Pennsylvania is taking part in a fierce competition to position itself to be the epicenter of nanotech -- a science that by manipulating atoms and molecules promises to radically alter the way products are made and the world does business.

Pennsylvania has spent $54 million since 1999 to try to capitalize on the much-hyped technology.

New York, Texas and California have spent up to 13 times as much to get ahead, but state officials say that in the end, it's strategy, not money that will win out, allowing Pennsylvania to claim the "nano-hub" label.

For Pennsylvania, the path to success is collaboration.

Pennsylvania economic development officials have joined forces with big-name companies, such as PPG Industries, that are better equipped to bring research to the marketplace.

"It's an opportunity the state hasn't had in decades," said Tim McNulty, special assistant to the Provost for Strategic Technology Initiatives at Carnegie Mellon University. He also worked as deputy chief of staff for Technology Initiatives for Gov. Tom Ridge and helped craft the state's nanotech strategy. "I'm not sure you can spend your way to success."

Indeed, industry watchers point out that research is only a piece of a successful nanotech equation.

States that are leading the nanotech race -- commercializing research, launching nanotech startups and luring established companies to set up shop -- aren't waiting for the universities. It's the private sector, they say, that knows how to turn ideas in products.

Pennsylvania officials figure that their latest approach -- the Pittsburgh-based NanoMaterials Commercialization Center, with a quartet of firms: U.S Steel Corp., PPG Industries, Alcoa and BayerMaterialScience -- will bring them more bang for their buck.

The bulk of the center's funding, around $1.5 million, stems from the Air Force Research Lab, but nanotech insiders claim the involvement of the companies with market-oriented interest is invaluable.

In New York, Gov. George Pataki has pledged $700 million to create a "Nano Tech Center" in Albany. He's sold IBM, International Sematech and General Electric on the idea, which in turn pledged $7 billion.

Other states also are shelling out money, but have yet to enjoy such corporate commitments.

"Places like New York will spend a lot of money on large facilities and not a plan and in five to 10 years, they'll have a hard time justifying what they did," said Rich Overmoyer, former deputy secretary for technology investment at the Pennsylvania Department of Community and Economic Development.

Pennsylvania launched its nanotech initiative in 2003, but not without its own hurdles.

A benchmarking report by New York analyst firm Lux Research noted that Pennsylvania, which landed around $2 billion in sponsored research in 2003, is "historically strong at research and weak at commercialization." That characterization made Mr. McNulty bristle.

"Some of that is just the raw business climate," Mr. McNulty said. "I'm not telling you we should pop open the champagne. But from my perspective, the trend line is going in the right direction."

Alan Brown, the NanoMaterials Center's executive director, said about a half dozen university-bred nanotechnology projects will be brought to market next year.

The report also planted the state in nanotech purgatory -- ranked 13th out of 50 and straddled between the labels "nano-aspirant" and "nano-leader."

The culprit -- the state's poor showing among small business innovation research grants awarded -- is "a reflection that there aren't as many startups as there are in nano-leader states such as California and Massachusetts," said analyst Michael Holman. The state's efforts could be bolstered by creating a business climate that encourages existing startups and growing firms to stay, he added.

The perennial debate on how to grow a regional economy is not new. Before nanotech, it was biotech that was state's golden fleece, promising to bolster the economy and deliver jobs.

This time things are different, advocates said, because nanotech cuts across a number of sectors, promising to deliver industry-altering products in areas where the state boasts research strengths, namely advanced materials, bio-pharmaceuticals and information technology.

With at least 15 large firms doing some nanotech-related work, and about 40 smaller firms and startups, efforts to build a viable cluster won't be like starting from scratch.

PPG senior scientist Dan Reardan said the companies' involvement in the NanoMaterials Center is more "along the lines of economic development," as opposed to a chance to grab hot technologies fresh out of the lab. For those purposes, PPG has sponsored research projects at Penn State and the University of Pittsburgh, he added.

It's taken awhile to articulate the state's nanotech strategy, said Kelly Wylam, who manages Pennsylvania's state nanotech programs at the Department of Community and Economic Development, but a limited pot of money -- $5 million in this fiscal year and the last -- has forced the state to focus its efforts.

The Ben Franklin Technology Development Authority, which controls state tech funding, is revising its funding policy to allow nanotech dollars to include more commercialization efforts.

Even the prospect of a nano-fabrication plant, lab or company incubator hasn't been ruled out. It's a topic the universities and companies should "explore and evaluate," Mr. McNulty said. "I think facilities are going to be key to our future."