Defense and National Security Nano, Nanomaterials, and Nanotechnologies

Yushchenko Offers Technological Aid to Peres

2006-10-06T14:01:00.000-05:00

Here is another take on the level of importance placed by Israel on nanotechnology. Smart people, indeed!

Best,

Nanoguru.

Yushchenko offers technological aid to Peres

Israeli vice premier, Ukrainian president meet in Berlin, discuss collaboration on nano-technology in fight against terror

Ronny Sofer

Published 10.03.06, 23:05

BERLIN – At a meeting in Berlin Tuesday, Ukrainian president Victor Yushchenko offered Israeli Vice Premier Shimon Peres his cooperation in the development of missiles and satellites, in the shadow of his country’s past development of missiles for the former Soviet Union.

Peres in turn offered Yushchenko his cooperation in the nano-technology field and in investments in the “Peace Valley”. Yushchenko will head an economic committee that will visit Israel on November 7.

After the collapse of the Soviet Union, about 200 nuclear soviet missiles could be found in the Ukraine. The missiles and nuclear heads were returned to Russia, except for 12-20 missiles which ‘disappeared’ and were apparently transferred secretly to Iran in an illegal deal.

These missiles were thought to have been used by Iran in the development of the country’s “Shihab” missiles.

Peres and Yushchenko met at Peres’ hotel and discussed the development of nano-technology in the struggle against world terror. Yushchenko expressed interest in the idea of a possible collaboration on the subject.

Peres also offered the Ukraine to cooperate in the “Peace Valley,” set to encompass the area between the Red Sea in the south and the

Yarmuch River in the north.

The project is expected to include a channel that will connect the Red Sea and the Dead Sea, advanced industries areas and tourism projects in which three countries – Israel, Jordan and the Palestinians would cooperate. Hundreds of millions of dollars are set to be invested in the huge initiative by international bodies. Former United States President Bill Clinton is currently contemplating the possibility of heading the project.

Peres told Yushchenko that the "Peace Valley" initiative is set to be launched next year, and added: "The development of peace will be carried out by economic means, after the diplomatic means have failed." Yushchenko, on his part, expressed interest in contributing to the subject.

Peres: Nano-technology will Beat Rockets

2006-10-06T13:51:00.000-05:00

Even Israel recognizes the importance of nanotechnology. What Mr. Peres does not say is that nanotechnology can certainly be used for offensive capabilities!

We (Americans) all know that the most notorious spies originate not from Russia, or even erstwhile Soviet Union, but from France and Israel. Now, do we not?

Best,

Nanoguru.

Peres: Nano-technology will beat rockets

Vice premier concludes Germany visit, where he was awarded prestigious peace prize, offers to promote negotiations with Palestinians through financial endeavors

Ronny Sofer

Published 10.05.06, 10:08

GERMANY – Nano-technology is the key to Israel’s defense in future armed conflicts, Vice Premier Shimon Peres told Ynet in an interview Wednesday at the conclusion of his visit in Germany .

“The missiles threatening Israel and the terrorists threatening to hurt the people of Israel should be handled using weapons that will be developed by the technology of the future, nano-technology. This is my lesson from the war, and I’m operating today, as I always have, with a vision in a bid to change the realities of the Middle East,” Peres said.

Peres was in Germany to receive a prestigious prize, awarded to him for his efforts to promote peace in the region. in the interview, the veteran politician spoke about the conceptual revolution Israel and the Israeli government need to undergo in their relations with the countries of the region. He claimed that in light of the current reality, the internal strife within the PA and the difficulties in promoting the Road Map plan, peace should be pursued through economic means.

“The peace process should move faster now in the economic route. We have to admit that we failed in finding a resolution through diplomacy or wars,” he stated.

German support

Peres reported that during his visit he succeeded in enlisting Germany’s support for his Peace Valley enterprise, a project set to be established as a joint initiative of Israel, Jordan and the Palestinian Authority. The Germans also promised to invest in developing an industry area near Jenin, a project that was suspended at the beginning of the intifada.

The vice premier reiterated his belief that economy would lead the way to change in the region.

“Government can’t invest funds, but private investors are looking for international investments, and a Jordanian-Palestinian-Israeli cooperation can certainly be successful, and constitute a mile stone for peace,” he said.

Optimism needed

When asked whether the failures of some of his past visions, like the Oslo Accord, did not demoralize him, Peres said: “We ruin the solutions with our own hands. Look at the agreement me and Yasser Arafat reached in London in 1991. Who destroyed it? Wasn’t it us, with our own hands? What do I get out of all the skeptics? We have to be more optimistic and find solutions like the Peace Valley.”

“This isn’t just another vision,” he continued. “I’m accused of being delusional, but I proved myself… I’m not a dreamer, I’m a man of action. I’ve proven this my entire life. My credit is for actions, what seems imaginary today, will make Israel proud tomorrow…” he concluded.

China's Nanotechnology Gains Have U.S. Looking Over Its Shoulder

2006-10-05T15:46:00.000-05:00

Here is an article that appeared on The Wall Street Journal website on September 27, 2006.

It serves us well, also, to read the Battelle Report entitled “China Gaining Ground in Global Head and Brains Race.”

Here is another piece of news regarding China and the extent the Chinese “businesses” (read: the Chinese government) go to acquire technological know-how and secrets: Stealing a Head Start - Trade Secrets Lost to Students, Businessmen, Researchers.

Best,

Nanoguru.

China’s Nanotechnology Gains Have U.S. Looking Over Its Shoulder

By ANDREW BATSON
September 27, 2006

BEIJING – China is rapidly catching up to the U.S. in nanotechnology, the field of working with extremely small objects, a visiting U.S. official said. That success could hold lessons for U.S. policy makers seeking to maintain a competitive edge in scientific research.

“China is one of the players that is gaining on us,” said Robert Cresanti, undersecretary for technology at the U.S. Department of Commerce, in an interview yesterday. “We are wise to take a look at what they are doing that’s been successful, and see how it might apply to improve our system.”

Mr. Cresanti, who is in Beijing to meet with Chinese policy makers, said China’s progress was apparent during his visit. “We saw labs today full to the rafters with scientists and machinery,” he said. There has also been a dramatic increase in the quality and quantity of papers on nanotechnology published by Chinese scientists, he added.

Nanotechnology gets its name from the nanometer, which is one-billionth of a meter, or about 1/100,000th the width of a human hair. The term refers to the manipulation of materials at very small scales, where they start to take on unusual physical properties. Many governments have focused on the technology because it could lead to breakthroughs in areas such as enabling tiny medical devices that could enter human cells and building superstrong materials from novel combinations of molecules.

This year, the Chinese government released a national plan for scientific development that calls for raising spending on research and development to equal 2% of economic output by 2010, from just above 1% in recent years. The plan names nanotechnology as a major priority, calling it an area where China may be able to “leapfrog” wealthier nations.

In a report on nanotechnology released this week, the U.S. National Research Council, a private advisory group, echoed Mr. Cresanti’s worries, writing that “the U.S. lead is facing significant and increasing international competition.” The group said Japan and the European Union are each spending in the order of $1 billion annually on nanotechnology research, which is comparable to the outlay in the U.S.

By comparison, Lux Research Inc. has estimated China’s funding for nanotechnology at $250 million in 2005.

Mr. Cresanti characterized Chinese nanotechnology research as shorter-term and more narrowly focused than the foundational research going on in U.S. labs, but said: “We can learn from each other.” He said Chinese researchers work more closely with industry and tend to be more focused on developing technologies to solve specific commercial problems.

While the direction of research in the U.S. is determined largely by private institutions, China’s rapid development in the field has been tightly orchestrated by its government.

Policy makers are trying to shift China’s economy away from its historic reliance on low-cost manufacturing and toward technology and higher-end industries.

Write to Andrew Batson at andrew.batson@dowjones.com

Next up: Desktop nanofactories that can pump out cars as well as nano weapons

2006-09-22T11:30:00.000-05:00

The following is my post in response to Tim Harper’s blog post: http://www.cientifica.com/blog/mt/2006/09/nanospam.html in reference to the entitled article. (I do not know why Tim calls the Center for Responsible Nanotechnology the Center for “Irresponsible” Nanotechnology. I feel that he is only doing a disservice to the community by doing so. Sorry, Tim!)

Also, we have not yet caught the perpetrators of the 2001 anthrax attacks, lest we have a memory lapse. It only reinforces my contention that it is, unfortunately, very easy to manufacture these deadly pathogens and toxins.

Tim:

I agree with you that Drexelerian “nanobots” are quite some time away from becoming a reality. However, the fact remains that the amalgamation of nano and bio could be either a boon, or a bane. It could deal a terrible blow to the Humanity from a weapons viewpoint.

We (the U. S.) already have an issue with the detection of biological species coming into the country via the airports. If you could envision nanobioweapons, then the outlook of detection gets significantly less-than-stellar. In that context, that article to which you referred should ring alarm bells all over the world. I can tell you that I have personally worked on such projects (for detection and neutralization) with absolutely incredible results. However, I am certain that the same technology could be used in the opposite direction.

We are currently worried the most only about the spread of nuclear weapons; but these nanobioweapons surely pose a clear, present, and imminent danger to society. Look, all it takes are decent biologists and chemists to whip up a concoction of the “gray goo,” which is not only undetectable at the airports, but their results are also insidious and devastating. Can you envisage all the first-responders and medical professionals, who can become infected with the pathogens (potentially mutable and very communicable) and the diseases’ spreading rapidly by subsequent infection of others? Almost all the “developing” (and certainly the “developed” countries) have the requisite skills to enable this program. The apocalyptic picture is certainly not pretty.

What is your take on it?

Next up: Desktop nanofactories that can pump out cars as well as nano weapons

Melbourne, Sept 22: The potential applications of nanotechnology are limitless, but experts warn that these getting into the wrong hands could be scary.

Mike Treder from the think tank, Centre for Responsible Nanotechnology (CRN) in New York claims that within 15 years, desktop nanofactories could pump out anything ranging from a new car to a sophisticated nanoweapon.

He warns that though the technology could help solve problems like world poverty, it could at the same time wreak economic and social chaos. He says the society needs to start preparing for this brave new world.

“It’s the biggest challenge we’ve ever faced as a species,” ABC quoted Treder as telling a gathering of Australian scientists.

CNR is a non-profit organisation which aims to raise awareness about the benefits and dangers of molecular manufacturing, the precise assembly of products atom-by-atom.

Treder says that researchers are currently working on building molecular-scale machines that could eventually move atoms around to make consumer products like cups and chairs to cars and house bricks.

He says that in less than 15 years raw materials like carbon would be used in the nanofactory, where atoms would be rearranged to make products according to programs downloaded from the internet.

He warns that that though such desktop nanofactories could eliminate poverty and starvation in developing nations, and provide tremendous medical benefits, society needs to guard against its potential risks.

Treder says that CRN is concerned that these desktop nanofactories would lead to a nano “arms race” in which hard-to-detect nanoweapons could be designed, manufactured and tested much quicker than they are today.

“Imagine a suitcase filled with billions of toxin-carrying flying robots that could be released anywhere to target a population. You could make a suitcase full of these things overnight for a few dollars,” he said.

The mass production of consumer goods by private desktop factories could also trigger social chaos due to economic disruption, says Treder.

“If I can make my own car at home for a couple of hundred dollars with a design downloaded from the internet that means I’m not a customer of the auto dealer down the road.”

Waste from such easy manufacturing, or nanolitter, is another issue that needs to be thought about, he says.

“If someone could send you a product online that you don’t want but they just make it pump out of your nanofactory, how are we going to prevent that?”

All theses argument raises the question of whether nanotechnology will be building a better future or destroying the world.

– ANI

Best,

Nanoguru.

Putin Focuses on Nanotechnology in Annual Address

2006-09-09T16:21:00.000-05:00

It seems that Vladimir Putin is serious about nanotechnology (perhaps, fashioning himself after Mr. George W. Bush).

Best,

Nanoguru.

WRAP-UP: Putin focuses on demographic, social issues in annual address

MOSCOW

May 10, 2006

(Prime-Tass)

In his annual state of the nation address to both houses of parliament on Wednesday, Russian President Vladimir Putin focused on social and demographic issues.

In particular, Putin commented on the government’s increasing investments in public services.

“Increased economic capabilities have allowed us to allocate additional investments for public services,” he said.

In September 2005 Putin announced the launch of the national projects, which envisage total investments of over 120 billion rubles this year. They include education, agriculture, healthcare and housing projects.

Putin also outlined a set of measures aimed at promoting population growth in the country.

Russia’s population has declined from a historical high of 148.4 million people in 1992 to about 143 million people at the end of 2005, according to Russia’s State Statistics Service.

Putin said that immigration alone would not be able to solve the problem of Russia’s declining population.

Making a bow to growing nationalism in Russia, the president said that immigrants should make efforts to adapt to the Russian culture.

Putin called for adopting a program starting from January 1, 2007 that would encourage couples to have more children. The program should support young families and women making the decision to have a child.

The president proposed increasing subsidies to families, including a larger monthly subsidy to a family for their second child.

Putin went on to comment on his idea of doubling Russia’s gross domestic product (GDP) in 10 years, which he put forward in 2003.

“We seem to be coping with this task and during the past three years the average annual economic growth amounted to 7%. However, I’d like to point out that, unless we get rid of some problems, improve major economic indicators, guarantee a proper level of economic freedom, create equal conditions for competition and strengthen property rights, we are unlikely to achieve these economic goals within these time limits,” Putin said.

For an economy to double within 10 years, it should grow at an average annual rate of over 7.1%. Russia’s GDP rose 7.1% in 2004 and 6.4% on the year in 2005. Russia’s 2006 budget projects the country’s GDP to grow 5.8%.

Putin also called for investing in the energy, communications, space, aircraft, IT and nanotechnology industries to assist in Russia’s economic development.

However, these investments should be carried out without “disturbing financial stability,” Putin said. He did not elaborate.

Meanwhile, obsolete equipment and poor energy efficiency are major challenges for Russia’s economic growth, Putin said.

Commenting on the government’s increasing role in Russia’s economy, Putin said that government investments are necessary but they should not be the only means of economic development.

Putin also said that Russians’ high degree of distrust in the government and big business was a major problem for the country.

Putin said that failed hopes for better living standards during reforms in 1990s were the major reason behind distrust.

He also said that the unprecedented personal enrichment of few at the expense of people had also fueled the distrust.

To emphasize his efforts in the past few years on the issue, Putin quoted U.S. President Franklin D. Roosevelt in his speech.

"In the working out of a great national program which seeks the primary good of the greater number, it is true that the toes of some people are being stepped on and are going to be stepped on," Putin quoted Roosevelt's speech delivered in June 1934.

One part of the historical Russian translation Putin quoted - " are going to be stepped on" - was closer to "we will continue to do so" and could have been interpreted as a reference to the so-called Yukos affair. Oil company Yukos has been burdened with multibillion dollar back tax claims since 2003; its major owners and top managers either went to jail or live in exile while being prosecuted in Russia.

"But these toes belong to the comparative few who seek to retain or to gain position or riches or both by some short cut which is harmful to the greater good," Putin said continuing with Roosevelt's quote.

"Great words," Putin said. "Too bad it is not me who said them."

Putin also called for strengthening Russia’s military, noting that the country’s military budget is 25 times less than that of the U.S.

“Their house is their fortress - good for them,” Putin said. “But that means that we also must make our house strong and reliable.”

However Russia should not increase its military might at the expense of economy and social services, repeating the Soviet Union’s mistakes, Putin said.

Putin also commented on Russia’s possible accession to the World Trade Organization (WTO).

Talks on Russia’s accession to the World Trade Organization (WTO) should not turn into “bargaining” over issues that have nothing to do with the WTO’s objectives, he said.

(27.0802 rubles - U.S. $1)

Russian PM Inks Ruling to Invest 15 Billion Rubles in Government Venture Fund

2006-09-09T14:13:00.000-05:00

Lately, there has been a spate of news from Russia (with love, of course!) on nanotechnology.

Best,

Nanoguru.

Russian PM inks ruling to invest 15 bln rbl in govt venture fund

MOSCOW

Aug 25, 2006

(Prime-Tass)

Russian Prime Minister Mikhail Fradkov has signed a ruling to invest 15 billion rubles in the Russian Venture Company, a governmental venture capital fund, in 2006-2007, the government's press office said Friday.

