Russia is set to invest $10 billion (280 billion rubles) in nanotechnology programs in the mid-term Deputy Prime Minister Sergey Ivanov announced in an effort to boost and diversify the oil-dependent economy.

"The total size of funding for nano initiatives has been approved at some $10 billion in Russia for the mid-term, with half of the funds coming from the Russian Nanotechnology Corporation (Rusnano)," he said at an international nanotechnology forum in Moscow.

Ivanov added that global government, corporate and venture investment in nanotechnology totaled $13.5 billion (377 billion rubles) last year. The US currently leads in nanotechnologies, with the government and corporations investing a combined $4.25 billion (118 billion rubles) in 2006-7, closely followed by Japan, which spent approximately $3 billion (84 billion rubles.)

Russia lags significantly behind the two leaders, with a total of $207 million (5.8 billion rubles) in the same period. However, nanotechnology is seen by the government as a key industry to boost innovation and diversify the Russian economy, which is heavily dependent on raw materials and suffering due to falling oil prices.

"Today, the development and use of nanotechnology and nano-materials predetermines the rate of research development, which means potential for Russia's socioeconomic expansion," Ivanov said, quoting a message by President Dmitry Medvedev to the forum.

In 2007 the Russian Corporation of Nanotechnologies was set up with a budget of $5 billion for the commercialization of nanotechnology. This is expected to be spent in the mid term of around 3 years, significantly boosting Russian expenditure on the science.

Rusnano is expected to spend $714 million (20 billion rubles) on twenty projects in the next three months the corporation's head, Anatoly Chubais, announced at the exhibition. This level of investment could lead to Russia becoming a dominant power in the industry and better living standards.

"We have all the required conditions for a future breakthrough to create a potential dominance in the sphere of nanotechnology," Medvedev's statement reads, citing state support and the country's intellectual potential.

The forum, which was the first international nanotechnology event in Russia, was organized by Rusnano with the aim of creating a global platform for communication, bringing scientists and businessmen together to commercialize and develop nanotechnologies. It attracted over 300 people from 33 countries.

Russia is already becoming one of the leading countries, with companies like Samsung, Siemens and Hewlett Packard all investing in nanotechnology research in Russia.

"Russia has the educational level and research capability to make it a recipe for success," said Owen Kemp from Hewlett Packard. The computer company recently signed a memorandum of understanding with the Kurchatov Institute for jointly modeling new nano-materials.

Kemp went on to praise the event, saying it was one of the best conferences he had attended on nanotechnology.

"It is a stunning collection of the whole nano-space. I've not seen an international conference of such a size devoted to such a niche but exciting topic," he told The Moscow News.

Despite being a comparatively small industry, the global market is growing rapidly, with the volume of marketed goods increasing threefold - from $479 billion to $1.4 trillion (39 trillion rubles) from 2004 to 2007. The market will be worth an estimated $4 trillion by 2015.

"It (nanotechnologies) is of course still the midterm future ... many tangible products are still around 5 years away," Kemp said.

By Ed Bentley