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A Proving Ground
08.11.2010
In February 2010, the Russian President, Dmitry Medvedev, announced his plans to create a Russian Silicon Valley. The message was received with some skepticism by the public. Of course, such skepticism was not caused by the President’s intention to attract investments into the development of innovative technologies, but rather by the very possibility of creating an innovation city on a green field.
Elementary development They do not put much trust in the claim that investments assigned to research and start-up of new companies will be used for that purpose. Another reason for doubt is the rather blurry vision of the future innovation city. Even the Skolkovo research manager and Nobel laureate in physics, Zhores Alferov, has not made any comments on this project. As his secretary explained, Zhores Ivanovich is not commenting because the project design is still under development, and it is too early to speculate about what it will finally look like. The main goal of the innovation city is to generate and commercialize new technologies and new products, and bring them onto the global and Russian markets,” says Viktor Maslakov, vice president of the non-commercial organization Fund for Developing the Center for Design and Commercialization of New Technologies. “Basic elements of the center will be innovative enterprises in five directions approved by the President of the Russian Federation – strategic computer technologies, space technologies, nuclear technologies, health care technologies, energy efficiency and energy savings.” The innovative center will also include a technical university working in these five directions. In addition to the innovative enterprises and the university, the Skolkovo Project proposes building residential buildings as well as utility and social infrastructure objects. In accordance with Federal Law No. 244, the premises will only be leased to tenants. From the development point of view, building an innovation city within four years presents no problems, say the experts. “As they used to say in a classic Soviet movie, ‘there are no impossible things for a person with some intellectual abilities,” says Evgeny Aleshin, CEO of Storm Properties Company. “In the purely technical sense, it is possible to build an innovation city, or more precisely, its first phase, within four years.” However, in Mr. Alyoshin's opinion, everything depends on several “if” factors. In particular, if the Master Plan is timely and properly prepared and approved to be split between developers, if state-financed organizations undertake construction of engineering and road infrastructure and do it with the required quality and within the terms set by developers, and certainly if there is steady funding and efficient coordination of the project. The rest is just a matter of technology. “In terms of sheer physical capacity, we can build an innovation city even faster. The experience of Soviet construction projects shows us that people can actually build a city anywhere – in the taiga, desert, or on coal deposits,” notes Mahach Bizhanov, Managing Partner of Legal Consulting Group. “But it is important to take into account which technologies will be used in the project and who is going to live and work there? There are still no answers to these questions. Now there is only a desire to build such city and get the funding, which is not always an exhaustive success formula.” By studying the experience of other countries, we can see successful growth of science cities around large universities and research centers without any systematic approach and programs, as well as failed projects that left only empty buildings behind. In Mr. Bizhanov’s opinion, an innovation city is first of all about the atmosphere and opportunities for creative work in the field of innovative technologies. However, the leaders of the Skolkovo Project are promising to pay special attention to the quality of the urban environment. Competitive selection “Russian architects do not have the experience in developing master plans of large areas for the construction of such specific projects as innovative business facilities,” comments Evgeny Aleshin. “To create a master plan for an area of 1,000 ha of a district or even an entire town and fill it with standard buildings of KOPE or P-44T type is the usual thing to do; to draw a project of a business park or an office complex is also something we already know, and at a rather good level. But combining large areas and innovative approaches is something that only foreign planners can do at the moment.” The competition for development of the master-planning concept of the Skolkovo Innovation Center is not over yet, and therefore we cannot say, that “Russian specialists were not admitted”. “The first stage of the competition, the qualifying selection, was an open deal, where quite a number of Russian project design offices got involved, both independently and as members of international teams,” explains Sergey Kryuchkov, architect and deputy general director for project development at ABD Architects. “At the moment, five participants for the final stage have been selected, and we are one of these, as a member of the team led by the New York-based office of Perkins Eastman Architects International PLC.” The final stage will be held in the form of a closed tender among the winners of the qualifying selection. In addition, semi-finalists will be subjected to individual quick tests, by the results of which one of the teams will be admitted to the final stage. Thus, by the end of the process, the customer will have six possible versions of the town-planning concept. The winner will develop a detailed master plan and site design. “Afterwards we may also involve Russian companies in the development of design documents for particular buildings and facilities. This is a matter to be decided by the results of the future tenders,” says Viktor Maslakov. Thus far, all the companies in semi-finals are international teams. “It could not have been otherwise,” explains Sergey Kryuchkov. “The reason for this is that the subject of work is something we never did in our town-planning