The hype surrounding nanotechnology and its possible uses brings back memories of the dotcom boom-and-bust days, writes Jim Colgan.

Some 45 years ago, an American scientist and Nobel laureate named Richard Feynman laid out a map for what he described as a "staggeringly small world".

In a speech that is now considered the bible for devotees of what came to be called nanotechnology, the physicist said: "In the year 2000, when they look back at this age, they will wonder why it was not until the year 1960 that anybody began seriously to move in this direction."

Today - a few years past Feynman's deadline - we have yet to see the life-altering effects of nanotechnology and there is still debate over just how revolutionary it will be.

But as scientists and financiers put their bets on the technology fufilling its declared potential, funding is surging. And in a field where private investment mixes with government financing at an unprecedented level, the composition of companies is proving unique.

Nanotechnology is typically defined as the ability to manipulate matter at the nano-scale - "nano" meaning particles one billionth of a metre wide.

The science is still at a very early stage and encompasses areas as diverse as healthcare, electronics, and aerospace. Products on the consumer market include water-resistant trousers and sun-tan lotion that does not leave a white residue.

Though these may sound a little trivial, the real impact is expected in areas like healthcare and computing.

But as scientists and entrepreneurs continue to wax lyrical about the seemingly endless possibilities of nanotechnology, it is easy to draw comparisons with the tech boom of the 1990s.

"We have declared that this is the 1992 or the 1993 of the nanotech age," says Josh Wolfe, a partner at Lux Capital, a venture capital firm strictly focused on nanotechnology companies.

Labelling nanotech as this decade's dotcom boom is a common refrain in the industry; however, Mr Wolfe says investors like him still bear the scars of the internet bust.

Regardless of the negative connotations, some experts think a similar rise and fall period might have long-term benefits for the industry.

"There's lots of overblown hyperbole alright, but it doesn't mean they're wrong with the likely impact of nanotech on industry and business overall and that can be good," says Dave Bishop, vice president of nanotechnology research at Lucent Technologies' Bell Labs.

While the hype has led to a host of firms emerging with the word "nano" somewhere in the title, the industry make-up is diverse.

Larger firms such as Lucent Technologies, IBM and DuPont have set up nanotech arms focused on wide-ranging areas. But increasingly, stand-alone firms devoted to niche areas are emerging.

Dubbed "pure play", these companies are mostly recent start- ups still in private hands. An example is California-based Nanosys Inc, whose main activity is developing patented devices such as solar panels and military projects.

Companies like this and Nano-Tex, which makes stain-proof trousers, are attracting significant investment dollars but, Mr Wolf says, the level of government financing is unprecedented, not to mention welcome.

Thirty-five per cent of the $70 million ($57.2 million) Nanosys gets in funding comes from the government and Federal nanotechnology legislation passed late last year set aside $3.7 billion for three years of funding companies and universities.

Mr Wolf believes the industry is waiting for just one high-profile public offering or a major breakthrough for a flood of funding to kick in.

But it is unclear how close the technology is to having an impact on everyday life. "We are at the very beginning of this in many ways," says Dr James Yardley, director of the Nanotechnology Research Centre at Columbia University.

"We don't even know what all the scientific rules about the technology are yet," he adds. Despite this scepticism, the potential is convincing enough for development to persist.

For instance, in healthcare, the most hyped discoveries are still far from completion, but the possibilities are significant enough to spur intensive research.

In the meantime, futurists talk about the day when surgeons will use engineered "nanobots" on the human body to single out and eliminate cancer cells. "And there are some well-thought out approaches as to how to do that now," Mr Yardley says.

"We've known about this for a long time," says Mr Bishop of Bell Labs. "But we're only just figuring out how to do it."

In the four decades since Richard Feynman's speech, some milestones have shaped research trends, Mr Bishop says. One was the discovery of carbon nanotubes over a decade ago.

Based on altered carbon particles, this material is 100 times stronger than steel and predicted uses range from manufacturing extremely durable cloth to building an elevator into space.

Though four Nobel prizes were awarded for nanotechnology research, some events are not determined solely by scientists.

Indeed, experts increasingly acknowledge the role science fiction has played. The novelist Arthur C Clarke wrote about space elevators in 1978, for instance.

More recently Michael Crichton wrote Prey where the plot centres on escaped nanobots bent on destroying the world.

However far-fetched, scientists say the fiction surrounding these books has increased public awareness of nanotechnology, but it has also induced fear.

"Science fiction has had some impact, in that it made researchers nervous that the public might get worried about this technology," says Christine Peterson, president of the Foresight Institute, a think-tank based in California devoted to longer-term nanotechnology.

Though these fears may seem outlandish, there are safety concerns recognised by scientists and activists alike.

For instance, the dust from nanotubes is said to have potentially harmful effects on human lungs and there have been public calls to scale back development over these fears.

"Yeah, there is a real concern," says Ms Peterson, who is also a trained chemist. "But I don't think you can justify calls for a moratorium."

Ms Peterson believes the real focus of nanotechnology development in the coming years should be on the longer-term possibilities.

She and other futurists believe the medical and environmental potential of so-called molecular manufacturing should be society's priority.

In fact, she says, a lot of the shorter-term activity should not be called nanotechnology at all. But pragmatists say commercial demands call for development of more tangible products like electronic devices and stronger building materials.

And as industry watchers predict the business landscape will emerge more like the internet boom, companies are holding out to be the Microsoft of the nanotech world.