Russia intends to diversify its economy away from dependence on the export of raw materials by funding its own version of Silicon Valley an hour outside of Moscow. While this project isn’t exactly new, Deputy Prime Minister Vladislav Surkov announced earlier this week that state-owned companies will start transferring billions of rubles into an endowment fund for a flagship research institute at Skolkovo.
Skolkovo is intended to be Russia’s hub for research and design in the IT, energy, biomedical, atomic, and telecom sectors. The Kremlin-backed Skolkovo Foundation has signed agreements with Dow, Intel, Cisco, and Microsoft to invest hundreds of millions of dollars in R&D centres at the site. Officials and investors hope that it will become a hotbed for innovation, according to The Financial Times. Last year the government earmarked $167 million for startups.
Then President Dmitry Medvedev announced the launch of the high-tech hub in 2009 in the wake of the 2008 recession that hit Russia harder than any other developing economy. Proponents say that Skolkovo will help put an end to Russia’s brain drain, which has been severely depleting the country’s research base since the 1990s.
Analysts cited in the Financial Times piece praised Skolkovo for its transparency, in particular for a grant-process overseen by a panel of Russian and foreign experts. However, more than two years after the project was announced construction at the Skolkovo campus is only now underway. The project has also faced much criticism both at home and abroad. Critics have described Medvedev’s attempt to establish a “knowledge economy” as unrealistic, and some have expressed concerns that Russia’s lack of legal guarantees and widespread corruption are ill-suited to a healthy high-tech sector.