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Massachusetts, California best states for nanotech

Got a degree in nanomaterials and wondering where to move? Try Massachusetts, but stay out of the Dakotas or Arkansas.

Massachusetts, California and Colorado are the three states best poised to capitalize on nanotechnology, according to a study released Tuesday by Lux Research, which studies the industry.

State governments collectively poured an estimated $400 million into facilities and research aimed at prodding the development of local nanotechnology industries in 2004, the study said. The federal government spent about $1 billion on nanotech projects in the same year. Nanotechnology involves building products with components or molecules measuring 100 nanometers or less. A nanometer is a billionth of a meter.

Each state has its virtues and problems. Massachusetts is home to some of the leading universities and nanotech leaders, such as Harvard's Charlie Lieber, but the state doesn't have a coordinated statewide initiative. No. 2 California, though, comes with high taxes and regulatory hurdles.

Colorado has committed little in the way of state funds, but it's home to companies such as ZettaCore, which is working on molecular memory, and the state is the recipient of federal funds.

New York, No. 10 on the list, actually provided the greatest amount of funding of any state in 2004, $150 million. A substantial portion of the funds are dedicated to building a nanotech center in Albany, a project often touted by New York Gov. George Pataki. No. 13 Washington created one of the first nanotechnology degree programs, at the University of Washington.

Arkansas, Alaska, Hawaii and Mississippi all tied for last place. The states were scored on a variety of factors, including the size of the available scientific work force, funding, local corporate taxation and patent activity. The states were then ranked on a relative basis by local population, so the nanotech activity in a given state could be viewed in proportion with its size. Hence, Texas is ranked No. 14. The state is home to Rice University, which is fairly active in nanotech, but it also has a large population.

To date, only a few nanotechnology products have hit the market, and few of the several start-ups in the area have become large, profitable ventures. Nanosys, one of the more celebrated companies, cancelled its IPO last year.

Still, several scientists and analysts believe the field will one day make for a large market. If anything, governments are willing to spend money on nanotech. In 1997, government-funded research worldwide for nanotechnology came to about $500 million. In 2003, it rose to $3.5 billion, according to Paolo Gargini, director of technology strategy at Intel.

"For 20 years, there had been no investment in the basic sciences," Gargini said in a presentation last fall. "It was like Santa Claus was coming to town."