It is a great pleasure and honor to be here with all of you today:

- With Neal Lane, who as science advisor to the President had the foresight to champion the National Nanotechnology Initiative.

- With Richard Smalley, co-discoverer of fullerenes-Bucky Balls-and one of the founding fathers of the nano revolution.

- And with all of you here today who are pushing out the frontiers of science and technology at the nano-level and bringing new nanotechnology-enabled products and services to market.

- And let me offer my thanks to Sharon Yun from my staff who organized this workshop.

- I am thrilled and humbled to be with so many brilliant people.

And I am thrilled and honored to represent the U.S. Department of Commerce, its Technology Administration and the National Institute of Standards and Technology where our two Nobel Prize winners and their colleagues contribute to knowledge about the molecular level every day.

Now unlike many of you, I am not a scientist or engineer, so I don't bring great technical knowledge to my work in this arena. But I do bring three important tools: passion, position and politics.

- Passion-because I believe fervently in the economic potential and social advances that nanotechnology can bring to the citizens of the United States and the rest of the world;

- Position-in my dual positions as Under Secretary of Commerce for Technology and Chief of Staff for the Department of Commerce I can guarantee that the opportunities and challenges of nanotechnology are brought to the attention of Commerce Secretary Don Evans and other senior Administration officials in the White House and other Federal agencies; and

- Politics-the necessary evil, because to accomplish your objectives in Washington you have to understand the corporate culture of the town and know how to work within it to achieve your objectives.

I pledge to you today to use these tools to advance this Grand Challenge.

Nanotechnology is one of the rare and wonderful subjects in Washington where there is deep bipartisan agreement-from President George Bush to Senate Leader Tom Daschle, from former President Bill Clinton to former House Speaker Newt Gingrich. This coalition helps explain why nanotechnology has enjoyed significant R&D funding increases.

In a difficult war-time budget-as we struggle to meet funding priorities across government against the backdrop of our war on terrorism and need to bolster homeland security-President Bush has proposed a record $111.8 billion Federal investment in R&D for FY2003, an 8 percent increase over this year's spending. In particular, the President has proposed a 17 percent increase in NNI funding in FY2003-to more than $700 million in the coming year.

If successful in nano, this audience knows what that means:

- continued improvement in electronics for IT;
- higher-performance, lower-maintenance materials for defense, transportation, space, and environmental applications;
- and accelerated biotechnical applications in medicine, healthcare, and agriculture.

Throughout the day, you will talk in detail about the possibilities and state-of-play in theses areas.

Federal nano investments in FY 2003 will focus on fundamental nanoscale research, centers and networks of excellence, and on the supporting infrastructure.

Priority areas include:

- research to enable efficient nanoscale manufacturing;
- innovative nanotechnology solutions for detection of and protection from (CBRN) biological-chemical-radiological-explosive agents;
- the education and training of workers for future nano-based industries; and
- the NNI priority that you are focused on today: partnerships and policies to enhance industrial participation in the nanotechnology revolution.

It is essential that we bring together all the key stakeholders-government, industry, academia, and financiers-to see knowledge move quickly and efficiently from the laboratory to the marketplace.

Today my remarks will focus on three areas related to nanotechnology: opportunity, hype and hope, and responsibility.

First, opportunity. In the coming years, our substantial and sustained national investment will result in scientific and technical breakthroughs, technology transfer and commercialization.

These will, in turn, fuel economic growth and opportunity that will pay huge dividends for the health, security, and prosperity of the American people. Real families will be able to meet real needs. A child will get health care, a visit to the doctor will be prevented, a family will be able to afford to send their daughter on for her PhD in chemistry; a starving mother somewhere in the world will have food-for herself and for the baby she carries. In this field, as in every other, the bottom line for the U.S. Department of Commerce is creating the American jobs of the future based on American values.

This is critical: the Federal government is not the only player-or even the most important player-in this unfolding drama. State governments are undertaking initiatives to foster research, innovation, and commercialization, and American universities and companies are working feverishly to apply this knowledge to capture the economic benefits. I am most familiar with nano's implications for IT:

- Just this week, IBM announced it had successfully built and tested a transistor made from a carbon nanotube that is faster than today's fastest silicon-based semiconductors. And IBM knows how to take ideas from the lab to the market.

- Late last year, Intel announced plans to produce a TeraHertz transistor as early as 2005 based on a recent breakthrough in chip transistor design at the nano level. The TeraHertz chip would have 25 times the number of transistors as the top-of-the-line Pentium 4 and run at 10 times the speed, with no increase in power consumption.

- Last year HP announced that it had figured out how to use a chemical process to make grids of nanowires a few atoms thick, how to place molecules at the intersections of the wires, and how to manipulate the molecules to function like a microprocessor. Already, HP and University of California scientists have patented a process to pack a number of different functions into a single nanochip. HP says it could be making nanocomputers smaller than a bacterium in the next decade or so. Those of you who know Stan Williams know we should not doubt him.