Under the ruling, the government is expected to contribute 5 billion rubles from its Investment Fund to the company's charter capital in 2006 and another 10 billion rubles next year.

The Russian Venture Company will finance projects in information technology, telecommunications, biotechnology, medicine, nanotechnology and power generation.

The government is expected to hold 100% in the Russian Venture Company.

The Russian Venture Company is expected to allocate the government's share of investments into sector-oriented venture funds. The government will be responsible for 49% of the money accumulated in the sector-oriented venture funds, which will represent from 600 million rubles to 1.5 billion rubles depending on the fund.

Russian President Vladimir Putin has repeatedly called for developing IT and high-tech industries and supported the establishment of the Russian Venture Company.

(26.7863 rubles - U.S. $1)

Russian Government Approves 30 Billion Ruble Program to Finance Nanotechnology

2006-09-09T13:02:00.000-05:00

It seems that we have a nanowar on our hands! Please see my earlier post on the same subject (Russia Opens New Nanotech Center).

Best,

Nanoguru.

Russian govt approves 30 bln ruble program to finance nanotechnology

MOSCOW

Sep 07, 2006

(Prime-Tass)

The Russian government approved in general Thursday a 30 billion ruble program to finance the nanotechnology industry, Prime Minister Mikhail Fradkov and Education and Science Minister Andrei Fursenko said following a regular government meeting.

The funds will be allocated mainly from the federal budget, Fursenko said.

The program has not yet been approved by the Economic Development and Trade Ministry and the Finance Ministry, he said.

Economic Development and Trade Minister German Gref has objected to Fursenko's proposal to start the program in 2007 and proposed launching it in 2008 and completing it five years later, Fursenko said.

Meanwhile, the government has already allocated 3.9 billion rubles to finance nanotechnology in the draft federal budget for 2007, Gref has said, as cited by Fursenko.

In May Russian President Vladimir Putin called for investing in the nanotechnology industry in his state of the nation address.

(26.6714 rubles - U.S. $1)

Iranian President Calls for National Nanotechnology Organization

2006-08-18T18:01:00.000-05:00

The following is an article that appeared on the English language website of Iran's "Islamic Republic News Agency." It appears that Iran also wants to get involved in the nanotechnology development, quite seriously; however, only time will tell if Iran indeed wants to develop this for constructive, or destructive purposes. The specifics of the Initiative were not disclosed. Would it not be nice to get a copy of the "20-Year Vision Plan"?

President calls for setting up of national nanotechnology organ

Tehran, July 15, IRNA

Iran-President-nanotechnology President Mahmoud Ahmadinejad who chairs the High Council for Cultural Revolution on Saturday issued the strategy for development of nanotechnology in the country. He advised First Vice-President Parviz Davoudi to organize national headquarters for development of nanotechnology. "You are expected to adopt necessary strategies to give incentives for experts, scientific, research and industrial centers, and the state and private companies to go ahead with nanotechnology. "Considering the 20-Year Vision Plan for Economic, Social and Cultural Development (2005-2025) which has given preference to nanotechnology and the 10-year program for nanotechnology adopted by High Council for Cultural Revolution, all the government organizations are responsible to spend special amount of money envisaged in their annual budgets for this purpose," said the president. He urged the national headquarters to give report on progress of nano-technology to the High Council for Cultural Revolution every six-month in order to remove any possible obstacle.

Best,

Nanoguru.

Message in a Bottle

2006-08-11T09:48:00.000-05:00

It seems that we have a Menace in a Bottle (as it is appropriately captioned in the following article that appeared in The Wall Street Journal on August 11, 2006). I would rather like to think of it as a “Message in a Bottle” that has been begging for our attention (to wake up and smell the after-shave lotion, water, shampoo, etc.!) to our defense, national-security, and homeland-security interests.

What bothers me is that many of us are swept up by the hysteria surrounding this terror plot and do not look at such underlying issues as religious divisions and ethnic factions. There have been numerous calls for profiling, relinquishing civil liberties, suspension of the U. S. Constitution (Bill of Rights and its Amendments). Well, let me posit something: we all believe that the would-be terrorists are muslims. To add fuel to the flames, the alleged terrorists in the latest terror plot were all British-born citizens of Pakistani descent. Unfortunately, we cannot profile based on names, etc. (Remember Richard Reid, John Walker Lindh, et al, who did not have an Islamic name! Having said that, I strongly believe that the next generation of Islamic fundamentalists and terrorists will be born, bred, and nurtured in Pakistan and Saudi Arabia.) Extremists, fanatics, "fascists," and terrorists come from all walks of life and religions. We just need to invest in and develop both humint (human intelligence) and technologies to obviate such terror plots in the future.

It serves us well to remember the following quote: “They that can give up essential liberty to obtain a little temporary safety deserve neither liberty, nor safety – Ben Franklin, Historical Review of Pennsylvania, 1759 – US author, diplomat, inventor, physicist, politician, & printer (1706 - 1790).”

The following is an article that appeared in The Wall Street Journal on August 11, 2006:

Menace in a Bottle

Assembling a Bomb Onboard – Could Be as Simple as Mixing Chemicals and a Blasting Cap

By LAURA MECKLER, DEBORAH BALL and CASSELL BRYAN-LOW August 11, 2006; Page A7

Liquids may be the new box-cutters. Take an explosive chemical like nitroglycerin, hydrogen peroxide or hydrazine, all relatively easy to obtain. Pour it into a travel bottle of mouthwash or shampoo. Bring along a blasting cap like those found on a firecracker, about the size of a short pencil. Jury-rig a travel alarm clock or a cellphone to provide a charge strong enough to set off the blasting cap. Even a small explosion could bring down a jet aircraft. For all the advancements in aviation security since 9/11, the ingredients for deadly explosives could be easily carried through airport checkpoints and onto an airplane – until yesterday, that is. In the wake of the foiled plot to blow up as many as ten airliners, carriers in the U.S. and Europe suddenly banned shampoos, creams, gels, beverages and other liquids from carry-on luggage.

"This is a huge area of vulnerability," says Clark Kent Ervin, former inspector general at the Department of Homeland Security. Terrorists, he says, "are learning, adapting. They develop countermeasures to our countermeasures. We are reactive, and they are proactive."

Aviation officials have been worried about the danger of explosives for years, and the Transportation Security Administration has tried to shift its focus to address the threat. With all the screening for weapons in carry-on luggage, it may now be easier to blow up a plane than to hijack one.

After the 2001 terrorist attacks, security officials banned box-cutters, scissors and sharp objects that terrorists could use to hijack a plane. The TSA allowed small scissors and tools back in passenger cabins in late 2005 because they were spending too much time confiscating these items, and because it allowed airport security screeners to focus on the hunt for bombs. In a similar vein, after Richard Reid unsuccessfully tried to detonate a shoe bomb aboard a plane in late 2001, the U.S. Congress banned cigarette lighters from U.S. flights. Now, TSA officials complain that they are spending too much time confiscating 30,000 lighters a day. Matches are allowed, but lighters are not. Mr. Reid tried to use a match – not a lighter. To focus on explosives, the TSA has installed 93 "puffer" machines that can detect minute amounts of explosive residue on passengers in 36 airports. The machines also have been installed at London's Heathrow airport, and TSA is rolling them out elsewhere. The TSA also upped the number of bomb-sniffing dog teams. It added teams that watch passenger behavior and try to assess those who exhibit unusual behavior and facial movements. And it gave screeners special training on how to identify bomb-making components hidden in carry-on bags. A Transportation Security Administration official at Chicago's O'Hare airport (above) collects liquid and gel products that are now banned from carry-on luggage; a TSA security officer (left) at Dulles airport in Dulles, Va., alerts passengers to the new rules. Yet experts say the system remains highly vulnerable to plots like the one broken up yesterday in England. Most carry-on baggage passes through an X-ray machine that can easily detect a gun or a knife with its recognizable shape but can miss a bomb component disguised to look innocuous or a bottle of explosive liquid. "An ordinary X-ray will not be effective in examining a sealed bottle," says Cathal Flynn, former security chief at the Federal Aviation Administration. Screening mass numbers of bottles that come through checkpoints every day is not possible with equipment now available at the checkpoint, he says. All checked bags are screened for bombs, using CT scans, and those have been considered for carry-on bags, but they are typically very large and would eat up valuable square footage at the checkpoint.

The TSA is planning airport trials with an advanced scanner made by Rapiscan Systems, a unit of OSI Systems Inc., Hawthorne, Calif., which enhances the detection of explosive material. The scanner uses Quadrapole Resonance, a radio-frequency technology that can detect certain explosives in liquids, as well as plastic and sheet explosives, and explosives that might be distributed in packets throughout a piece of luggage and made to resemble innocuous items. The government expects to test the machines at three or four U.S. airports, but they are expensive – $160,000 each vs. about $35,000 for a basic X-ray. Another technology that hasn't been deployed by the government would specifically address the threat of liquid in bottles. In the mid-1990s, a small company called Quantum Magnetics, now owned by General Electric Co., began developing a machine that can detect liquid explosives inside bottles. It got some attention in the wake of a 1995 terrorist plot, but has yet to be rolled out in airports.

Dangerous chemicals are easily available. One chemical that has concerned authorities is triacetone triperoxide, known among them as the "Mother of Satan" of explosives because it is so unstable. It is used commonly among suicide bombers in the Middle East and has shown up in a growing number of domestic plots, including in Phoenix where a drug investigation turned into a terrorism probe when authorities found TATP in an apartment there. Experts say a small amount of explosive material could be devastating. "It may not take a huge blast," says Suraj Lakhani, a researcher on counterterrorism at Royal United Services Institute, a think tank that advises the British government on security issues. "If the person detonating [an explosive] sat near a window or near the fuselage, it could cause a big enough hole to bring the plane down."

Even liquor and matches could be used to start a fire onboard. But aviation and security experts say that as long as airline crews are able to quickly detect and fight a fire in the cabin, it would be difficult for a terrorist to spark a catastrophic blaze. Flight attendants are trained to use portable oxygen and hand-held fire extinguishers at the first sign of a fire, and passenger seats are made of material that only ignites at high temperatures.

Liquid explosives haven't been used much because they are notoriously difficult to transport and can be highly unstable. "The chances of [the explosives] going off while walking around the airport or even when leaving the house is pretty great," says John Chase, a security expert at Kroll Inc., a risk-consulting group and a unit of Marsh & McLennan Companies, Inc.

Yet terrorists have used explosive chemicals on planes before. The latest plot wasn't unimaginable; it reminded several aviation experts of an al Qaeda plot to bomb 11 U.S. passenger jets over the Pacific that was uncovered in the Philippines in 1995. Codenamed "Bojinka," the Serbo-Croatian word for "explosion," the plot also included the assassination of Pope John Paul II during a visit to Manila and crashing a plane into the Central Intelligence Agency's headquarters in Virginia. Police in Manila stumbled across the conspiracy when they responded to a fire at an apartment rented by Abdul Hakim Murad and Ramzi Yousef, who was later caught in Pakistan and convicted for the 1993 World Trade Center bombing. They found bomb-making materials in a sink and a laptop computer full of coded information. The mastermind of the Bojinka plot – Khalid Shaikh Mohammed – later went on to orchestrate the Sept. 11 attacks in the U.S. He was captured in Pakistan in 2003. In what was believed to be a test run for the Bojinka plot, Mr. Yousef used a liquid bomb on a flight from Manila to Tokyo. He used a stable form of liquid nitroglycerin carried in a bottle labeled as contact lens solution, using cotton as a stabilizer. The device was placed in a life-jacket pouch under a seat before he disembarked during a layover. The bomb exploded on the second leg, killing one passenger but the plane was able to land. At the time, some airports barred passengers from taking liquids onboard planes but relaxed the rules after several months.

– Lynn Lunsford, Gary Fields, Jonathan Karp and Kathryn Kranhold contributed to this article.

Write to Laura Meckler at laura.meckler@wsj.com, Deborah Ball at deborah.ball@wsj.com and Cassell Bryan-Low at cassell.bryan-low@wsj.com

Best,

Nanoguru.

Alleged Terror Plot Involved Liquid Explosives, Official Says

2006-08-10T14:41:00.000-05:00

I keep harping on the fact that we, the U. S., are blindly focusing only on nuclear weapons (vide my earlier post: “70-20-10” – U.S. Security Still Needs A Focus on Technology). This is exactly what I meant, when I posted my blog “70-20-10” – U.S. Security Still Needs A Focus on Technology on June 14, 2006.

I agree with most of the observations made by Randall Larsen, Jonathan Katz, and Mark Mills. However, some of the salient points must be elucidated. For instance, gamma rays from nuclear armaments could be shielded from detectors by using certain conventional materials that are readily available on the commercial market. (I will not elaborate on those, lest my comments be exploited.) A determined adversary, who has no regard for lives – including his/her own – is very difficult to vanquish easily. There is a dire need for forward-looking, proactive research and development in detection and neutralization of chemical, biological, and nuclear threats. I am afraid that we (the U. S.) are deeply concerned only about nuclear threats. However, there is a more sinister, emerging threat from biological and chemical weapons. To make matters worse, these weapons are unimaginably even more destructive; advances in nanotechnologies could be exploited by nation-states AND individuals without access to high-tech centrifuges, advanced pieces of equipment, etc. Nanomaterials and nanotechnologies are so ubiquitous and all-encompassing that they cover all applications. For instance, anthrax spores could be nanosized to significantly increase their lethality; chemical agents could be nanosized, or adsorbed on the surface of the nanomaterials, to effectuate the same results, if not more lethal. The applications are essentially limitless. I, for one, truly believe that we should spend adequate (certainly more than what is currently being done) resources on conventional processes and technologies and derive substantial detective and protective measures. Furthermore, today’s state-of the-art mass spectrometers deployed at the airports cannot detect most biological species, much less nanosized weapons-grade materials. Even ordinary materials could be turned into conflagrant, pyrophoric explosives. These nanomaterials cannot be detected as threats by current standards. I earnestly hope that the U. S. government would foresee and perceive the need for research into such seemingly mundane and conventional materials.

What is more telling is the fact the airport-based detectors (mass spectrometers – atomic-absorption spectrometers, and inductively-coupled plasma-mass spectrometers, gas chromatographs, and gas chromatograph-mass spectrometers, etc. – and others – radiation and scintillation detectors) cannot detect all the chemical explosives that we are currently dealing with, much less those in well-sealed containers. The crux of the problem is how we are going to prevent the conversion of seemingly ordinary chemicals (read: household cleaners, fertilizers, bleach, and the like) into deadly weapons by terrorists, who are moderately skilled at chemistry. Read the following quote from a “security consultant” based in London, U. K.:

“Explosive liquids could get through airport security because security checks don't use sensors that would pick up its vapors. Furthermore, if the liquids were tightly sealed in a container, such a sensor wouldn't detect it. That would require airport security personnel to open each bottle of liquid in order to check for such chemicals. That would mean checking every single bottle of shampoo that anyone has ever taken from a hotel room,” said Bob Ayers, an associate fellow at Chatham House in London and vice president for homeland security for Selex Sensors & Airborne Systems of Italy, an arm of Finmeccanica SpA. “The best and optimal way to make sure no one carries something dangerous onto a plane is to make people fly naked and with no baggage,” he added.”

Well, he forgets the power of human ingenuity and that necessity is the mother of all inventions! What about those “mules” in illicit drug trade, who carry a lot of drugs in their body cavities using latex bags (i. e., condoms and gloves)? Remember the old saying – “where there is a will, there is always a way”! It is just a cat-and-mouse game and one-upmanship, in which we are engaged. Nobody will have a clear-cut, perpetual lead at this game. If we think that we can prevent all terrorist activities, then we are only deluding ourselves! The sad truth is that we just cannot! I will be first one to admit that I am no genius; however, I can think of myriad ways to beat the current state-of-the-art detection and neutralization techniques. We must bear in mind that these detection and neutralization techniques are only devised by humans, who are immensely fallible! We must also remember that the results of these detection techniques are only as good as the individuals, who operate them! Well, I am not sure that one could expect a lowly TSA (or a TSA-contractor's) employee to be a proficient analytical chemist. Even trained analytical chemists have significant difficulty differentiating between various species of explosive components. Furthermore, there is a tremendous amount of time pressure on these screeners, and hence, numerous false-positives and negatives result! We must be vigilant and proactive at countermeasures. However, we cannot police the entire world, nor can we afford to trample on civil liberties of innocent public, for it will only antagonize them. I believe that the primary solution to terrorism will have to be political one – politicians and bureaucrats (not just the ones in Washington) must read and understand history and learn from it; that the separation of church and state is a must; that we must not support one faction (or a country, for that matter), or the other; that our policies are even-handed, fair, and just, have a long-term view, and not for the sake of expediency.

