Centrally Planned Innovation: A SWOT Analysis of Russia's Silicon Valley

Abstract

Russia has long been dependent on its abundant natural resources (oil, gas, and timber) as the main source of domestic revenue. In 2010, President Dmitri Medvedev and Prime Minister Vladimir Putin took the initiative to move away from natural resource dependency and to begin investing in high-tech. Indeed, Russia has its sights set on becoming the next Silicon Valley. It aims to evolve its technological sector from one that steals innovation to one that produces it. In order to do this, the Russian government has begun to pour money into the region of Skolkovo, a suburb of Moscow. Medvedev and Putin have had multiple meetings with the top players in the technology field, including Cisco, HP, Nokia, Dell, and Microsoft. In the past year, Cisco has agreed to invest $1 Billion in Russian technology innovations over the next decade, while Microsoft has awarded a $100,000 grant to a Russian anti-piracy startup. Despite Microsoft and Cisco's initiative, other companies and states are still hesitant to invest in Skolkovo due to corruption, intellectual property rights abuse, poor national infrastructure, and concern over returns on investments into the region. In order to evaluate the potential success of the Skolkovo initiative, I use a framework known in the business sector as SWOT (Strengths, Weaknesses, Opportunities,Threats). This framework allows me to objectively look at and qualitatively to measure different elements of the Skolkovo environment and then compare it with other global tech-hubs. My results using SWOT analysis will be both an operational asset to potential investors as well as a theoretical asset for those interested in the agency of non-state institutional actors. Using the SWOT framework, I explore whether Skolkovo possesses the necessary structures and institutions needed to evolve Russia from an information communication technology (ICT) purchasing state to a developmental one. If it can create the structures, I posit that Skolkovo has the capacity to be a competitive global tech-hub.