practice. Roughly speaking, Skolkovo can be compared with the old Soviet campuses, but these were all planned many years ago, and domestic urban planners have been mostly engaged in designing typical urban areas ever since.” “ABD Architects deliberately joined a selected team," notes Mr. Kryuchkov. “We do not believe that we can presume to find solutions to such a task on our own. We found ourselves in a similar situation when working on the development concept for the Tomsk Special Economic Zone, where we had to work with an absolutely new format and without any easily defined target specifications.” In that case, the team managed to complete the assignment, but they had to involve American economists who interviewed potential residents, drew a financial model and provided recommendations for optimal typology of the development. With Skolkovo, the task is even more serious as it proposes the creation of a “Knowledge Community”, and this above all means creating the right environment. “Such work calls for certain skills, and that is why only design offices with working experience and the ability to organize the work of advisors from related industries have a chance to create anything worthwhile within the exclusively short terms of 2 months,” explains Sergey Kryuchkov. Who will build? Mahach Bizhanov believes that the question of who will build the center is going to be decided at the top level. “I believe there will be structures of enterprises from the inner circle of our government, for this project is very ambitious and advertised around the world, and today’s visit by California Governor Mr. Schwarzeneger to Moscow is one more thing that proves this,” says Mr. Bizhanov. “Realization of the project will be given to trustworthy people, as nobody wants to take risks, in the light of experience with the Sochi Olympics.” According to Viktor Maslakov, the working process will involve both Russian and foreign contractors. Skolkovo Innovative Center is a complex of various construction projects. There will be roads, networks, and separate buildings so there will be no single tender, but several instead, for construction of utility networks, roads, housing, university, innovation enterprises and so on. Tenders will be held after the design documents are ready, which will be no sooner than next spring. However, a specific object, a cubic house, is being designed at the moment, with competition for best design well under way. This is the starting object and the first building to be constructed – the Skolkovo Urban Development Center. It is a comparatively small object, though it has a great importance for refining energy efficiency and ergonomics solutions if not for other things. The bidding for this structure will be announced in the nearest future. The visit of California Governor, Arnold Schwarzenegger, to Skolkovo was the time of high hopes for attracting large investments. “Russia has an immense potential for economic growth and we hope we can assist Russia, particularly in the field of high tech and bioengineering,” the California Governor promised. Founders of the Silicon Valley and representatives of venture business were more cautious about their promises. For example, head of New Enterprise Association, Dick Kramlich, advised the Russian government to develop technologies where the country already had certain achievements such as power engineering, nuclear technologies, medical services and products. Venture investors were puzzled (and not without reason) by the non-transparent scheme of investment distribution and promised to come to Russia soon, but no sooner than Russian legislation becomes more ‘friendly’ to foreign entrepreneurs. It would be appropriate to note that Dmitry Medvedev has initiated amendments to the legislation, which have resulted in giving the Skolkovo Innovation City a special tax status. Companies residing in Skolkovo will not need to pay any profit taxes, land use taxes, transport taxes nor VAT, and will also enjoy reduced rates of social contributions (only 14%) and a preferential tariff treatment. Zero tax payments for companies will last for ten years or until they reach annual revenues of 3 billion rubles. Still, investors are not rushing to Skolkovo, saying there is a shortage of ideas for successful commercialization, high risks and clumsiness in the bureaucratic mechanisms. “Successful venture projects in Russia require guarantees of economic and political freedom as well as the absence of corruption,” said Franklin Johnson, founder of the Asset Management Company, at the meeting in Skolkovo. One of the most effective science cities, similar to our Skolkovo, is the Stanford Research Institute in the famous Silicon Valley. Its staff includes 2,200 scientists. With the institute, receiving $500 million in funding annually from the California state government, they produce two or three start-up companies every year, which then earn millions of dollars in profits. Plans for Skolkovo include the employment of 11,000-12,000 research workers, with annual state funding of 170 billion rubles. According to Anatoly Chubais, if this becomes successful, then Skolkovo's performance capacity will grow and become several times larger than this. Soon the income generated by Skolkovo will become comparable to that from exports of raw materials. Dmitry Medvedev calls the Skolkovo Project a proving ground for the new economic policy. “I am confident about the success of the Skolkovo Project,” says Georgy Dzagurov. “The location is good, and if Russia is serious about wanting its brightest minds to stay here, they will create a comfortable place for them to work. The main task of this project, the task of greatest importance for today, is attracting the end users, at its initial stage. It is the interest of such companies as Cisco, Microsoft and others that provides for the success of the whole project.” Construction of the innovation city, initiated by the state, is sure to be successful, the experts correctly predict. However, the effective operations of the Skolkovo proving ground will depend on the three components, which are investments, innovations and the human factor.
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