Nanotechnology and its many applications could transform every field of manufacturing, experts are predicting, with large implications for production location patterns. Fields to be affected include automotive engineering, oil and exploration, materials, aviation, IT hardware, food and medicine.

Nanotechnology – engineering on a molecular scale – is evolving rapidly. Even during this grassroots phase of innovation-driven growth, many believe it offers companies advantages and can spur economic development.

The global market for nanotechnology overall is estimated by the Organisation for Economic Cooperation and Development to be $3000bn.

While much of the technology in the US comes out of universities and becomes venture capital-supported, most initial funding comes from the federal government. The US leads the world in nanotechnology R&D funding. In 2010, the National Nanotechnology Initiative (NNI), the federal government’s R&D programme that coordinates multiagency efforts in nanotech science, was allocated $1.7bn.

The proposed 2011 NNI budget is $1.76bn, with funding now emphasising accelerating the transition from basic R&D advancements into innovations that support national priorities, such as energy, manufacturing, healthcare and environmental protection.

Although funding figures are not available, many believe that China is not far behind the US in its push to become a nanotech powerhouse. Having selected nanotechnology as a national priority, China has developed into a world leader based on the number of registered nanotech firms, publications and nanotech-related patents.

Many European countries also have their own nanotechnology initiatives, with ever-growing investments focusing on the environmental and materials sectors. Pushing the technology to commercialisation, however, remains restrained.

Recognising the huge economic benefits nanotechnology can have for countries with a strong science infrastructure, a sustainable innovative capability and high-quality human resources, even countries such as Indonesia are jumping on the nanotech bandwagon. This year Indonesia is expected to spend $29m to foster communication between industry and universities to encourage the use of nanotechnology and improve the country's industrial competitiveness.

Advaero Technologies, a spin-off company from the North Carolina Agricultural and Technical State University in Greensboro, North Carolina, is an example of a company utilising nanotechnology to its benefit.

Formed to leverage the university’s research into advanced composites manufacturing, Advaero's emphasis is on slashing the cost of producing engineered components made of strong, lightweight carbon-fibre composite materials. Such materials can be used in applications ranging from helicopter parts, wind turbines to boat hulls.

In 2008, VX Aerospace of Morgantown, North Carolina, teamed with Advaero to explore new manufacturing techniques for lightweight composite parts for military aircraft. “Most of the research is coming out of our own labs,” said Advaero CEO Greg Bowers. The company holds two licences from the university: one for its composite manufacturing process and another for manufacturing glass nanofibres.

Advaero benefits from its location in a research park close to the new Joint School of Nanoscience and Nanoengineering, a collaborative project between the University of North Carolina and the North Carolina Agricultural and Technical State University.

Today Advaero is part of a consortium that includes Stanford University and French engineered textiles firm Chomarat. Its goal is to bring new carbon fibre to market. Mr Bowers said he sees great promise for Advaero, as exemplified by the recent consortium. Under that arrangement, Chomarat will produce material designed by Stanford using Advaero’s technology.

“The market for carbon-fibre composite materials is $20bn plus, so the potential is huge,” he said.