With buildings like the Hypercube and the Matrix, the Russian startup hub looks the part – but corruption allegations, the parlous international situation and getting on the wrong side of Vladimir Putin have all made life difficult
There’s a machine that can print a thyroid gland, a mechanised suit that is helping a paraplegic play football and a lifelike bust of Alan Turing answering questions in a robotic drawl.
Welcome to Skolkovo, a 400-hectare plot of land west of Moscow that is trying to style itself as Russia’s coming Silicon Valley. On a glorious day, surrounded by suitably named buildings like the Hypercube, the Matrix and the Technopark, a cluster of prodigies that put the star into start-up are showing off their ideas to a trickle of potential investors, venture capitalists from Russia and abroad.
At face value, the innovation hub first conceived of five years ago, appears a promising, even urgent, idea in a country so rich in scientific brilliance but so poor at bringing it to market. Even now it is hard to think of a single Russian brand that has broken through internationally. The country has long been chastised for over-relying on raw materials for its wealth; here is a counterpoint to all that.
But Skolkovo has endured an excruciating incubation. Far from turning Moscow into a new free-wheeling California, it quickly got on the wrong side of a suspicious Vladimir Putin and found itself grappling with tax inspectors and corruption allegations. Some of its mentors – and startups – emigrated.
And now something perhaps even worse: the parlous international situation makes investment in Russia a risky game again. Every bullet that’s fired in Ukraine is another shot across the bows of the international venture capitalists that were supposed to breathe life, and capital, into Skolkovo. With the exception of a large delegation of intrepid Finns, including strangely the F1 driver Mika Häkkinen, Europeans were conspicuous by their absence at last week’s investment fair.
Skolkovo has 1,100 startups working in IT, biomedicine, green energy, robotics, telecoms and radiation technology
Even those in the government who are rooting for Skolkovo admit they have a battle on their hands.
The prime minister, Dmitry Medvedev, an early champion of the idea of a tech hub, acknowledged last week that they were facing “a fairly difficult foreign backdrop,” but stuck to his guns. “It’s clear that we need a modern system of supplying innovations that is integrated with the globalised world, that attracts the best minds and makes the most of partner connections,” Medvedev told the first group of graduates from Skolkovo’s new graduate school, Skoltech.
His deputy, Arkady Dvorkovich, told the Guardian it was just a coincidence that foreign interest had switched from Europeans to Chinese in recent months. “It’s a global project and we are open to all kinds of investment, but due to sanctions, we took more effort to attract companies from new countries.”
“We are well above all our targets. We could make things even faster in a better international environment. We cannot ignore certain political strands, but we are lucky it is not having an impact on us,” he added.
So what are the numbers? Skolkovo now has 1,100 startups noodling around in everything from IT to biomedicine, green energy to robotics, telecoms to radiation technology. Though most have yet to bring products to market, total revenue reached $1bn at end 2014. Big international firms like Microsoft, Samsung, Cisco, Nokia and Boeing were early investors. MIT partnered in the Skoltech university.
And yet … investors are still counted in dozens not thousands. Total investment in 2014 was $60m, which doesn’t seem very large.
The young Russian innovators here are breathlessly enthusiastic about the hub, which secures them big tax breaks, office space, access to business angels and mentors and international trade fairs, as well as helping with more mundane affairs like setting up businesses and applying for patents.
Usef Hesuani, a 30-year-old former medical graduate, says Skolkovo gave his company a $400,000 grant to help produce Russia’s first 3D organ printer. “The potential is really huge when you consider that in China alone, 1.5 million people are waiting for organ transplants,” Hesuani says.
Ekaterina Bereziy of ExoAtlet, which makes mechanised suits to help disabled people walk says the Skolkovo foundation helped with intellectual property and patents. A $26,000 prize for winning a nationwide startup competition in 2014 also came in handy.
Nikita Rodichenko, 26, technical director of Tsuru, a robotics startup, says Skolkovo helped him meet a business angel and also sent him to MIT for a year.
“We believe it is possible to operate in Russia, even in this quite intense international situation,” Rodichenko says, though he doesn’t rule out setting up a second office in California if his tech firm succeeds.
But is this rubbing off on Moscow itself? The site is in a field 10 miles out of the city. It seems disconnected. Curiously Rodichenko, a graduate of the prestigious Moscow State University (MGU), says he had barely heard of Skoltech before his professor told him to apply.
Perhaps more worryingly, Vladimir Putin’s daughter Yekaterina Tikhonova is reportedly spearheading a $1.7bn project to create a new research hub around MGU.
So will Putin allow this ‘silicon farm’ to flourish? Or will his natural suspicion of western partnership and control of the digital world doom Skolkovo to irrelevance?
Ilya Ponomaryov, a former Skolkovo founder and MP who is currently in exile because of corruption charges that he rejects as political, says Skolkovo won’t pay off quickly enough for the president.
“Putin is extremely rational,” Ponomaryov said. “He understands that projects like Skolkovo would actually pay off 10 years from now. But Putin is thinking way more short-term than that.”
The othe worry is that Skolkovo - or some of its startups - might succeed rather too well and become targets for appropriation. Post-Soviet Russia is after all a state whose founding principal is that asset grabs that conform to the political objectives of the Kremlin are fair play.
Pekka Viljakainen, a 43-year-old Finnish entrepreneur, who has invested in a dozen companies at Skolkovo says the fear is overplayed.
“I don’t see any political risk to the hi-tech sector,” says the Finn, who calls himself ‘the Bulldozer’ and advises Medvedev on hi-tech strategy. “If you are in a strategic field – power stations, paper mills – then maybe. If you have a knowledge business and you get trouble, you can move it one hour north to Helsinki.”
Ponomaryov counters that a number of startups have already moved to California to be on the safe side - and notes that more than 200,000 people officially left Russia last year.
That may be. But for people like Albert Yefimov, head of robotics at Skolkovo, it’s a moot point. Whether Russia’s tech hub thrives or dies remains to be seen. But they have to try.
“Robots will come to Russia anyway,” he says, after some genial banter with the robotic AI-enhanced Alan Turing. “German, American, British, it’s just about where they are made, where the software is made. Mechanics and mathematics are key competences of Russia. We see how to capitalise on this in the next wave of tech.”
“We don’t want to make war, we want to make robots.”
theguardian.com