Stop trying to make the next Silicon Valley happen. It’s not going to happen!

Since I was a young boy studying global political economy armed with little but an Economist subscription and a smile, I’ve noticed that, at some point, every country and their neighbor tries to do something to create their own Silicon Valley.  Whether it’s Great Britain, China, France, Brazil, or even North Korea, it seems as though every country in the world is trying to hit upon the right policy formula to create their own hub of high-tech innovation and entrepreneurship. 

Given the tax avoidance value-added created by Silicon Valley, this is no surprise.  At the same time, all of this is the IPE equivalent of Gretchen Weiner’s efforts to coin urban slang in Mean Girls: 

I don’t mean this in a "HA HA HA, you stupid non-Americans!!" way.  I’m pretty sure that the conditions that created the actual Silicon Valley had more to do with serendipity, fortuna, and happy accidents than any conscious set of policies (though see here for my deeper thoughts on this subject). 

Which brings me to Russia’s efforts to grow its own version of Silicon Valley.  It launched Skolkovo Innovation Hub, a pet project of Russian President Dmitri Medvedev, and then paid MIT a boatload of money ($300 million) to set up a school and design a curriculum to attract Russia’s best and brightest.  High-profile western firms like Cisco have gotten involved.  In all, the Russian government has thrown an estimated $4.2 billion at this project. 

So how’s  it going?  Well, Courtney Weaver and Charles Clover have a Skolkovo update over at the Financial Times.  Here’s how it starts:

Just over a month ago, Tony Blair and Colin Powell were sitting in Moscow’s towering World Trade Centre, helping Kremlin officials brainstorm how they could attract more investment to Russia. A few storeys above them, employees of Skolkovo, the government’s flagship high-tech project, received a few visitors of their own.

At 9.30am on April 18, more than a dozen agents of Russia’s domestic security agency stormed Skolkovo’s office, confiscating mobile phones and removing reams of paper.

Skolkovo was meant to be Russia’s answer to Silicon Valley – a Kremlin-sponsored technopark with research centres for the world’s leading science and technology companies. But over the past few months it has found itself caught in the crossfire of Russian politics, causing those involved to question the project’s future….

People close to Skolkovo, including [Kremlin "gray cardinal" Vladislav] Surkov, have suggested that the volume of charges and their highly public airing are signs that the investigations are not part of an anti-corruption drive but are politically motivated. The crackdown comes amid a power struggle within the government between more liberal ministers led by Dmitry Medvedev, the prime minister and former president, and hardliners who are pushing back against the pet programmes of Mr Medvedev’s presidency, the most visible one being Skolkovo.

So, a few things:

1)  Here’s a thought:  if you are trying to woo high-tech foreign direct investment and your go-to guys are Tony Blair and Colin Powell, then you can pretty much forget trying to clone Silicon Valley.  Only Russian politicians could envision the following script playing out: 

SILICON VALLEY MOGUL:  Set up a major investment in Russia?  Yeah, they’ve got the human capital, but the downside risk is massive.  It’s government by diktat, and Putin blows hot and cold with foreign investment.  There are too many ways we can lose our lunch.

EXECUTIVE ASSISTANT:  Pardon me, but I have Colin Powell on the line.  He says he’d like to talk to you about investing in Russia.

SILICON VALLEY MOGUL:  Did you say Colin Powell???!!!  Hold my calls for the next hour.  It’s not every day you get to hear the business musings of a man who has limited business experience and hasn’t been in office for close to nine years!!!

2) Correct me if I’m wrong, but any time Putin and Medvedev have a policy disagreement or turf war, Putin wins.  Why, if you’re negotiating some kind of Russian venture, would you ever feel secure with any arrangement with Medvedev? 

3)  Wait, scratch #2 — even if you cut a deal with Putin’s men, would you ever feel secure about it?  As I said at the outset, it’s hard enough trying to incubate an innovation hub in the best of circumstances.  Trying to do so with a government that doesn’t understand the words "credible commitment" makes it damn near impossible. 

Am I missing anything?