I still very strongly advocate the following (these action items are work in progress and may be modified as further refinements are made):

Invest in the biological and chemical weapons technology development, detection, and neutralization.
Form an International Technology Working Group – ITWG – perhaps, under the U. N. umbrella. (However, I do not have much faith in the U. N's ability to police the spread of anything, much less a technology that is already widespread. This is, perhaps, because of our own doing. Responsibility without authority does not mean anything!)
The ITWG must comprise personnel from industry, academia, intelligence community, and armed services from across the globe.
Invest in nanotechnology and nanomaterials, for these would be the deadliest future weapons platform.
Screen and limit publicly available information. (This may be very difficult, if not impossible, because the proverbial cat is already out of the bag and playing gleefully.) It is instructive to remember that Ramzi Yousef (mastermind of 1993 WTC bombing) was allegedly employed at Allied-Signal – now Honeywell – in Morristown, NJ, learning all the tricks of the trade!
Invest in the education of our children. (See What innovation advantage? Chinese and Indian companies aren't leaving design to the North Americans, Russia opens new nanotech center, Virus Fuels a Battery Breakthrough, and Business Round Table Discussion and Recommendations.)
Bottom line is that we must very quickly reprioritize our goals (and act on, of course) to include education of our citizens; investment in technology (regardless of religious convictions; read: President Bush's veto of the Stem Cell Bill); invest in a strong defense (read: do not fight other people's wars); learn from other countries and adapt to the challenge; and above all acquire, invest in, and nurture talent from anywhere in the world (read: legal immigration).

The following article appeared in August 10, 2006 edition of the Wall Street Journal:

Alleged Terror Plot Involved Liquid Explosives, Official Says

By DEBORAH BALL and CASSELL BRYAN-LOW

August 10, 2006 12:07 p.m.

LONDON – The alleged plot to bring down several trans-Atlantic flights involving liquid explosives highlights a vulnerable area in airline travel, despite efforts since the Sept. 11, 2001 terrorist attacks to strengthen security. Security experts say there are a number of chemicals that could potentially be used in such a bomb, including nitroglycerin, hydrogen peroxide or hydrazine.

The attraction for terrorists is that liquid explosives can be hard to detect, says Peter Hurry, an explosion specialist at risk consultant Kroll Inc. and a former British army bomb-disposal expert. Explosive liquids could get through airport security because security checks don’t use sensors that would pick up its vapors. Furthermore, if the liquids were tightly sealed in a container, such a sensor wouldn’t detect it. That would require airport security personnel to open each bottle of liquid in order to check for such chemicals.

“That would mean checking every single bottle of shampoo that anyone has ever taken from a hotel room,” said Bob Ayers, an associate fellow at Chatham House in London and vice president for homeland security for Selex Sensors & Airborne Systems of Italy, an arm of Finmeccanica SpA. “The best and optimal way to make sure no one carries something dangerous onto a plane is to make people fly naked and with no baggage,” he added. Authorities in Britain responded yesterday by moving closer to those draconian measures, banning almost all hand-carried items on planes departing from British airports. Elsewhere, airline passengers were required to give up any liquids – such as beverages, hair gels and lotions – before boarding.

A terrorist could carry a container of liquid explosive onto a plane and then detonate it using the electric current from a simple device, such as a travel alarm clock or a cellphone, to detonate the container. However, the reason that liquid explosives haven’t been used more often is because they are tricky to store, difficult to transport and can be highly unstable.

“The people who are going to carry it onto a plane aren’t too concerned with blowing themselves up, but it might before they even get it to the plane,” Mr. Ayers said.

This latest plot appears to bear some similarities to an al Qaeda plot to bomb 11 U.S. passenger jets over the Pacific that was uncovered in the Philippines in 1995. Code-named “Bojinka” – the Serbo-Croatian word for “explosion” – the plot also included the assassination of Pope John Paul II during a visit to Manila and crashing a plane into the U.S. Central Intelligence Agency’s headquarters in Virginia.

Police in Manila stumbled across the conspiracy when they responded to a fire at an apartment rented by Abdul Hakim Murad and Ramzi Yousef, who was later caught in Pakistan and convicted for the 1993 World Trade Center bombing. They found bomb-making materials in a sink and a laptop computer full of coded information. The mastermind of the Bojinka plot – Khalid Shaikh Mohammed – later went on to orchestrate the Sept. 11 attacks in the U.S. He was captured in Pakistan in 2003.

“The parallels are quite striking between what [Mr. Yousef] did then and what is happening now,” said Peter Neumann, director for the center for defense studies at King’s College in London. The masterminds of the Bojinka plot had planned to hide the batteries needed to detonate the liquid bombs in the heels of their shoes, Mr. Neumann said. It is likely for that reason that passengers in Britain yesterday were advised that no electrical or battery-powered items including laptops and mobile phones could be carried into the aircraft cabin.

“It may not take a huge blast,” said Suraj Lakhani, a researcher on counterterrorism at Royal United Services Institute, a think tank that advises the British government on security issues. “If the person detonating it sat near a window or near the fuselage, it could cause a big enough hole to bring the plane down.”

–James Hookway contributed to this article Write to Deborah Ball at deborah.ball@wsj.com and Cassell Bryan-Low at cassell.bryan-low@wsj.com

Best,

Nanoguru.

Engineered Microbes Pose New Bioterror Threat

2006-07-31T18:18:00.000-05:00

Well, well, well! I just hope that these articles open the politicians' and policymakers' eyes to the cold, hard reality of our world today. This is exactly what I had in mind when I posted my blog “70-20-10” - U.S. Security Still Needs A Focus on Technology (which can be accessed at http://nanomat.blogspot.com/2006/06/70-20-10-us-security-still-needs-focus.html) on June 14, 2006. I especially like the following quote: All it would take for advanced bioweapons development is one skilled scientist and modest equipment — an activity we are unlikely to detect in advance. — Charles Allen, U.S. Homeland Security Department Chief Intelligence Officer.

However, I strongly disagree with Mr. Allen's following statement:

"The capability of terrorists to embark on this path in the near- to mid-term is judged to be low," Charles E. Allen, chief intelligence officer for the Department of Homeland Security, said in testimony May 4 before a panel of the House Committee on Homeland Security. "Just because the technology is available doesn't mean terrorists can or will use it."

Should we wait for a terrorist incident to happen? Once it happens, we could say "Oh, no! Terrorists not only have the technology available, but they also know how to use it." I just do not understand the U. S.' suffering from ostrich syndrome.

We are all only obsessed with nuclear weapons proliferation. Fortunately, nuclear precursors and technology are reasonably much better controlled and protected than chemical and biological weapons precursors. For better, or worse, nuclear scientists foresaw the destruction that those weapons could wreak and tried to place adequate controls on the development and proliferation of technology. Here comes the bad part: we did not anticipate the ease with which the chemical and biological weapons technologies could be spread. Hence, the technology is everywhere. In terms of biotechnology, any country with decent biologists and biochemists could develop these dreaded bioweapons. I would especially be wary of the following countries: Cuba, China, Iran, Syria, North Korea, Libya, Malaysia, Pakistan, Israel, India, and Russia, just to name a few. (Of these countries, India may not have an ax to grind with the U. S.) To make things even worse, one could buy these "oligonucleotides" (DNA fragments) and viruses from U. S. companies very cheaply, by mail; yes, by mail. (Are you surprised, yet?) In fact, the author of this blog has purchased many of these "fragments" and viruses on many occasions from these companies. I do not know how many of us know that Japan was a pioneer in bioweapons (bubonic plague) program during World War II. Only Providence and stupidity and infighting on the Japanese's part prevented the delivery of these deadly pathogens to the U. S. (The chief Japanese scientist on the program was later an Adviser to the U. S. Government, despite the fact that he tested the efficacy of these pathogens on innocent Manchurians, instead of being tried for Crimes Against Humanity. Go figure!) Lastly, the articles completely ignore the development of a nascent (but it has been in existence since Mankind was known to be on earth) technology - nanotechnology. Nanotechnology can be universally employed across the boundaries of traditional disciplines. This interdisciplinary nature of nanotechnology makes it perhaps the single most important discipline today. Specifically, in the context of this discussion, nanobiology and nanochemistry. One has to realize the significance and reach of nanotechnology and its impact on all the other disciplines. For instance, nanotechnology could enable the creation of synthetic viruses and other biological entities. Another example of nanotechnology is the weaponization of biological agents. (The author does not wish to disclose the specific techniques on an open, public website.) We must be extremely mindful of the convergence and fusion of nanotechnology, biotechnology, and information technology.

The Central Intelligence Agency (CIA) and Defense Intelligence Agency (DIA) have also published studies on status and mitigation of proliferation of bioweapons programs:

https://www.cia.gov/csi/studies/vol48no3/article06.html

http://www.dia.mil/publicaffairs/Testimonies/20050317_DR_Jacoby_WWT_SASC_SFR-U-Final.pdf

I very strongly advocate the following (these action items are work in progress and may be modified as further refinements are made):

Invest in the biological and chemical weapons technology development, detection, and neutralization.
Form an International Technology Working Group - ITWG - perhaps, under the U. N. umbrella. (However, I do not have much faith in the U. N's ability to police the spread of anything, much less a technology that is already widespread. This is, perhaps, because of our own doing. Responsibility without authority does not mean anything!)
The ITWG must comprise personnel from industry, academia, intelligence community, and armed services from across the globe.
Invest in nanotechnology and nanomaterials, for it would be the deadliest future weapons platform.
Screen and limit publicly available information. (This may be very difficult, if not impossible, because the proverbial cat is already out of the bag and playing gleefully.)

The following is an article posted on the Global Security Network website:

Engineered Microbes Pose New Bioterror Threat

Rapid advances in microbe engineering that could new biological weapons are outstripping U.S. efforts to prevent bioterrorism, the Washington Post reported today (see GSN, June 29, 2005).

Diseases could be overcome and lives saved through new technologies now under study in hundreds of laboratories around the world. However, they also could be used to increase the lethality of pathogens or restore early strains such as the 1918 influenza. The technologies could also be used to improve ways to widely deliver disease agents. “The biological weapons threat is multiplying and will do so regardless of the countermeasures we try to take,” said Steven Block, a Stanford University biophysicist and former president of the Biophysical Society. “You can’t stop it, any more than you can stop the progress of mankind. You just have to hope that your collective brainpower can muster more resources than your adversaries’.”

The U.S. Centers for Disease Control and Prevention to date has not moved to monitor the expanding gene-synthesis industry. The supervision of controversial experiments is voluntary and irregular at universities and private laboratories in the United States, and even more rare internationally, the Post reported. Conventional biodefense practices such as stockpiling antibiotics or controlling strains of known fatal diseases are still important, but more efforts are necessary, bioterrorism experts said. “There’s a name for fixed defenses that can easily be outflanked: They are called Maginot lines,” said molecular biologist Roger Brent, a former biodefense adviser to the Defense Department. “By themselves, stockpiled defenses against specific threats will be no more effective to the defense of the United States than the Maginot line was to the defense of France in 1940.”

The development of biotechnology has been compared to the start of the nuclear age. Analysts, however, noted important differences. Rather than seeing a U.S. monopoly on such advances, there are dozens of nations conducting this work, the Post reported. No treaty or oversight agency exists to prevent abuse of this work, and biological secrets can be obtained for free over the Internet, said Robert Erwin, a geneticist and founder of Large Scale Biology Corp “It’s too cheap, it’s too fast, there are too many people who know too much, and it’s too late to stop it,” Erwin said at a recent forum in Washington. The threat comes not only from exotic diseases. Modifications to harmless bacteria that enter a body could change normal functions such as immunity or hormone production, according to “Biotechnology: Impact on Biological Warfare and Biodefense” a report authored by three biodefense experts with the Defense Intelligence Agency. There have been no recorded bioterrorism incidents involving engineered microbes, though experiments on genetically altered strains occurred late in the Cold War in the Soviet Union. Some experts say terrorists are still more likely to use ordinary germs that could produce the same deadly effect. “The capability of terrorists to embark on this path in the near- to mid-term is judged to be low,” Charles Allen, chief intelligence officer for the Homeland Security Department, told the House Homeland Security Committee on May 4. “Just because the technology is available doesn’t mean terrorists can or will use it.”

More dangerous perhaps is a “lone wolf” scientist or biological hacker — working alone or in a small group — motivated by ideology or personal issues, Allen said. “All it would take for advanced bioweapons development is one skilled scientist and modest equipment — an activity we are unlikely to detect in advance,” he said. The U.S. federal “Select Agent” rule restricts access to select deadly bacteria, viruses and toxins. However, there are few CDC restrictions on transfers of synthetic genes that could be made into lethal bioterrorism agents, according to the Post. Modifications are being considered, but the lapse is an example of technology growing beyond law and policy. “It would be possible — fully legal — for a person to produce full-length 1918 influenza virus or Ebola virus genomes, along with kits containing detailed procedures and all other materials for reconstitution,” said Richard Ebright, a Rutgers University biochemist and bioterrorism expert. “It is also possible to advertise and to sell the product, in the United States or overseas.” Some scientists favor more oversight, or even peer review to impede the accidental or deliberate release of genetically modified organisms.

The National Institutes of Health has set guidelines to commission volunteer institutional biosafety committees for federally funded schools and private laboratories. A 2004 National Academy of Sciences report urged the committees to expand their oversight efforts of research that could produce more lethal biological agents, the Post reported (see GSN, Sept. 10, 2004). In many cases, the committees are only theoretical bodies. The nonprofit Sunshine Project in 2004 requested meeting minutes or notes evaluating research projects from 390 committees. Only 15 of those institutions showed full compliance with NIH guidelines, said survey director Edward Hammond. About 200 had poor or missing records, or had none at all, while some committees had not actually met. New techniques and research in microbes could help overcome bioterrorism threats and cure natural diseases, but the search for new drugs is slow.

Five years after Sept. 11, the government sets aside nearly $8 billion a year for civilian biodefense. Billions more have been spent to develop, purchase and stockpile new drugs, primarily related to identified bioterrorism threats such as anthrax. While efforts are being made to make the system more efficient, the development of one new drug could take up to 10 years and cost hundreds of million of dollars. If proven successful, the drug would treat only one of many illnesses on a growing list of bioterrorism threats (Joby Warrick, Washington Post, July 31).

The following is an article published in the Washington Post:

Custom-Built Pathogens Raise Bioterror Fears

By Joby Warrick

Washington Post Staff Writer

Monday, July 31, 2006; A01

STONY BROOK, N.Y.

Eckard Wimmer knows of a shortcut terrorists could someday use to get their hands on the lethal viruses that cause Ebola and smallpox. He knows it exceptionally well, because he discovered it himself. In 2002, the German-born molecular geneticist startled the scientific world by creating the first live, fully artificial virus in the lab. It was a variation of the bug that causes polio, yet different from any virus known to nature. And Wimmer built it from scratch. The virus was made wholly from nonliving parts, using equipment and chemicals on hand in Wimmer's small laboratory at the State University of New York here on Long Island. The most crucial part, the genetic code, was picked up for free on the Internet. Hundreds of tiny bits of viral DNA were purchased online, with final assembly in the lab. Wimmer intended to sound a warning, to show that science had crossed a threshold into an era in which genetically altered and made-from-scratch germ weapons were feasible. But in the four years since, other scientists have made advances faster than Wimmer imagined possible. Government officials, and scientists such as Wimmer, are only beginning to grasp the implications. "The future," he said, "has already come." Five years ago, deadly anthrax attacks forced Americans to confront the suddenly real prospect of bioterrorism. Since then the Bush administration has poured billions of dollars into building a defensive wall of drugs, vaccines and special sensors that can detect dangerous pathogens. But already, technology is hurtling past it. While government scientists press their search for new drugs for old foes such as classic anthrax, a revolution in biology has ushered in an age of engineered microbes and novel ways to make them. The new technology opens the door to new tools for defeating disease and saving lives. But today, in hundreds of labs worldwide, it is also possible to transform common intestinal microbes into killers. Or to make deadly strains even more lethal. Or to resurrect bygone killers, such the 1918 influenza. Or to manipulate a person's hormones by switching genes on or off. Or to craft cheap, efficient delivery systems that can infect large numbers of people. "The biological weapons threat is multiplying and will do so regardless of the countermeasures we try to take," said Steven M. Block, a Stanford University biophysicist and former president of the Biophysical Society. "You can't stop it, any more than you can stop the progress of mankind. You just have to hope that your collective brainpower can muster more resources than your adversaries'." The Bush administration has acknowledged the evolving threat, and last year it appointed a panel of scientists to begin a years-long study of the problem. It also is building a large and controversial lab in Frederick, where new bioterrorism threats can be studied and tested. But overall, specific responses have been few and slow. The U.S. Centers for Disease Control and Prevention has declined so far to police the booming gene-synthesis industry, which churns out made-to-order DNA to sell to scientists. Oversight of controversial experiments remains voluntary and sporadic in many universities and private labs in the United States, and occurs even more rarely overseas. Bioterrorism experts say traditional biodefense approaches, such as stockpiling antibiotics or locking up well-known strains such as the smallpox virus, remain important. But they are not enough. "There's a name for fixed defenses that can easily be outflanked: They are called Maginot lines," said Roger Brent, a California molecular biologist and former biodefense adviser to the Defense Department, referring to the elaborate but short-sighted network of border fortifications built by France after World War I to prevent future invasions by Germany. "By themselves," Brent said, "stockpiled defenses against specific threats will be no more effective to the defense of the United States than the Maginot line was to the defense of France in 1940."

