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Russian "Silicon Valley Skolkovo": Will it work?

Sunday, December 26, 2010 · Category Economy · comments 0

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Can you really rattle with a bag of gold to attrackt multi-billion dollar corporations into investing in a new Russian "Silicon Valley" initiative? Is this really the way to revitalise the poor state of Russian Science?

Skolkovo Valley: Why it is needed?

From a government point of view - currently Skolkovo is mainly President Medvedev's pet project - there are a number of factors and goals to be achieved by the newly - build from scratch - scientific Skolkovo City.

  1. Russia has inherited a rich scientific base from Soviet times, but it has had trouble drawing foreign investment and commercializing homegrown scientific innovations.
  2. Diversify the Russian economy by reducing its dependence on oil and gas exports and encouraging the development of hi-tech sectors and research.
  3. Curb the brain drain from Russia which took place after the fall of Communism and continues today as conditions for scientists are very meager.
  4. Entice some of the brightest Russian minds to come back home
  5. Russia's problem is not coming up with innovations. There are many interesting inventions and projects. Unfortunately, Russia doesn't know how to sell them, find companies, and work with innovative business sectors around the world.

The projected issues and problems for Skolkovo Valley

Infrastructure is one of the most important problems. In Skolkovo, it may be built from scratch, on the basis of advanced technologies. In response the Skolkovo residents will enjoy tax breaks, facilitated customs duties and visa regime. The center offers the best conditions for scientists from all over the world. The complex will have it's own police force, customs, and tax inspection authorities.

Another notable problem is that The Silicon Valley in California was created on the basis of universities. It was a bottom-up growth. In Russia, it's top down, and the goals are unclear. Deputy Vladimir Babkin says the Skolkovo draft laws submitted to parliament contain many vague areas and say the structure appointed to manage the park is equally opaque. "We must rebuild a high-tech industry, because this is the main client for new innovations. But there's not a single word about that," Babkin says. "The draft legislation provides details such as the fact that the fund will oversee sewage and water and heat supply, but it says nothing about the most important issue: how the profits will be distributed."

What opponents say

One of the biggest opponents without a doubt is Russian Noble Price winner Geim. Although he welcomes and understands Russia's determination to invest in science, he fears that bureaucracy means the government's ambitions will prove to be to exotic. "There are some prospects, but the same money could be invested in prominent academies, institutes and science academies that already exist," thinks the scientist.

He said that investment in science now sounds as yet another "slogan, rather than effective investment." There are already places in Russia, like Chernogolovka in the Moscow region, there are other cities - why build a new city?" he said. Russia already has several special state-sponsored science parks near Moscow and in Siberia, but none of them has really taken off.

Although Geim was invited at first, his visa to return to Russia has been rejected after making comments on the question why he didn't stay in Russia. "Staying in Russia would have been like spending my life tilting at windmills," Geim concluded.

Other critics say such projects can only bear fruit if the government gets out of the way and let entrepreneurs flourish unhindered. In addition to revamping existing science parks which would make more economical sense, the government may have to spend millions of dollars to relocate a state agricultural center that uses large swathes of land in Skolkovo.

About Skolkovo Valley

In March 2006, the Russian government approved a program to create technoparks to incorporate high-tech enterprises in the sectors of nano- and bio- information, and other types of technology, as well as scientific research organizations, educational institutions and other related ventures.

The high-tech research and production hub is being built from scratch in the Moscow Region town of Skolkovo. It is planned that some 4.6 billion rubles ($158 mln) will be allocated for the construction in 2010.

The new center's activities will focus on five priority spheres: energy, information technologies, communication, biomedical research and nuclear technologies.

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