THE BLOG

Why Russia's Skolkovo Innovation Center is Off Strategy

04/07/2015 03:52 pm ET | Updated Jun 07, 2015

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This is what Silicon Valley looked like in 1950.

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Farmland.

Now, it looks like this.

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And this.

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How did that happen?

More importantly, can it be replicated?

In my opinion, no it cannot. Because it happened in Silicon Valley organically, almost by mistake instead of with intention. Does that serendipitous occurrence mean we shouldn't try to replicate the phenomenal growth of Silicon Valley? No, of course we should try.

But it won't be easy.

Ever.

Many countries, states and cities are hard at work trying to duplicate this magical innovation development. Most will fail.

Let us see what Russia is up to in this regard.

Russia's strong effort to re-create the "Silicon Valley Phenomena" is a great initiative for an oil and cash-rich nation to undertake--it is a necessary and wise investment of these always limited, windfall resources.

And any attempt to harness the prodigious intellect of Russian minds is admirable and requisite. But is Russia's Skolkovo Innovation Center off to the right start? Are all systems go?

From Amsterdam's innovation initiative to Hong Kong's "Cyberport" and from Singapore's great Economic Development Board to Malaysia's "Multimedia Super Corridor" (MSC), I've been privileged to visit and understand some of the world's top efforts at this kind of growth and creation of the right environment for technology/entrepreneurial development.

And there's one thing that's exceedingly clear about these kinds of well-intentioned, innovation activities: They are very difficult, very difficult indeed to pull off successfully; to recreate Silicon Valley.

Because even Silicon Valley wasn't done with any intention at all. It just happened.

How could any country recreate something that happened by kismet? They could not.

So it's very tricky, if not impossible to pull off these 'rabbit-out-of-a-hat' types of economic growth undertakings.

Some lessons learned from Silicon Valley, Amsterdam, Malaysia and Singapore:

1. Proximity to a top technical university or other center of excellence is crucial. Without this starting place, failure could be inevitable. Stanford's proximity made Silicon Valley happen. Ditto with NUS (National University of Singapore) along with the University of Amsterdam (and its "Brainport").

2. A central location is always better than a faraway one. Because of its absolutely central location in Western Europe and Schiphol Airport, Amsterdam was able to package up and sell their convenient location to tech giants such as Cisco Systems to locate their European headquarters there. This meant jobs for top graduate Dutch minds normally headed abroad to work and then causing a 'brain drain' at home.

3. Create a "money parade" for young companies to get funded, without going elsewhere to obtain those funds. Once you help them build it, if you let them go elsewhere to find funding, you've lost them forever. University of Amsterdam's Twinning Center did this beautifully. So does University of Helsinki's Biomedicum and Technomedicum in the Medical field.

4. Bring in leaders in different fields and disciplines to share their experiences, triumphs and most importantly, their bitter failures in detail with the candidates.

5. And overarchingly, create a strong, trusting relationship between the government and private enterprise sectors that works closely together in the process. Without the government's promise to ease regulation and taxation of small, developing business, this kind of innovation is hopeless.

So, with these points in mind, how do they relate to Russia and Skolkovo?

Well, let me begin with good news. Numbers three, four and five are all pretty well handled in Skolkovo.

The bad news is that numbers one and two above are both badly out of whack in Skolkovo.

Instead of dovetailing with the already humming Moscow State University and Novosibirsk State University (Hello? Looking for some of the finest mathematical minds in the world? Hello Novo?), among many others, the powers that be for Skolkovo decided to build a gleaming, new university from the dirt up right outside Moscow. How do you suppose Russia's other centers of learning felt about this? They didn't like it one bit, that's how.

More significantly, Russia missed the opportunity to connect the dots between their unbelievably innovative RAS (Russian Academy of Sciences) and this momentous commitment to innovation. With no less than 18 Nobel Prize winners (Stanford only has 21 after a big advantage over the last five decades), the RAS was the natural place to connect all that Russkie brainpower and decades of research with the Russian' secret cities (Sarov, Dubna, Zheleznogorsk, Seversk, etc.) to create a neural network that would put Stanford and Silicon Valley to shame.

Number one, "proximity" connecting already existing intellectual property, rather than building a new center from scratch is, to me, a big mistake.

On number two, "central location," Russia also missed the boat. Moscow is located in the far western part of the eleven time-zone wide country. This is anything but centrally located. The rest of Russia, say everything east of Moscow has long felt like the red-headed step child of Moscow and St. Petersburg, when in fact, most all of the gas and oil and a good bit of the Russian technological and science thinking talent resides east of the capital. Siberia would've been a much more central location for Skolkovo.

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The severe western location aspect of Skolkovo also does not connect in any meaningful way, the vast RAS and secret city resources mentioned above. This is a shame because Russia is again starting from the ground up, when they don't have to, and could marshal these key nodes in from the cold to build their center of excellence.

The Russian government has in a number of ways followed advice I gave them in my Moscow Times columns on Russian innovation development in 2005, here and here. But to make such fundamental mistakes on perhaps the easiest of principles more than ten years later is sad.

Russians sometimes won't listen to Americans unless they know us a bit better. It is because of this, that I don't feel insulted. I just keep going with my exhortations.

So pay no attention to me, Prime Minister Medvedev. I'm sure you're doing all that you can. If you should however, encounter any difficulties in the areas I discuss above, please do get in touch. I'd be happy to help in any way I can.

(Thanks to Russia Insider for their assistance in writing this article)