How to Make a Virus

Wimmer's artificial virus looks and behaves like its natural cousin -- but with a far reduced ability to maim or kill -- and could be used to make a safer polio vaccine. But it was Wimmer's techniques, not his aims, that sparked controversy when news of his achievement hit the scientific journals. As the creator of the world's first "de novo" virus -- a human virus, at that -- Wimmer came under attack from other scientists who said his experiment was a dangerous stunt. He was accused of giving ideas to terrorists, or, even worse, of inviting a backlash that could result in new laws restricting scientific freedom. Wimmer counters that he didn't invent the technology that made his experiment possible. He only drew attention to it. "To most scientists and lay people, the reality that viruses could be synthesized was surprising, if not shocking," he said. "We consider it imperative to inform society of this new reality, which bears far-reaching consequences." One of the world's foremost experts on poliovirus, Wimmer has made de novo poliovirus six times since his groundbreaking experiment four years ago. Each time, the work is a little easier and faster. New techniques developed by other scientists allow the creation of synthetic viruses in mere days, not weeks or months. Hardware unveiled last year by a Harvard genetics professor can churn out synthetic genes by the thousands, for a few pennies each. But Wimmer continues to use methods available to any modestly funded university biology lab. He reckons that tens of thousands of scientists worldwide already are capable of doing what he does. "Our paper was the starting point of the revolution," Wimmer said. "But eventually the process will become so automated even technicians can do it." Wimmer's method starts with the virus's genetic blueprint, a code of instructions 7,441 characters long. Obtaining it is the easiest part: The entire code for poliovirus, and those for scores of other pathogens, is available for free on the Internet. Armed with a printout of the code, Wimmer places an order with a U.S. company that manufactures custom-made snippets of DNA, called oglionucleotides. The DNA fragments arrive by mail in hundreds of tiny vials, enough to cover a lab table in one of Wimmer's three small research suites. Using a kind of chemical epoxy, the scientist and his crew of graduate assistants begin the tedious task of fusing small snippets of DNA into larger fragments. Then they splice together the larger strands until the entire sequence is complete. The final step is almost magical. The finished but lifeless DNA, placed in a broth of organic "juice" from mushed-up cells, begins making proteins. Spontaneously, it assembles the trappings of a working virus around itself. While simple on paper, it is not a feat for amateurs, Wimmer said. There are additional steps to making effective bioweapons besides acquiring microbes. Like many scientists and a sizable number of biodefense experts, Wimmer believes traditional terrorist groups such as al-Qaeda will stick with easier methods, at least for now. Yet al-Qaeda is known to have sought bioweapons and has recruited experts, including microbiologists. And for any skilled microbiologist trained in modern techniques, Wimmer acknowledged, synthetic viruses are well within reach and getting easier. "This," he said, "is a wake-up call."

From Parlor Trick to Bio-Bricks

The global biotech revolution underway is more than mere genetic engineering. It is genetic engineering on hyperdrive. New scientific disciplines such as synthetic biology, practiced not only in the United States but also in new white-coat enclaves in China and Cuba, seek not to tweak biological systems but to reinvent them. The holy grail of synthetic biologists is the reduction of all life processes into building blocks -- interchangeable bio-bricks that can be reassembled into new forms. The technology envisions new species of microbes built from the bottom up: "living machines from off-the-shelf chemicals" to suit the needs of science, said Jonathan Tucker, a bioweapons expert with the Washington-based Center for Non-Proliferation Studies. "It is possible to engineer living organisms the way people now engineer electronic circuits," Tucker said. In the future, he said, these microbes could produce cheap drugs, detect toxic chemicals, break down pollutants, repair defective genes, destroy cancer cells and generate hydrogen for fuel. In less than five years, synthetic biology has gone from a kind of scientific parlor trick, useful for such things as creating glow-in-the-dark fish, to a cutting-edge bioscience with enormous commercial potential, said Eileen Choffnes, an expert on microbial threats with the National Academies' Institute of Medicine. "Now the technology can be even done at the lab bench in high school," she said. Along with synthetic biologists, a separate but equally ardent group is pursuing DNA shuffling, a kind of directed evolution that imbues microbes with new traits. Another faction seeks novel ways to deliver chemicals and medicines, using ultra-fine aerosols that penetrate deeply into the lungs or new forms of microencapsulated packaging that control how drugs are released in the body. Still another group is discovering ways to manipulate the essential biological circuitry of humans, using chemicals or engineered microbes to shut down defective genes or regulate the production of hormones controlling such functions as metabolism and mood. Some analysts have compared the flowering of biotechnology to the start of the nuclear age in the past century, but there are important differences. This time, the United States holds no monopoly over the emerging science, as it did in the early years of nuclear power. Racing to exploit each new discovery are dozens of countries, many of them in the developing world. There's no binding treaty or international watchdog to safeguard against abuse. And the secrets of biology are available on the Internet for free, said Robert L. Erwin at a recent Washington symposium pondering the new technology. He is a geneticist and founder of the California biotech firm Large Scale Biology Corp. "It's too cheap, it's too fast, there are too many people who know too much," Erwin said, "and it's too late to stop it."

A Darker Side

In May, when 300 synthetic biologists gathered in California for the second national conference in the history of their new field, they found protesters waiting. "Scientists creating new life forms cannot be allowed to act as judge and jury," Sue Mayer, a veterinary cell biologist and director of GeneWatch UK, said in a statement signed by 38 organizations. Activists are not the only ones concerned about where new technology could lead. Numerous studies by normally staid panels of scientists and security experts have also warned about the consequences of abuse. An unclassified CIA study in 2003 titled "The Darker Bioweapons Future" warned of a potential for a "class of new, more virulent biological agents engineered to attack" specific targets. "The effects of some of these engineered biological agents could be worse than any disease known to man," the study said. It is not just the potential for exotic diseases that is causing concern. Harmless bacteria can be modified to carry genetic instructions that, once inside the body, can alter basic functions, such as immunity or hormone production, three biodefense experts with the Defense Intelligence Agency said in an influential report titled "Biotechnology: Impact on Biological Warfare and Biodefense." As far as is publicly known, no such weapons have ever been used, although Soviet bioweapons scientists experimented with genetically altered strains in the final years of the Cold War. Some experts doubt terrorists would go to such trouble when ordinary germs can achieve the same goals. "The capability of terrorists to embark on this path in the near- to mid-term is judged to be low," Charles E. Allen, chief intelligence officer for the Department of Homeland Security, said in testimony May 4 before a panel of the House Committee on Homeland Security. "Just because the technology is available doesn't mean terrorists can or will use it." A far more likely source, Allen said, is a "lone wolf": a scientist or biological hacker working alone or in a small group, driven by ideology or perhaps personal demons. Many experts believe the anthrax attacks of 2001 were the work of just such a loner. "All it would take for advanced bioweapons development," Allen said, "is one skilled scientist and modest equipment -- an activity we are unlikely to detect in advance."

Genes for Sale

Throughout the Western world and even in developing countries such as India and Iran, dozens of companies have entered the booming business of commercial gene synthesis. Last fall, a British scientific journal, New Scientist, decided to contact some of these DNA-by-mail companies to show how easy it would be to obtain a potentially dangerous genetic sequence -- for example, DNA for a bacterial gene that produces deadly toxins. Only five of the 12 firms that responded said they screened customers' orders for DNA sequences that might pose a terrorism threat. Four companies acknowledged doing no screening at all. Under current laws, the companies are not required to screen. In the United States, the federal "Select Agent" rule restricts access to a few types of deadly bacteria, viruses and toxins. But, under the CDC's interpretation of the rule, there are few such controls on transfers of synthetic genes that can be turned into killers. Changes are being contemplated, but for now the gap is one example of technology's rapid advance leaving law and policy behind. "It would be possible -- fully legal -- for a person to produce full-length 1918 influenza virus or Ebola virus genomes, along with kits containing detailed procedures and all other materials for reconstitution," said Richard H. Ebright, a biochemist and professor at Rutgers University. "It is also possible to advertise and to sell the product, in the United States or overseas." While scientists tend to be deeply skeptical of government intrusion into their laboratories, many favor closer scrutiny over which kinds of genetic coding are being sold and to whom. Even DNA companies themselves are lobbying for better oversight. Blue Heron Biotechnology, a major U.S. gene-synthesis company based in suburban Seattle, formally petitioned the federal government three years ago to expand the Select Agent rule to require companies to screen DNA purchases. The company began voluntarily screening after receiving suspicious requests from overseas, including one from a Saudi customer asking for genes belonging to a virus that causes a disease akin to smallpox. "The request turned out to be legitimate, from a real scientist, but it made us ask ourselves: How can we make sure that some crazy person doesn't order something from us?" said John Mulligan, Blue Heron's founder and chief executive. "I used to think that such a thing was improbable, but then September 11 happened." Some scientists also favor greater scrutiny -- or at least peer review -- of research that could lead to the accidental or deliberate release of genetically modified organisms. In theory, such oversight is provided by volunteer boards known as institutional biosafety committees. Guidelines set by the National Institutes of Health call on federally funded schools and private labs to each appoint such a board. A 2004 National Academy of Sciences report recommended that the committees take on a larger role in policing research that could lead to more powerful biological weapons. In reality, many of these boards appear to exist only on paper. In 2004, the nonprofit Sunshine Project surveyed 390 such committees, asking for copies of minutes or notes from any meetings convened to evaluate research projects. Only 15 institutions earned high marks for showing full compliance with NIH guidelines, said Edward Hammond, who directed the survey. Nearly 200 others who responded had poor or missing records or none at all, he said. Some committees had never met.

Stockpiles Aren't Enough

New techniques that unlock the secrets of microbial life may someday lead to the defeat of bioterrorism threats and cures for natural diseases, too. But today, the search for new drugs of all kinds remains agonizingly slow. Five years after the Sept. 11 attacks, the federal government budgets nearly $8 billion annually -- an 18-fold increase since 2001 -- for the defense of civilians against biological attack. Billions have been spent to develop and stockpile new drugs, most of them each tied to a single, well-known bioterrorism threat, such as anthrax. Despite efforts to streamline the system, developing one new drug could still take up to a decade and cost hundreds of millions of dollars. If successful, the drug is a solution for just one disease threat out of a list that is rapidly expanding to include man-made varieties. In a biological attack, waiting even a few weeks for new drugs may be disastrous, said Tara O'Toole, a physician and director of the Center for Biosecurity at the University of Pittsburgh Medical Center. "We haven't yet absorbed the magnitude of this threat to national security," said O'Toole, who worries that the national commitment to biodefense is waning over time and the rise of natural threats such as pandemic flu. "It is true that pandemic flu is important, and we're not doing nearly enough, but I don't think pandemic flu could take down the United States of America. A campaign of moderate biological attacks could." © 2006 The Washington Post Company

Best,

Nanoguru.

Emerging Giants

2006-07-24T12:19:00.000-05:00

This is an article that appeared in the July 31, 2006 edition of Business Week:

Emerging Giants

JULY 31, 2006 COVER STORY

Emerging Giants

Multinationals from China, India, Brazil, Russia, and even Egypt are coming on strong. They're hungry -- and want your customers. They're changing the global game.

Like other rural residents of southern Mississippi, Jamie Lucenberg, 35, faced a huge cleanup job last fall in the wake of Hurricane Katrina. He needed a tractor fast to clear debris and trees from his 17-acre family farm, just 16 miles north of devastated Biloxi. "We literally had to cut our way up and down the blacktop roads," recalls Lucenberg.

But rather than buy an American-made John Deere or New Holland, brands he grew up with, Lucenberg chose a shiny red Mahindra 5500 made by India's Mahindra & Mahindra Ltd. "I have been around equipment all my life," says Lucenberg, who also used the tractor to earn extra money clearing destroyed homes along the Gulf Coast. But for $27,000, complete with a front loader, the 54-hp Mahindra" is by far the best for the money. It has more power and heavier steel," Lucenberg says. "When you lock it into four-wheel drive, you can move 3,000 pounds like nothing. That thing's an animal." The local dealership in nearby Saucier, Miss. (population 1,300), figures it has sold 300 Mahindras in the past four months. Surprised that a company from India is penetrating a U.S. market long dominated by venerable names like Deere & Co.? Then it's time to take a look at how globalization has come full circle. A new breed of ambitious multinational is rising on the world scene, presenting both challenges and opportunities for established global players.

These new contenders hail from seemingly unlikely places, developing nations such as Brazil, China, India, Russia, and even Egypt and South Africa. They are shaking up entire industries, from farm equipment and refrigerators to aircraft and telecom services, and changing the rules of global competition.

Unlike Japanese and Korean conglomerates, which benefited from protection and big profits at home before they took on the world, these are mostly companies that have prevailed in brutally competitive domestic markets, where local companies have to duke it out with homegrown rivals and Western multinationals every day. As a result, these emerging champions must make profits at price levels unheard of in the U.S. or Europe. Indian generic drugmakers, for example, often charge customers in their home market as little as 1% to 2% of what people pay in the U.S. Cellular outfits in North Africa, Brazil, and India offer phone service for pennies per minute. Yet these companies often thrive in such tough environments. Egyptian cellular operator Orascom boasts margins of 49%; Mahindra's pretax profit rose 81% last year.

Some already are marquee names. Lenovo Group, the Chinese computer maker, made waves last year by buying IBM's (IBM ) $11 billion PC business. Indian software outfits Infosys, Tata Consultancy Services, and Wipro (WIT ) have revolutionized the $650 billion technology services industry. Johannesburg brewer SABMiller PLC is challenging Anheuser-Busch Cos.' (BUD ) leadership right in the U.S.

These companies are just the first wave. The biggest international cellular provider? Soon it may be Mexico's América Móvil (AMX ), which boasts more than 100 million Latin American subscribers and led BusinessWeek's latest rankings of the world's top information technology companies. Never heard of Hong Kong's Techtronic Industries Ltd.? If you buy power tools at Home Depot Inc. (HD ), where its products now fill the aisles, you probably know some of the brands it manufactures: Ryobi, Milwaukee, and RIDGID. Brazil's Embraer has surged past Canada's Bombardier as the world's No. 3 aircraft maker and is winning midsize-jet orders that otherwise would have gone to larger planes by Airbus and Boeing (BA ). Western telecom equipment leaders have long looked down on China's Huawei Technologies Co. as a mere copier of their designs. But last year, Huawei snared $8 billion in new orders, including contracts from British Telecommunications PLC (BT ) for its $19 billion program to transform Britain's telecom network. The deal "sent a chill through the rest of the telecom manufacturers," says analyst Michael Howard of Infonetics Research Inc. in Campbell, Calif.

Many more companies are using their bases in the developing world as springboards to build global empires, such as Mexican cement giant Cemex, Indian drugmaker Ranbaxy, and Russia's Lukoil (LUKOY ), which has hundreds of gas stations in New Jersey and Pennsylvania. "What is surprising is the amount of progress emerging-market companies have made in the last few years," says Harold L. Sirkin, senior vice-president at Boston Consulting Group (BCG), which recently published a study based on data collected from 3,000 companies in 12 developing nations. BCG identified 100 emerging multinationals that appear positioned to "radically transform industries and markets around the world." The 100 had a combined $715 billion in revenue in 2005, $145 billion in operating profits, and a half-trillion dollars in assets. They have grown at a 24% annual clip in the past four years. "There is no doubt in my mind that Corporate America has started to take this threat seriously," Sirkin adds.

