CMP Científica says that devices could reach the wider market within three to seven years, against a previously estimated 10 to 15 years.

Its latest research also suggests that the UK is one of the leaders in the European nanotechnology market.

Tim Harper, Científica's CEO and co-author of its report, said: "Nanoelectonics is a very active field of research, not just in academia but also in industrial R&D, which will generate enormous revenues for those who get there first.

"This is why nanoelectronics will experience an accelerated pace to commercialisation."

The report predicts the market is around five years away from the introduction of major disruptive technologies, such as terabyte non-volatile memories based on nano-tubes. Científica believes these technologies could make a large part of the hard disk industry redundant.

The report estimates that €39m was spent on UK nanotechnology research during the year 2000. This places the UK second in Europe, although its spend is some way behind the €63m invested in market leader Germany during the same period. The Republic of Ireland spent €3.5m on nanotechnology in 2000.

"The UK is the second most advanced nanotechnology market in Europe," said Harper. "It has a particularly good technology transfer system in place. Just look at Cambridge University and its spin-out companies. Countries like France and Spain do not have that kind of set-up."

The UK also has two universities, Cranfield and Leeds, which already offer MSc courses in nanoscience and nanotechnology.

Concerns over intellectual property

One tricky issue surrounding the commercialisation of nanotechnology involves the protection of intellectual property (IP) and patents.

CMP Científica's report, Nanotechnology Opportunity, highlights the challenge already facing IP bureaucrats. By their own admission, the European and US patent offices do not fully understand nanotechnology.

As a result, the company believes there is a very high risk that early patents for the technology could be far too loosely defined and, as result, very difficult to defend and enforce in the future.

This could create long-term problems for companies such as Hewlett-Packard, which are already seeking to patent architectures for nanotechnology systems that may be 10 years away from a commercial launch.