Russia’s Silicon Valley gets financial boost

The mechanism of control over Skolkovo’s financing will be tightened now. Source: Skolkovo / Press Photo

The mechanism of control over Skolkovo’s financing will be tightened now. Source: Skolkovo / Press Photo

After a year of limbo, Skolkovo has received a guarantee from the government for financing through 2020.

The Skolkovo Innovation Centre near Moscow – Russia’s answer to the Silicon Valley and brainchild of Prime Minister Dmitry Medvedev – received a long-awaited answer from the government concerning financing. The Deputy Minister of Economic Development, Oleg Fomichev, told Vedomosti that the project will receive a total of 135.6 billion roubles (Around $40 billion) from the state budget by 2020.

The ministry’s department of innovation says the creation of an innovative environment will cost 57 billion roubles and the development of Skolkovo Institute of Science and Technology (Skoltech) – about 42 billion roubles. It is proposed that close to 37 billion roubles will be spent on infrastructure and 32 billion on grants to participants.

Skolkovo’s streak of misfortune thus comes to an end. It lasted nearly a year, starting last autumn when the Accounts Chamber announced a number of violations in the fund upon conclusion of its audit. Some of these violations have even come under the radar of the Investigative Committee of the Russian Federation.

The Accounts Chamber was primarily doubtful about the transparency of the procedures concerning the awarding of grants for innovation.

A federal official told Vedomosti that after the First Deputy to the Chief of the Administration, Vladislav Surkov (one of the founders of the Skolkovo fund) quit the government; many officials predicted Skolkovo’s gradual decay. Vladimir Putin considers the project artificial and has always distanced himself from it. He has never visited the construction site.

The mechanism of control over Skolkovo’s financing will be tightened now.

Skolkovo itself has promised to become more transparent. The Vice-President of the fund, Alexander Chernov, expects clear criteria to emerge for evaluating the effectiveness of the innovation city. He lists several possible target indicators: the quantity of jobs created by the residents of the fund, the share of their products on the market, and the number of patents registered by its residents.

Skolkovo continues to move closer to meeting key performance targets.  A thousand residents had to be registered in the innovation city and there are already 941. In addition, a quarter of the patents registered in the Russian IT industry come from Skolkovo participants.

Chernov insists that the displacement of budgetary funds with private investment will continue as planned. One of the criteria for the fund’s effectiveness is that the proportion of private investment must continue to grow.

First published in Russian in Vedomosti newspaper.

All rights reserved by Rossiyskaya Gazeta.

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