What makes these upstarts global contenders? Their key advantages are access to some of the world's most dynamic growth markets and immense pools of low-cost resources, be they production workers, engineers, land, petroleum, or iron ore. But these aspiring giants are about much more than low cost. The best of the pack are proving as innovative and expertly run as any in the business, astutely absorbing global consumer trends and technologies and getting new products to market faster than their rivals. Techtronic, for example, was the first to sell heavy-duty cordless tools powered by lightweight lithium ion batteries. Jetmaker Embraer's sleek EMB 190, which seats up to 118, has taken smaller commercial aircraft to a new level with a fuselage design that offers the legroom and overhead luggage space of much larger planes. Globalization and the Internet are ushering in this "seismic change" to the competitive landscape, says management guru Ram Charan. Because they can tap the same managerial talent, information, and capital as Western companies, "anyone from anywhere who sets his mind to it can really restructure an industry," Charan says. "Make no mistake, this now is a global game."

U.S. corporations, of course, have weathered waves of new rivals before. The 1960s and '70s saw the rise of Western European industrial groups such as Unilever, Philips, Siemens (SI ), and Volkswagen. Then came Japanese giants such as Sony (SNE ) and Toyota, followed by South Korean powerhouses such as Hyundai and Samsung and Taiwanese electronics conglomerates in the '90s. Each time, chief executives found themselves caught off guard. The best U.S. corporations adapted and emerged stronger than before.

Yet this new group of game-changing companies is different on many levels. For starters, the new players are coming from many nations at once and deploying an array of strategies. They're also arriving from lands that, while growing fast, remain relatively poor. Germany and Japan were industrial powers before World War II and built on those strengths to reemerge as global heavyweights. By contrast, China and India have begun to emerge from extreme poverty only in recent decades. Per capita income in China is still just $1,300 a year. In India it's $620. That sounds like a huge handicap for companies from those nations: It implies low-income customers, meager capital, and hand-me-down technologies. It also means struggling with arcane regulations, corruption, and poor infrastructure.

Fit Survivors

Hardscrabble origins, though, can be a vital source of strength. These companies have learned to make money by developing reliable, easy-to-use goods and services at very low prices. And those skills have equipped them well for operating elsewhere in the Third World. Telcos such as Orascom and India's Bharti Telecom, for example, earn high margins while selling cellular service in some nations for 2 cents or 3 cents a minute, while América Móvil pioneered the use of pay-as-you-go cellular service that allows the masses to pay as little as $4.50 for a prepaid card. India has some of the lowest pharmaceutical prices in the world. The country has 101 brands of generic ciprofloxacin, used to treat bacterial infections such as pneumonia and anthrax, costing an average of 63 cents for 10 tablets of 500mg each. That compares with $51 for generic ciprofloxacin in the U.S., according to Ranbaxy Laboratories. "By learning to compete in this environment, we have gained strength in development and marketing that helps us around the world," says Ranbaxy CEO Malvinder Mohan Singh.

The late 1990s proved to be a time of key opportunity for these companies. In the wake of financial crises in Asia, Latin America, and Russia, many Western companies and banks pulled back from all but a few developing nations. Well-run local players bought assets from retreating Westerners on the cheap and doggedly pursued opportunities from Nigeria to Pakistan to Colombia. From 1995 to 2003, the World Bank estimates, corporate investment from one developing nation to another more than tripled, to $47 billion annually. It probably has neared $60 billion since.

That leaves the new multinationals in a strong position. Over the next decade, the World Bank projects, developing nations' share of world gross domestic product is expected to grow from one-fifth to one-third. During the next two decades, predicts Goldman, Sachs & Co. (GS ), China, India, Brazil, and Russia alone will add to their populations some 225 million consumers who earn at least $15,000 a year. That's more than the combined population of Germany and Japan. Of 1.2 billion new cellular-phone subscribers worldwide by 2010, estimates Pyramid Research in Cambridge, Mass., 86% will be in developing nations. Chicago economic consultant Keystone India figures emerging markets will make up 69% of all new car sales by 2030, compared with 26% now.

Where they choose to fight, of course, the established multinationals still hold big advantages over the upstarts. Citibank (C ), General Electric (GE ), Honda (HMC ), HSBC (HBC ), Motorola (MOT ), Nokia (NOK ), and Philips (PHG ) are masters at using low-cost manufacturing, engineering, and managerial talent from Bangalore to São Paulo. Few developing-nation companies have such management agility.

That's especially true in China, where promising consumer-electronics makers such as Bird, Konka, and TCL have stumbled because of overcapacity at home and poorly managed acquisitions abroad. "Everyone sees Chinese enterprises as a threat, but in fact they face a lot of difficulties going global," concedes Zhang Xuebin, CEO of $1.5 billion color TV maker Skyworth Digital Holding Ltd.

The best emerging multinationals, though, have amassed piles of cash, have built global research and development networks, and boast world-class management. You get the idea how far some companies have come by touring Embraer's campus in São José dos Campos, the size of 55 soccer fields. On the floor of one hangar, dozens of workers in impeccable overalls put the finishing touches on three luxurious Legacy 600 corporate jets that seat up to 16. In a classroom perched above the assembly line, 30 engineers enrolled in the company's graduate aerospace program fine-tune a PowerPoint presentation on a hypothetical new jet they have designed after conducting exhaustive market research and cost-feasibility studies.

Local Heroes

Other emerging players are using their access to deep pools of low-cost local engineers and experience gained in developing nations to close the gap with Western incumbents. Just three years ago, Huawei was known in the U.S. mainly as the company that Cisco Systems Inc. (CSCO ) caught copying its designs. But Huawei, which spent $558 million in R&D last year and employs 7,000 engineers at its sprawling Shenzhen campus, is winning respect globally. Last year 57% of its sales were outside China. It boasts a 15% market share in Asia and 9% in Latin America, cutting sharply into Cisco's lead in those regions. Huawei is the global leader in the rapidly growing equipment market for voice-over-Internet protocol service.

Besides undercutting Western rivals' prices by 20% to 50%, Huawei is adept at designing equipment appropriate for developing nations. "A Cisco always starts a discussion with its software superiority," says Steven Davidson, leader of strategic change at IBM in Asia. "But many companies in developing nations would rather pay half the price for software that gets the job done."

A raft of Indian companies also have gotten in position for a U.S. assault after building heft at the margins of the global economy. Ranbaxy may rank just No. 14 in the $28 billion U.S. market for prescription generic drugs. But it is a leader in nations like Nigeria and Brazil. It has earned goodwill by being one of the biggest suppliers of $1-a-day generic AIDS treatments to Africa at cost, and hopes to have its own new malaria drug on the market by 2008. It has also snapped up smaller generic drugmakers in Belgium, Italy, and Romania. When Ranbaxy first began to market its drugs in Europe, recalls CEO Singh, its sales staff was often kept waiting hours before skeptical purchasing managers would hear their pitch. Now, Ranbaxy is a top supplier in much of Europe, and 80% of its $1.2 billion in revenues comes from overseas. It has staff in 49 nations, plants in seven, and an R&D team of 1,100 at its 17-acre campus outside New Delhi.

Ranbaxy hopes this R&D base will enable it to vault into the top five in the U.S. by 2012 and to No. 1 globally, passing Israel's Teva Pharmaceutical Industries Ltd. It has 58 generic medicines pending U.S. Food & Drug Administration approval, including a version of the anti-cholesterol drug Lipitor. Ranbaxy's pipeline is the second-biggest in the generic industry.

How can Western multinationals respond? The first step is to begin respecting the new competition. That is the attitude David C. Everitt, president of Deere's $10.5 billion agricultural division, is adopting toward Mahindra. Everitt concedes the Indian rival could someday pass Deere in global unit sales. Mahindra dominates the Indian market, which is bigger even than America's, and is especially strong in the small tractors that account for two-thirds of U.S. sales. But Deere also is picking up its game by, among other things, boosting R&D in higher-end tractors for mega-farms in the U.S., Europe, and Brazil, and expanding its own production in India and elsewhere. "We are not afraid of competition," Everitt says. "It gets the juices going and helps us find ways to be better."

Standing Pat

Another strategy is to refuse to cede ground either at home or abroad. Last year, Whirlpool Corp. (WHR ) agreed to pay a surprisingly high $2.8 billion to buy Maytag Corp. It wanted to keep Maytag out of the hands of China's Haier, which is ramping up in the U.S. and had made a rival bid. Cisco, meanwhile, is keeping up the pressure in China, Huawei's home market. Cisco continues to win large orders from Chinese corporations, has plowed $650 million into Chinese tech startups, and has forged a tieup with local Huawei rival ZTE Corp.Then there's always the strategy of joining the new challengers. Nortel Networks Ltd. (NT ) and 3Com (COMS ) have formed telecom equipment and design ventures with Huawei. And Navistar International Corp. in Warrenville, Ill., has a joint venture with Mahindra to build trucks and buses for export. "These companies can be opportunities," says BCG's Sirkin, "if you can work with them.

"No matter how the big U.S. companies respond, gone is the era when they could afford to wait for an emerging market to ripen, then count on their ability to roll over the unsophisticated local players. "If you don't participate in these markets, you not only miss opportunities but also are cut out of all the innovation that comes from competing there," says University of Michigan management strategist C.K. Prahalad. "Then you won't be able to withstand the pressure when these companies come and hit you here." Whether one chooses to confront or collaborate, the new multinationals are set to change the rules in industry after industry.

By Pete Engardio, with Michael Arndt in Chicago and Geri Smith in São José dos Campos, Brazil.

This reinforces my contention that the U. S. is seriously falling behind the Rapidly Developing Economies (RDEs), especially China and India. To redress these issues, we must very quickly reprioritize our goals (and act on, of course) to include education of our citizens; investment in technology (regardless of religious convictions; read: President Bush's veto of the Stem Cell Bill); invest in a strong defense (read: do not fight other people's wars); learn from other countries and adapt to the challenge; and above all acquire, invest in, and nurture talent from anywhere in the world (read: legal immigration).

The following is another related article, which also appeared in the July 31, 2006 edition of Business Week:

Why It's A Small World After All

JULY 31, 2006 COVER STORY

Why It's A Small World After All

By Ram Charan

Radical change in the structure of the world economy is rare. But make no mistake: The emergence of world-class companies from developing nations is a shift that portends a new global game.

Indeed, emerging economies are no longer just about outsourcing or tapping into local markets. We are seeing the first wave of emerging-nation players that have clear advantages in their industries. Rather than the competition among three or four countries that long dominated global commerce, we have entered an evolving game of multiple geographies. The importance of that change -- and the challenge it poses to the dominance of the West and Japan -- cannot be overstated.

This seismic shift began roughly 10 years ago, brought about by three forces: mobility of talent, mobility of capital, and mobility of knowledge, thanks largely to the Internet. As a result, anyone from anywhere with determination can restructure a global industry. Lakshmi N. Mittal used knowhow from his family's steel business in India to build London-based Mittal Steel Co. (MT ), the world's largest. Mexico's Cemex is a new world leader blossoming far from traditional business centers like New York and Tokyo. If India's Tata Motors (TTM ) can develop a $2,000 car, it will become yet another.

The rise of these multinationals shouldn't be surprising in this age of globalism. But what few realize is that the advantages of such developing giants amount to more than cheap labor and low currencies. (Even companies that are lucky in those respects can have productivity and quality problems.) Instead, their leaders are good executors who see niches in the global economy and can tap world intellectual capital and financial markets to consolidate control across their industries.

Many of these companies are headed by entrepreneurs who were trained in the West and who know how to attract top talent from America and elsewhere. Wipro of India recruited Vivek Paul from General Electric Co. (GE ), and he helped build Wipro into a highly profitable, global information technology powerhouse. Shanghai Automotive Co. recently hired Philip Murtaugh, who used to run the China office for its joint-venture partner, General Motors Corp. (GM ). And Haier Group Co., China's $12 billion consumer-electronics leader, has given Mike Jemal, its U.S. president and a former New York electronics retailer, free rein to pursue markets where Haier wants to be at least No. 2 or 3 -- not just on cost but by embracing an almost manic customer focus to fulfill unmet needs.

First World businesses must recognize that top intellectual capital is available to local entrepreneurs in emerging nations, and they should expect intense competition from these newcomers at home and abroad. But such nascent competitors have another potent advantage: a lack of legacy costs that keep even the most savvy Western outfits from fully realizing the efficiencies of their size and market power. That's one reason budding multinationals will not be a passing fad. Ready or not, the globe is about to get a lot smaller.

Ram Charan is a leading U.S. management consultant and co-author of two business best-sellers.

There is also a report by the U. S.-based Boston Consulting group entitled "The New Global Challengers: How Top 100 Companies from Rapidly Emerging Economies Are Changing the World." The New Global Challengers: How Top 100 Companies from Rapidly Emerging Economies Are Changing the World Vast majority of the companies on this list are from India and China. (This does not discount the fact that we are facing imminent threats from other RDEs.) All it evidences is that we (the U. S.) cannot dismiss these companies and countries as whippersnappers, upstarts, greenhorns, etc.

Best,

Nanoguru.

Russia Opens New Nanotech Center

2006-07-21T17:11:00.000-05:00

Russia opens new nanotech center

Nicolas Mokhoff

EE Times (07/13/2006 5:44 PM EDT)

MOSCOW — A multimillion dollar nanotechnology development center here funded by the Russian Federation expands on anticipated $400 million overall Russian investment in nanotechnology development by 2007. The Pilot Scientific and Technical Center of Excellence for Nanotechnology Development opened in June 3. Robert Cresanti, U.S. undersecretary of commerce for technology, and Bob Gregg, executive vice president at FEI, participated in the opening ceremonies. Global public investment in nanotechnology development is expected to reach $5 billion in 2006. Corporate investment is expected to exceed government funding this year, reaching nearly $6 billion. "Government nanotechnology investments were initially led by Europe, North America and Japan," Sean Murdock, executive director of the U.S.-based NanoBusiness Alliance, said in a statement. "Now countries such as Russia, China, Brazil and India have joined the trend and are making significant investments."

Here we go, again! It is not as if we do not have enough competition, already. I would not be surprised if there were to be a "nanowar," just like the cold war! A decent Russian engineer gets paid about $300-400/month. The correct exchange rate is 26.9 rubes per dollar. This provides the $400-million investment in nanotechnology center with nearly 10-15 times greater impact and return-on-investment (ROI) than it would in the U. S., or any of the other "first-world" nations, for that matter. Furthermore, the Russians already possess the technological know-how that the U. S. and its Western allies do not in many of the fields. (The only significant exception is computer technology; even there, the technology is out in the open and available for the "right" price!) We (the U. S.) must do more - a lot more - immediately! Instead of spending money on such idiotic wars as Iraq, we could invest money in alternative energy sources (sorry, coal not included).; education; medical research; defense (read: not "unnecessary" offense) and the list goes on and on like an Energizer Bunny!

Best,

Nanogurul.

What innovation advantage? Chinese and Indian companies aren't leaving design to the North Americans.

2006-06-19T14:30:00.000-05:00

The following is an article published in BusinessWeek (January 16, 2006):

What innovation advantage? Chinese and Indian companies aren't leaving design to the North Americans.

By Roger L. Martin

There is a romantic notion in North American business that its future lies in design and innovation, while India and China will be the home of less skilled, lower-paying operations churning out the products and services the U.S. comes up with. It is a nifty twist on David Ricardo’s seminal 19th century theory of “comparative advantage,” which explained why cloudy and cool England exported woolen goods to sunny and hot Spain, which in turn exported wine to England.

The problem is that the theory didn’t ring true when I rode through the streets of Hyderabad, Bombay, and Bangalore on visits to major Indian companies. At Tata Consultancy Services’ 23-acre campus in Bombay, for instance, I learned about its central goal of providing customers with not just an acceptable-quality service but also a user experience that delights and surprises. To accomplish this, its tech professionals also are taught how to manage client change.

