The United States urgently needs to invest more in nanotechnology if it is to maintain its global lead in the emerging field, according to a report issued on Thursday to U.S. President Barack Obama.

Between 2003 and 2008, U.S. public and private investments in nanotechnology grew at 18 percent a year against 27 percent a year throughout the world, the President's Council of Advisors on Science and Technology reported.

They recommend:

* Increased overall funding to coordinate the nation's research and development in nanotechnology.

* Greater focus on commercialization of new nanotech products.

* Incentives for national foreign scientists and engineers studying in the United States to stay once they complete their training.

Nanotechnology -- the design and manipulation of materials thousands of times smaller than the width of a human hair -- has been hailed as a way to make strong, lightweight materials, better cosmetics and even tastier food.

The United States is a global leader in the field. In 2008 it invested $5.7 billion in nanotechnology research and development, more than any other country, according to the report from the 21 advisory council members.

It is the third in a decade-long series of assessments of the National Nanotechnology Initiative or NNI, which coordinates federal research and development involving the manipulation of matter at scales smaller than 100 billionths of meter.

Though we are the leader, economic competition from other countries has dramatically increased, said Maxine Savitz, who chaired the NNI working group, which consisted of three members of the council and 12 nongovernmental nanotechnology experts.

CHINA PATENT APPLICATIONS UP

The group found that in 2005, the European Union outspent U.S. government investments in nanotechnology research and development. And in 2008, Asian countries -- mainly Japan, China and South Korea -- spent more.

The United States has far more nanotechnology patents than any other nation. But in recent years, China has surpassed it in the number of patents applied for, the report found.

Going forward we need to place even more emphasis on the commercialization of the technology -- through, for example, strategic funding of nanomanufacturing -- supported by improved measures of the true value-added that nano products can bring to our economy, Savitz said in a statement.

To achieve that, the working group called for a $2 million budget increase -- up from the current $3 million -- to strengthen the National Nanotechnology Coordinating Office, which oversees the NNI.

And they recommend the NNI -- which has funneled $12 billion in investments through 25 federal agencies over the past decade -- increase its investment in manufacturing of nanomaterials by 100 percent over the next five years.

The report also calls for programs to retain scientific and engineering talent trained in the United States, such as the development of permanent resident cards for foreign nationals who get an advanced degree in science or engineering at a U.S.-accredited institution and can prove they are working in science or engineering fields.

And it calls for better ways to track the impact of nanotechnology on the economy, the environment and health.

Industry wants to know what is going to be required, Savitz said in a telephone briefing.

(Editing by Xavier Briand)

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