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In one sign of its preliminary nature, the project doesn’t even have a website. But Ivan Zassoursky, a new media professor at Moscow State University, has created a group on Facebook and is helping to run a competition for the Russian Center of Internet Technologies, an organization of information technology companies, to come up with a name and a design of the facility. He says the vagueness of the effort is “sort of a healthy thing,” and adds: “The Kremlin is trying to do it right. They are not trying to push and line up people and tell them what to do. This is an area where they don’t think they are experts themselves and are going out of their way to reach out to the scientific community.”

In the area of information technology Russia is already home to several successful companies, including Kaspersky Lab, maker of antivirus software; the search engine Yandex; and social networks Vkontakte.Ru and Odnoklassniki.Ru. Eugene Kaspersky, the founder and CEO of Kaspersky Lab, who is advising Medvedev on the innovation center and on cybersecurity issues, says Moscow has its advantages, including the fact that major educational institutions and government ministries are all nearby. On the other hand, he admits, the weather can be pretty bad, and living and office costs are very high.

But other countries have beaten the odds to create innovation centers. “If you went around in 1991, you’d see a lot of skepticism about whether Israel could establish itself as a VC hub, for any number of reasons,” Lerner says. “The skeptics were wrong. So you can’t be too dismissive.” As for the notoriously long and brutal Russian winters, he adds: “It’s cold in Boston, too.”

Countries that might seem obvious centers for incubating high-tech companies have faced steep challenges. It’s not enough to have a modern economy, great infrastructure, and a deep talent pool in science and technology. “If that were the case, we’d see Japan as the hub of venture capital,” Lerner says. But Japan presents numerous barriers, from a tax policy that inhibits venture funding to a corporate culture that frowns on people who decide to leave large companies to chase new ideas, he says.

The Kremlin project has its critics. “The real attraction of the Kremlin’s Innovation City lies not in what it will accomplish for innovation but in how it will line the pockets of Russia’s corrupt officials,” one opposition politician, Vladimir Ryzhkov, wrote in a recent Moscow Times op-ed. “The greedy bureaucrats are already salivating in anticipation of the hundreds of construction permits that will be required to develop a Silicon Valley from scratch.”

But something must be done. Russia lost many scientists and engineers during the 1990s. Russia’s economy is heavily dependent on exports of natural gas and other resources, and contracted 7.9 percent last year as demand dropped.

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Credit: Kaspersky Lab

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

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