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B Y SE R GE MOR E L L ( W ’ 10 )

RUSSIA’S TECH BOOM:

A FAIRY TALE OR REALITY?

A

t the 3rd annual Russian nanotech

Over the past year, buzzwords such as

conference that opened in November

“modernization” and “nanotechnology” have

2010,

CEO

entered the vocabulary of everyone from

of Microsoft, pledged full support to the

school children to local politicians across

Russia displays technology at a fair in

development of Skolkovo, a $2 billion high

Russia. The idea of “catching up” to the rest

Paris, 2009.

tech complex outside of Moscow. Many see

of the world is of course nothing new to

it as Russia’s attempt to clone the innovative

Russia.

hub in the Silicon Valley. Russia will channel

of modernization that spanned from reformist

another $5 billion in investments towards

Czars, such as Peter the Great and Alexander

the creation of a $30 billion nanotechnology

II, to Soviet leaders, such as Gorbachev, who

industry in Russia by 2015. In its traditional,

sought

grandiose fashion, the sixth-largest economy

Focusing on technological competitiveness

in the world, known more for its abundance

has a certain nostalgia to many Russians. This

of natural resources and nuclear stockpiles, is

can only be done by reversing the massive

making way for the next tech boom.

brain-drain that started at the beginning of the

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111210 hq.indd 44

Steve

Ballmer,

the

The county cycled through periods

“perestroika”

and

“acceleration”.

The latest modernization crusade, spear-

20th century. The high proportion of Russian

headed by president Medvedev, is an attempt

educated scientists in universities across the

to diversify the Russian economy away from

world implies that Russia’s education is not

its dependence on oil and gas (currently

at fault for Russia’s lag. To this day, a large

80% of exports), clean up corruption, and

number of physicists, computer scientists,

provide sustained economic growth. After the

biologists leave Russia to pursue better

fi nancial crisis of 2008, a highly vulnerable

paying jobs in the West.

and volatile oil-based economy was deemed

However, brain-drain is not the only factor

unhealthy for a government that intends on

contributing to the lack of investment in the

staying in power. In an eff ort to modernize

tech space. Weak intellectual property laws and

and revamp the Russian economy, the Kremlin

an unpredictable judicial system have stymied

is focusing on five industries: biomedicine,

a number of potential investment projects. The

space and information technologies, energy,

international venture capital community had

and telecommunications.

steered clear of direct investments into Russian

I N T E R N AT I O N A L B U S I N E S S R E V I E W

FA L L 2 0 1 0

11/27/2010 3:13:15 PM

International Business Review - Fall 2015  

Fall edition of the IBR magazine at the Wharton School.

International Business Review - Fall 2015  

Fall edition of the IBR magazine at the Wharton School.

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