Russia has huge technological potential

Mr. Klecheski, Chief of Trade and Investment Policy Unit in Economic Section of the Embassy of the United States of America in Russian Federation, recently visited Nizhny Novgorod on a business trip and it was a good reason to ask him some questions to which he has kindly agreed to answer.

Mr. Klecheski, your assessment of Russia’s technological potential?

There is no question that Russia has huge technological potential. Russia has a long and distinguished tradition of cutting-edge scientific work, its population is among the leaders in knowledge of math and the sciences, and it has excellent institutions of higher education. And now, with internet penetration at 30-40% of the population and rising and with Russians traveling widely, the prospects look even better. The challenge is to translate this great potential into concrete products and services that can be commercialized. Through efforts such as Skolkovo, President Medvedev and all the many others involved in that project are trying to create the kind of clustering of creative minds, as well as a positive investment climate, that have made Silicon Valley such a success in the U.S. The U.S. Government and America’s private sector have viewed the Skolkovo effort enthusiastically. Numerous U.S. government officials visiting Moscow have made learning about Skolkovo among their top priorities, and American companies have said they plan to invest large sums in Skolkovo: Cisco’s plans to invest one billion dollars, Microsoft’s to invest one hundred million, and Boeing’s to open a branch of its Design Center there are among the more notable examples.

It’s important to note that this effort to promote technological innovation is not limited to the federal level. From my own travels to Nizhniy Novgorod, I know that this oblast’s institutions of higher education are doing a great deal to forge bonds with the private sector, which is a vital step. Even in the U.S., we don’t have just one “Silicon Valley” – there are several other prominent high-tech clusters in states such as Massachusetts, North Carolina, Virginia, Texas and others. I am pleased that Intel, an American company that is on the cutting edge of innovation, has such good relations with many of this oblast’s institutions of higher education. Innovation is also being encouraged by regional officials throughout the country, and in this respect too, Nizhegorodskaya Oblast is a good example, with its various programs to build on its historic strengths in order to become an innovation center.

What kinds of factors will determine the success of these efforts?

Such efforts, be they at the federal, the regional or other levels, are admirable. From our perspective, they will succeed best to the extent that they create the conditions to spark both investment and innovation. Innovative businesses and innovative people seek out an environment that has clear and transparent rules for doing business. They work best in a place where corruption – both actual and perceived – is low, and where government enforces its regulations even-handedly. They also seek out an environment in which bureaucratic requirements are not overly complex, in fact where they are kept to the minimum necessary. And innovators – from anywhere in the world – naturally put a high value on protection of intellectual property. Access to financing, particularly for smaller start-up companies, is another essential element for success. In fact, these SMEs are likely the greatest beneficiaries of an improved investment climate.

Do you think sparking innovation will lead to a worsening of relations between Russia and the U.S. or to their improvement?

The U.S. wants an economically strong Russia as its partner, so we are convinced that Russia’s innovation effort will improve the relationship. Already, it has led to cooperation in the Bilateral Presidential Commission, which is the institution established as part of the “reset” in our relations to map out and carry out cooperative programs. Joint projects under that Commission, to share experience in areas such as small business development and transparency in government procurement, unquestionably are contributing to an improvement in the overall relationship. Our support for Russia’s accession to the World Trade Organization is also part of the equation, because by joining that and other international institutions, like the OECD, Russia will further improve the context for becoming an innovation powerhouse.

To some extent, of course, innovative Russian companies will compete with innovative American ones. Such competition is healthy and necessary for continued growth. But particularly in today’s world, innovative Russian companies will also work hand-in-hand with American ones, and this too will strengthen the overall relationship. It will help ensure that both countries’ business communities, and the many people involved with them as owners, managers and employees, will have a real stake in cooperation, not conflict.