Never let it be said that the Russians do things by half measures. The Skolkovo project is a $4 billion scheme to construct a new technology city of 30,000 people outside Moscow that will give rise to, the founders hope, a new generation of innovation in a country that has seen its science and technology prowess slide.
While there is more than a whiff of Soviet-style grand planning about the project, the key difference between the Soviet-era technology cities of old and Skolkovo is the degree of openness. Far from being shut off, Skolkovo isn’t merely open to foreign investors and workers; they are positively encouraged.
According to Conor Lenihan, a former Irish science minister now responsible for striking international partnerships, Skolkovo will act “as a window for the rest of the world into Russian science and technology, and as a window for Russian science to the rest of the world.” Russian science has a rich history, he points out, but it has suffered from an outflow of scientists since the 1990s.
Skolkovo will include a university partnered with MIT that will be home to more than 1,200 students, a science and technology park, and five key technology centers covering nuclear, biomedical, IT, energy and space.
Russian IP protection
It would be fair to say that Russia doesn’t enjoy the best of reputations when it comes to protection of intellectual-property rights — a view that isn’t lost on the project’s brains trust.
According to Mr. Lenihan, the entire Skolkovo project will be inside a special federal area with its own customs, tax, and immigration service. That should help make the often Kafka-esque Russian visa procedures simpler.
Importantly, says Mr. Lenihan, the area will have its own intellectual-property court and legal-advice service. IBM, one of the Western companies that has agreed to establish a presence in Skolkovo, has acted as an IP adviser to the program. Companies that create IP in Skolkovo aren’t required to share it and nor are they bound by any exclusivity deals, Mr. Lenihan said. However, there is a requirement that any IP generated has to be owned by a legal entity founded in Skolkovo.
Grants up to $10 million
In return, the terms for start-ups funded by the project, due to be completed by 2014, are generous; grants, not loans, are available to start-ups of up to $10 million, and companies can enjoy a tax holiday of up to 10 years if their turnover is below $30 million.
So far, some 140 companies have obtained funding through the program, about 80% of them Russian, although Mr. Lenihan said the aim was for half of all companies to be non-Russian. Typically these companies were R&D-heavy companies, he said. When open and running, the park will cater for some 600 start-ups.
Mr. Lenihan said the project is looking to attract some 40 key players into the region. To date, 21 have signed up, including Cisco, Boeing, SAP, Siemens and Intel. On average, he said, the companies were investing between $100 million and $150 million, and were committing to employing about 90 researchers at the site.
It is too early to say how successful the project will be — it isn’t yet even a building site — but among Russian entrepreneurs there has been admiration for the scale of the project. Still, questions have been raised over the project’s ability to attract talent for larger companies.
If you build it, will they come?
“When the Russian government makes it clear that it is a project they care about, they are usually very successful at this sort of thing,” said Maelle Gavet, CEO of OZON, one of Russia’s leading e-commerce sites.
“The problem for us is that it is too far away. If you are a small start-up and you need 10 people then it would work fine, but if you are company like OZON that needs 300 people in our head office, it would be a challenge to find 300 people ready to go to Skolkovo.”
The Skolkovo project was announced by Russian President Dmitry Medvedev in November 2009. It is funded directly by the Russian government and while $4 billion has been allocated, Viktor Vekselberg, the head of the Skolkovo foundation, a not-for-profit, has said that potentially up to $8 billion might be made available.
Source: Blog.WSJ.Com