Skolkovo: dream or reality?

‘So many of our dreams at first seem impossible, then they seem improbable, and then, when we summon the will, they soon become inevitable’. – These are the words of Christopher Reeve, who acted Superman in 4 American movies.

Can you imagine that after pressing only one button of your mobile phone, you could read the thoughts of a man? The dream of any person, isn’t it? Another point is, whether it is legal or not. But if we omit the problem of human rights observance, we could ask the following question: What can make such a dream come true? Our answer is – such huge innovation centres as Skolkovo.

First of all let’s look at the Skolkovo profile more carefully. Innovation Centre Skolkovo is a project for the Russian research and industrial spheres that is based on the example of one of the biggest techno parks in the world – Silicon Valley in the USA. Although Skolkovo is often called ‘Russian Silicon Valley’, especially in foreign mass media, it is necessary to understand that it is not a copy or duplicate of the American innovation centre. Skolkovo will be an independent and unique ultramodern complex created to attract and encourage scientifically and technologically developed companies. It should be noted that there are ten biggest Research Parks in the world. The Skolkovo project is intended to reach the international scale of these parks and march in step with them by the year 2014. The terms of creation of the Russian innovation centre are varying within 3–7 years.

The planned research centre in Skolkovo should first of all focus on five high-tech sectors: energy, information technology, telecommunications, biomedicine, and nuclear technologies. Board of Trustees Skolkovo is headed personally by President of Russian – Dmitry Medvedev. Also such representatives of Russian Government are members of Skolkovo Board of Trustees as: Head of the Supervisory Board of the Fund for Assistance to Small Innovative Enterprises in the scientific and technical area (Ivan Bortnik); Assistant to the President of the Russian Federation (Arkady Dvorkovich); Deputy Prime-Minister of the Government of the Russian Federation – Finance Minister of the Russian Federation (Alexei Kudrin); Minister of Economic Development and Trade of the Russian Federation (Elvira Nabiullina); Deputy Prime Minister of the Russian Federation (Sergey Sobyanin); First Deputy Chief of Staff of the Presidential Executive Office (Vladislav Surkov); Minister of Education and Science of the Russian Federation (Andrey Fursenko). [6, p.6]

Skolkovo Foundation Council includes representatives of such international companies as: Lukoil Oil Company (Vagit Alekperov, President); Nokia Corporation (Esko Aho, Executive Vice President); Almaz Capital Partners (Alexander Galitsky, Managing Partner); Siemens AG (Peter Lцscher, President and Chief Executive Officer); Tata Sons (Ratan Tata, Chairman); Cisco Systems, Inc. (John T. Chambers, Chairman and Chief Executive Officer); Russian Corporation of Nanotechnologies (RUSNANO) (Anatoly Chubais, Chief Executive Officer); Google Inc. (Eric E. Schmidt, Chairman and Chief Executive Officer). [6, p.6]

In the World Economic Forum in Davos in January, 2011 President of Russia emphasized the importance of the Skolkovo project not only for our country, but also for other states. The reason for such an announcement is that new opportunities for innovation and venture capital financing are being created in Russia. In addition, Russia is training its own specialists and seeking to attract the best foreign specialists. According to Dmitry Medvedev, the Skolkovo Innovation Centre is our biggest project in this area. ‘Dozens of businesses, big and small, registered in various locations throughout Russia, will take part in this project this year and will all enjoy special incentives. I am sure that we will see the emergence of new global brands coming out of Russia over the coming years, and the involvement of foreign business, innovative foreign business, in these efforts will boost our chances’ – Dmitry Medvedev. [3, p.6]

And how do the specialists estimate the future return on this project? In huge Techno Parks as Skolkovo is planned to become, such technologies and products are developed, that are in demand and attractive to consumers. According to Chief Executive Officer of Rusnano Anatoly Chubais, the production of innovative products in Skolkovo by the year 2015 could bring at least 100-200 billion roubles a year for the first 10 projects. And if we churn it out, then this sum will make up 1 trillion roubles a year. [5, p.6]

Sergei Borisov, president of the All-Russian Public Organization of Small and Medium Enterprises ‘SUPPORT OF RUSSIA’ said: Skolkovo is not just a complex that generates a synergetic effect. These are such systemic factors that will affect the entire innovation environment in Russia. This system will bring up talents, create motivations for technological renewal, and stimulate demand and commercialization. [5, p.6]

But not everything is so easy and smoothly with the Innovation Centre Skolkovo. As any huge innovative project, it has to meet a number of challenges. We called the complex of these issues – ‘the Ladder of Challenges’ (see Img.1).

The second step of the Ladder of Challenges is infrastructure. Initially five foreign architecture companies were chosen to put in a tender for Skolkovo building. At present there are 2 finalists in the Skolkovo architects competition: building companies from Holland and France. Every person who is interested in the future of the project can watch the presentations of finalists and vote for the best one on the official website of the Skolkovo foundation. In that way the Russian Government emphasises that everyone can make a contribution in realisation of this project.

When the project has the area and planned infrastructure, it needs lots of capital investments to move further. And this is the third step of the Ladder of Challenges - investors. Of course the Skolkovo project has already had a number of investors. One of the first foreign investors was the American fund Siguler Guff that has already invested $250 mln in Skolkovo. The Cisco Company, an American-based multinational corporation that designs and sells consumer electronics, networking, voice, and communications technology and services, is going to invest $1 bln within 10 years. If we take into consideration that the world economy is still in hard post-crisis condition, the above-mentioned figures acquire special importance.

