NEW YORK, Feb. 4 (UPI) -- State governments invested more than $400 million in nanotechnology research and development in 2004. Combined with the more than $1 billion in federal spending, that makes nanotechnology the largest publicly-funded science initiative since the space race.
Not all states ranked equally, however, and experts told UPI's Nano World which ones topped the list and how the rankings might soon change.
"You probably will see a couple of states move up a few ranks in the next year, especially in smaller states such as Vermont," said F. Mark Modzelewski, managing director of Lux Research, a nanotechnology analysis firm in New York City.
In a report to the U.S. Department of Commerce, Lux Research ranked all 50 states on their ability to develop their economies through nanotechnology. The report assessed each state's nanotech spending, active nanotech companies, nanotech initiative, and centers and in-state nanotech patents.
The firm also looked at general technology development strength by state, including R&D inputs, size of the technology and science workforce, concentration of high-tech companies, and corporate taxation and regulatory burdens.
Lux Research named nine states as nanotechnology leaders, the best positioned to create jobs and attract investment, combining a high level of nanotech activity with a high degree of general technology strength. The usual names won out, such as Massachusetts and California, but surprises such as Colorado and New Mexico emerged, too.
"Colorado is quite good at nano, with the National Renewable Energy Laboratory, the University of Colorado and Colorado State University, the NIST labs, and a large number of startups," Modzelewski said, "but it doesn't have a formal nanotech infrastructure like a state initiative and has little state funding, relying mostly on the federal government. I wouldn't be surprised to see Colorado maintain its nano-leadership position, but I wouldn't be surprised to see it fall multiple spots until they realize what they have, either."
Speaking in favor of Colorado, "the report did note that while Massachusetts ends up the highest, it, too, has almost no state funding for nanotech," said Randy Levine, founder and director of ZettaCore, a nanotech memory company in Denver. "Colorado does have a fairly extensive grassroots nanotechnology effort as well that some of us are recommending more publicity for."
Seven other states are aspirants, boasting high levels of nanotech activity relative to their populations but lacking a history of the technology development strength needed to convert such activity to economic growth. For example, Oklahoma has aggressively developed its state nanotech initiative, but has scant R&D inputs and a small technology and science workforce, Modzelewski said.
Nine states are laggards, excelling in the use of high tech to develop their economies, but focusing on biotech, software and other fields instead of nanotech. The remaining 25 states are no-shows.
"As the report mentions, this is a study about the potential for success, not of who has already succeeded," Levine said. "All Lux is saying that some places are better poised than others to take advantage of nanotechnology for their population. So it's really a wakeup call to say, if you're not high on the list, how are you going to get higher, and if you're high, how do you stay there? There is no Silicon Valley of nanotech. You can develop good firms anywhere."
In order, the top 10 states ranked by Lux Research are Massachusetts, California, Colorado, Virginia, New Mexico, New Jersey, Connecticut, Maryland and, in a tie, Illinois and New York.
All 10 leaders feature multiple nanotechnology anchors -- including universities, government labs, corporations and start-ups -- that drive and commercialize nanotech discoveries. All also boast a highly educated population and levels of entrepreneurship that sustain multidisciplinary, cutting-edge fields such as nano.
The top ten are not without flaws, however, Modzelewski noted. For example, Massachusetts is top because of its leading universities and high concentration of technology entrepreneurs, but it lacks a coordinated statewide initiative.
The greatest differences in the top states emerge in areas such as regulation and taxation, which can swing site-selection decisions for startups and corporations, Modzelewski said. Colorado and Virginia represent the friendliest locales, while New York and Connecticut are the worst, relatively speaking.
"With its heavy environmental regulations and the cost to do business, New York just bleeds people," Modzelewski said. For startup companies, operating costs and permit processes "are a heck of a lot better in places like New Mexico."
The next five, in order, are Washington, New Hampshire, Pennsylvania, Texas and Minnesota.
Modzelewski said all deserve recognition because of their rising momentum and unique activities. Washington state, for instance, created one of the first nanotech degree programs.
"I wouldn't be surprised to see Washington pull into a nano-leadership post in the next year," he asserted.
Nanotech often struggles within the second-tier five, Modzelewski said. New Hampshire state officials, for instance, have done little to promote nanotech, although the University of New Hampshire has aggressively sought to develop it, partnering with Northeastern University in Boston as part of the National Science Foundation's Center for High Rate Nanomanufacturing. Minnesota, meanwhile, is still planning its state initiative, though it boasts stellar R&D at both the University of Minnesota and corporations such as 3M.
"Leading states have three things in common," Modzelewski said. "First, they involve all relevant stakeholders in developing nanotechnology initiatives rather than leaving the effort to universities. Illinois Governor Blagojevich's administration has done a particularly strong job in partnership with the Daly administration in Chicago."
That partnership, he said, has brought together Boeing, Caterpillar, Kraft, Motorola, Northwestern University, the University of Chicago and the University of Illinois; as well as nanotech startups such as Arryx, NanoInk and Nanosphere; federal government labs such as Argonne and Fermilab, and investors and professional associations.
"Second," Modzelewski said, "they focus on commercialization from the outset, as California did when it recruited entrepreneur Derrick Boston to lead the commercialization effort for the California NanoSystems Institute," which involved a $400 million university collaboration with corporations such as Accelrys, Agilent, HP, Intel and Sun Microsystems, as well as investors such as Bear Stearns and JPMorgan Partners.
In many states, government leaders have let universities structure nanotech initiatives without input from stakeholders with commercial interests, he noted, leading to stellar research facilities, but understaffed and underskilled technology transfer departments.
"Third, they play to strengths," he said. For example, Arizona exploited assets donated by Motorola to develop nanotech efforts in electronics, where a concentration of research activity already operates.
"States should not necessarily go after what they wish they were good at, but what they are good at," Modzelewski said. "They'll need to make a honest evaluation of what they are doing well, and pursue nanotech (as it relates to their strengths) and use money wisely, or they'll have to pay a premium to build nanotech from scratch. You look at biotech, and you have 46 states with biotech initiatives. How many of them are good at it? I wouldn't want 50 nanotech initiatives ending up the same way."
Nano World is a weekly series examining the exploding field of nanotechnology, by Charles Choi, who covers research and technology for UPI Science News. E-mail: email@example.com