SKOLKOVO – СКОЛКОВО. SMART CITIES AND INNOVATION: WHICH CAME FIRST, THE CHICKEN OR THE EGG? RUSSIAN PROJECT TO DEVELOP A SILICON VALLEY BELOW ZERO.

Some weeks ago, business media in Russia announced that Ericsson, Sweden’s largest telecommunication systems producer, will build its own scientific research center in Skolkovo (СКОЛКОВО), Russia’s Innovation Center. Ericsson will start the implementation of this large-scale project later this year, and that centre will focus on the development of “smart grids” for power supply systems, according to the words of Sergei Skripnikov, Head of media relations for Russia and CIS at Ericsson, starting with the development of “smart meters” and automatic paying systems.

To develop ICT talent in Russia, Ericsson currently operates the Ericsson Training Center, which was opened in Moscow in 1996. The Center is a joint venture with the Moscow Technical University of Telecommunications – MTUCI. Since opening, the Center has trained more than 20,000 ICT professionals. But now, the commitment goes far beyond, and the strategic agreement between Ericsson and the Skolkovo Foundation will help drive innovation and development in the country’s science and technology sectors, allowing Ericsson to play a key partner role with the non-profit Skolkovo Foundation in the development of the Russian crown jewel called Skolkovo Innovation Center.

But what is Skolkovo Innovation Center? According to the master plan developed by Russian Government and the ubiquitous tycoon Viktor Vekselberg (Chairman of the Foundation for Development of the Center of Research and Commercializing of New Technologies (Skolkovo Foundation)), Skolkovo will be the core of innovation in Russia, consisting ona high-technology mega-business park aimed at promoting the development of science and technology companiesin Russia, attracting creative people and high-tech industries to the land of the Tsars.

 

This greenfield initiative is being developed by the Skolkovo Foundation, described as a non-profit organization charged by the Russian Government with driving innovations that will benefit society (http://www.i-gorod.com/en/). The foundation was established by the Russian Academy of Sciences, the Bank for Development and Foreign Economic Affairs (Vneshekonombank), the Russian Corporation of Nanotechnologies (Rusnano), Bauman Moscow State Technical University, the Russian Venture Company and the Fund for Assistance to Small Innovative Enterprises in the scientific and technical area. The project for making Skolkovo a technological start-up hub, as a sort of Russian Silicon Valley involves technology clusters (energy, biomedical, IT, space and nuclear) that will engage in developing new technologies and products. Construction of 398 hectares of land is scheduled to start this year. The center is planned to employ, at conclusion, 20,000 high-qualified people. Besides, MIT and Cisco are supporting the project as well.

From the Soviet “Secret Cities” (many of which were built by slave labor from the Soviet GULAG for scientific purposes and known only by a postal code or identified with a name and a number) to the modern “Naukograds” (“science city” in russian, like Obninsk, a town with many nuclear and other special materials, meteorology and medical research facilities; Dubna, an international nuclear research centre or ; Korolyov, where many space research facilities are located; and Koltsovo, near Akademgorodok, originally the home of the biowarfare center Vector but now a center for pharmaceutical and medical research) Russian relationship with concepts like talent, creativity and  freewheeling has been rude.

But now, the concept is going open and international.  As many other jealous places, - last, but not least, the recent NY Plan of Major Bloomberg,- Russia aims to challenge Silicon Valley with its innovation center in the suburbs of Moscow. The modern center for research and development will be built in the village of Skolkovo located in the Moscow region. The Russian ‘Silicon Valley’ will host five different scientific communities next to the campus of Skolkovo Moscow School of Management, a top-level business school founded by leading Russian and international companies.

The goal of President Medvedev is to cluster the Russian talented and creative scientists working on the cutting-edge technologies in a variety of fields to that place, and, for sure, to create favourable conditions for “brains” from abroad. Promoters think that building a high-tech hub for scientists and business people in Skolkovo should help Russia to develop and commercialize new technologies in the right way, something that has to be proven by facts.

According to the official, despite all the cliche about Russia outside the country, everything can be overcome. The international view of the project is crucial for Skolkovo, and the government has started to allocate grants to attract foreign scientists to work in Russia, while companies inviting specialists from abroad allow them get financial support from the state. Moreover, special bodies might be created to focus exactly on headhunting (talented geeks). Meanwhile, on July 1, a new law came into force which makes it simpler for highly-qualified specialists – those who earn over 2 million rubles (about $65,000) a year – to get a work permit in Russia (it is all about money?)

