In February 2010, Russian President Dmitry Medvedev announced his plans to create a Russian Silicon Valley. This message was received with a substantial amount of skepticism from the public. Of course, such skepticism stemmed not from the president’s intention to attract investments into the development of innovative technologies but rather from the very proposition of creating an innovation city from scratch.
Elementary development
The blurry outline of the innovation city started getting clearer on the eve of the visit by Governor of California Arnold Schwarzenegger, who kindly brought along a group of venture investors. Research work vectors were determined, work began on the town-planning concept, and the date for the first sitting of the Scientific Advisory Council of the Foundation for the Development of the Center for Design and Commercialization of New Technologies (Skolkovo Foundation) was set.
“The main goal of the innovation city is to generate and commercialize new technologies and new products, and bring them onto the global and Russian markets,” says Viktor Maslakov, Executive Director in Territory Development for the Skolkovo Foundation. “The basic elements of the center will be innovative enterprises focusing in the five priority development vectors approved by the president of the Russian Federation - strategic computer technologies, space technologies, nuclear technologies, health care technologies, energy efficiency and energy savings.” The innovative center will also include a technical university working in these five areas. In addition to the innovative enterprises and the university, the Skolkovo project entails building residential buildings as well as utility and social infrastructure objects. In accordance with the federal law No. 244, the premises will only be leased to tenants.
From the development point of view, construction of an innovation city within four years presents no problems, say the experts. “As they used to say in the classic Soviet movie, ‘nothing is impossible for a person with some intellectual abilities’,” says Eugene Alyoshin, General Director of Storm Properties. “In the purely technical sense, it is possible to build an innovation city, or more precisely, its first phase, within four years.” However, in Mr. Alyoshin’s opinion, everything depends on several “if” factors. In particular, if the Master Plan is timely and properly designed and approved to be split between developers; if state-financed organizations undertake construction of engineering and road infrastructure and do it with the sufficient quality and within the terms set by developers; and certainly if there is steady funding and efficient coordination of the project. The rest is just the matter of technology.
“In terms of sheer physical capacity, we can build an innovative city even faster. The experience of Soviet construction projects shows us that people can actually build a city anywhere – in the taiga, in a desert, or on coal deposits,” notes Mahach Bizhanov, managing partner of the Legal Consulting Group. “But it is important to take into account which technologies will be used in realizing the project and who is going to live and work there?” By studying the experience of other countries, we can see successful growth of science cities around large universities and research centers without any systematic approach and programs, as well as failed projects that left only vacant buildings behind. In Mr. Bizhanov’s opinion, an innovative city is first of all about the atmosphere and creating opportunities for creative work in the field of innovations. However, the leaders of the Skolkovo project are promising to pay special attention to the quality of the urban environment.
Competitive selection
At the moment, the project leaders are talking only about the atmosphere they would like to create in the innovation city, but it is not clear yet what Skolkovo will be like. Development of the town-planning concept and the Master Plan is only about to begin. For that purpose, five companies have been selected (ARUP, AREP, JURONG, SWECO and Perkins Eastman Architects). Most of these either have representative offices in Russia or cooperate with Russian companies. As Viktor Maslakov confirmed, at the planning stage there are no purely Russian companies without some foreign participation.
“Russian architects do not have the experience in development of master plans of large areas for construction of such specific objects as innovative business facilities,” comments Eugene Alyoshin. “To create a master plan for an area of 1,000 ha of a district or even an entire town and fill it with standard buildings of KOPE or P-44T type is the usual thing to do; to draw a project of a business park or an office complex is also something we already know, and at a rather good level. But combining large areas and innovative approaches is something that only foreigners can do at the moment.”
The competition for development of the city-planning concept of the Skolkovo Innovation Center is not over yet, and therefore we cannot say, that Russian specialists were not allowed to participate. “The first stage of the competition, the qualifying selection, was an open part, where quite a number of Russian project design offices took part, both independently and as members of international teams,” explains Sergey Kriuchkov, architect and deputy General Director for project development at the ABD Architects Company. “At the moment, 5 participants for the final stage have been selected, and we are one of these, as a member of the team led by the New York-based office of Perkins Eastman Architects International PLLC.”
The final stage will be held in the form of a closed tender among the winners of the qualifying selection. In addition to this, semi-finalists will be subjected to individual quick investigations, by the results of which one of the teams will be admitted to the final stage. Thus, by the end of the process, the customer will have six possible variants of the town-planning concept. The winner will develop a detailed master plan and site design. “Afterwards we may also involve Russian companies into the development of project documentation for particular buildings and objects. This is the matter to be decided by results of the future tenders,” says Viktor Maslakov.
Thus far, all the companies in the semi-final are international teams. “It could not have been otherwise,” explains Sergey Kriuchkov. “The reason for this is that the subject of work is something we never did in our town-planning practice. Roughly speaking, Skolkovo can be compared with the old Soviet campuses, but these have all been planned many years ago, and domestic urban planners have been mostly engaged in designing typical urban areas ever since.”
