Russia plans to build its own Silicon Valley (Feature)

By Ulf Mauder Apr 28, 2010, 3:05 GMT

Moscow - Russia has sought for quite some time to attract the intellects necessary to restructure its resource-based economy. But it has been hamstrung by an exodus of homegrown talent who have bolted for more money - and freedoms - abroad.

But Russian President Dmitry Medvedev now aims to staunch, and reverse, the heavy brain drain.

In his video blog, the 44-year-old internet enthusiast has called for the modernization of his 'backward' homeland, a key element of which is the construction, outside Moscow, of an innovation hub modelled after America's high-tech hotbed Silicon Valley.

The plans have so far drawn little enthusiasm.

On behalf of the Kremlin, Russian multi-billionaire businessman Viktor Vekselberg is beating the drum for the new city of superlatives in Skolkovo, a town close to Moscow that recently became the site of a prestigious business school housed in futuristic buildings just west of the Moscow ring road.

The Kremlin hopes that 30,000 to 40,000 scientists and engineers will be working in Skolkovo by 2015, their minds given free rein to achieve technological breakthroughs for Mother Russia.

Medvedev has warned repeatedly that Russia's natural resources are finite and the country, the world's largest in area, needs to diversify its economy away from oil and natural gas.

Unlike China, Russia imports most of its high-tech products, for example machinery from Germany.

In future, however, the Kremlin wants new technology to develop at home. It has long been disturbed by the many Russian ideas that fail to be converted into marketable products.

If the Kremlin has its way, fundamental change is coming. It envisions managers, researchers and engineers forging Russia's future in the country's own Silicon Valley, an island of freedom.

Universities, laboratories and companies are to be located at the new science and technology centre, projected to be the biggest testing ground for Russian economic policy.

'Everyone is welcome to participate,' remarked Medvedev, who said the five priority spheres were energy, space research, telecommunications, biomedicine and nuclear technology.

To finance the first phase of the project, which includes planning, the Russian government has earmarked the equivalent of more than 130 million US dollars.

Vekselberg said the project could receive about 2 billion dollars over the next two and a half years.

The government's commission on modernization, headed by Prime Minister Vladimir Putin, has about 20 billion euros at its disposal for substantive work on the project in 2010 alone, according to media reports.

The city of innovation, dubbed 'Innograd' by Russian news media, will be run by a government-financed foundation headed by Vekselberg rather than a mayor.

Instead of taxes, corrupt police and arbitrary red tape, there is to be freedom and prosperity in the form of kindergartens, hospitals and comfortable homes in environmentally sound surroundings.

'The miracle is possible,' said Vladimir Surkov, deputy director of the presidential administration, in an interview with the Russian business newspaper Vedomosti. The Kremlin's chief ideologue, Surkov is overseeing the project.

But plans to build the innovation hub have met with a good deal of scepticism.

The Russian newspaper The New Times, which is often critical of the Kremlin, noted that much of the Soviet Union's know-how had been gathered via espionage despite the 'golden cages' created for scientists by the regime.

'Progress doesn't happen in authoritarian societies' - it arises only out of social interaction, remarked former world chess champion Garry Kasparov, now a Kremlin opposition leader, in reference to the high-tech innovations that have come from Silicon Valley, the nickname for the southern San Francisco Bay Area of the United States.

There, without government pressure, computer developments originated that are now known around the world, Kasparov said.

Russky Newsweek, the Russian-language partner of the U.S. magazine Newsweek, wrote that the idea to establish a 'colony for geniuses' was 'half-baked.'

It noted that Russia already had 350 technology parks, more than Japan, but little to show for them.

Russia clearly wants to see a return on the billions of dollars it plans to invest in Skolkovo, namely products that change the world and bring billions of dollars back.

For years it has been trying to set up Glonass, a global satellite navigation system meant as Russia's answer to GPS of the United States. The system is still not fully operational, however.

The Kremlin hopes that 'Innograd' will boost Glonass, too.