What’s the Difference Between Silicon Valley and Siberia?

I can’t stop thinking about this NYT piece on the Russian government’s efforts to create their own “Silicon Valley,” a center for innovation and entrepreneurship. And it’s not only because of the quasi-comical Soviet-esque way they’re going about it (seriously, the idea was conceived by the Kremlin’s Commission on Modernization), but also because they’re struggling with the same questions that we and every other country still struggles with: how can you replicate the Bay Area’s success?

Is it tax policy, infrastructure investments and immigration reform? Is it a culture or a quality of life issue? Or is it a particular mix of institutions and resources (universities and venture capital)? This quote really sums it up:

In the midst of the oil boom, Russian officials suggested luring back Russian talent by building a gated residential community outside Moscow, designed to look like an American suburb. What is it about life in Palo Alto, they seemed to be asking, that we cannot duplicate in oil-rich Russia? The new effort, though, goes well beyond good housing. It also embraced the idea of encouraging new companies to commercialize the work done at university laboratories.

Some of you may remember our International Benchmarking Consortium, the network of regions that we’ve been working with to share economic development best practices. Last year, at the meeting in Barcelona, we discussed talent attraction and retention; this year – in Fukuoka, Japan – we’ll be focused on “the knowledge region,” this exact question of how is it that universities, businesses and governments (the so-called triple helix) function most effectively to create and commercialize innovation.

The Russians actually understand that it’s not enough to be smart.  As the Russian president is quoted: “The new technologies which we are creating are not toys for eggheads.”  All the knowledge and innovation in the world won’t create jobs and economic impact, so there must be a way to get those innovations into the real world.  And for most of us, the exact ways that you ensure this happens is still a mystery.   A classic example is Johns Hopkins University vs. MIT.  Johns Hopkins had $1.8 billion in research expenditures in 2007, which resulted in 5 start-ups and $13 million in licensing revenue; MIT invested $1.2 billion in research, but netted 24 start-ups and $62 million in licensing.  So, what’s the difference?

Our initial theory is that the triple helix in and of itself is not what facilitates knowledge making it into the world.  There is a core intermediary function and force that brings those three together most effectively and ties together all the pieces into one cohesive whole.  And figuring out how to encourage and expand that intermediary function is the holy grail of economic development.  It’s probably not this approach though:

In California, the climate is beautiful and they don’t have the ridiculous problems of Russia,” Mr. Shtorkh said. To compete, he said, Russia will form a place apart for scientists. “They should be isolated from our reality,” he added.

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One Response to What’s the Difference Between Silicon Valley and Siberia?

  1. I’m a Silicon Valley native who has worked with dozens of regions trying to clone the valley. What they forget is that Silicon Valley was jumpstarted by NASA’s Apollo Project and billions of dollars annually in Pentagon spending, which still continues secretly. Add great weather, an open society, great universities, a 1849 Gold Rush mentality, and you have the reasons for its rise. Russia lacks great weather and an open society, which will hurt it, but its lack of openness will be the biggest obstacle. Russia needs to attract, cultivate and promote its national minorities and foreigners equally if it wants to copy Silicon Valley.

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