“ABD Architects deliberately joined a select team,” notes Sergey Kriuchkov. “We do not believe that we can presume to find solutions to such a task on our own. We found ourselves in a similar situation when working on the development concept for the Tomsk Special Economic Zone, where we had to work with an absolutely new format and without any easily defined target specifications.” In that case, the team managed to complete the assignment, but they had to involve American economists who interviewed potential residents, drew a financial model and provided recommendations for optimal typology of the development. With Skolkovo, the task is even more serious as it proposes the creation of a “Knowledge Community”, and this above all means creating the right environment. “Such work requires certain skills, and that is why only design offices with working experience and the ability to organize work of advisors from related industries, have a chance to create anything worth while within the exclusively short terms,” explains Sergey Kriuchkov.
Who will build?
No less important (at least for developers) is the question of who is going to build Skolkovo. “Limiting participation to only ‘our guys’ always harms the market procedures of selecting contractors, developers and investors,” believes Georgy Dzagurov, director of Penny Lane Realty. “If the goal is to save resources, the process of selecting the developer should be open and transparent, but if it is to divide up funding and receive maximum profits it is more convenient to use the ‘our guys method’.”
Mahach Bizhanov believes that the question of who will build the center is going to be decided at the top level. “I believe there will be structures of enterprises from the inner circle of our government, for this project is very ambitious and advertised around the world,” says Mr. Bizhanov. “Realization of the project will be given to trustworthy people, as nobody wants to take risks, in the light of experience with the Sochi Olympics.”
According to Viktor Maslakov, the working process will involve both Russian and foreign contractors. Skolkovo Innovative Center is a complex of various construction projects. There will be roads, utility networks, and separate buildings so there will be no single tender. There are going to be several of these, for construction of the networks, roads, housing, university, innovation enterprises and so on. Tenders will be held after the project documentation is ready. However, a specific object, a cubic house, is being designed at the moment, with the competition for best design well underway. This is the starting object and the first building to be constructed – the Skolkovo Urban Development Center. It is a comparatively small facility, though it has a great importance, including that for refining energy efficiency and ergonomics solutions. The bidding for this structure will be announced in the nearest future.
Innovative hopes
According to Viktor Vekselberg, President of the Skolkovo Foundation, the three-year budget for the Skolkovo Project will be about 180-200 billion rubles. Ideally, it should be funded as follows: 50% from the state budget and 50% from the private sector.
The visit of California Governor Arnold Schwarzenegger to Skolkovo was a time of high hopes for attracting large investments. “Russia has an immense potential for economic growth and we hope we can assist Russia, particularly in the field of high tech and bioengineering,” the California governor promised. Founders of the Silicon Valley and representatives of venture business were more cautious with their promises. For example, head of New Enterprise Association, Dick Kramlich, advised the Russian government to develop technologies where the country has already had certain achievements such as power engineering, nuclear technologies, medical services and products. Venture investors were puzzled (and not without reason) by the non-transparent scheme of investment distribution and promised to come to Russia soon, but no sooner than Russian legislation becomes more ‘friendly’ to foreign entrepreneurs. It would be appropriate to note that Dmitry Medvedev has initiated amendments to the legislation, which has resulted in giving the Skolkovo Innovation City a special tax status. Companies residing in Skolkovo will not need to pay any profit taxes, land use taxes, transport taxes nor VAT, and will also enjoy reduced rates of social contributions (only 14%) and a preferential tariff treatment. Zero tax payments for companies will last for ten years or until they reach annual revenues of 3 billion rubles.
One of the most effective science cities, similar to our Skolkovo, is the Stanford Research Institute in the famous Silicon Valley. Its staff includes 2,200 scientists. With the institute, receiving $500 million in funding annually from the California state government, they produce two or three start-up companies every year, which then earn millions of dollars in profits.
Plans for Skolkovo include the employment of 11 to 12 thousand research workers, with annual state funding of 170 billion rubles. According to Anatoly Chubais, if this becomes successful, then Skolkovo’s performance capacity will grow and become several times larger than this. Soon the income generated from Skolkovo will become comparable with that from exports of raw materials.
Dmitry Medvedev calls the Skolkovo Project a proving ground for the new economic policy. “I am confident about the success of the Skolkovo Project,” says Georgy Dzagurov. “The location is good, and if Russia is serious about wanting its brightest minds to stay here, they will create a comfortable place for them to work then. The main task of this project, the task of greatest importance for today, is attracting the end users, at its initial stage. It is the interest of such companies as Cisco, Microsoft and others that makes the recipe for success of the whole project.”
Construction of the innovation city, initiated by the state, is sure to be successful, the experts predict. However, the effective operations of the Skolkovo proving ground will depend on the three core components, which are investments, innovations and the human factor.