October 18, 2012 8:18 pm

Innovation: Massive funds for a ‘Silicon Valley’ lookalike

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The Skolkovo Hypercube

The Hypercube has set the tone for much of what Skolkovo is about

There is not much to see at the construction site in south-west Moscow where bulldozers are digging the foundations of Russia’s new Skolkovo innovation hub.

But the Hypercube that opened its doors last month has set the tone for much of what Skolkovo is about. Billed as the country’s first high-tech building, the seven-storey concrete structure is packed with inventive features from solar lighting and waste recycling to a convention hall where the seating disappears at the touch of a button.

Skolkovo was launched by Dmitry Medvedev in 2010 as part of the Kremlin’s efforts to transform the oil and gas dependent country into a modern, post-industrial economy.

The idea is to bring the best Russian and foreign brains together with big business and venture capital and create an innovative ecosystem that will be Russia’s answer to Silicon Valley.

Even in a country with an embedded entrepreneurial culture, it took decades for Silicon Valley to become a driving force for US innovation. Russia is trying to jump-start the process with a massive injection of funds. The government has earmarked $4.2bn for investment and pledged millions more in grants and tax privileges.

About three-quarters of the government funds will be spent developing a 390-hectare site on the fringes of south-west Moscow. The area is not yet served by main highways or commuter lines.

A master plan for the project includes a 167m tall glass dome with its own balmy micro-climate inside and a building shaped like a Matroshka doll.

A technopark for up to 1,000 start ups will be divided into clusters focused on Skolkovo’s five target sectors – energy efficiency, biomedicine, nuclear and space technologies and IT.

Among the most prestigious projects is the Skolkovo Institute of Science and Technology, a huge university campus that Switzerland’s Herzog & de Meuron is designing in collaboration with the Massachusetts Institute of Technology.

While waiting for a permanent base, Skolkovo’s various departments are scattered in offices across central Moscow. Postgraduates enrolled at SkolkovoTech have been farmed out to foreign universities.

A small version of the technopark is taking shape at a building a mile from the future innovation hub.

Skolkovo has screened thousands of applications and handed out $260m worth of grants so far. Plans are to allocate between $100m and $200m a year, says Alexander Lupachev, chief investment officer at the Skolkovo Foundation.

“We want to be sure that by 2014 we have a critical mass of energetic people ready to move there.”

However, even venture capitalists betting on Skolkovo are uncertain about its prospects.

Dmitry Alimov, whose Frontier Ventures fund has pledged to invest $20m, says results will take time to materialise.

“The question is, is Skolkovo going to make a 1 per cent difference to the trajectory of Russian modernisation or be a major game changer. It depends if the government has the patience to sit it out for 10 to 15 years.”

Mr Lupachev is confident the government will honour its commitments to the project. “No one at the top is interested in the failure of Skolkovo.”

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