Bringing the technology world to Russia

The billions of rubles of government money being invested in the Skolkovo Innovation Centre on the outskirts of Moscow (read my previous post for more details) is not only going into developing the local tech startup community.

Several multinational technology companies have also signed up as partners for the Skolkovo initiative, including IBM, SAP, Intel, Cisco, Siemens and others.

While those firms will get early access to the innovations coming out of the Skolkovo-backed startups – and to government incentives that see startups excused of corporation tax for up to 10 years – they are also expected to set up research and development facilities at the expanding Skolkovo site, and so bring inward investment to the Russian tech sector.

There is an acknowledgement among Skolkovo executives that Russia’s domestic technology market is not sufficient to grow its own startups, and by implication is not so appealing to the global tech suppliers beyond a core of 80 or so giant Russian companies such as Gazprom or Rosneft, the state gas and oil firms.

So Skolkovo is also intended to attract those IT suppliers to Russia by demonstrating the quality of Russian startup skills and the products they bring to market – and of course by the government cash being spent here.

Russian prime minister Dmitry Medvedev is due to visit the Startup Village event today – security at the gates was tighter, with lots of burly men in suits with earpieces and bulges under their jackets checking passports and IDs on the way in. Skolkovo is seen as one of Medvedev’s pet projects and he is keen to give a demonstration of public support.

The oligarch that Medvedev put in charge of the Skolkovo project is Viktor Vekselberg – reputedly Russia’s third richest man. Opening the event yesterday, Vekselberg said, “There is a saying in Russia: The first pancake you bake will be a failure. But here, we hope that all the pancakes we bake will be successful.”

There is realism as well as pots of government cash behind Skolkovo, and it’s not expected that the overseas IT giants will set up their R&D centres here until 2017 or 2018 at the earliest – plenty of time for them to better assess the return on investing in what is still an unproven initiative.

But in the global competition for the growing digital dollar, Russia is intent on becoming a major player – and that’s something the UK and EU governments need to be aware of. The US, China and Japan will soon have another potential home for their R&D cash.