The recent report of news agency RIA Novosti citing a source in the Skolkovo Fund, stays that the construction of the first complex of the Skolkovo Innovation Center is scheduled to begin in 2012 and be completed in early 2014. Under current plans, the center is to have 850 residential housing units, classrooms for 600 students, as well as to create 1,000 jobs by 2014. The Skolkovo lab-city is reportedly to become the largest site for development and implementation of new technologies for energy-efficiency, transport, information, communication and other areas by project participants.

Even Tax breaks and other funding will be offered to selected companies, the goal is enormous: Skolkovo is going to be rather a pricy project. 60 billion rubles (about $2 billion) of public and private investments will be required in next five years, and promoters try to concern not only state funds, but fundraising partners, achieving 50/50 co-financing by public and private contributors.

Skolkovo, as an innovation hub itself,  should be also a smart city, deploying technologies such as pneumatic waste processing, use of underground heat sources, use of heat from sewage waters, use of solar panels, biogas and absorption devices. Transportation technologies will be developed as well – the construction of intercepting park and ride facilities at the center, high speed public transport connected to railway transport by interchange terminals, pedestrian and bicycle zones, and carpooling.

At first step, Skolkovo will become a center of research and innovation in five directions that carry top priority for Russia-energy, IT, telecommunications, biomedicine and nuclear technologies- hosting the branches of the largest corporations and the best graduate programs. It will provide tax incentives, easy access to new clients, and mechanisms to finance and sell new ideas. For all these reasons, the center is sometimes called “Innograd” which means “innovation city” in Russian.

The choice of the village of Skolkovo might be explained by different reasons. Start from scratching and creating new conditions for the best people who will power the future of Russian economy is said to be first.  Second, Skolkovo is conveniently located in close proximity to Moscowand such institutions as Moscow School of  Management and the Center of Space Communication. In addition, the suburbs of Moscow have very efficient infrastructure (Russian standards…) which will further help the Russian government control the development and progress of its new ambitions project.

Russian government has repeatedly urged economic diversification, predicting that the world’s biggest energy exporter will remain extremely vulnerable unless it can kick its dependence on oil and gas sales. But critics say the Kremlin’s modernization rhetoric needs to be translated into action and be accompanied by measures to improve the investment climate if diversification efforts are to have any chance of success. Instead, critics have already ridiculed Medvedev’s attempts to establish a top-down knowledge economy in Russia, saying the country’s rampant corruption, poor living conditions and lack of legal guarantees make it ill-suited to rivaling California’s science and technology center.

The fact is that thousands of scientists, engineers and intellectuals abandoned Russiaduring the economic chaos of the 1990s and though the pace of the brain drain has slowed, the country’s research base has been severely depleted. Moreover,Russia’s economy contracted by 7.9 percent last year as the global economic crisis destroyed demand for key exports such as oil, gas and metals, ending a decade-long boom. The depth of the recession, said to be by far the worst to hit any major emerging market, shocked the Russian elite and spurred calls for the economy to lessen dependence on raw materials.

Should the innovation and business blossom at Skolkovo’s area? Stay tuned!

For further information, please visit:

 http://www.ericsson.com/news/1509346 (Ericsson report about the Skolkovo agreement)

http://news.bbc.co.uk/2/hi/8638222.stm (BBC on Skolkovo)

http://www.reuters.com/article/2010/03/18/us-russia-siliconvalley-idUSTRE62H33S20100318 (Reuters on Skolkovo)

http://www.themoscowtimes.com/vedomosti/article/russian-silicon-valley-for-moscow-region/399710.html#ixzz1Y2W6Aaot (Moscow Times report)

http://www.skolkovo.ru/public/en/ (description of the project)

http://www.huffingtonpost.com/2011/07/19/bloomberg-wants-nyc-to-be_n_903781.html (Bloomberg projects for NY)

http://rt.com/politics/schwarzenegger-skolkovo-learn-moscow/ (Arnold Schwarzenegger pays a visit to Skolkovo)

http://web.mit.edu/newsoffice/2011/skolkovo-mit-announcement-0618.html (MIT supports Skolkovo)

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