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Russia is finalizing plans to launch a Silicon Valley-like “innovation center” near Moscow. The Kremlin has selected a patch of farmland near a private business school, has set aside funding, and this week named a Nobel laureate, the physicist Zhores Alferov, as the project’s science advisor. Now comes the hard part: making it work.

This means deciding what kind of operating and funding model to pursue, and making sure Russia’s legal and financial structures will support entrepreneurship. “There certainly isn’t any shortage of really bright technical people with great technological ideas in Russia, and that’s a strong suit,” says Josh Lerner, a professor of investment banking at Harvard Business School. “But the big thing has to be: ‘What are the barriers to being an entrepreneur and how can we address them?’ The entrepreneurial environment represents somewhat of a challenge.”

In particular, Russia will need to prove that inventors can secure intellectual property and protect it in the courts, and that investors won’t face onerous taxes or other restrictions in financing new ventures. “I think all those areas represent challenges to them,” Lerner adds. “My guess is that litigating intellectual property will be challenging.”

The project was announced in February by Russian president Dmitry Medvedev and will be financed in part by a $340 million government modernization grant. The facility is to be built from scratch in the village of Skokolo, west of Moscow, flanking the site of a privately run business school.

Yesterday, Vladislav Surkov, a Medvedev aide who heads a working group on the project, led a meeting in Moscow attended by 200 scientists to discuss the best way to achieve two objectives. The first is to create a government-subsidized lab and corporate space to incubate startup companies built on innovations flowing from existing Russian and multinational companies. The second is to create a research university setting where PhDs can get a salary, laboratory facilities, and access to supercomputers to develop technologies that could then be sold to existing companies or launched within new startups.

The overall goal is to commercialize emerging technologies in energy, biomedicine, information technology, telecommunications, and nuclear engineering–and to eventually diversify Russia’s economy away from its dependence on oil and natural gas. “The new technologies that we create are not toys for eggheads, they’re something else entirely,” Medvedev was quoted as saying in the Moscow Times in late March. “They’ll help cut costs, raise enterprises’ revenue, improve labor conditions and the environment.”

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Credit: Kaspersky Lab

Tagged: Business, business, startups, innovation, technology, Silicon Valley, entrepreneurship, enterprise computing

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