Otical and electron confinement are utilized to tailor the optical characteristics of active materials and photonic devices. A technique to incorporate semiconductor quantum dots into planar glass waveguides with low propagation loss is demonstrated. The waveguides are fabricated by potassium-sodium and silver-sodium ion exchange processes in glasses that contain PbS quantum dots with radii of a few nanometers. The unique optical properties of the quantum dots are preserved throughout the waveguide fabrication process. We also demonstrate novel compact fiber lasers based on active, highly doped fibers with photonic crystal cladding. The flexibility provided by microstructuring the fiber enables improved fiber laser performance and several Watts of laser output are generated from few centimeters of active fiber.