report recommends that nanotech "be allowed to proceed as other transforming technologies such as chemistry, steam power, and electricity have done."

Just as nanotech is expected to become integrated into almost every industry and eventually permeate almost every aspect of daily life, so is globalism a fact of life for all high-tech companies.

Offshoring in the semiconductor industry has been taking place for decades, initially for lower labor costs in the assembly process, but now increasingly for complex fabrication and design work, with Taiwan and China the major chosen locations. Offshoring of software services, primarily to India, gained momentum about 10 years ago. A growing number of U.S. companies are outsourcing R&D work of all kinds to foreign countries as the quality of math, science, and engineering education has continued to improve overseas. China, for example, now annually awards four times as many engineering bachelor's degrees than the United States does.

High-tech imports to the United States exceed high-tech exports: $322 billion in imports compared to $220 billion in exports during 2006, according to AeA. Not surprisingly, the biggest trade deficit with any single country is with China. While U.S. high-tech exports to China more than tripled between 2000 and 2006 - from $4.6 billion to $14.1 billion - high-tech imports from China to the U.S. almost quadrupled - from $26 billion to $102 billion.

The largest market for U.S. high-tech goods is the European Union, with which the United States has a trade surplus ($46.1 billion in high-tech exports versus $33.4 billion in imports in 2006). The United States also has a trade surplus with its second-largest high-tech market, Canada ($30.1 billion in exports versus $11.7 billion in imports); but a deficit with its third-largest market, Mexico ($29.6 billion in exports versus 44.7 billion in imports). The countries of Central and South America, taken as a whole, could be considered the fourth-largest market with which the United States also has a trade surplus in high-tech ($17.1 billion in exports versus $3.1 billion in imports in 2006).

Globalism has blurred the boundaries between countries, however. Most major U.S. high-tech companies have overseas facilities, and foreign direct investment in the United States continues to increase as well. As noted in a 2004 AeA report on outsourcing, which still holds true, "In the global marketplace, companies need to have a physical presence in overseas markets or they cannot compete in those markets. Indeed, these jobs are not outsourced, but rather are necessary for companies to gain access to their customers."

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