Regional innovation clusters and a role universities can play

An innovation economy has been a buzz phrase lately in all sorts of context. But the words oftentimes fail to convey what it’s all about and what needs to be done. Let me have a try and verbalize my own vision of what it is.

First and foremost, it’s the creation of an innovation ecosystem. It is a pretty capacious concept that also incorporates the notion of innovation culture. It is an environment. And for as long as we carry on attempts to create an innovation ecosystem in the environment tailored to the old commodity economy, this environment will be vomiting it out as ‘foreign substance.’ You can’t create an innovation economy without generating an innovation environment.

The latter encompasses many things. The first brick in the wall is teaching and training of young people. In my system of beliefs, youth should be taught from an early age; they need to know what to expect in their future.

The wind has changed lately; polls show schoolchildren would much rather become government officials than entrepreneurs. Universities that train officials are showered with applications—unlike entrepreneurial chairs. Other polls reveal that for many, entrepreneurship is a sort of hobby but not their life. Entrepreneurship can’t be optional; one can’t play soccer without a ball. You’re either inside, dedicating your whole life to it, or you’re completely outside and have nothing to do with it.

To create a system funding is crucial. I’ve seen statistics saying in the U.S., venture investments account for about 2% of overall investments. But I also know a fact: companies that have spun off from venture businesses currently employ more than 20% of Americans. To me this indicator is much more important than investments; it shows that venture business’ contribution to the American GDP is way over 2%.

This brings us to a plain and logical conclusion: venture investments yield much more than any others. The focus is to create a system of VENTURE investing.

You won’t reap an innovation crop unless you lay the groundwork for sowing innovative ideas. There’s conventional wisdom among officials that Russia’s flush with innovative ideas. It is not true, unfortunately. Russia may be flush with raw concepts but ideas with potential for commercialization are few. An environment, a sort of ‘broth’ is required where entrepreneurs with commercially viable ideas will ‘boil’ alongside investors and consultants.

Historically, this country stashed R&D funding aside for fundamental research; that’s why Russia’s still home to first-rate mathematicians and physicists. But those generating ideas for monetization are scarce.

When we talk about support infrastructure, we use words that all know, such as ‘business incubators,’ ‘techno-parks,’ ‘technology transfer centers,’ etc. A lot has been done to discern what they imply; lots of funds have been spent; but results are still barely visible and efficiency of what’s available is low.

There are four levels of techno-parks. Russia is coyly transitioning itself from level 1 to level 2. What does that mean? It means that what is called a techno-park leases out space to outsiders. Most widely touted techno-parks, now referred to as Russia’s exemplary in innovation, do just that. Courting large companies for tenancy doesn’t make one an innovation techno-park.

And finally, a cluster approach. To my mind, there’s currently no better response to innovation challenges. The approach enables an innovation system; it helps spawn technological and business innovations, no matter what its name—a ‘science city,’ a ‘zone’ or a ‘valley’. Wherever the cluster approach takes root, activities are jump-started.

’A promised land’

There are different models for innovation economy that different countries and cities employ. What suits Russia most seems to be one referred to as a ‘promised land.’ It is nurtured through contribution by intellectual communities. All Russian ‘science cities’, such as Novosibirsk’s Akademgorodok or Dubna outside Moscow or Sarov in the Nizhny Novgorod region, are established as nuclei of Russia’s ‘promised land.’

There are a few clusters worldwide that are most vivid examples of a ‘promised land’ approach. These are the U.S.’ Silicon Valley, India’s Bangalore, Canada’s Toronto, and Finland’s Helsinki.

Russia’s ‘Silicon Valley’

Russia is setting up a sort of ‘Silicon Valley’ of its own. Unfortunately, the essence of what was established in America is being poorly translated to the Russian turf. I’m talking about the Skolkovo ‘science city’ outside Moscow.

I’m ready to make a wager with whomever and win in five years. The construct will lack the kind of spirit the original Valley has had.

In the U.S., the Valley was built out around the Stanford research and industrial nucleus that consisted of three powerful educational hubs: Stanford University, University of California Berkeley, and University of San Francisco. The park also incorporated large labs and companies that formed the system. In addition to technology companies (52% of a total) and Internet companies (2%), there were 46% of firms that provide services, including financial companies, law firms and consultancies. On top of those, there are restaurants, movie-theaters, etc.

This is food for thought for those who might think that bringing many scientists and ideas into Skolkovo will make it another Silicon Valley. No; a ‘Silicon Valley’ is a combination of technology and support companies. Those are venture establishments, lawyers, advisors, etc. Had the U.S. lacked all this, it wouldn’t have ensured the result we all know of.

Many believe an idea is a product. It’s a delusion. An idea is but only a raw material, from which one can make a ‘sweet’ while another a piece of sh…