The past two years have seen an increasing interest in nanotechnology from the Gulf states, and I’ve spent time discussing this as it relates Abu Dhabi, Dubai, Saudi Arabia and even Iran.

The wake up call for me came 18 months ago when I was discussing the Gulf region with a well-known professor of nanotechnology who’d recently been invited to speak at a technology conference there. What he told me was quite shocking.

In front of the assembled ministers and academics responsible for technology in the region, the vice president of technology for a major oil company said, as part of his speech, “Technology is of increasing importance to us as much oil if the easy oil has already been exploited, and we expect (nano)technology to help us get at the harder stuff more economically.”

The response of the assembled technology grandees was unanimous: “We are not creating technology centers simply for the petrochemical industry.”

Much of this anti-oil bravado has been stimulated by Dubai, a tiny emirate with dwindling oil resources that’s spent the last 15 years successfully reinventing itself as tourism and business hub.

Although the rest of the region thought the sultan was quite potty and carried on paying foreign companies to extract their natural resources, the mention of Dubai’s newly constructed ski slope in the desert makes many of their neighbors living in cultural austerity green with envy.

Before anyone gets too worried about Arab nanotechnologies and any possible military uses, it’s worth looking at the state of the various nanotechnology programs. Almost all of them are in their infancy.

In many cases, states are taking their first crack at developing national nanotechnology strategies, and the level of ignorance is, in some cases, shocking. By ignorance I don’t just mean scientific; in fact, many of the region’s top scientists were educated in Europe and the US. They’re well aware of what nanotechnology is, but there’s a lack of knowledge of suitable applications for the technology.

However, what they lack in knowledge is more than made up in terms of funding. Saudi Arabia has some $50 million available right now.

There are two new nanotechnology centers being built in King Adulaziz City for Science and Technology in Riyadh, one focusing on semiconductors and the other on nano-bio. Another center at Fahd University of Petroleum and Minerals in Dhahran is in the heart of the oil-producing region.

In addition, I was recently involved in a $100 million nanotechnology project in one of the emirates. Although the number looks small in comparison to the US and European Union, in terms of per capita spending, it’s huge.

Labs are being built and equipment ordered, but the limiting factor will be human resources. Although many of the Gulf states have fast-growing populations-–especially Saudi Arabia because petrodollar-funded water desalination plants have lifted the population limit imposed by the environment–experience still tends to be brought in from abroad. And throwing huge sums of money at nanotechnology doesn’t necessarily produce any results.

This is something that European governments found in the 1970s and ’80s when huge sums were invested to create European semiconductor companies to compete with the US. As so often happens, the ones that survived had little to do with government handouts and plenty to do with having products that the market wanted.

Although any good university in the US can use an endowment of a chair to attract a top-flight scientist and the consequent research funding that inevitably follows, this is a trickier proposition in the Gulf.

Abu Dhabi, Bahrain and Dubai may be attractive locations, but it’s far tougher to lure an experienced academic to Riyadh, Jeddah, Saudi Arabia, or Tehran, Iran. As a result, much of the nanotechnology work in the region will be based on existing microtechnologies such as semiconductors and Micro-Electro-Mechanical Systems, where returning post docs can bring their experience, than in cutting-edge areas such as bio-nanotechnologies.

All these initiatives also have objectives in terms of commercializing technologies, creating spinoffs, setting up technology incubators and a variety of other imported ideas. All are possible; but first, some changes are required in business cultures where companies are either massive, international, state-run concerns or market stalls with little in between.

Investors have no experience with academic spinoffs. And they have little interest in small deals, where much work is required for relatively little reward compared to building a new seven-star hotel in Dubai.

Overall, the strategies are heading in the right direction, but given the limitations I just discussed, I don’t see any major investment opportunities arising in the region for a good while yet.

I deliberately avoided mentioning Iran for two reasons. First, although bordering the Gulf, the culture is more Persian than Arabic. Second, they have a very well-organized scientific infrastructure, with 30 years of sanctions developing a culture of self-reliance absent elsewhere in the region.

I’ve met with growing numbers of Iranian nanotechnology firms, mainly manufacturing materials such as nano silver and various fullerenes. Some have moved up the value chain and started producing clothing incorporating antibacterial silver, for example.

Most of these companies are university spinouts. Entrepreneurs are seeing opportunities in the domestic Iranian market before turning their sights on the export market.

It’s also worth noting that although the US has a total embargo on trade with Iran, there are no such restrictions elsewhere (apart from the obvious nuclear and military ones that also affect the availability of scientific equipment such as atomic force and electron microscopes).

So while the rest of the region takes its first steps into the nanoworld, Iran already has a well-organized research infrastructure, cash to invest and a start-up culture.

In addition, there’s a large Iranian diaspora scattered throughout the world’s universities, with a fair number working on the nanoscale.

Although we often think of Dubai as the economic success story of the Gulf, it would only take a small shift in international relations for Iran to become a technological superpower to rival Israel.

Now that would be a shock!

Tim Harper is contributing editor of The Real Nanotech Investor and president of Cientifica, a global nanotech consulting firm serving government and industry.