Multinationals Move on Nanotech

"For instance, while the U.S. still provides more corporate R&D funding for nanotech than any nation in the world, its spending grew only 9% from 2005 to 2006," according to the report, "while other dominant players like Japan and South Korea saw increases of 29% and 30% respectively -- and the worldwide total grew by 19%."

But this doesn't necessarily spell trouble for U.S. nanotech companies. Another of the report's not-so-sensational but interesting points was that, as fledgling as the nanotech industry may be, it's already seeing the erasure of borders usually experienced in more mature, globalized industries.

"Earlier this year, German chemical giant BASF announced an R&D agreement with Singapore's NanoMaterials Technology for work on zinc oxide nanoparticles, and U.S.-based Dow Corning established a strategic partnership with German nanoparticle application developer Nanogate," the report said.

Other examples cited: GE has established nanotech research facilities in China and India; materials giant Rohm & Hass (ROH Quote) recently set up a technical center in Taiwan; Irish drug developer Elan is marketing reformulations based on its nanocrystal technology in the U.S. through Merck and Abbott .

All of that should remind investors who once scoured the markets for a hot nanotech play that they may find nanotech-driven profits through multinationals. Not only do these international giants have the deep R&D pockets to sustain investment that might not pan out for years, they long ago built inroads for overseas collaboration.

Nanotech is one area of innovation that is not driven by start-ups -- at least for now. The day may come when a hot new IPO reignites fervor in so-called nanotech stocks. But for the foreseeable future, the next big thing belongs to the same old multinationals.