It is a great honor to be here today. As some of the most disruptive technologies likely to emerge in the first half of the 21st century, nanotechnologies present an incredibly important topic. Experts gathered by the NSF predict the market for nanotech products and services will exceed $1 trillion in the US alone by 2015. Even if they are only 1/3rd correct, that represents over 3% of our current GDP.

With respect to Ed's opening question - are venture capitalists too short-term focused to adequately fund nanotech - I'd suggest that the American VC industry has its strengths and weaknesses, like everything else. Pessimism about VCs today is much like optimism about VCs in 2000 - both estimations are probably overblown. Remember first that VCs have not traditionally invested as much in long-range, high-risk, pre-competitive technology development, so the current climate may not represent a "broken" model as much as a return to normalcy. One thing I do know is that every other country on the face of the earth is desperately seeking to develop a similar market-based engine of growth, innovation and entrepreneurship. America's seed, angel and venture investors are the envy of the world and will remain critical elements of our economic and technology leadership in the years ahead.

That said, Ed is certainly correct in predicting that a good deal of today's VC industry is being impacted by the boom and bust of the late 1990s - either expecting unrealistically large and fast returns or unwilling to take good risks today following bad experiences over the past few years. And because the knock-your-socks-off, over-the-horizon nanotech applications, like those in biotech, require patient capital with a strong stomach for long-term risk, venture capitalists are more likely to put their money into more incremental advances.

And that, of course, will lead many to suggest government should step in. The federal government does indeed have an important and critical role in nanotech. Yet just because VCs aren't willing or able to fund every would-be nano-entrepreneur with an idea it does not mean government should. Nor could it. I would suggest the government's role in the research, development, and commercialization of nanotechnology includes 10 core elements.

First. Funding long-term basic research. Both to support high-risk research and to promote the education and training of future nanotech innovators, the federal government needs to invest heavily in promising technologies. And we are. The Bush Administration increased USG nanotech research 46.3% in its first two budgets - from $463.85M (actual) in 2001 to $678.7M (proposed) for 2003. In addition, government R&D programs such as the SBIR program and the ATP program at NIST try and help finance generic, pre-competitive enabling technologies.

Second. Coordinating efforts among federal and university research, to leverage synergies and avoid redundancies. That's why we aggressively support the National Nanotechnology Initiative and the great work in Nanotechnology at our federal labs such as NIST.

Third. Monitoring global developments and competitiveness implications. America is certainly not the only nation to recognize the promise and importance of nanotechnology. Japan and other leading economies in Asia are also investing heavily, while a recent EU report suggests EU nanotech funding is vastly under-counted and that the emerging field is "ours to lose." It will remain critical for business, government and financial leaders to follow international efforts closely - both to accelerate progress by sharing information and to assess America's global competitiveness. In this regard my office is in the process of preparing a report comparing global nanotechnology R&D. We are hoping to release our report in the spring.

Fourth. Helping everyone maintain realistic expectations. A great deal of nanotechnology is extraordinarily promising, yet there is also excessive hype. Irrational exhuberance… well we all know what that can lead to. Government needs to provide leaders with unemotional and unbiased assessments of the value and implications of technology, providing the accurate information so essential to efficient market operations.

Fifth. Helping ensure consideration of the social, legal and ethical implications. That is not to suggest that Bill Joy is right, that the future does not need us and grey goo will take over the planet. But technology is neither good nor bad - even nanotechnology. It can enable extraordinary things, and we all hope nanotech will allow for radical improvements in the human condition. Technology can also be misused or misunderstood. Nanotechnology innovations are most likely to enable progress when they are understood by the public and used responsibly, and the government can help here.

Sixth. Aggressively protecting intellectual property while also ensuring protections do not stifle research. If Patent and Trademark Office examiners have a hard time with complex biotechnology applications, image what self-assembling, self-replicating blood-based nanobots will do to them. Yet we will need a reliable and effective regime for processing and protecting intellectual property to ensure the investments are made and the commercialization can happen.

Seventh. Supporting academic access to the best and brightest students and researchers from around the world while protecting national security and encouraging more American students to pursue careers in technology. Stan Williams of Hewlett-Packard famously tells of a nanotech team where half his researchers - the younger half - are foreign nationals, while nano-entrepreneur Jim Von Ehr describes his team at Zyvex as overwhelmingly coming from abroad. America's openness to immigrants and incomparable research and business climates have ensured that the best and brightest technologists from around the world have come here to do their work.

Eighth. Working to improve nanotech networks. The nations most likely to win the nanotechnology race will be those most able to commercialize innovations, and that will take effective networks among entrepreneurs, seed and venture funders, academics and industry leaders. At Commerce the Technology Administration continues to work to bring industry and financial leaders together with researchers and academics, co-sponsoring conferences at UCLA and Rice University (so far), doing our best to help build nanotech networks.

Ninth. Purchasing goods and services where appropriate and needed. Government procures remarkable amounts of stuff. In 2003, we'll buy $52 billion in IT products alone, for example. Government procurement officers will need to stay abreast of developments in nanotechnology, ensuring we are early adopters of innovations that improve government services and returns on taxpayer investment.

And tenth. Ensuring reliable information in the markets so efficient investments can be made. The financial markets today seem to suffer from three overriding factors: (1) post-bubble reaction to excess capacity built in the late 1990s, (2) post-9/11 uncertainty over risk and reallocation of resources to security, and (3) reduced confidence in the reliability of corporate information after revelations of the accounting scandals of the late 1990s. This Administration is taking aggressive actions to promote security, punish those who broke the law and restore confidence in the reliability of corporate accounting.

We are committed to working together to promote American success in the research, development and commercialization of nanotechnology. I look forward to today's panel and to working with so many of you on this critically important technology. Thanks.