Russia appears to be getting serious about feeding its nascent technology industry through the creation of a high-tech incubator in the Skolkovo suburbs of Moscow.
It now looks like President Dmitry Medvedev was on an investment road show as well as a goodwill tour when he toured Stanford and Silicon Valley before heading to Washington. Cisco (CSCO) kicked in $1 billion to get a piece of the Skolkovo project, and there may be other investors lining up.
We talked about this on CNBC:
Russia clearly knows it needs to diversify its economy away from oil. Oil is great, but it is a non-renewable resource and the boom-and-bust cycle has driven massive capital into the country in good times, only to deflate the economy when crude prices turn.
As it is, the economy is only growing 4% a year right now, which is pretty chilly compared to the growth rates of 9% to 11% investors can get from Brazil or China.
A high-tech center would give Medvedev and company a place to divert a few billion petrodollars into a sustainable computing industry. The benefits could be tremendous, and while U.S. investors may ruefully remember the dot-com bust, it is still less risky than living and dying by the oil markets.
While Russia builds out, the best ways to play for a U.S. retail investor are still telecom: VIP, MBT. Smart phones are technology plays too, and mobile will almost certainly be a big piece of the Russian technology story.