And this is only the beginning! One of the major shares falls on the Russian government. In the year 2010 the Russian Government allocated more than 4 bln roubles for the innovation centre projecting. On August 5, 2010 the Ministry of Finance of the Russian Federation published its fiscal policy directions. According to these directions 15 bln roubles in 2011, 22 bln roubles in 2012 and 17.1 bln roubles in 2013 will be allocated for the Skolkovo project from the Federal Budget. And the total sum of the governmental support by the year 2015 will make up more than 100 bln roubles. [7, p.6]

The Russian Government is also attracting more foreign investors. It used an effective solution of establishing contacts for Skolkovo. In June, 2010 President of Russia Dmitry Medvedev visited the world famous science centre – Silicon Valley.

In response to Russian President’s visit ex-governor of California Arnold Schwarzenegger came to Russia on October 11, 2010 and brought to Russia the US investors who are going to invest up to $ 1 billion in joint projects with Rusnano in Skolkovo. As a result of this meeting in Skolkovo such international companies as Intel, Nokia Siemens Networks, Microsoft, IBM, Google and Apple have been interested in investing in the project.

The forth step of the Ladder of Challenges is occupied by high-tech equipment. By all means there should be up-to-date high-performance equipment for researches and developments in Skolkovo. It is desirable that it is produced in Russia. However, there is no chance to rely on miracles, because it would be a big success even if the production of this equipment right there in Skolkovo was developed at least in 5 years after the launch of the project. Therefore the Skolkovo project will have to buy the necessary equipment abroad.

In spite of the importance of the first four steps of the Ladder of Challenges, the most essential factor is at the very top of the ladder. These are human resources. Only people, their bright new ideas, their intellect, their progressive views and their creations and inventions can make the project alive.

Of course the Skolkovo project does not need all the people of the world but it will be enough for it to attract the best ones. Although it is not an easy task to do this, but Russia in cooperation with the Russian Academy of Sciences has already achieved some successful results in this field. Zhores Alferov, Noble Prize Laureate in Physics (2000), Academician of the Russian Academy of Sciences, Vice-President of the Russian Academy of Sciences, Rector of St. Petersburg Academic University – Nanotechnology Research and Education Centre of the Russian Academy of Sciences, and Roger Kornberg, Noble Prize Laureate in Chemistry (2006), Professor at Stanford University, are co-chairmen at the Skolkovo Scientific Advisory Council. [6, p.6]

Moreover, Skolkovo collaborates with such universities as The Scripps Research Institute, the University of California, the Max Planck Institute of Colloids and Interfaces, the Max Planck Institute of Molecular Plant Physiology, the Technical University of Berlin, Purdue University, Moscow State Bauman Technical University, the Institute of High Energy Densities, the Institute of Catalysis named after G.K. Foreskov and Scientific Research Institute of molecular electronics. [6, p.6]

Why are modern successful companies so keen on human resources (HR)? Most economists agree that investments in HR are very important. Of course there are reasonable grounds to maintain this. Ideas and other intellectual products define the principal value and the main source of income in companies nowadays. Research on this issue has shown that if we improve employees’ professional skills by 10%, labour productivity increases by 8, 6%. Moreover, it is known that with a skilled management, the return on investments in human resources is almost three times higher than the return on investments in equipment. [1, p.6]

Nowadays international companies know about the foregoing facts and widely use this knowledge in their practice. The Table1 [2, p.6] shows the amount of investments in human resources as of the year 2008 of such well-known corporations as Microsoft, Siemens, Intel, IBM, Nokia and Cisco, which are going to invest into the Skolkovo project.

The Table2 [1, p.6] produces the level of governmental financing into science in the USA, Japan, EU, Russia and China in the year 2005 (as a percentage of GDP). There is also the forecast for the year 2030. According to these figures, the level of financing into science will be increased considerably in the presented countries by the year 2030.

Year	USA	Japan	EU	Russia	China
2005	2.72	3.20	1.87	1.25	1.34
2030	3.10	3.50	2.50	2.30	2.60

If we calculate the real level of financing into science taking into account real GDP indicators based on Global Purchasing Power Parities in the year 2005 [4] we will have the following results:

The matter is about the huge sums of money allocated for science development and personnel training in these countries and regions. But in comparison with the presented states Russia has a weak uncompetitive position in the sphere of science development and needs to improve the situation.

Having passed through and analysed all the five steps of the Ladder of Challenges we draw a number of conclusions and answer the main question: Is the Skolkovo project dream or reality? We suppose that in a few years the dream of Techno Park Skolkovo will be alive and live up to our expectations overcoming the obstacles.

It is a positive point that more and more attention is payed to innovations in Russia. But it will be necessary to built and develop unique ultramodern complex in rather limited relatively small territory. Although the project has enough funds and attracts foreign investors, these pluses can turn out for minuses in a few years. All these foreign investors give the project lots of money but at the same time they get the right to use all the intellectual property created in Skolkovo. That is why the authorities of Russia should attract not only foreign capital but also stimulate the interest of domestic individual capitalists and corporations in order innovative products and technologies produced in Skolkovo to stay inside the country and bring a big profit by using Russian patents and licenses.

References:

1. Innovation development: economy, intellectual capital, knowledge management. Ed. BZ Milner. M.: INFRA-M, 2010, Pages 65, 71-72

2. R & D Magazine. September 2007. P. G16

3. http://eng.news.kremlin.ru/news/1684 - The official website of President of Russia. Article ‘Dmitry Medvedev addressed the World Economic Forum in Davos’, January 26, 2011

4. http://go.worldbank.org/U6HXIPKWA0 - The official website of the World Bank. ICP 2005 Report

5. http://shuum.ru/articles/127 - Шум – журнал о политике, обществе и культуре. Статья «Сколковская долина» от 05.07.2010

6. www.i-gorod.com - The official website of the Skolkovo Foundation

7. www1.minfin.ru/ru - The official website of the Ministry of Finance of the Russian Federation