AT ANY GIVEN TIME on Satyam Computer Services Ltd.’s (SAY ) 120-acre campus on the outskirts of Hyderabad, 1,000 staffers are in intensive training. Plenty of the instruction is eye-glazing, info tech jargon: “J2EE Development using JBOSS.” But there’s also a “Finding a Better Way” sequence that includes sessions on creative problem solving and managing innovation – hardly low-end stuff. Likewise, ICICI Bank (IBN ) management in Bombay is obsessively assembling talent that exhibits passion, perseverance, and bias for action rather than a willingness to perform routine tasks in front of a terminal. Meanwhile, Infosys Technologies (INFY ) is ramping up recruiting at the world’s leading business schools.

These globally oriented outfits are not entrusting all creativity, design, and innovation to “first world” opponents while they huddle over their workstations. True, they have staggering cost advantages over traditional competitors. But that doesn’t mean they are incapable of design and innovation. (Their North American rivals just wish they were.) The Ricardian logic, based on so-called natural endowments, simply doesn’t apply.

This is not the first time the theory has been applied with checkered results. For decades, America’s Big Three carmakers reasoned that Japanese manufacturers would stick with their “natural advantage” in small, inexpensive cars and allow them to dominate the lucrative high end. But Detroit painfully learned otherwise as Japan ultimately became a fierce competitor in almost every market segment.

More recently, companies like Solectron (SLR ), Flextronics (FLEX ), and Celestica (CLS ) grew spectacularly in the 1990s by making equipment designed fully by big names such as Dell (DELL ), IBM (IBM ), and Nortel. (NT ). But they dismissed Taiwanese manufacturers like BenQ, Hon Hai Precision Industry, and HTC, which designed and built mainly low-end gear for “no-name” PC vendors, as being nothing but unskilled low-cost players. Wrong. The Taiwanese companies actually had more engineers, held more patents, and performed more research and development. And in recent years they’ve dominated ever-more-sophisticated segments of the industry.

Assuming that capabilities are static and advantages are permanent is a mistake. Natural endowments of climate, location, and mineral resources may be enduring, but company-generated capabilities are quite fluid. It is as much an error to assume that competitors won’t attempt to develop a capability because it seemingly conflicts with an existing one – in this case low cost vs. innovation expertise. The general rule: If the opposite of a capability sounds stupid, competitors won’t try to acquire it – they’ll pursue the reasonable one. For example, the opposite of choosing to be “customer-oriented” is to elect to ignore your customers, a truly daft proposal.

Since lackluster design and staid conformity are obviously bad ideas, it is safe to assume that compelling design and potent innovation are going to be almost universally sought. So North American companies, many of which have pretty dreary design, are wrong if they assume their Asian rivals will pay no attention.

In the end, design is about refusing to accept apparent trade-offs and instead innovating around them to produce creative resolutions. If North American businesses genuinely want to ward off Indian and Chinese rivals, they’d better start by rejecting the notion of an apparent trade-off between low cost on one hand and design and innovation on the other.

Roger L. Martin is Dean of the Rotman School of Management at the University of Toronto and a columnist on BusinessWeek Online's Innovation & Design channel.

As much as I hate to admit it, it is very true. We Americans misguidedly believe that we still have a considerable edge over other countries on technology. Unfortunately, it is fast diminishing. Al though the article primarily focuses on Information Technology (IT) prowess evinced by the Indians and Chinese, there is far more sinister possibility just down the road - basic sciences - chemistry physics, biology, mathematics, and allied fields. The Chinese and Indian have had well-established programs in these fields and have pioneered many of the theories in the past. It is about time we took a long, hard, and objective look at our standing in the science and technology fields and assess our SWOT (Strengths, Weaknesses, Opportunities, and Threats). Immediately thereafter, we must modify our strategic thinking to regain our preeminence in the world. Nanotechnology is one field that encompasses all these "discrete" disciplines. I just wish that our (the U. S.) Government would really do the needful.

Best,

Nanoguru.

“70-20-10” - U.S. Security Still Needs A Focus on Technology

2006-06-14T11:29:00.000-05:00

The following are the article (Commentary) that appeared in the Wall Street Journal on May 25, 2006 and the Letters in response to it:

Within hours of the 9/11 attacks, land, air and sea ports were either closed or severely restricted. Given the imponderables, this response to the crisis was understandable. Five years later, however, too many people remain committed to a port and border security paradigm that is short on risk analysis and offers little or no value to the nation. Members of Congress, including Democrat Ed Markey and Republican Chris Shays, are actively urging 100% inspection of all 12 million containers entering the U.S. Legislation to this effect would require X-ray and radiological scans to ensure that no WMD is inside. But even if these programs work flawlessly – at a cost of billions – America will be no more secure. Arguably we will be less so, because the money could have been spent on programs with a far better return on investment.

We are dealing with a thinking enemy who is patient, uses extensive surveillance and carefully selects the means and methods of attack. Thus we must answer two questions: What materials – weapons – would terrorists want to bring across our borders, and how would this be accomplished? A thinking enemy will not be deterred by deadbolt locks on America’s front doors (our seaports) when our windows and back doors (7,000 miles of virtually unguarded land borders and 95,000 miles of shoreline) remain wide open.

Consider these types of weapons of mass destruction: chemical, biological, radiological or enhanced conventional explosives. A terrorist does not need to bring these into the U.S. – because they are already here. According to an EPA document which was removed from the Internet shortly after 9/11, there are at least 123 chemical facilities in the U.S. that could put a million people at risk if attacked, and more than 700 plants that could put at least 100,000 people at risk. A study in the late 1990s conducted by the Defense Threat Reduction Agency demonstrated that the equipment required to build a sophisticated biological weapon could be purchased off the Internet for less than $250,000, and would fit inside a standard two-car garage.

The material required to build a “dirty bomb” is readily available at medical facilities, research institutes, universities and major construction sites. Trucks containing large quantities of cesium-137 drive between hospitals in Southern California with no security protection. Why bring radiological material into the U.S. to attack us? It’s already here. All a terrorist need do is blow up one of the large X-ray machines we’ve installed to “secure” our ports. As for enhanced conventional weapons, future terrorists will have no more problem building them inside the U.S. than did Ramzi Yousef, who built the bomb that hit the World Trade Center in 1993 – or Timothy McVeigh, who parked a homemade diesel-fuel fertilizer bomb in Oklahoma City in 1995. Al Qaeda training manuals, in fact, say it is preferable to build weapons inside the country to be attacked, as they did in the attack on the trains in Spain, the subway in London and the hotels in Indonesia.

In other words, a 100% success rate for “scan before sail” and similar programs will simply not reduce the likelihood of chemical, biological, radiological or enhanced conventional attacks.

What about nukes? I asked nuclear physicists and security professionals at a Homeland Security panel: “If you were advising al Qaeda on how to smuggle a Hiroshima-type bomb into the U.S., how many of you would suggest renting a 40-foot container and putting it on a ship bound for a U.S. seaport?” No hand was raised. Even if terrorists were to put a nuke in a container, don’t you suppose they’d also be smart enough to put lead around it? This makes a Hiroshima bomb virtually undetectable by screening.

The best strategy for preventing a nuclear device from entering the U.S. has little to do with examining containers by X-ray machines and radiological scanners – despite the idea’s appeal to citizens and their elected officials. The formula for success is rather “70-20-10”:

• 70% of money appropriated in the name of “securing America against nuclear terrorism” should be spent “upstream”: thwarting efforts to obtain weapons-grade nuclear material. This includes increased funding for programs such as Nunn-Lugar Cooperative Threat Reduction. Furthermore, we must ensure that nukes are the intelligence community’s highest concern. The recent Report from the Commission on the Intelligence Capabilities of the United States Regarding Weapons of Mass Destruction stated: “It is obvious that intelligence on loose nukes is not a high priority for the intelligence community.” What could possibly be a higher priority?

• 20% of funding should be allocated to the pursuit and recovery of material and devices should weapons-grade materials fall into terrorists’ hands. This should be a multinational effort led by the U.S. Funds for research and development of new-generation, rapidly deployable detectors would be included here.

• 10% should be spent on response and mitigation capabilities should a nuclear detonation occur. Developing pre-positioned equipment (as does France) for responders and the American population is required.

Since 9/11, the administration and Congress have spent too much time thinking at a tactical level, and too often technology has driven their strategy. No one doubts their good intentions, but this is a backward approach. Wasting money with good intentions make us no more secure.

Mr. Larsen is director of the Institute for Homeland Security and author of “Our Own Worst Enemy,” forthcoming from Warner Books.

U.S. Security Still Needs A Focus on Technology

June 1, 2006; Page A19

Randall Larsen is right that a terrorist chemical, biological or radiological threat probably would be made in the U.S., rather than imported (“‘70-20-10’,” editorial page, May 25). He is also right that the first part of our defense against terrorist nuclear weapons must be to control the proliferation, dispersion, and potential loss of weapons and materials. But he is wrong to discount the threat of a nuclear weapon in a shipping container, and wrong to say such a weapon could easily be shielded from detection. Nuclear weapons, especially primitive ones, are big and heavy. They cannot be smuggled across the Rio Grande or through the north woods in a backpack. While a shipping container could contain ample shielding, that isn’t as simple as wrapping a bomb in lead (lead absorbs gamma rays but not neutrons). More important, the presence of a shield is readily detected by radiography, and would itself be an indication that a container needs to be opened and inspected. We require a defense in depth. That begins with controls over the production and distribution of nuclear material. But these are unlikely to be perfect (prior to September 11 we thought our commercial aircraft were secure against hijacking). They must be backed up by a program to inspect, using radiographic technologies now becoming available, cargo destined for the U.S. at its point of embarkation.

Jonathan Katz

Professor of Physics

Washington University

St. Louis, Mo.

Mr. Larsen is of course correct in calling for strategic, as well as tactical thinking. But he is quite wrong in stating that “too often technology has driven their strategy.” U.S. strategy has not been sufficiently tech-based; in fact, it often fails to incorporate fundamental advances in technology. All evidence points now to a major technology inflection in our capabilities to see, sense, identify, track and deter threats. While 9/11 has accelerated a market for security technologies, the tech boom of the past two decades fortuitously set the stage for the current maturation and expansion of the tools, materials and software in our digital economy that enables capabilities heretofore limited to high-tech suspense fantasies.

Mark P. Mills

Chief Technology Officer

ICx Technologies Inc.

Washington

I agree with most of the observations made by Randall Larsen, Jonathan Katz, and Mark Mills. However, some of the salient points must be elucidated. For instance, gamma rays from nuclear armaments could be shielded from detectors by using certain conventional materials that are readily available on the commercial market. ( I will not elaborate on those, lest my comments be exploited.) A determined adversary, who has no regard for lives – including his/her own – is very difficult to vanquish easily. There is a dire need for forward-looking, proactive research and development in detection and neutralization of chemical, biological, and nuclear threats. I am afraid that we (the U. S.) are deeply concerned only about nuclear threats. However, there is a more sinister, emerging threat from biological and chemical weapons. To make matters worse, these weapons are unimaginably even more destructive; advances in nanotechnologies could be exploited by nation-states AND individuals without access to high-tech centrifuges, advanced pieces of equipment, etc. Nanomaterials and nanotechnologies are so ubiquitous and all-encompassing that they cover all applications. For instance, anthrax spores could be nanosized to significantly increase their lethality; chemical agents could be nanosized, or adsorbed on the surface of the nanomaterials, to effectuate the same results, if not more lethal. The applications are essentially limitless. I, for one, truly believe that we should spend adequate (certainly more than what is currently being done) resources on conventional processes and technologies and derive substantial detective and protective measures. Furthermore, today’s state-of the-art mass spectrometers deployed at the airports cannot detect most biological species, much less nanosized weapons-grade materials. Even ordinary materials could be turned into conflagrant, pyrophoric explosives. These nanomaterials cannot be detected as threats by current standards. I earnestly hope that the U. S. government would foresee and perceive the need for research into such seemingly mundane and conventional materials.

Best,

Nanoguru.

Growing Sino-India Military Ties

2006-06-07T09:20:00.000-05:00

SUPERPOWERS

Growing Sino-India Military Ties

by Kushal Jeena
New Delhi (UPI) Jun 07, 2006
Indian defense minister Pranab Mukherjee's recent visit to Japan, China and Singapore indicates the emergence of a creative regional security strategy that boosts New Delhi's global image, Indian defense analysts said Tuesday.

"Mukherjee's recent visit to three Asian countries, particularly China, has consolidated the new strategy by expanding the military ties with China and deepening security cooperation with Japan," said A.B. Mahapatra, the director of the Centre for Asian Studies, a New Delhi based think tank.

Mahapatra said Mukherjee capped it all at the end of his visit in Singapore, where he unveiled a comprehensive defense strategy that was aimed at reinforcing India's traditional claim of a central security role on the Asian continent and Indian Ocean.

In a landmark development, India and China inked a pact to expand military cooperation between two Asian giants during defense minister Mukherjee's recent three-nation tour.

As part of the second leg of his visit, Mukherjee arrived in Beijing June 4 to sign a military accord, which the Indian defense establishment said would institutionalize training, exercises and other contacts between the two countries.

"During the visit, India and China signed a memorandum of understanding on exchanges and cooperation in the field of defense," the Indian foreign office said in a statement. On the military pact, the Indian defense ministry said it was aimed at developing a strategic and cooperative partnership for peace and prosperity between India and China.

During his Monday visit to Beijing, Mukherjee held discussions with his Chinese counterpart, Cao Gangchun, and foreign minister Li Zhaoxing. The Indian embassy in Beijing said the two sides held talks on wide ranging issues, including military and security cooperation.

"My efforts will be to have a much larger participation in joint military exercises, more exchange visits by armed forces personnel and an expanded mutual training program," Mukherjee said.

The Indian defense minister said the visit was an important milestone and a major confidence building measure in Sino-India relations. The defense agreement signed during the visit could become an instrument for a regular and sustained dialogue between the two sides on issues relating to defense.

The relations between the two countries have never been as cordial as they are today. Diplomatic ties between the two were severed after they fought a small but bitter war in 1962, which ended in India's defeat. India took the initiative in the early 1990s to improve relations, but they have yet to resolve a long-standing boundary dispute.

The India-China military pact assumes significance on the heels of reports that China has been providing military assistance to India's archrival Pakistan.

The two principles at the core of the defense doctrine Mukherjee presented to China are India's determination to become a major power on the Asian continent and the designation of the Indian Ocean as a peace zone.

Following remarkable improvement in its relations with the United States and other western countries, India has been working hard to raise its standing in matters of Asian security. Analysts say the Indian strategy to achieve this goal is to engage with all but align with none, and Mukherjee's three-nation visit was part of this strategy.

During his China visit, Mukherjee was given an in-depth presentation of China's military modernization program by Gen Guo Boxiong, vice chairman of the central military commission of China. "We both reiterated that reform of the military should not be seen as a threat to each other," Mukherjee said after the presentation.

In Japan, Mukherjee was apprised of Tokyo's concerns regarding China's military build-up. Japan also sought India's support in calling for greater transparency in Beijing's defense program for the sake of overall Asian stability.

Mukherjee told the Japanese that China had been an important military power from the beginning. "We are fully aware of it, but every country has its own perception of the development and modernization of their armed forces," Mukherjee said.

Chinese authorities welcomed the argument of Mukherjee, saying India has distanced itself from the Japanese viewpoint of Beijing's military build-up, which Tokyo says is posing a threat to the stability to the Asian continent.

Source: United Press International

This is another indication that the U. S. needs to be mindful of the immense influence that the regional powers (read: potential superpowers) can wield over international status quo. (Needless to say, China and India educate more of their populations than the rest of the world combined.) We MUST devote more than adequate resources to protect our standing and slight technological edge. Nanotechnology and nanomaterials have very serious (both positive and negative) direct and collateral impact on a nation's defense and security. For instance, even a small terrorist organization, or cell, can exploit nanomaterials to deliver much greater effect (than conventional-size materials) on its intended target using very simple, conventional materials. They do not really need nuclear weapons to inflict terror and damage on the populace. Hence, it behooves us (the U. S. and other "peaceable" nations) to study these technologies beforehand and obviate the negative consequences, while we are ahead in the game.

Best,

Nanoguru.

BASF Sets Aside $221 Million For Nano R & D, Opens Asian Center

2006-05-08T19:27:00.000-05:00

By Kyle James
Small Times Correspondent

Mar. 20, 2006 - BASF, the world's largest chemical company, is devoting $221 million to nanotechnology research and development between 2006 and 2008. The German corporation is opening up a new nanotech center in Singapore this year as well. The investments are part of an expansion of its global R&D activities, with nanotech one of five "growth clusters" that BASF will build over the next two years to ensure it stays competitive.

