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Many question future of Skolkovo science cluster

September 04, 2012, 16:26 UTC+3 Alexandrova Lyudmila

The future of plans for a center of innovation at Skolkovo, near Moscow, launched several years ago at the initiative of the then President Dmitry Medvedev as an equivalent of the Silicon valley, looks doubtful to many experts. Largely because Medvedev, who positioned himself as an ardent enthusiast of modernization and innovation, is no longer the head of state. Also, the looming risk of a financial crisis may shatter the financing of this ambitious science and research cluster. The third reason is Skolkovo these days is focused on plain construction work. Pessimists predict a very grim future, while the optimists argue that the project has gone too far ahead already to be abandoned.

Last week the Finance Ministry promised that the financing of Skolkovo would not be reconsidered downwards. The science cluster by 2015 will get 85 billion rubles in investment, as much as it had been originally expected, although the government is working on an anti-crisis budget project and foresees the possibility of slashing spending even on such “sacred cows” as the defense industry and social spending. In 2011 Skolkovo received about 11 billion rubles of budget money, and this year’s budget injection plans stand at 22 billion, and in the following two years, another 34 billion rubles. In all, the science cluster is to get about 170 billion rubles from various sources, including extra-budgetary ones, over several years to come.

Far from everybody believes that the Finance Ministry will stand by its promises. “The Russian economy is stagnant. A revision of the 2012 budget is on the horizon. As a result the funds earmarked for Skolkovo will be re-directed to spending articles far more important to the government, including cash allowances for the police,” the daily Novyie Izvestia quotes the general director of the Stolichnaya Finansovaya Korporatsiya, Pavel Gennel, as saying.

Whatever the case, the Finance Ministry’s promises have not shattered gloomy expectations, but on the contrary made them stronger. Most residents of the science cluster, authors of concepts and experts are certain that the money will be spent not on innovation, but on banal construction work, says Kommersant-Dengi magazine. As for the innovation center project itself, the magazine suspects that it is close to failure. There are no private investors, and the grants disbursed from the state budget (the system of their distribution as it is) hinder development and as a matter of fact kill the tiny and embryonic market of venture financing.

Although the government will disburse the promised billions for Skolkovo, the money will be spent to build a “wonder city” for hosting a G8 summit, while the original purposes and tasks of what was conceived as an all-Russia innovation center have begun to forgotten slowly but surely, the magazine says. It recalls that at the start of his presidency Dmitry Medvedev said that Skolkovo in 2014 would host a G8 summit.

The existence of a large-scale pompous construction sight on the Skolkovo highway by no means guarantees the success of the project. It is all the other way round. “When the task was set of finalizing the construction work by the summit, the project’s priorities were obviously changed,” a source told the magazine. “These days innovations are no longer on the agenda. The most important thing is to build everything by the established deadline.” By 2014 at least office rooms and spaces for conferences, as well as housing for the delegations to the summit are to be in place. Besides, there will have to be created all transport and engineering infrastructures.

According to the vice-president of the Skolkovo fund, Alexander Chernov, three-fifths of the budget money was spent on construction work, but so far only one building has been erected – a seven-storey hyper-cube with transforming halls, which can be used as an area of small offices, and where one push of a button is enough to fold the chairs into the floor.

The president of the group of companies Cognitive Technologies, Olga Uskova, says Skolkovo is changing its strategy to shift the emphasis from innovation to development. “Everything that is happening there is banal land development.” “Anything that concerns innovation activities it is painstakingly ignored,” Uskova said. In her opinion, this is a critical point. “Either we rush to correct everything right away, or by 2014 we shall see a finalized construction project, but no innovations.”

No heavy budget spending on the projects had been planned from the outset. The moment the idea of Skolkovo emerged it was expected that the very same 85 billion rubles would be invested mostly into infrastructures and the financing of projects at the start-up phases and into a “strong university.”

However, the idea of a “strong university” has already suffered a collapse. Back in January 2012 Medvedev’s commission for modernization and technological development obliged the public companies to transfer up to one percent of the ”innovative budget” into the endowment of the Skolkovo Institute of Science and Technologies (Skoltech). Only the Russian railways company RZD has obeyed the instruction to have transferred 1.5 percent of its 2011 net profit – 280 million rubles. Gazprom said that it will create its own equivalent of Skolkovo - an innovative center on the basis of the gas research institute VNIIGAZ.

The principle of financing the SEED phase of the project has changed, too. The fund has begun to give money only to well-established companies, while the financing of start-ups has been minimized.

Whatever the further march of events, Skolkovo will not disappear altogether, experts say, experts say. “True, it will be still in place,” a specialist at Skolkovo said. “There are 500 companies already. They will serve as a shop window during the G8 summit and as a monument to the Medvedev era. But, whereas originally the project was proposed as a favorable environment for the emergence of tens and hundreds of new projects in all branches of the economy, the net outcome is a dull and lifeless “ministry of innovations.”

Other experts do not believe Skolkovo will last. “There are just two options,” the publication quotes a source in Skolkovo as saying. “The failed science cluster may be closed down, and quite painlessly. The projects that have been financed are not very bad, and the money has not been spent in fain. The other option is to put Skolkovo on the original track, but this scenario begins to look ever more unrealistic.”

While Skolkovo’s critics say it is just a toy for Dmitry Medvedev and the project will not survive without him, the Skolkovo management team is certain about the opposite. The vice-president of the Skolkovo Fund, Seta Pumpyanskaya, is quoted by NEWSru.com the project is already at a level where it cannot be abandoned. “Also, the technical side is a reason for certain optimism. For instance, there is the official budget approved for three years ahead,” she said. “True, Moscow will not become a world center of the economy of knowledge overnight, but at least the process of modernization will be kick-started at last.

Moscow, September 4