06/26/2012 10:22 am ET Updated Dec 06, 2017

Innovation Propels Russia's Economic Growth -- And Not Just in Moscow

In this year's Battle of the Brains international programming contest held last month in Warsaw, three students from St. Petersburg State University of Information Technology, Mechanics & Optics, a leading Russian technical school, were named world programming champions beating more than 100 other teams. This may sound like a lucky win for Russia in face of fierce competition from the best universities around the world. In fact, teams from the same university have won the contest three times in the past five years solving some of the world's most challenging computer programming problems.

This is not only an astounding achievement but indicative of Russia's great potential on the global stage beyond natural resources. While China is a global leader in manufacturing, and India in the export of services, Russia's hi-tech skills are creating an opportunity for it to become an innovation powerhouse.

There are real examples of where this is already happening. Previous winners of the Battle of the Brains contest from St. Petersburg have since gone on to establish successful innovative businesses such as Yota which is making waves with its own 4G mobile internet devices. Other past winners have gone on to set up which has established itself as one of Russia's most famous social networking sites. The computer security firm Kaspersky Lab is perhaps the best known global success story for Russian IT innovation.

And this is not just a potential restricted to skills in Moscow and St. Petersburg. This year's Battle of the Brains world finals had high performing teams from the Russian cities of Saratov, Nizhny Novgorod, Tomsk and Volgograd. Increasingly these cities are waking up to the value of technology and investing in the development of IT skills. In fact, Russia's future economic success and diversification is dependent on the successful development of the entire country, not just its main two cities.

There is huge potential in Russia's regional cities. That is why IBM this week announced its plans to double its presence in Russia and the broader Commonwealth of Independent States (CIS) region this year. In recognition of the great potential for growth and to increase support for customers and partners in Russia's regional cities and across the CIS, IBM is rolling out a major program of geographic expansion. Through a $6 million incremental investment this year into our sales, support and services network, we will open 10 new branches extending our footprint in the Russia/CIS region to 22 branches covering 7 Russian Federal Districts and 7 time zones -- from St Petersburg in the West to the Russian city of Khabarovsk on the North East border with China. We will also double the number of staff in the Russian regions and the CIS this year and extend our network of business partners to over 4,000.

Companies and government organizations in Russia's regional cities are turning to technology to transform the way they work, drive operational efficiencies and increase competitiveness. While the early stages of IT market development in these cities are largely related to the implementation of basic infrastructure, the infusion of hi-tech skills into the local IT market paves the way for the development of smarter city systems that address such issues as transportation, healthcare, utilities, education and public safety.

Of course we are not the only ones to spot the potential of Russia's regions. With the realization that regional cities are key to Russia's economic future, the Russian government is focused on a number of modernization initiatives supporting regional development covering such diverse areas as trade, education, tourism, healthcare and pharmaceuticals.

As for Russia's innovation agenda, the Russian government has a number of high-profile initiatives that are attracting global attention. Perhaps the best known is the work of the Skolkovo Foundation -- a non-profit organization established by the Russian Government to accelerate the transformation of Russia from a resource-based to an innovation-based economy. Its flagship project is the Skolkovo Innovation Center currently being constructed in Moscow and which is set to become a major hub for Russian innovation.

IBM is working closely with the Skolkovo Foundation and assisting in the development of an Intellectual property management system to help identify and evaluate technologies of high potential commercial value. IBM will also establish a Science and Technology Center within the future Skolkovo Innovation Center. In addition to Skolkovo, IBM is working with a number of Russia's innovation giants such as Rosnano, Rostelecom, Russian Venture Company and ITFY to leverage the power of cloud computing and provide access to global best practice in microelectronics.

Innovation is becoming Russia's new shining star of future economic growth. However, it is only by investing in the Russian regions and bringing into play the vast wealth of IT skills from across the country that Russia can truly realize this vision.