While smaller is often better in the field of nanotechnology, where new materials and technologies are created on an atomic and molecular scale, the shrinking state budget has left Yale and University of Connecticut researchers scrambling to find other sources of funding.

When the administration of Gov. M. Jodi Rell proposed to set aside $5 million in 2008 to create two centers to house state-of-the-art nanotechnology equipment at Yale and UConn, researchers said the funding would have propelled Connecticut into the front ranks of nanotechnology innovation. But with the money as good as gone — the proposal was absent from both the 2008 state budget and this year’s budget — the centers are on hold, and researchers must now travel out-of-state to competing institutions to conduct their research.

“[When] the budget crunch hit, all was postponed indefinitely,” said Mark Reed, the associate director of nanoscience at the Yale Institute for Nanoscience and Quantum Engineering, which would have hosted one of the new centers.

Nanotechnology, which began to take off in the 1980s, has been used to develop fuel cells, biofuels, energy storage devices, drug delivery systems and cancer treatments. While nanotechnology research at Yale focuses on biological and pharmaceutical applications, research at the University of Connecticut focuses on developing new materials.

Researchers from UConn and Yale originally thought the nanotechnology centers would raise Connecticut’s profile in nanotechnology while stimulating small business development and job growth, said Rob Keating, the state’s workforce development director. Half of the funding for the $10 million centers would have come from the state, with Yale and the University of Connecticut putting up matching investments, he said.

“The state must afford to spend a little money to make investments towards the future,” said University of Connecticut professor Fotios Papadimitrakopoulos, who is an associate director of the school’s Institute of Material Science, the would-besite of the second center. “[But] by the time we were willing to put out the money, the economy crashed.”

Most of the funding would have gone to buying a $4 million high-resolution transmission electron microscope, Papadimitrakopoulos said. While the most precise microscopes currently available to the schools can see up to 0.2 nanometers, or about the width of two atoms, the new microscope would have been able to see down to 0.07 nanometers.

Without the more advanced equipment, Connecticut scientists have to travel to other universities such as Harvard and Cornell to conduct their research, Papadimitrakopoulos said. Not only are researchers inconvenienced by travel time, but also have to pay fees to use the instruments, he added.

Furthermore, the absence of advanced equipment at Yale and the UConn makes it much harder for the researchers to compete for federal grants, he added. Federal funding for nanotechnology research comes from the National Nanotechnology Initiative, with about $1.6 billion spread across 13 federal agencies.

The advanced equipment would also have improved collaboration between universities and local business, which would have lead to more commercial products, said Samuel Brauer, a consultant and the founder of Nanotech Plus, based in Stamford, Conn. As it is, Yale is already behind in spinning off its nanotechnology research into new companies, Brauer said.

The researchers said they hope that the state government changes its mind before Connecticut loses its edge in nanotechnology research.

“I hope there would be enough of a public outcry and that people would be stirred up a bit,” Brauer said. “Hopefully, [Gov.] Rell will reconsider the decision.”

According to advisory firm Lux Research, nanotechnology-enabled products will form a $3.1 trillion market by 2015.