As a result of developments like these, policymakers in Washington are beginning to understand what you already know: intelligence may be embedded everywhere. Everyone in anyplace-interconnected. We could create a "knowledge utility" that makes accessibility to knowledge and information as ubiquitous as our access to electricity-a system that's reactive, adaptive, intuitive and personal.

One of my staff joked the other day about how nice it would be to have products with embedded intelligence that guide you in their assembly. Like when you're putting together a child's bicycle at 2:00 am on Christmas Eve. My Assistant Secretary for Technology Policy, Bruce Mehlman-who has a REAL vision for the future-responded that this vision was too limited.that the real promise of nanotechnology is in self-assembly-so that we can just TELL the bicycle to assemble itself.

Now, my second point. Maybe this sounds like more-than-a-little hype to some of you. I appreciate and agree with the notion that we should not be seduced by nano and allow it to become an ill-fated bubble. We've all seen seductive predictions about the economic promise of nano. Let's keep them in perspective. Near term developments are most likely to be incremental, not fundamental. Nano's potential is likely to be more about the future of my daughters than my own future. So as a policy person, I try to separate hype from hope. However, as a student of politics, I also must confess that often the melding of hype and hope has an upside-hype and hope end up fueling the social passion that forms our politics. It gets budgets passed. It makes things possible for all of you. Without some passion in the public square, we will not achieve the potential that nanotechnology has to offer. We will not maintain American leadership.

In 2000, the United States formally launched the National Nanotechnology Initiative (NNI). Like the shots fired at Lexington in 1776, this shot was heard 'round the world. The NNI was translated into dozens of languages. Countries around the globe have responded with their own nanotech initiatives. The National Science Foundation estimates that global governmental spending on nano R&D is about $2.2 billion. Today the United States accounts for a little more than a quarter, Japan about one-third, and Western Europe about a fifth. Today there is excitement. We lead the world.

Let us channel that passion to fire a new generation of young scientists-young scientists who want to achieve the miraculous nanoscale dreams. Ignite the imagination of a generation, without selling the country a bill of goods. Ignite the passion of policymakers to see this is a long-term national priority.

And finally, my third point: responsibility. I mentioned I had young kids. Now let me steal a line out of this Spring's blockbuster movie, Spiderman:

"With great power comes great responsibility."

If we are correct about the profound and transforming potential of nanotechnology, then we must be as concerned about the societal, moral and ethical questions as we are with the opportunities and benefits.

We must pay attention to these issues because it is both the right thing to do and the necessary thing to do.

Nanoscience and nanotechnology-especially in combination with bio-, info- and cognitive technologies-have the power to unleash human potential. It is not inconceivable that these technology could truly achieve the miraculous: making the blind see, the lame walk, the deaf hear; curing AIDS, cancer, diabetes and other afflictions; ending hunger; and even supplementing the power of our minds, enabling us to think great thoughts, create new knowledge, and gain new insights.

But these powerful technologies can be put to inappropriate uses and may create moral and ethical dilemmas beyond those we struggle with today. In the hands of terrorists, these technologies could be used to injure or kill millions. They could be used to pierce our privacy-monitoring our communications, movements and associations. They could render all current encryption technologies powerless to protect national secrets or our personal privacy.

Some of the advances may offer more ambiguity in their potential. They may offer us the ability to enhance our human senses and capabilities. Beyond offering sight to the blind and hearing to the deaf, we may become attracted to implanting accessories such as data storage devices hard-wired to our brains. We may not be satisfied with "regular" 20/20 vision, opting to replace our eyes with electronic sensors that offer telescopic or microscopic vision, or allow us to see in infrared or ultraviolet spectrums. With new nano-bio-information technologies, we may be able to enhance our human capabilities by customizing our DNA to give us superior intelligence, strength, speed or endurance-creating what Wired magazine calls "robosapiens."

On the one hand, these advances seem to offer much promise. On the other hand, they represent a departure in human development. And they also could possibly create a new societal dividing line between nanotech haves and have-nots. Imagine the advantage to those with superior mental and physical prowess.

These are issues that we cannot afford to wait to deal with. Our social and governmental institutions do not react quickly to change. So we have to start thinking about them now.

Those who created the NNI had the foresight to recognize the importance of these considerations and built into the program a component to consider the social, ethical, legal, and cultural implications of nanotechnology. We must accord these issues a level of attention proportionate to their importance.

From an economic perspective, we need to address these issues if we expect the market to accept and embrace technologies that could profoundly change our lives and our world. As throughout history, recently we have seen technological advances run into social resistance: genetically modified organisms, so-called Frankenfoods, cloning. Sometimes these forces can act to delay or prohibit the entry of these technologies into the marketplace.

To this end, we are reviewing options at the Commerce Department for the establishment of an external advisory committee focused on these issues as they relate to the department's scientific, technological and policy research efforts. I encourage each of you, from every sector-government, industry and academia-to walk this path with us.

Let me close with this: I am a steward. I will pledge to be a passionate one. Together we can harness the hype.realize the hope.wrestle with the ethical.and maintain American leadership in the 21st Century.if we succeed in your purpose today. So I wish you luck and God speed in your work. Thank you.