St. Petersburg – Shoring up the slow and difficult transition in the Russian economy from gas and oil to a more knowledge driven paradigm, the St. Petersburg International Economic Forum held in the end of last week in Russia’s Northern capital was replete with innovation related declarations on a massive scale.
Innovation was a central theme at the country’s main economic event, the first item not only in keynote speaker Russian President Medvedev’s opening speech but a constant refrain echoing throughout the Forum with dozens of announcements made by business leaders and government representatives from both Russia and abroad. East-West Digital News was present and offers highlights of the most significant revelations.
$10 billion for innovation
Russian President Dmitry Medvedev offered more details about the Fund of Direct Investments (RFDI), a state financed investment vehicle designed to co-invest in innovative projects announced earlier in April. Of the $10 billion to be invested in the coming five years, the fund declared its intention to invest an initial outlay of $500 million before the end of 2011.
The fund will concentrate on innovation, pharma, agriculture and consumer goods sectors as well as energy efficiency projects. The key principle of the RFDI is cooperation with international institutional investors ready to bring “smart money” to projects in Russia.
A wholly owned subsidiary of state run Vnesheconombank, the RFDI has already received positive feedback from a number of major international investors, particularly from sovereign funds from China and the Gulf states. The RFDI expects to close its first deal in 6-9 months.
Long-term visas for foreign entrepreneurs and investors
Large foreign investors and entrepreneurs owning significant businesses in Russia will be eligible for long term Russian visas, President Medvedev announced. “We will provide the opportunity to receive long term visas for all investors and entrepreneurs who own a substantial business in Russia,” he said. International businessmen participating in the establishment of Skolkovo, the state run innovation hub currently under construction near Moscow, would receive long term Russian visas in the first turn.
The move was presented as a “concrete step” taken to encourage the European Union, in particular, to lift visa barriers for Russians.
Earlier this year, Russia significantly simplified the procedure for obtaining work permits for highly skilled foreigners coming to Russia.
Two new partners for Skolkovo
Skolkovo also announced two new international partnerships at the Forum. The Skolkovo Foundation, the management organization behind the project, signed a preliminary agreement with the Massachusetts Institute of Technology to create the Skolkovo Institute of Science and Technology (SIST). Under the agreement MIT will assist the Skolkovo Foundation in building SIST into a world class research university. MIT has experience in advising academic institutions abroad, from the Indian Institute of Technology in Kanpur in the late 1950s to the Masdar Institute of Science and Technology in Abu Dhabi in 2007 and two other collaborative endeavors in Singapore in 2008 and 2010.
MIT has pledged to help the SIST organize educational processes around four programs, namely energy science and technology, biomedical science, information science, and space science and technology. A program for nuclear science and technology may either be included in the energy program or constitute as a separate program. The SIST will offer masters and doctoral degree programs under those four disciplines with focused degree tracks in specialized research areas within each program.
The second partnership initiative with Skolkovo announced at the Forum was a joint project with Nokia. The Finnish company will first create a small R&D center employing 25 people at Skolkovo. Furthermore, Nokia is intends to develop “large scale scientific projects” on the Skolkovo platform by 2014.
Microsoft technologies for St. Petersburg students and startups
A cooperation agreement between Microsoft and the St. Petersburg municipal government could open a channel for Microsoft technologies in the city’s educational system. In particular, the US software publisher has agreed to develop several innovation centers based on the computer science faculties at St. Petersburg universities.
Under the agreement, Microsoft is to set up an information center in Ingriya technopark, as well as to participate in the development of an IT-cluster in the city.
Specifically, the parties have agreed to support young talented innovation entrepreneurs at the start-up stage. St. Petersburg startups will benefit from a nationwide Microsoft program providing 1,000 IT startups with free access to a wide range of its software products over the next three years.
Alcatel-Lucent and EMC offer solutions for Russian telecoms
Russian state run corporation Russian Technologies and Alcatel-Lucent announced the expansion of their joint venture Alcatel-Lucent RT to develop and manufacture LTE components customized for the Russian market.
In addition, the Russian Telecom Equipment Corporation (RTEC), a part of Russian Technologies, inked a memorandum of understanding with EMC, a major international provider of data storage solutions. The document lays the framework for a future OEM agreement. According to the document, RTEC will be enabled to design and develop integrated storage solutions based on EMC products and technologies intended for the Russian market, particularly for public sector customers.
Rosy forecast for the Russian Internet
Minister of Communications and Mass Media Igor Shchegolev forecast at the forum that revenues from the Russian Internet sector will total 2% of the nation’s GDP by 2015.
Shchegolev’s optimism is backed by the fast pace of Internet development across the country. About two thirds of the adult population are expected to have access to Internet by 2015, according to a forecast by EWDN this year, up from 45% in 2001, according to the Public Opinion Foundation (FOM).
Google chairman Eric Schmidt, who also spoke at the Forum, noted that Russia needs to develop broadband Internet access.
According to Schmidt, currently the broadband Internet penetration rate in Russia stands at 40% compared to 80% in the Western Europe and almost 100% in Japan. The extension of broadband Internet availability is the only way to integrate Russia into global information systems, Schmidt emphasized.
Unique discussions and networking opportunities
Last but not least, the event provided unique discussion and networking opportunities with key businessmen and officials. “At a session specially dedicated to the international integration of IT industries, I met a wide variety of Western investors, from Californian VCs and business angles like Esther Dyson to the retired chairman of the Intel board, Craig Barrett, the heads of Boeing and Microsoft in Russia as well as key representatives of MIT – which is launching a huge research project with Skolkovo,” Kendrick White told East-West Digital News. “I spoke with presidential aide Arkady Dvorkovich as well as Conor Lenihan, the former Irish Minister of Science and Technology and now advisor of the Skolkovo Foundation. Telecasts were organized with VC representatives from California and Moscow.”
Kendrick D. White, an American businessman living in Nizhny Novgorod, is the founder of MarchmontNews.com, an English language information site and events organizer geared towards investment in Russian regions. White also runs an investment advisory firm.
“At the end of the conference, enthusiasm about Russia was evident among the participants. This elite crowd was virtually ecstatic. President Medvedev, who visited the session, gave all the right messages about the necessity of modernization. There was so much momentum about these moves and reforms, a feeling that this process could be irreversible, despite the forthcoming political cycle,” White added.
Sources: EWDN, CNews, Kommersant, Kremlin Press service, Marchmont News, Preqveca, TelecomDaily, Unova
