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ATOMS are the fundamental building blocks of matter, which means they are very small indeed. The world at the scale of atoms and molecules is difficult to describe and hard to imagine. It is so odd that it even has its own special branch of physics, called quantum mechanics, to explain the strange things that happen there. If you were to throw a tennis ball against a brick wall, you might be surprised if the ball passed cleanly through the wall and sailed out on the other side. Yet this is the kind of thing that happens at the quantum scale. At very small scales, the properties of a material, such as colour, magnetism and the ability to conduct electricity, also change in unexpected ways.

It is not possible to “see” the atomic world in the normal sense of the word, because its features are smaller than the wavelength of visible light (see table 1). But back in 1981, researchers at IBM designed a probe called the scanning tunnelling microscope (STM), named after a quantum-mechanical effect it employs. Rather like the stylus on an old-fashioned record player, it could trace the bumps and grooves of the nanoscale world. This allowed scientists to “see” atoms and molecules for the first time. It revealed landscapes as beautiful and complex as the ridges, troughs and valleys of a Peruvian mountainside, but at the almost unimaginably small nanometre (nm) scale.

A nanometre is a billionth of a metre, or roughly the length of ten hydrogen atoms. Although scientists had thought about tinkering with things this small as long ago as the late 1950s, they had to wait until the invention of the STM to make it possible.

Nanotechnology is generally agreed to cover objects measuring from 1 to 100nm, though the definition is somewhat arbitrary. Some people include things as small as a tenth of a nanometre, which is about the size of the bond between two carbon atoms. At the other end of the range, in objects larger than 50nm the laws of classical physics become increasingly dominant.

There are plenty of materials that simply happen to have features at the nanoscale—such as stained glass, mayonnaise or cat litter—but do not qualify for the nanotechnology label. The point about nanotechnology is that it sets out deliberately to exploit the strange properties found in these very small worlds.

At the nanoscale, explains George Smith, the amiable head of materials science at Oxford University, “new, exciting and different” properties can be found. If you were to start with a grain of sugar, he says, and chopped it up into ever smaller pieces and simply ended up with a tiny grain of sugar, that would be no big deal. But as an object gets smaller, the ratio between its surface area and its volume rises. This matters because the atoms on the surface of a material are generally more reactive than those at its centre.

Small wonders Apply here Fear and loathing Downsizing Handle with care Audio interview Acknowledgments and sources Offer to readers Audio interview Dec 29th 2004 IBM, General Electric, and Lux Research offer more information about current nanotechnology research.

So icing sugar, for instance, dissolves more quickly in water than does the granulated form. And if silver is turned into very small particles, it has antimicrobial properties that are not present in the bulk material. One company exploits this phenomenon by making nanoparticles of the compound cerium oxide, which in that form are chemically reactive enough to serve as a catalyst.

In this invisible world, tiny particles of gold melt at temperatures several hundred degrees lower than a large nugget, and copper, which is normally a good conductor of electricity, can become resistant in thin layers in the presence of a magnetic field. Electrons, like that imaginary tennis ball, can simply jump (or tunnel) from one place to another, and molecules can attract each other at moderate distances. This effect allows geckos to walk on the ceiling, using tiny hairs on the soles of their feet.

But finding novel properties at the nanoscale is only the first step. The next is to make use of this knowledge. Most usefully, the ability to make stuff with atomic precision will allow scientists to produce materials with improved, or new, optical, magnetic, thermal or electrical properties. And even just understanding the atomic-scale defects in a material can suggest better ways of making it.

Indeed, entirely new kinds of material are now being developed. For example, NanoSonic in Blacksburg, Virginia, has created metallic rubber, which flexes and stretches like rubber but conducts electricity like a solid metal. General Electric's research centre in Schenectady in New York state is trying to make flexible ceramics. If it succeeds, the material could be used for jet-engine parts, allowing them to run at higher, more efficient temperatures. And several companies are working on materials that could one day be made into solar cells in the form of paint.

Because nanotechnology has such broad applications, many people think that it may turn out to be as important as electricity or plastic. As this survey will show, nanotechnology will indeed affect every industry through improvements to existing materials and products, as well as allowing the creation of entirely new materials. Moreover, work at the smallest of scales will produce important advances in areas such as electronics, energy and biomedicine.

Nanotechnology does not derive from a single scientific discipline. Although it probably has most in common with materials science, the properties of atoms and molecules underpin many areas of science, so the field attracts scientists of different disciplines. Worldwide, around 20,000 people are estimated to be working in nanotechnology, but the sector is hard to define. Small-scale work in electronics, optics and biotechnology may have been relabelled “nanobiotechnology”, “nano-optics” and “nanoelectronics” because nano-anything has become fashionable.

The “nano” prefix is thought to derive from the Greek noun for dwarf. Oxford's Mr Smith jokingly offers an alternative explanation: that it “comes from the verb which means to seek research funding”. And research funding is certainly available by the bucketload. Lux Research, a nanotechnology consultancy based in New York, estimates that total spending on nanotechnology research and development by governments, companies and venture capitalists worldwide was more than $8.6 billion in 2004, with over half coming from governments. But Lux predicts that in future years companies are likely to spend more than governments.

For America, nanotechnology is the largest federally funded science initiative since the country decided to put a man on the moon. In 2004, the American government spent $1.6 billion on it, well over twice as much as it did on the Human Genome Project at its peak. In 2005, it is planning to shell out a further $982m. Japan is the next biggest spender, and other parts of Asia as well as Europe have also joined the funding race (see chart 2). Perhaps surprisingly, the contenders include many developing countries, such as India, China, South Africa and Brazil.

In the six years up to 2003, nanotechnology investment reported by government organisations increased roughly sevenfold, according to figures from Mihail Roco, senior adviser for nanotechnology at America's National Science Foundation. This large amount of funding has raised expectations that may not be met. Some people worry that all the nanotechnology start-ups will help to inflate a bubble reminiscent of the internet one. But there are good reasons to think that the risk has been exaggerated. Private investors are being much more cautious than they were during the dotcom boom, and much of the money that is being spent by governments is going on basic science and on developing technologies that will not become available for years.

However, a number of existing products have already been improved through nanotechnology, with more to come in the next few years. Bandages for burns have been made antimicrobial by the addition of nanoparticles of silver. Fabrics have been stain- and odour-proofed by attaching molecules to cotton fibres that create a protective barrier. Tennis rackets have been strengthened by adding tiny particles that improve torsion and flex resistance. Other applications include coatings for the hulls of boats, sunscreen, car parts and refrigerators. In the longer term nanotechnology may produce much bigger innovations, such as new kinds of computer memory, improved medical technology and better energy-production methods such as solar cells.

The technology's most ardent proponents claim that it will lead to clean energy, zero-waste manufacturing and cheap space travel, if not immortality. Its opponents fear that it will bring universal surveillance and harm the poor, the environment and human health—and may even destroy the whole planet through self-replicating “grey goo”. This survey will argue that both sides overstate their case, but that on balance nanotechnology should be welcomed.