The decision to create an “Innovation City” in Skolkovo, 20 kilometers west of central Moscow, comes as a welcome step for several reasons. First, the timing is right. The combined efforts and cooperation among Russia’s top scientists and their colleagues in other countries could produce the innovation results Russia has been seeking. Second, with research budgets suffering cutbacks during the crisis, the large salaries and benefits that the new project will offer the world’s top scientists will help stem the country’s brain drain. Third, with global investors disappointed in the modest profits in traditional sectors of the Russian economy, Skolkovo might attract capital as a promising new alternative.
More significant, the authorities have promised that Skolkovo will be relieved of the high tax and bureaucratic burdens that have suffocated so many businesses in Russia. They also promised to simplify the process of attracting foreign specialists. Although there is nothing revolutionary about these measures — the proposed 14 percent social tax for Skolkovo has already been applied to other technology parks — they are nevertheless very encouraging indications. It also shows that the authorities understand that the existing tax law, customs duties and government bureaucracy hinder the development of competitive innovation-based projects.
In addition, the scale of the project is reasonable and manageable. In contrast to China, where technology centers and free economic zones can encompass entire cities, Russian politicians have wisely limited theirs to 300 hectares, properly gauging their ability to produce the desired result. The authorities are unwilling to commit to a larger territory, and rightfully so. If they cannot prove themselves on this relatively small patch of land, it would be pointless to expect a major breakthrough on a larger scale. And opting for a comparatively small testing ground leaves no room for failure.
For those who believe that nothing substantial can be accomplished on only 300 hectares of land, they should remember that the campus of the top-ranked Massachusetts Institute of Technology occupies only 68 hectares, and the California Institute of Technology a mere 50 hectares. If we need more land to expand later, there is no shortage of it in Russia.
Skolkovo might be the first step toward modernizing Russia’s economy.? Most important, the project exemplifies the concept of an economic “freedom zone” and establishes a sanctuary from the oppressive burden of Russian bureaucracy.
The government’s role in the project is crucial, but its broader innovation objectives will have to extend far beyond Skolkovo, of course. Russia will need to create a special agency responsible for technological development — not only to produce new, innovative technologies, but also for finding practical applications for them. In other countries, similar agencies have played key roles in advancing innovation — for example, the Ministry of Science, Technology and Innovation in Malaysia; the Ministry of Science and Technology in Brazil; the Ministry of National Development in Singapore;? and the Council of Scientific and Industrial Research in India.
The Skolkovo project is exactly what Russia needs. Of course, it will have its own unique trademarks and will differ from analogous projects implemented in other countries, but it will mark a step forward in modernizing the country.
For the project to succeed, however, there are three conditions that must be met. First, the state needs to view Skolkovo as a way for this country to open its doors to the world and not as an excuse to pump enormous sums into pork barrel projects. Second, it must be seen as a venture project for the country’s long-term development and modernization, and not as a “get rich quick” scheme. Finally, Skolkovo must be seen as a first step in a long journey and not as a magic formula for converting Russia from a natural resource-based economy into an innovation-based one.
If the Kremlin can provide the competent political and economic management and oversight of Skolkovo, the project has an excellent chance of becoming a success.
Vladislav Inozemtsev is a professor of economics, director of the Moscow-based Center for Post-Industrial Studies and editor of the Russian edition of Le Monde Diplomatique.