"Nanotechnology gives us the possibility to innovate, especially in a hard market like chemicals," said Elmar Kessenich, manager of nanotechnology coordination at BASF. "Most of the chemical market is commodities, so if you really want to be competitive, you have to add value. You can do that with nanotechnology."

Besides nanotechnology, BASF is concentrating on energy management, raw material change, plant biotechnology and white biotechnology. (White biotechnology uses biological systems and techniques to make cleaner or more energy efficient industrial processes.) All together, the five areas will receive $982 million.

The list of nanotech areas BASF plans to support with the cash infusion is long. It includes new products for the automotive and construction markets, cosmetics, printed electronics, electronic components and energy management systems such as fuel cells, OLED displays, and a variety of surfaces, such as scratch-resistant coatings and dirt-repellent paint.

BASF says its R&D strategy will enable it to stay at the forefront of materials innovation. While nanotechnology is still in its early stages regarding widespread application, even conservative estimates put growth rates at 10 percent a year and an end-user market size at $614 billion in 2010. BASF expects the market for its nanosystems and components to be between $61 billion and $74 billion in four years.

"It's a key technology for us, since it helps us meet challenges of the global market not only with new products but also with old ones," Kessenich said. As an example, he cited the company's Ultradur High Speed product, an engineered plastic for electronic components. While a previous version of the product had been on the market for several years, BASF added nanoparticles to the mix, which brought down manufacturing costs and increased performance.

Part of BASF's more intensive focus on nanotechnology is a new research center in Singapore, the company's first nanotech facility to be opened in Asia. Set up to open at the end of the first quarter of 2006, the center will concentrate on nanostructured surface modifications, such as controlling the hydrophobic or hydrophilic characteristics of a surface. Hydrophobic molecules shun water; hydrophilic molecules have an affinity for water.

The facility will employ about 20 people, including six researchers, technicians and post-docs, with most of them coming from the region. BASF chose Singapore because of the city-state's good infrastructure, its location and the fact that intellectual property protection is better there than in China. That's "a prerequisite for any R&D project," said Harald Lauke, president of the company's Asia-Pacific division.

According to Kessenich, Asia is focusing more of its attention on nanotech. "There are a lot of interesting nano startups there," he said. "At international conferences we see increasing numbers of good researchers from Asia presenting their results."

Asia in general is also becoming a more important market for BASF, which is interested in getting a firm foothold there. BASF is not completely new to Asia; the company opened a chemical production facility in Nanjing, China in 2005. A presence in the region will also help BASF recruit Asian chemists, since the company could offer them a position closer to home instead of asking them to move to another continent.

BASF's strategy appears to be on target, since Asia as a recruiting ground is looking more fertile all the time. A Georgia Institute of Technology study found that as more Asians earn doctorates, they increasingly apply them to Asian – not U.S.-based – careers. In the meantime, the number of U.S. citizens earning advanced degrees continues to decline.

The investment advisory group Innovest gave BASF good marks in the nanotechnology index it published in the fall. It highlighted the company as having high growth potential relative to its competitors, especially regarding transparency and addressing potential concerns like product safety.

"It's not all sunshine. Some of their products are still in the commodity range and they do have a lot of risk," said Heather Langsner, author of the report. "But they have paid attention to nanotech risk factors and will most likely succeed in sensitive markets."

"BASF's strategy appears to be on target, since Asia as a recruiting ground is looking more fertile all the time. A Georgia Institute of Technology study found that as more Asians earn doctorates, they increasingly apply them to Asian – not U.S.-based – careers. In the meantime, the number of U. S. citizens earning advanced degrees continues to decline."

The above Small Times article reinforces my contention that the US is seriously lagging behind Asian countries in education and that their lead in nanotechnology is only a few short years away.

Best,

Nanoguru.

Virus Fuels a Battery Breakthrough.

2006-04-08T23:12:00.000-05:00

The following is the article that appeared in The Wall Street Journal:

By WILLIAM M. BULKELEY

April 7, 2006; Page B2

CAMBRIDGE, Mass. --

Many researchers focus on stopping the replication of viruses that bring illness or death.

But Angela Belcher is excited about promoting the replication of viruses -- and harnessing them to create high-performance devices for practical applications. Dr. Belcher, a materials scientist at the Massachusetts Institute of Technology, heads a team that has successfully created a battery assembled by a benign biological virus that binds to gold and cobalt oxide.

Her invention is an advance in the emerging science of using biological methods to create new materials, and also falls within the field of nanotechnology -- the development of useful devices from bits of material so small they are measured in atoms.

The new battery material created by Dr. Belcher's team has three times the electricity-generating capacity of traditional battery materials of the same size. The team described its work in a paper in Science magazine this week.

Dr. Belcher says that based on the proof of concept described in the article, her team thinks it can make prototype batteries for specific applications within two years. Yet-Ming Chiang, an MIT materials scientist and battery expert who worked on the team, said he believes the size of the first batteries using the material will be "between a grain of rice and a hearing-aid battery."

Dr. Belcher declined to describe early applications, but she said they would probably be for the Defense Department since the work was funded by the Army Research Office. Besides high power, the technology promises batteries that are flexible and transparent. That raises the possibility that a small portable video screen -- such as the one on a cellphone -- could be coated with the viral-battery material instead of being attached to a separate battery. Other applications might involve medical use such as battery power for tiny devices threaded through arteries.

Dr. Belcher, a professor of materials science and engineering, and biological engineering, has been working on coding viruses to produce nano-scale materials. Nano-scale usually refers to particles that are less than a few hundred atoms in width. "As a material scientist, bacteria are just a factory to make viruses, and the viruses are just a tool to build electrodes," she said.

Two years ago in Science her team described coding viruses to grow semiconductor wires. "In this case we actually created viruses that self-assembled into this device," Dr. Belcher said in an interview.

According to the paper in Science, the researchers used a virus called M13, which is widely used in medical research, and engineered a specialized clone that would grow nanowires. The viruses were incubated for 30 minutes in a liquid bath of cobalt chloride after which they created cobalt-oxide nanowires.

Next the scientists further altered another part of the virus's protein coating to make it bind to gold particles. Using a small number of the gold viruses interspersed with a larger number of the cobalt viruses, the scientists created a cobalt-oxide and gold material that produced substantially higher power than the pure cobalt-oxide electrode did.

The paper says the bioengineered material contains precisely positioned nano materials and its crystalline structure helps make the batteries less prone to rapid fading than conventionally assembled batteries of the same materials.

Dr. Belcher said Cambrios Technologies Corp., a Mountain View, Calif., company that she founded and has the rights to her "directed evolution" virus technology, is looking at the developments. Cambrios is working on display and semiconductor manufacturing technology.

Write to William M. Bulkeley at bill.bulkeley@wsj.com

I see a clear conflict of interest with respect to using public funds to develop technologies, only to be "licensed" to the companies founded by professors. I thought our professors' duty was first and foremost to educate our kids?! Also, it appears that our professors are busy feathering their nests! Have I the wrong expectation? What hath become of our great country - USA?

Best,

Nanoguru.

Tim Harper's comments on Iranian nano initiatives.

2006-04-08T21:30:00.000-05:00

Please click on the above link for the comments by Tim Harper of Cientifica, Ltd.

Well said! One has to remember that Iran used to be a huge country called "Persia," before the Brits divvied it up into many fractions (and shafted most of the "Persians" - installing a boy king, getting very favorable oil contracts, etc.) that currently form many monarchical/dictatorial states! As a matter of fact, Persia contributed much to the ancient science and technological developments (at least comparable to many other civilizations). Unfortunately, Iran has been ruled, for the last 26 years, by religiously fanatical oligarchs. Iran still has a significant weapon in its arsenal - oil, which means money. While money cannot buy everything, but as evident from UAE, money can surely buy a lot of things including science and technology. Nowhere is it more evident than in Singapore! From what I understand, Iran is on the prowl for nanotechnologies, nanotechnologists, and nanoscientists. Has anyone heard anything in this regard?

The problem, as I see it, is that we (i. e., western countries, especially the USA - my beloved home) mess with other countries for the sake of expediency - supporting the Shah Pahlavi and Mujaihaideen (Afghan war) with all the latest American "gadgets," which come back to haunt us. Let us keep our hands to ourselves and focus on educating our kids!

Best,

Nanoguru.

Iranian Nano Industry Think Tank.

2005-12-16T21:42:00.000-05:00

Here is another website that details some of Iran's nano initiatives. Unfortunately, there is not much useful information on this, although they seem to focus on steels.

Formed in 2005, Nano and Industry Think-Tank’s (NITT) knowledge and expertise comes from a combination of thinking and doing. We have focused on creating value through researching and developing innovative approaches to meet industry needs in the area of Nanotechnology.

NITT is a center which develops and publishes policy proposals as part of its mission to influence decisions within four inter-related strands: industry sections; government; investors; and society. Its aim is to understand the dynamic processes at work within its areas of study.

Our aim is to create new understandings by drawing on available evidence and presenting alternative views that encourage new thinking again on what works (or doesn't), how, and why. We focus on the space between the development of policy aims and their translation into practical, operational realities.

Best,

Nanoguru.

Zhukov suggests concentrated financing of nanotechnology.

2005-12-16T20:44:00.000-05:00

Well, Russia is also getting aggressive on nanotechnology. Now, this is a very serious competitor; only this time it could be the nanowar, rather than cold war, and worse!

[December 16, 2005]

Zhukov suggests concentrated financing of nano-technology

(Interfax News Agency)MOSCOW. Dec 15 (Interfax) - Deputy Prime Minister Alexander Zhukov has suggested making nano-technologies a priority of Russian science and the economy.

Russia should have a national program for the development of nano- technologies, Zhukov said at a Cabinet meeting on Thursday.

"The significance of nano-technologies in the 21st century will be equal to that of the atomic bomb and information technology in the 20th," he said.

In contrast to many other spheres, Russia is not yet lagging behind other states in the field of nano-technology, Zhukov said. "Yet we may begin to do so should a national program supporting nano-technologies not be launched," he said.

Experts believe that the world market for nano-technologies will reach trillions of dollars in 2015-2020, Zhukov said.

The government should concentrate funds on specific scientific projects, including nano-technologies. "Should we continue dispersing our funds, our results will be meager," he said.

Allocations for science and innovation will reach 2% of Russia's GDP by 2010, Education and Science Minister Andrei Fursenko said.

Best,

Nanoguru.

Iranian Nanotechnology Initiative.

2005-09-16T08:52:00.000-05:00

Does anyone know what initiatives Iran has undertaken in the nanotechnology field? Lately, I see a lot of press releases coming from Iran and its affiliates (governmental and NGO). By the way, most of the information is in Persian!

About us

Nanotechnology is able to create new materials, devices and systems through the control of matter on the nanometer-length scale (molecules and atoms) and the exploitation of novel properties and phenomena developed at this scale. Such definition of nanotechnology shows that it is not a new discipline but it is a new approach in many disciplines. Technology on this scale comprises of applications for many fields, including food and drug, electronics, computer, energy, aeronautics, transportation, communication, biotechnology, medicine, healthcare, and national security.

Pervasive applications of nanotechnology along with social, political and legal implications of it make it a trans-disciplinary and trans-sectional subject. So besides the common infrastructures it needs, research and development policymaking must be centralized. It is clear that nanotechnology cannot be achieved merely by a laboratory or a research team, however it needs a correct infrastructure and elements and a trans-sectional coordinating organization.

Nanotechnology Policy Studies Committee is established to study the different aspects of this technology, its applications and impacts on other technologies, potential of the country and the trend of R&D activities in I. R. Iran.

Activities:

In order to formulate the country’s macro infrastructure, it is necessary to have a survey in the committee in the following:

·         Applications and impacts of Nanotechnology

·         Potential of different countries in Nanotechnology

·         Making necessary infrastructures such as national laboratories, educational programs, scientific networks and so forth.

·         Recognizing the potentialities in the universities and research centers to allocate research activities to them

Besides the above mentioned, some activities such as publishing Books, articles and recognizing the Iranian and non-Iranian researchers in this field are included in the scope of committee works.

Best,

Nanoguru.

Small Times Article - India-Russia Cooperation.

2005-09-16T08:39:00.000-05:00

Hello, folks! It is time for me to sound off, yet again. Russia and India are cooperating on nanotechnology, among other things. The U. S. would rather be needlessly mired in countries like Iraq and police the world and be complacent AND stuck! Am I being an alarmist, or what? I don't think so! It is time for us internalize our energies and resources and focus on our needs.

Best,

Nanoguru.

Business Round Table Discussion and Recommendations

2005-08-26T21:16:00.000-05:00

G'Day, folks! I was referred to this press release - Business Round Table Recommendations - by Ms. Judith LightFeather of The Nanotechnology Group. This PDF file - Tapping America's Potential - The Education for Innovation Initiative - has a list of recommendations that the U. S. should follow forthwith. I completely agree with all the recommendations, except significantly increasing "basic research" funding. Evidently, education is a very important factor! Duh! (This derision is for politicians, who dream on that we will be technologically superior, even when we act illogically.) I believe that we should signifiantly increase the teaching budget with appropriate share of research funding. Unfortunately. nowadays, universities and colleges have become income generators for their school systems. They operate more like a billion-dollar corporation, rather than non-profits and not-for-profits charged with educating tomorrow's technological leaders. At most "prestigious" institutions (I graduated from one of them) in the U. S., professors are tenured based on the number of publications and amount of funding that they have secured for their institutions. Is that "Sorry, no time for you Mr. Undergrad," which I hear from that "distinguished" professor? Oh, I see that he is extremely busy writing technical proposals and business plans for their start-ups incubated on campus and employing slave-labor (undergrad and grad students) for a few dollars a day. We cannot ask him to enlighten his students, because he is enriching himself and his institution; he is only human! Terribly lamentable, indeed! Opinions, anyone?

Best,

Nanoguru.

August 22, 2005 Business Week Article and U. S. Nanotechnology Spending.

2005-08-14T14:31:00.000-05:00

Perfect timing for my next post! There is a brand-new article in the latest issue on China and India. You may want to read it here: China and India: What You Need to Know Now. It is quite an eye-opener and reflects some of my sentiments and feelings about the Tiger and the Dragon. My feelings are one of helplessness and that the US government and politicians are more interested in fighting the unnecessary and costly war in Iraq and spending on pork (read highway bill) and religious entitlements (such as faith-based initiatives - what a crock!). It costs ONLY about $1.5 billion a day! How much did we spend on NNI, last year - FY2005? Was it $1 billion? I rest my case! Uncle Sam, you had better wake up fast and smell the Darjeeling and Green "tea."

AUGUST 22, 2005

CHINA AND INDIA -- THE CHALLENGE

A New World Economy

The balance of power will shift to the East as China and India evolve

It may not top the must-see list of many tourists. But to appreciate Shanghai's ambitious view of its future, there is no better place than the Urban Planning Exhibition Hall, a glass-and-metal structure across from People's Square. The highlight is a scale model bigger than a basketball court of the entire metropolis -- every skyscraper, house, lane, factory, dock, and patch of green space -- in the year 2020.

There are white plastic showpiece towers designed by architects such as I.M. Pei and Sir Norman Foster. There are immense new industrial parks for autos and petrochemicals, along with new subway lines, airport runways, ribbons of expressway, and an elaborate riverfront development, site of the 2010 World Expo. Nine futuristic planned communities for 800,000 residents each, with generous parks, retail districts, man-made lakes, and nearby college campuses, rise in the suburbs. The message is clear. Shanghai already is looking well past its industrial age to its expected emergence as a global mecca of knowledge workers. "In an information economy, it is very important to have urban space with a better natural and social environment," explains Architectural Society of Shanghai President Zheng Shiling, a key city adviser.

It is easy to dismiss such dreams as bubble-economy hubris -- until you take into account the audacious goals Shanghai already has achieved. Since 1990, when the city still seemed caught in a socialist time warp, Shanghai has erected enough high-rises to fill Manhattan. The once-rundown Pudong district boasts a space-age skyline, some of the world's biggest industrial zones, dozens of research centers, and a bullet train. This is the story of China, where an extraordinary ability to mobilize workers and capital has tripled per capita income in a generation, and has eased 300 million out of poverty. Leaders now are frenetically laying the groundwork for decades of new growth.

