Early investors in nano-technology may get their fingers burned, setting back the development of the technology, according to Intel’s director of technology strategy.

Paolo Gargini

The US government is investing $1bn a year in the technology and US venture capitalists invested more than £350m in nanotechnology start-ups in 2002 and 2003, but new investments started drying up last year and the UK may have avoided the potential carnage.

“The UK has lagged behind the US and Europe on nanotech VC investment,” said Stuart McKnight, of corporate financiers Ascendant. “People are sitting on their hands waiting for better prospects to come through.”

One of the most promising approaches to nano-technology, which Intel, Infineon Technologies, IBM and other companies are pursuing, is carbon nanotubes.

Asked about the possibility of producing commercial electronic devices using carbon nanotubes, Gargini replied: “The earliest we could consider this happening will be in the next decade.”

Recent figures suggest that European venture capital funds have raised $16bn from potential investors, and this money is sitting around waiting for suitable projects to emerge.

That may be because investors are wary about high-tech.

Jamie Urquhart, partner in venture capitalists Pond Ventures, recently pointed out that $30bn was invested in European high-tech projects between 2000 and 2001 and half of it has already been lost.