{"id":29014,"date":"2018-11-12T17:55:26","date_gmt":"2018-11-12T22:55:26","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/innovation-vs-corruption\/"},"modified":"2018-11-12T17:55:26","modified_gmt":"2018-11-12T22:55:26","slug":"skolkovo-russian-silicon-valley-vs-corruption-how-innovation-can-thrive","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/skolkovo-russian-silicon-valley-vs-corruption-how-innovation-can-thrive\/","title":{"rendered":"Skolkovo, Russian Silicon Valley vs. Corruption: how innovation can thrive?"},"content":{"rendered":"

\u201cNowadays we export oil, gas, and, unfortunately, brains\u201d said Russian premier minister Dmitry Medvedev in 2017. [1] Despite being home of 29 Noble Prize winners and the long list of mathematical and physics geniuses, Russia celebrates centenary of its brain drain disease, that started with Bolsheviks\u2019 Revolution in 1918 and according to the recent research by Russian Presidential Academy of National Economy and Public Administration accelerated after 2014 [2]. Unsurprisingly, Russian Government is disappointed with this trend, as continued innovation is one of the key drivers of the economy growth. Recent space missions\u2019 fiascos are few of the warning signs of the depth and severity of talent supply conundrum.<\/p>\n

One of the main initiatives to foster innovation that Russian Government undertook was to create Skolkovo Technopark, \u201cthe biggest of its kind in Europe and marvel of engineering\u201d. [3] Located outside of Moscow, Skolkovo is innovation city by itself, home to 1000 startups and employs over 30,000 people. Funded by federal budget in 2010, Skolkovo landed partner agreements with leading tech and innovation organizations like IBM, Microsoft, Intel, Cisco as well as collaborated with MIT on setting up Skoltech, private institute of science and technology. [4]<\/p>\n

Skolkovo supports innovations in multiple dimensions. Its 5 clusters (IT, BioMed, Energy, Space, Nuclear) are autonomous to set up their goals, directions, locate funding and potential partnerships, holds innovation competitions co-sponsored with international partners, awards grants to the aspiring scientists and entrepreneurs to prototype and test the most daring ideas.<\/p>\n

However, Skolkovo cannot be separated from the realm of Russian political and societal crisis. Skolkovo is the product of Tandemocracy era, the period or Russian modernization and the \u201creset\u201d of the U.S.-Russian relations led by Presidents Obama and Medvedev. The focus shifted with the resumed presidency of Putin in 2013.<\/p>\n

Under Medvedev the government adopted special law for Skolkovo, that enabled beneficial tax and customs regime, as well as allocated lucrative shank of budget money for multiple tenders. According to Transparency International Russia deputy head Ivan Ninenko, “The Skolkovo setup is a very corruption-encouraging environment.\u201d As the president and prime minister rotated back, the political climate changed as well. Previously favored officials fell out of grace with new leadership. \u201cThere is no fight against corruption in Russia, it is rather a fight against particular corrupt officials,\u2019 he added [5]. Skolkovo faced multiple corruption probes, its offices were raided by the law enforcement officers, and managers were accused of corruption, embezzlement and fraudulent tenders.<\/p>\n

Reputation damage was huge and demanded complete rebranding and change in business model. Before the main goal was to turn Skolkovo into global hub for innovation and to bring bright minds not only from within, but from outside of Russia. It was based on international partnerships and open innovation. After 2013 new vision for Skolkovo has been set to attract and sustain internal talent, \u201ctrying to build entrepreneurship on the foundation of Russia\u2019s basic science achievements\u201d. [6]<\/p>\n

But how well did they manage to do so since? HKS student, who visited Skolkovo in 2016, spotted behind modern, almost westernized buildings the uniformed guards and claimed the innovation center to be \u201cnearly-defunct\u201d. [7] One particular recent example is astonishing. In 2017 the founder of \u201cTion\u201d (Skolkovo resident) Dmitry Trubitsyn was charged with criminal conspiracy to produce counterfeit medical devices and jeopardizing the Russian healthcare.<\/p>\n

Mr. Trubitsyn is aspiring physicist, who worked in Skolkovo as well as partnering Akademgorodok on inventing new air filters and climate controlling devices. His scientific interest was the new technology of purifying and disinfecting air using photocatalytic oxidation. He founded start-up Tion to produce high-tech air filters for hospitals using his inventions. The start-up grew steady to employ 250 people and by 2017 supplied the state hospitals with its devices.<\/p>\n