INVALUABLE ROLE
Now hop a plane to India. It is hard to tell this is the world's other emerging superpower. Jolting sights of extreme poverty abound even in the business capitals. A lack of subways and a dearth of expressways result in nightmarish traffic.

But visit the office towers and research and development centers sprouting everywhere, and you see the miracle. Here, Indians are playing invaluable roles in the global innovation chain. Motorola, (MOT ) Hewlett-Packard (HPQ ), Cisco Systems (CSCO ), and other tech giants now rely on their Indian teams to devise software platforms and dazzling multimedia features for next-generation devices. Google (GOOG ) principal scientist Krishna Bharat is setting up a Bangalore lab complete with colorful furniture, exercise balls, and a Yamaha organ -- like Google's Mountain View (Calif.) headquarters -- to work on core search-engine technology. Indian engineering houses use 3-D computer simulations to tweak designs of everything from car engines and forklifts to aircraft wings for such clients as General Motors Corp. (GM ) and Boeing Co (BA ). Financial and market-research experts at outfits like B2K, OfficeTiger, and Iris crunch the latest disclosures of blue-chip companies for Wall Street. By 2010 such outsourcing work is expected to quadruple, to $56 billion a year.

Even more exhilarating is the pace of innovation, as tech hubs like Bangalore spawn companies producing their own chip designs, software, and pharmaceuticals. "I find Bangalore to be one of the most exciting places in the world," says Dan Scheinman, Cisco Systems Inc.'s senior vice-president for corporate development. "It is Silicon Valley in 1999." Beyond Bangalore, Indian companies are showing a flair for producing high-quality goods and services at ridiculously low prices, from $50 air flights and crystal-clear 2 cents-a-minute cell-phone service to $2,200 cars and cardiac operations by top surgeons at a fraction of U.S. costs. Some analysts see the beginnings of hypercompetitive multinationals. "Once they learn to sell at Indian prices with world quality, they can compete anywhere," predicts University of Michigan management guru C.K. Prahalad. Adds A. T. Kearney high-tech consultant John Ciacchella: "I don't think U.S. companies realize India is building next-generation service companies."

SIMULTANEOUS TAKEOFFS
China and India. Rarely has the economic ascent of two still relatively poor nations been watched with such a mixture of awe, opportunism, and trepidation. The postwar era witnessed economic miracles in Japan and South Korea. But neither was populous enough to power worldwide growth or change the game in a complete spectrum of industries. China and India, by contrast, possess the weight and dynamism to transform the 21st-century global economy. The closest parallel to their emergence is the saga of 19th-century America, a huge continental economy with a young, driven workforce that grabbed the lead in agriculture, apparel, and the high technologies of the era, such as steam engines, the telegraph, and electric lights.

But in a way, even America's rise falls short in comparison to what's happening now. Never has the world seen the simultaneous, sustained takeoffs of two nations that together account for one-third of the planet's population. For the past two decades, China has been growing at an astounding 9.5% a year, and India by 6%. Given their young populations, high savings, and the sheer amount of catching up they still have to do, most economists figure China and India possess the fundamentals to keep growing in the 7%-to-8% range for decades.

Barring cataclysm, within three decades India should have vaulted over Germany as the world's third-biggest economy. By mid-century, China should have overtaken the U.S. as No. 1. By then, China and India could account for half of global output. Indeed, the troika of China, India, and the U.S. -- the only industrialized nation with significant population growth -- by most projections will dwarf every other economy.

What makes the two giants especially powerful is that they complement each other's strengths. An accelerating trend is that technical and managerial skills in both China and India are becoming more important than cheap assembly labor. China will stay dominant in mass manufacturing, and is one of the few nations building multibillion-dollar electronics and heavy industrial plants. India is a rising power in software, design, services, and precision industry. This raises a provocative question: What if the two nations merge into one giant "Chindia?" Rival political and economic ambitions make that unlikely. But if their industries truly collaborate, "they would take over the world tech industry," predicts Forrester Research Inc (FORR ). analyst Navi Radjou.

In a practical sense, the yin and yang of these immense workforces already are converging. True, annual trade between the two economies is just $14 billion. But thanks to the Internet and plunging telecom costs, multinationals are having their goods built in China with software and circuitry designed in India. As interactive design technology makes it easier to perfect virtual 3-D prototypes of everything from telecom routers to turbine generators on PCs, the distance between India's low-cost laboratories and China's low-cost factories shrinks by the month. Managers in the vanguard of globalization's new wave say the impact will be nothing less than explosive. "In a few years you'll see most companies unleashing this massive productivity surge," predicts Infosys Technologies (INFY ) CEO Nandan M. Nilekani.

To globalization's skeptics, however, what's good for Corporate America translates into layoffs and lower pay for workers. Little wonder the West is suffering from future shock. Each new Chinese corporate takeover bid or revelation of a major Indian outsourcing deal elicits howls of protest by U.S. politicians. Washington think tanks are publishing thick white papers charting China's rapid progress in microelectronics, nanotech, and aerospace -- and painting dark scenarios about what it means for America's global leadership.

Such alarmism is understandable. But the U.S. and other established powers will have to learn to make room for China and India. For in almost every dimension -- as consumer markets, investors, producers, and users of energy and commodities -- they will be 21st-century heavyweights. The growing economic might will carry into geopolitics as well. China and India are more assertively pressing their interests in the Middle East and Africa, and China's military will likely challenge U.S. dominance in the Pacific.

One implication is that the balance of power in many technologies will likely move from West to East. An obvious reason is that China and India graduate a combined half a million engineers and scientists a year, vs. 60,000 in the U.S. In life sciences, projects the McKinsey Global Institute, the total number of young researchers in both nations will rise by 35%, to 1.6 million by 2008. The U.S. supply will drop by 11%, to 760,000. As most Western scientists will tell you, China and India already are making important contributions in medicine and materials that will help everyone. Because these nations can throw more brains at technical problems at a fraction of the cost, their contributions to innovation will grow.

CONSUMERS RISING
American business isn't just shifting research work because Indian and Chinese brains are young, cheap, and plentiful. In many cases, these engineers combine skills -- mastery of the latest software tools, a knack for complex mathematical algorithms, and fluency in new multimedia technologies -- that often surpass those of their American counterparts. As Cisco's Scheinman puts it: "We came to India for the costs, we stayed for the quality, and we're now investing for the innovation."

A rising consumer class also will drive innovation. This year, China's passenger car market is expected to reach 3 million, No. 3 in the world. China already has the world's biggest base of cell-phone subscribers -- 350 million -- and that is expected to near 600 million by 2009. In two years, China should overtake the U.S. in homes connected to broadband. Less noticed is that India's consumer market is on the same explosive trajectory as China five years ago. Since 2000, the number of cellular subscribers has rocketed from 5.6 million to 55 million.

What's more, Chinese and Indian consumers and companies now demand the latest technologies and features. Studies show the attitudes and aspirations of today's young Chinese and Indians resemble those of Americans a few decades ago. Surveys of thousands of young adults in both nations by marketing firm Grey Global Group found they are overwhelmingly optimistic about the future, believe success is in their hands, and view products as status symbols. In China, it's fashionable for the upwardly mobile to switch high-end cell phones every three months, says Josh Li, managing director of Grey's Beijing office, because an old model suggests "you are not getting ahead and updated." That means these nations will be huge proving grounds for next-generation multimedia gizmos, networking equipment, and wireless Web services, and will play a greater role in setting global standards. In consumer electronics, "we will see China in a few years going from being a follower to a leader in defining consumer-electronics trends," predicts Philips Semiconductors (PHG ) Executive Vice-President Leon Husson.

For all the huge advantages they now enjoy, India and China cannot assume their role as new superpowers is assured. Today, China and India account for a mere 6% of global gross domestic product -- half that of Japan. They must keep growing rapidly just to provide jobs for tens of millions entering the workforce annually, and to keep many millions more from crashing back into poverty. Both nations must confront ecological degradation that's as obvious as the smog shrouding Shanghai and Bombay, and face real risks of social strife, war, and financial crisis.

Increasingly, such problems will be the world's problems. Also, with wages rising fast, especially in many skilled areas, the cheap labor edge won't last forever. Both nations will go through many boom and harrowing bust cycles. And neither country is yet producing companies like Samsung, Nokia (NOK ), or Toyota (TM ) that put it all together, developing, making, and marketing world-beating products.

Both countries, however, have survived earlier crises and possess immense untapped potential. In China, serious development only now is reaching the 800 million people in rural areas, where per capita annual income is just $354. In areas outside major cities, wages are as little as 45 cents an hour. "This is why China can have another 20 years of high-speed growth," contends Beijing University economist Hai Wen.

Very impressive. But India's long-term potential may be even higher. Due to its one-child policy, China's working-age population will peak at 1 billion in 2015 and then shrink steadily. China then will have to provide for a graying population that has limited retirement benefits. India has nearly 500 million people under age 19 and higher fertility rates. By mid-century, India is expected to have 1.6 billion people -- and 220 million more workers than China. That could be a source for instability, but a great advantage for growth if the government can provide education and opportunity for India's masses. New Delhi just now is pushing to open its power, telecom, commercial real estate and retail sectors to foreigners. These industries could lure big capital inflows. "The pace of institutional changes and industries being liberalized is phenomenal," says Chief Economist William T. Wilson of consultancy Keystone Business Intelligence India. "I believe India has a better model than China, and over time will surpass it in growth."

For its part, China has yet to prove it can go beyond forced-march industrialization. China directs massive investment into public works and factories, a wildly successful formula for rapid growth and job creation. But considering its massive manufacturing output, China is surprisingly weak in innovation. A full 57% of exports are from foreign-invested factories, and China underachieves in software, even with 35 software colleges and plans to graduate 200,000 software engineers a year. It's not for lack of genius. Microsoft Corp.'s (MSFT ) 180-engineer R&D lab in Beijing, for example, is one of the world's most productive sources of innovation in computer graphics and language simulation.

While China's big state-run R&D institutes are close to the cutting edge at the theoretical level, they have yet to yield many commercial breakthroughs. "China has a lot of capability," says Microsoft Chief Technology Officer Craig Mundie. "But when you look under the covers, there is not a lot of collaboration with industry." The lack of intellectual property protection, and Beijing's heavy role in building up its own tech companies, make many other multinationals leery of doing serious R&D in China.

China also is hugely wasteful. Its 9.5% growth rate in 2004 is less impressive when you consider that $850 billion -- half of GDP -- was plowed into already-glutted sectors like crude steel, vehicles, and office buildings. Its factories burn fuel five times less efficiently than in the West, and more than 20% of bank loans are bad. Two-thirds of China's 1,300 listed companies don't earn back their true cost of capital, estimates Beijing National Accounting Institute President Chen Xiaoyue. "We build the roads and industrial parks, but we sacrifice a lot," Chen says.

India, by contrast, has had to develop with scarcity. It gets scant foreign investment, and has no room to waste fuel and materials like China. India also has Western legal institutions, a modern stock market, and private banks and corporations. As a result, it is far more capital-efficient. A BusinessWeek analysis of Standard & Poor's (MHP ) Compustat data on 346 top listed companies in both nations shows Indian corporations have achieved higher returns on equity and invested capital in the past five years in industries from autos to food products. The average Indian company posted a 16.7% return on capital in 2004, vs. 12.8% in China.

SMALL-BATCH EXPERTISE
The burning question is whether India can replicate China's mass manufacturing achievement. India's info-tech services industry, successful as it is, employs fewer than 1 million people. But 200 million Indians subsist on $1 a day or less. Export manufacturing is one of India's best hopes of generating millions of new jobs.

India has sophisticated manufacturing knowhow. Tata Steel is among the world's most-efficient producers. The country boasts several top precision auto parts companies, such as Bharat Forge Ltd. The world's biggest supplier of chassis parts to major auto makers, it employs 1,200 engineers at its heavily automated Pune plant. India's forte is small-batch production of high-value goods requiring lots of engineering, such as power generators for Cummins Inc. (CMI ) and core components for General Electric Co. (GE ) CAT scanners.

What holds India back are bureaucratic red tape, rigid labor laws, and its inability to build infrastructure fast enough. There are hopeful signs. Nokia Corp. is building a major campus to make cell phones in Madras, and South Korea's Pohang Iron & Steel Co. plans a $12 billion complex by 2016 in Orissa state. But it will take India many years to build the highways, power plants, and airports needed to rival China in mass manufacturing. With Beijing now pushing software and pledging intellectual property rights protection, some Indians fret design work will shift to China to be closer to factories. "The question is whether China can move from manufacturing to services faster than we can solve our infrastructure bottlenecks," says President Aravind Melligeri of Bangalore-based QuEST, whose 700 engineers design gas turbines, aircraft engines, and medical gear for GE and other clients.

However the race plays out, Corporate America has little choice but to be engaged -- heavily. Motorola illustrates the value of leveraging both nations to lower costs and speed up development. Most of its hardware is assembled and partly designed in China. Its R&D center in Bangalore devises about 40% of the software in its new phones. The Bangalore team developed the multimedia software and user interfaces in the hot Razr cell phone. Now, they are working on phones that display and send live video, stream movies from the Web, or route incoming calls to voicemail when you are shifting gears in a car. "This is a very, very critical, state-of-the-art resource for Motorola," says Motorola South Asia President Amit Sharma.

Companies like Motorola realize they must succeed in China and India at many levels simultaneously to stay competitive. That requires strategies for winning consumers, recruiting and managing R&D and professional talent, and skillfully sourcing from factories. "Over the next few years, you will see a dramatic gap opening between companies," predicts Jim Hemerling, who runs Boston Consulting Group's Shanghai practice. "It will be between those who get it and are fully mobilized in China and India, and those that are still pondering."

In the coming decades, China and India will disrupt workforces, industries, companies, and markets in ways that we can barely begin to imagine. The upheaval will test America's commitment to the global trade system, and shake its confidence. In the 19th century, Europe went through a similar trauma when it realized a new giant -- the U.S. -- had arrived. "It is up to America to manage its own expectation of China and India as either a threat or opportunity," says corporate strategist Kenichi Ohmae. "America should be as open-minded as Europe was 100 years ago." How these Asian giants integrate with the rest of the world will largely shape the 21st-century global economy.

Best,

Nanoguru.

Nanomaterials and Nanotechnologies and Defense and National Security implications.

2005-08-13T11:03:00.000-05:00

We would like to welcome and encourage you to post items of interest to the nanomaterials and nanotechnologies community at large, especially defense-related and national-security applications. This blog is dedicated to exploring and discussing the implications of nanomaterial sand nanotechnologies on defense and national security of all countries. Examples of topics for discussion may include, but are not limited to, nanomaterials for explosives, propellants, etc. (energetics, in general); chemical-agent-resistant coatings (CARC); biomedical applications; camouflage (visible, IR/laser, etc.) applications; WMD detection and neutralization; armor (transparent and nontransparent, ceramic-/polymer-based) ) and anti-armor applications; terrestrial vehicular components (spark plugs, glow plugs, engine coolants, etc.); and aerospace components (this list is not at all all-inclusive, but only just illustrative). Another example might be how nanomaterials and nanotechnologies could affect the balance of power in the world - power could be economic and/or military. We ask you that you post constructive information ands that you not post personal, defamatory, or derogatory, information. We thank you, in advance, for your active participation and exchange of ideas!

To me, specifically, two countries are of great interest - China and the U. S. How do we - nanomaterials scientists/engineers/nanotechnologists and others - see the U. S.' and China's investment in the nanomaterials and nanotechnologies field? Should the U. S. be concerned about the Chinese nanotechnology spending? If yes, how much should it be concerned? What about India? Taiwan? South Korea? Singapore? European countries - Germany, the U. K., France, etc.? I feel that China and India are real threats to the U. S. dominance, because of their raw purchasing parity; i. e., $1 will go much further in China and India than in the U. S. Also, I strongly believe that nanotechnology is an amalgam of all the disciplines (engineering and life sciences). China and India graduate a significantly higher number of students in these disciplines than any other developed nation. Hence, these two countries are quite well-positioned to surpass the U. S. In my opinion, the U. S. should foster the nanotechnology industry just as it did (if not significantly better) manufacturing sector during WWII. The U. S. is already falling behind (despite almost a $1 billion in NNI spending). Let us hear your opinions. Good starter links for this blog could be:

http://www.odci.gov/nic/NIC_researchsupported.html http://www.futurebrief.com/resources.asp

Best,

Nanoguru.