Skolkovo Under Fire; Government Innovation Policies May Be Reshaped

Skolkovo, the state-sponsored giant tech hub nearing completion on the outskirts of Moscow, has come under sharp criticism over the last several months, suggesting that government policies in support of innovation in the country could be reviewed.

Among the first signs of resistance to Skolkovo’s recent development were remarks made this past October by Deputy Prime Minister Vladislav Surkov, who cast doubt on the need for two expensive, monument-scale buildings planned by the Skolkovo Foundation.

Surkov’s remarks perhaps echoed the cynical views of Russian businessmen and officials who believe that Skolkovo’s actual raison d’être – behind the stated goal of stimulating innovation – is to create juicy real estate development opportunities.

The next-level attack came earlier this month from Russia’s president in person. In a rare move, Vladimir Putin vetoed amendments to the federal law on Skolkovo which had been passed by the parliament and submitted to the president for signature and promulgation.

According to the Kremlin’s press release, these amendments “[failed] to define the criteria and parameters for the assessment of the Skolkovo Innovation Center’s effectiveness in the economic, social and scientific spheres. [They did] not fill the existing gaps in the Russian legislation with regard to intellectual property rights regulation and [did] not address the needs of innovative companies.”

The president also rejected the proposition that “the management company of the Skolkovo Innovation Center [be granted] the right to approve urban planning and design standards and identify the list of necessary planning permits and authorizations and construction phases” – because under Russian law, these functions are “the responsibility of relevant state agencies and local authorities.”

A source familiar with the issues interpreted the presidential statements for East-West Digital News as follows: having returned to the presidency this past spring, Putin acknowledges the need to continue the innovation-friendly policies of former president Dmitry Medvedev. But the president is increasingly critical of certain of the government-sponsored organizations that represent the fruit of these policies – not only Skolkovo, but also nanotech giant Rusnano and fund of funds RVC, to a lesser extent – and is considering reshaping them to better match his own views, the source believes.

High profile, wrong focus

Matters turned even worse for Skolkovo just days after Putin’s veto, with public criticism coming from abroad.

In a report on the diversification of the Russian economy, the EBRD offered mixed appreciations of the government’s “top-down approach” in the field of innovation.

The report praises Skolkovo as “the most high-profile and ambitious government project fostering innovation and diversification,” with its international partnerships, tax exemptions and other favorable conditions. But the project is seen as an “enclave” which the EBRD believes is “less likely to lead to success than clusters that are reasonably well integrated into the wider economy.”

“In this respect, China’s experience highlights the role of such clusters in attracting FDI and increasing exports,” the EBRD experts note. “Some of these features are replicated in certain regions of Russia (such as Kaluga, where activity is centered on the automotive sector), but this approach is rather different from the ‘beacon model’ exemplified by a project such as the Skolkovo initiative.”

Much less diplomatic was an opinion published last week in the Russian press by Skolkovo’s former Chief Operating Officer Steven Geiger, shortly after his resignation.

Geiger’s straightforward remarks raise four key issues:

  • Skolkovo’s focus, which encompasses five strategic fields –  IT, biotech, energy, space and nuclear technologies – has been too broad. Space and nuclear technologies require separate treatment, Geiger believes.

  • The interests of Skolkovo’s management team are neither properly aligned with those of the Russian state nor sufficiently connected with the success of the tech hub’s resident companies. Moreover, Skolkovo’s KPIs are “more quantitative than qualitative, reminiscent of Soviet five-year economic development plans.”

  • Skolkovo’s focus on material assets and infrastructure is excessive; non-material assets, “from intellectual property to know-how to creativity,” deserve more attention. “It has been a typical mistake in various countries to present innovation projects as super-expensive cities with architectural and technological marvels. While such projects may indeed look fascinating, they almost always fail to develop and actually have little in common with innovation.”

  • Skolkovo’s internationalization – which is an absolute prerequisite for success, as demonstrated by Silicon Valley – might fail because the government bodies responsible for immigration policies are not sufficiently aware of the necessity to attract foreigners to key positions, Geiger says.

The Russian government is investing several billion dollars in the Skolkovo project, setting for it the praiseworthy goal of stimulating innovation across the country.

Even though it has been criticized for its bureaucratic organization and procedures, the giant tech hub has already managed to attract more than 500 Russian and foreign startups as well as an impressive array of Russian and international tech giantsresearch institutions and investment funds.


This post has been originally published by East-West Digital news. ArcticStartup has a partnership with the site and does content exchange and collaboration to bring you more coverage to and from Russia.

About East-West Digital News

Launched in 2011, East-West Digital News is the first all English-language online resource dedicated to the Russian IT and innovation scene. The site provides news, events, market data, business tools and updates related to Internet, e-commerce, mobile and telecoms, digital TV and satellite systems, software and hardware innovation.

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