Russian Pres. Medvedev is looking to build "Silicon Valley" near Moscow

I'm a Russian (well, Ukrainian, but who cares) expat. I'm not a "big name", but I did gain a lot of valuable experience in the thirteen years I've lived in the U.S. No amount of financial incentives would convince me to start a business in Russia, even if they hand me a pile of no strings attached cash in the airport.

You see, I like being able to start a business, rent an office, pay bills, pass inspections (car, fire safety, whatever), file my taxes, get through the airport security, get a driver's license, go to a university, and send kids to school (if I had kids) without having to bribe a single soul. I like knowing that nobody else around me has the opportunity to drive drunk without fear of repercussions because they can give a cop $50 and drive on.

I like walking on the street, getting on a bus, and riding a subway without fear of being beaten or killed because someone doesn't like my ethnicity. Ok, so I'm a white male, but I also like that other people around me have the opportunity to do the same. I'm not even talking about being treated decently, I'm talking about basic safety. Black people in Russia are doomed to standing by tanning salons with a sign "I got my tan here" (yeah, this is real).

I'm not even talking about making any significant amount money. Heaven forbid you make money in Russia. Well, first of all, without having connections in the government, you can't. But even if you do establish such connections, good luck dealing with their IRS, the KGB that wants a piece of the pie (ok, so they renamed it, but it's all the same people), and the corrupt-beyond-belief court system.

I like grabbing coffee with rich people who want to meet me purely because they're happy to give advice, who didn't start out their career in organized crime, and who don't need three body guards and an armored SUV just to get around.

Boy, does this article touch a nerve. I know a ton of smart, driven, capable Russians who love their country and who want to change the world while living there. But they're all here, in the U.S., because back there they're doomed to a life of corruption they refuse to deal with. The idea of offering them financial incentive to go back is frankly insulting. They don't need financial incentive. They just need an opportunity to make an honest living. The rest, they'll do on their own.

Surkov is one of those smart guys in Kremlin administration. But the plan to build a silicon valley in Moscow is just ridiculous. As well as other government plans on innovations. There are at least two reasons for that:

First and most important is that innovations exist not just because government wants it. At least until the government is the client (and I suppose that's not what they're going to be in this case). Innovations is a result of public and individuals needs, a competition of prices and efficiency (and other things). And it also takes a certain infrastructure for them to work. Russia lacks these things. Most people simply don't care about better quality of life or at least are not willing to do anything about it. Then there's no infrastructure: an example of that would be a broken national post system or absolutely no financial and banking culture (very limited usage of credit cards). I could name a lot of successful US startups that simply wouldn't work in Russia for those reasons.

Second is corruption, of course. I can imagine it's slightly simpler for IT business to stay out of it, but only until you're making a certain amount of money. A common saying in Russian business is "Sit quiet and try not to reflect the light".

The problem with all those plans of building something innovative is that government should not initiate them at all. If they ever wanted to make any difference, they would probably be trying to build a healthy environment for businesses. Business does not need any help. What it needs is to eliminate obstructions on its way.

The issue is that business succeeds in America because, generally speaking, there are few barriers here and wonderful protections. In America, the idea that the government would simply take something you made is abhorrent. Even when things like eminent domain are called upon, there is compensation provided (and compensation that can be challenged in courts). So businesses and investors feel safe that what is their's is actually their's.

Likewise, there are few barriers. Censorship is near non-existant in America and that's important for a lot of technology companies. Likewise, there are few administrative hassles - especially compared to economies that thrive on bribes.

There just isn't enough safety and security and too much hassle and you can't just decide to build that. It takes time to change the culture around that. And you have to prove that it's a durable stability. Many countries try to lure in foreign businesses with tax credits and the promise of stability and once profits are seen and businesses created, that stability is yanked away and assets eroded. America just has a long history of defending property rights in a way that actions over the past decade speak differently of Russia.

And, with that in mind, money going into Russia will demand much more favorable terms (since there's more assumed risk). The more favorable the terms, the worse a deal it is for Russia and the more incentive there is to yank the deal later on. Remember, politicians have maybe 20 years or so. They want their results quick. They often don't care about creating stability and responsibility that will leave their country in an advantageous position while the current voters vote them out of office.

What Russia really needs is a commitment to the rule of law and the enforcement of that law whether it's in the government's interest (or anyone's interest) or not. That's what really attracts money and prosperity - when the rules are just and enforced fairly against all parties.

There was an ISP in the first floor of my building in Moscow, and you got broadband delivered by ethernet run up the stairwells. There was a sign in the stairwell offering a reward for turning in whoever kept cutting the ethernet wires. The gang of thugs that lived in the stairwell, would - in between using the stairs as a urinal and conducting brutal robberies - slash these wires regularly.

The ISP couldn't really call the police, because freedom in Moscow is equivalent to avoiding the police, and they were a shoestring operation without enough for bribes. Not that the police would investigate even if you bribed them, they'd more like pick a few scapegoats and beat them up or torture them.

So my internet went out frequently. They fixed it as fast as they could. It wasn't bad internet considering.

I can't imagine running a business in that environment.

Back when I was in university doing my undergrad (only 4 years ago), in the two years that I spent in that particular university - out of all the people that I talked to, only one of them was actively looking to start a company or do something. It was a Russian foreign exchange student in his 1st year. He had already started and succeeded in business back in Mother Russia and was using his hard earned cash to now get an undergrad as an international student.

The Russians are intelligent, smart, and resourceful - they have all the qualities needed for entrepreneurship and it will take very little effort on the part of the Russian government to create an environment to attract them.

Yesterday, I came back from Russia. Though this wasn't my first time there. The first thing you notice there, is that there's plenty of illegal competition. In one of the biggest shopping centers in Moscow, there is a shop just a side of an authorized Apple reseller that tries to sell you an iPhone (which is actually a chinese TVPhone).

Apart from this, I really do think that Russia needs its own Silicon Valley with VCs and Incubators from U.S. There are many talented people with innovative ideas and products.

Speaking of corruption level and unsafe environment, I don't think that India is better, but nevertheless they have their own SV with well-established VCs from the States.

Given Russia's somewhat shady rule of law I doubt the real Silicon Valley is worried.

Making a Silicon Valley by fiat is pretty tough, even in a country where coffeemug's perceptive comments about the rule of law do not apply. Japan has at least a dozen places which wish they were Silicon Valley. I used to work at one of them. It wasn't a failure -- it employs a few thousand people and you are statistically certain to have used something containing something made there -- but it also wasn't the "put our town on the international map" thing the mucky mucks were hoping for.

I think PG had an article about that a few years ago. Yep, here we go. http://www.paulgraham.com/america.html I translated that for internal circulation among my bosses. It got... mixed reactions.

I wonder if other city-states during the Renaissance sat around plotting, "How can we have our own Florence?"

I was under the impression that "Silicon Valleys" aren't planned to happen, but that they just happen. It's a mixture of the people and tech happening. It's a vibe. It's a culture. It's people.

I moved to the Valley a couple years ago there are many developers here who are all enterprising, talented, entrepreneurial, and willing to try and fail. It is something that simply doesn't exist where I'm from (Reno) because most people there are more willing to simply work for whoever will hire them and spend the rest of the time doing whatever they want (usually watching TV or playing videogames).

Moral of the story: you can't really teach or wish for this kind of thing to happen. You have to build a community willing to innovate and try and fail.

Also, those who succeed must get fabulously rich and a lot of prestige and respect.

secret codename is "Kirpitch Walley", insider says.

it should be IN Moscow...near Sherementyevo. Only way for this to succeed.