Russia is planning another revolution. Moscow has pinned its future on transforming 400 hectares of nondescript farmland 30km west of the Kremlin into a base camp for the next generation of Mark Zuckerbergs.
By 2015 these desolate fields will be transformed into a city of 35,000 people and boast some of the most advanced research space in the world, if you believe the Kremlin’s plans. This is Silikonnovaya Dolina: Russia’s Silicon Valley.
It’s no pipe dream, according to promotional material handed out to British scientists, entrepreneurs and investors last week as part of a global mission to drum up interest in the Skolkovo Innovation Centre, Russian President Dmitry Medvedev’s pet project.
“We have plans to further explore the moon and the planets,” said a pamphlet promoting Skolkovo’s space center, one of five planned “clusters,” alongside information technology, biomedical science, energy efficiency and nuclear technology.
Sergey Zhukov, a cosmonaut who supervised research aboard the Mir space station and now heads the space cluster, said it “will not only allow thousands of people to implement their dreams of a spaceflight. It will also contribute to accelerate mankind’s technological development.”
Space is a key focus for Skolkovo, which is aiming to turn Russian ideas and scientific achievements into cash. While Russia is responsible for 40 percent of global space launches, it is far behind NASA in its ability to generate money. Output per Russian space industry employee is currently worth US$14,800 a year, less than 33 times that in the US.
The center, which has brought billionaire entrepreneur Sir Richard Branson on board, plans to launch a string of new satellites and a “new generation of rocket carriers that ensure low-cost space transportation.”
However, for now there is nothing there, although Viktor Vekselberg, the oligarch running the project, has assured potential investors that the groundwork has begun and the project will be completed on schedule.
Vekselberg, who is worth US$13 billion, according to Forbes magazine, has been drumming up international interest and investment in the project. Last week, his whistle-stop world tour visited Oxford, Cambridge and London.
The oligarch, who made his billions in natural resources and holds a stake in TNK-BP, the oil company part-owned by BP, told potential British investors and scientists at the Institute of Directors in London last week that the project was part of Russia’s attempt to diversify away from natural resources.
“Now is the time to move the economy to a new area, one where we are no longer reliant on natural resources,” he said.
However, Russia’s oil history casts a long shadow. The biggest deal Skolkovo signed in London last week was a ￡9.3 million (US$14.6 million) investment agreement with BP and Imperial College London. It is hoped the much-delayed deal will help build bridges following last summer’s armed raid on BP’s Moscow offices.
The Russian state’s history of interfering in international business is likely to be the biggest stumbling block in Skolkovo’s development. British hedge fund Hermitage was hounded out of the country and its lawyer, Sergei Magnitsky, died in jail after uncovering an alleged US$230 million fraud by police and tax officials.
British Labour Member of Parliament Denis MacShane has written to British Minister of State for Trade and Investment Stephen Green, also a former HSBC chairman, to criticize UK Trade and Investment, the government’s export adviser, for hosting the conference and warned of the dangers of legitimizing “a regime that is so plagued by criminality and corruption.”