Coders, Come Home! Russia Seeks Silicon Valley Cash and Talent
Now, Russian President Dimitry Medvedev (pictured) wants them back. Sort of. Them plus some big venture capital, thank you. Russia's head honcho is passing through the San Francisco Bay Area to meet with top tech titans like the CEOs of Google (GOOG), Twitter and Apple (AAPL) to pitch them on his plan to establish a Silicon Valley-esque tech cluster outside Moscow. Meetings with Sand Hill Road venture capitalists are also likely on the agenda.
Bringing Ex-Pats Home
Medvedev's pitch is the latest effort by a leader of an emerging economy to lure back talent and entice investment dollars. He's not totally off the mark, either. China has successfully attracted thousands of entrepreneurs, scientists and techies back from the U.S. to seek their fortunes in burgeoning Shanghai and Beijing. India, too, has seen an enormous repatriation of software and science talent from the U.S.
Vivek Wadhwa, a visiting scholar at the University of California at Berkeley, details the forces behind these trends quite well in a scholarly article that I helped to edit. In a nutshell, rising costs in the U.S., decreasing relative incomes, better health care and, above all, a sense of place and desire to be with friends and family has fueled the exodus.
For Russia, there's also the hope that new industries could act as shock absorbers to help protect the country from its wild swings in commodity prices. Those oscillations have recently helped the economy, but in the past have seriously hurt it.
Long Road Ahead
The man from Moscow, however, has a taller order than his BRIC peers in China and India. For starters, he must overcome Western perceptions that Russia remains a corrupt and dangerous country -- perceptions that many U.S. tech companies doing business there claim are overblown.
Second, Russia's economy is largely powered by natural resources. While Medvedev wants to change that, the resource-tied economy will probably make it more difficult for Russia to build a startup hot zone akin to the Valley. It's not impossible: A number of blue-chip venture capital firms have launched major second and third offices in Chinese or Indian cities like Beijing and Bangalore.
But those VCs have tended to be followers who arrived only after enough deals were flowing to justify a pricey ex-pat placement. For the Russian president, this is likely only the first step in a long dance to capture the Silicon Valley economic lightning in a bottle and diversify Russia's economy.