\"\"<\/a>
The Tion Air technology, credit https:\/\/pro.tion.ru\/en\/med\/<\/figcaption><\/figure>\n

To prove the concept, Mr. Trubitsyn set up 10-meter long aerosol stand to experiment with technology. As patent was pending, during intensive trials and tests the scientists came to the conclusion that photocatalysis was not improving the purifying efficiency. In fact, it might have dangerous chemical by-products [8] and is less energy-efficient, and the filter invented by Mr. Trubitsyn and Tion is much better product without this technology. Tion filed the amendments to the patent, but the Russian Law Enforcement alleged that Mr. Trubitsyn built and sold air purifiers that are useless without photocatalysis. Increasingly empowered under Putin’s presidency security services accused Mr. Trubitsyn of innovating “too fast and too freely”. [10]<\/p>\n

Can open innovation survive and flourish in the highly centralized economies that are prone to corruption? Is there successful example how innovation can go around bureaucracy and scrutiny of government officials?<\/p>\n

(764 words)<\/p>\n

 <\/p>\n

[1]\u00a0RBC. (2017).\u00a0Investment forum in Sochi, 2017<\/i>. [online] Available at: https:\/\/www.rbc.ru\/rbcfreenews\/58b41aec9a7947ea101ed916 [Accessed 27 Feb. 2017].<\/p>\n

[2] RBC. (2018).\u00a0Accelerated brain drain in Russia<\/i>. [online] Available at: https:\/\/www.rbc.ru\/society\/23\/01\/2018\/5a673f129a794712579d7dbe [Accessed 23 Jan. 2018].<\/p>\n

[3] Sk.ru. (2018).\u00a0About Technopark – Skolkovo Community<\/i>. [online] Available at: https:\/\/sk.ru\/technopark\/about\/ [Accessed 12 Nov. 2018].<\/p>\n

[4] Skoltech.mit.edu. (2018).\u00a0MIT Skoltech Program<\/i>. [online] Available at: https:\/\/skoltech.mit.edu\/ [Accessed 12 Nov. 2018].<\/p>\n

[5] Nechepurenko, I. (2013).\u00a0Skolkovo Office 性视界ed in Corruption Probe<\/i>. [online] The Moscow Times. Available at: https:\/\/themoscowtimes.com\/articles\/skolkovo-office-searched-in-corruption-probe-23399 [Accessed 19 Apr. 2013].<\/p>\n

[6] Mellow, C. (2015).\u00a0Dodging Geopolitics, Russia\u2019s Skolkovo Tech Center Evolves<\/i>. [online] Institutional Investor. Available at: https:\/\/www.institutionalinvestor.com\/article\/b14z9y83k6mrnk\/dodging-geopolitics-russias-skolkovo-tech-center-evolves [Accessed 13 Jul. 2015].<\/p>\n

[7] Reynolds, J. (2016).\u00a0Skolkovo: The Moscow Suburb\u2019s Struggle to Survive – KENNEDY SCHOOL REVIEW<\/i>. [online] KENNEDY SCHOOL REVIEW. Available at: http:\/\/ksr.hkspublications.org\/2016\/04\/14\/skolkovo-the-moscow-suburbs-struggle-to-survive\/ [Accessed 14 Apr. 2016].<\/p>\n

[8] ScienceDaily. (2015).\u00a0Certain air filters using photocatalytic oxidation have dangerous by-product, study shows: Dangerous by-products released by a filter already in commercial use<\/i>. [online] Available at: https:\/\/www.sciencedaily.com\/releases\/2015\/07\/150715130835.htm [Accessed 15 Jul. 2015].<\/p>\n

[9]\u00a0“Air Purification And Decontamination In Medical Facilities”. 2018.\u00a0TION<\/i>. https:\/\/pro.tion.ru\/en\/med\/.<\/p>\n

[10]\u00a0Higgins, Andrew. 2017. “Russia Wants Innovation, But It\u2019S Arresting Its Innovators”.\u00a0Nytimes.Com<\/i>. https:\/\/www.nytimes.com\/2017\/08\/09\/world\/europe\/vladimir-putin-russia-siberia.html.<\/p>\n","protected":false},"excerpt":{"rendered":"

Skolkovo was built with aspiration to nurture domestic breakthrough talent so much needed for the failing economy. 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