Nanotechnology — technology at the scale of atoms and molecules — has already had a substantial economic impact on the global economy, and it has the potential to revolutionize fields ranging from medicine to computing. Because nanotechnology is an enabling technology across a wide range of fields, it presents a microcosm of the global innovation ecosystem, and it serves as a useful case study for innovation policy. As described in this Article, the story of nanotechnology involves both substantial state funding and heavy use of the patent system. Nanotechnology is thus a useful counterpoint both to the growing number of case studies of how innovation can flourish without intellectual property and to the myth of an independent private sector that produces breakthrough innovations without government intervention. This case study also helps illustrate that even though legal academics have viewed patent law as the primary policy tool to promote innovation, intellectual property is only one of many areas of law that govern knowledge production. Over sixty countries have created national nanotechnology R&D programs. These governments have played an essential role not only through funding basic research, but also by creating infrastructure to lower the barriers to entry, and providing substantial direct funding to firms to help mitigate the risk of entering uncertain nanotechnology markets.