RD Event: In New York, thought leaders on Russian technology and innovation discussed the challenges and prospects facing Russia’s innovation sector during a time of economic isolation from the West.


"There is no modernization, no innovation without liberation." Photo: TASS

Amidst the warnings that Russia will face increasing technological challenges, with prolonged sanctions and economic isolation from the West, Russia Direct conducted a panel discussion "Future of Russian Hi-Tech/Science Cities and Innovation," on June 25, in New York, shortly after the release of its new report "Insider’s guide to Russian high-tech hubs." The big challenge, said participants, was how to transform Russia’s technical expertise and know-how into the types of goods and services that will be competitive globally.

One of the panel speakers, Axel Tillmann, the head of RVC-USA, the U.S. subsidiary of Russian Venture Company, points out that Russia has a number of strong points, including its affinity for research and development (R&D) and a significant talent pipeline in mechanical engineering and mathematics, both of which can contribute to developing innovation.

Likewise, Cathleen Campbell, the CEO of CRDF Global, says that, “One of the greatest strengths that Russia has is brains. The scientists [and entrepreneurs] are wonderful.”

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However, the problem is that Russia doesn’t have “any loud success stories” that would be known globally, according to Taras Polischuk, an HR technology expert and an investment professional, a board member for Talent Tech Labs, a New York-based incubator. He believes that what Russia needs now is “more and more success stories.”

The RD panel discussion "Future of Russian Hi-Tech/Science Cities and Innovation." Photo: Russia Direct

Campbell and others echo this view. She argues that more scientists and entrepreneurs need to focus on “listening to the market” and sharing their experience. Some technologies are separated from this market and this is the challenge that hampers the successful commercialization of the most innovative ideas. 

Indeed, despite the big role of Russia’s science and its potential, today it seems to be lagging behind in cultivating high-tech technologies and innovating the economy. Although it’s one of the leaders in developing space, defense and nuclear technologies (almost everything that aims at national intimidation), Russia is drastically falling behind in producing consumer technologies such as smartphones, laptops and cars. This was one of the conclusions the audience and speakers came up with as a result of the discussion.

Brain drain is still a challenge

While some participants of the RD discussion—such as Mikhail Kalugin, head of the Economic Section at the Russian Embassy in the U.S—tried to explain Russia’s lagging innovation potential with the concept of the international “division of labor,” others focused on the underlying reasons why Russia is falling behind. One factor, they say, is the brain drain, spurred by the Kremlin’s controversial domestic policies and legislation.

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Indeed, the human capital outflow was spurred by the Ukraine crisis and recent events in Russia (the adoption of the “law on undesirables,” the relentless search for foreign agents and the so-called “fifth column”). Among those who recently fled Russia are prominent academics and economists (Sergei Guriev, the former rector of New Economic School, and Konstantin Sonin, a professor of the Higher School of Economics).

In addition, entrepreneurs (Pavel Durov, the founder of VKontakte social network, Russia’s counterpart of Facebook) and patrons of science such as Dmitry Zimin, the founder of the non-profit Dynasty Foundation, which fosters science projects and publishes popular natural science literature, have also left the country. After the Foundation was fined and accused of being a foreign agent, it is on the brink of the closure, with its future in limbo and Zimin now living abroad. 

When asked about the increasing brain drain and the controversy over the Dynasty Foundation, one of the panel speakers, Nikolay Vasilyev, a staff scientist at the Division of Surgery at Harvard Medical School and a co-founder and current president of the Russian American Science Association, described such a trend as “an alarming example.”

Vasilyev argues that such a problem stems from the fact that science in Russia is primarily funded by the government, with no private funds involved in supporting science. He believes private funds should contribute more to science.

“If the government is the only source for Russian science, it is really an alarming practice,” he argues. “We have to make sure that private funds are allowed to support science.”

According to Vasilyev, some Russian professors are leaving country because they want to work in a foreign university and Russia has to encourage such mobility, and this mobility needs to happen in both directions. 

“Not only to allow people to leave the country and work abroad, but also to attract [foreign] professors to Russia,” he said, describing such practice as “a two-way road.”

Meanwhile, Kalugin point out the importance of a greater role from the government in attracting and keeping Russian and foreign talent in the country. 

“Attracting innovation and preventing the brain drain is a bumpy road,” said Kalugin. “There are ups and downs. In general, we [the government] try to attract foreigners and keep Russian professors in Russia. And that’s why Skolkovo was founded completely from scratch.”

Kalugin prefers to focus on the positive experience of Russia’s science and innovation sector. In particular, he shares experience of the innovation working group within the U.S.-Russia Presidential Commission that was very active during the reset between two countries.

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U.S.-Russia inter-university exchange programs are also a shining example in a time of differences and political standoff. Kalugin mentions the exchange program between Lobachevsky Nizhny Novgorod State University and University of Maryland, which gives an opportunity to Russian young and promising innovators to come to the U.S. for three weeks to work on different start-ups.

Likewise, Campbell points to positive aspects, including U.S.-Russia cooperation in space and the need to foster science diplomacy regardless of politics differences.

“And, fortunately, we see the same sort of mentality and interest among the entrepreneurs,” she said, adding that this creates “tremendous opportunities” for future cooperation. “The entrepreneurs we work with— they are so eager to absorb and share knowledge and learn from their colleagues in Russia and around the world.”

However, Vasilyev keeps focusing on the problems that affect Russian science and, thus, its innovative potential. These challenges include the deficit of multi-disciplinary science programs in universities, a weak intellectual property legal framework, the lack of “transparent rules” and, again, private funding. Russia’s science should be “open to the world,” attractive and spark exchange mobility, he argues, adding that “Russian universities should be open and part of global science,” like Skoltech.

No innovation without liberation

Meanwhile, Dominique Fache, the administrator of Sophia Antipolis (SA) Foundation, a prominent French technological park, argues that innovation comes out of the everyday world and, as a result, innovators have different approaches for changing societies. And this, according to Fache, often contradicts how things are done in Russia.

“It [innovation revolution] is a very difficult for the Russian society, which is based on vertical and very strong power to go for innovation, because innovation needs what former Russian President Dmitry Medvedev described as raskreposchenie [liberation in English] ,” Fache told Russia Direct via skype. “There is no modernization, no innovation without raskreposchenie. And this is not really present in the Russian society. Russian economy is based on big companies which are not ready to innovation, because the rules of the game [in case of innovation] are different. It’s not innovation coming from the government.” 

Video wrap-up of the panel discussion "Future of Russian Hi-Tech/Science Cities and Innovation" held on June 25, 2015 in New York. Video by Uliana Malashenko and RBTH Multimedia Team