beyondbrics

Dmitry Medvedev, Russia’s president, gave a rousing speech at this weekend’s St Petersburg Economic Forum but the conference also had two other breakout stars: Arkady Volozh and Yuri Milner, champions of the Russian internet.

Through their respective start-ups, Yandex and Mail.ru, the two have successfully proven that Russian internet groups can secure billion-dollar valuations abroad, and that the country has more to offer investors than natural resources. Now the question is how the Kremlin can build on Mail.ru and Yandex’s success and make sure such companies, and their talent, stay inside Russia.

To answer the question so far, Russia’s leaders has been touting Skolkovo, its own version of Silicon Valley, which is meant as a way to both diversify the country’s economy and help foster a new generation of Russian entrepreneurs like Volozh and Milner.

As Medvedev himself said this week, dropping in on one forum session that featured Volozh and Milner and focused on the internet economy: “Russia needs to be not just a big energy country…but an organic part of the digital space.”

To do that, the Kremlin is employing the assistance of foreign groups, such as Cisco and the Massachusetts Institute of Technology, both of which agreed to invest in Skolkovo at last year’s forum and were back again this year, reaffirming their commitment.

Specifically, MIT said on Saturday that it would collaborate with Skolkovo’s leadership to create the Skolkovo Institute of Science and Technology, a three-year collaboration project that hopes to bring Russian scientists together with foreign peers.

It is a great idea in theory. But as Zhores Alferov, a Nobel Prize-winning physicist and rector at the Russian Academy of Sciences, noted during one of the forum’s panel sessions, groups, such as MIT and Cisco, have to make sure they are actually investing in the project and not just trying to exploit a new generation of Russian scientists and technology experts.

“The success of Skolkovo depends on one thing: that we do it together…Our foreign partners should understand that they are not here to make big money or to take advantage of our national talent,” he told a group including John Chambers, Cisco’s chairman.

While scientists and academics were highly regarded, and paid, in the Soviet Union, their standing has slipped in the past two decades, Alferov noted. As Medvedev told the FT, too many young people are choosing to be civil servants these days – and not for the right reasons.

A continued focus on Skolkovo propels “the hope that our country has good examples,” said Vladimir Solovyev, a well-known TV presenter hosting the Skolkovo panel. The government, he added, needs to “convince a new generation that Russia doesn’t just have a great past, but a great future.”

According to Solovyev, the biggest task for the government is reaching concrete milestones, such as the agreement with MIT, that can show both Russians and investors was Skolkovo is actually about and that the project is making progress.

“People don’t understand what is meant by Skolkovo and what people are talking about,” the presenter bemoaned.

It is the task of both the government, and Russia’s already-established entrepreneurs, to change that.

Related reading:
FT Interview: Dmitry Medvedev, Moscow’s enigma, FT
Web becomes valued forum for free speech, FT
Cisco in Russia, “we don’t underestimate the hurdles”, beyondbrics
Life after oil: Russia faces up to its challenging future, beyondbrics