Rolling out Russian tech reforms

PALO ALTO, Calif.--Andrey Fursenko, Russia's minister of education and science, certainly has his work cut out for him.

The government official in charge of the country's technology strategy laid out ambitious plans for his nation during an interview and a speech at the U.S.-Russia Technology Symposium at Stanford University last week.

In January, President Vladimir Putin gave him the go-head to come up with a plan for erecting tax-friendly technology parks to attract local and international IT companies, similar to those in China, Ireland and the United States.

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What's new:
Russia's head technician says his country could become a tech powerhouse in Europe, but a few elements are still missing.

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Among the challenges the country faces are a lack of business management training and a reputation for corporate corruption.

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Fursenko, a scientist himself, has also initiated reforms at the Russian Academy of Sciences and in the nation's university system. Part of the reforms will involve changing degree programs so that the credentials more closely resemble the bachelor's, master's and Ph.D. degrees of the West, further smoothing the path for intellectual exports.

"This is one of the most challenging reforms in the immediate future. We are losing our position. We need to make sure there is no longer a decline in the quality of education," Fursenko said. "Engineering training is sometimes better in Russia, but business training is better here."

Ideally, the reforms could help India and China become established as low-cost centers of advanced technology. Russian technology exports include Sea Launch, a company that launches satellites from a platform on the equator, and antivirus software. Yandex, Russia's version of Google, is growing rapidly and has emerged as a possible takeover target, one high-tech executive said.

The country also remains one of hot markets in the world for IT products and has outpaced other European countries in the consumption of cell phones, PCs, networking equipment and other items for the past few years. The growth there, in part, prompted Microsoft to launch a low-cost version of Windows there.

"Engineering training is sometimes better in Russia, but business training is better (in the United States)."

--Andrey Fursenko
Minister of education
and science, Russia

But creating a Shanghai on the Lena won't be easy. Foreign investors remain wary about Russia, especially when it is so much easier to open operations in China. The amount of U.S. venture investing in Russia pales in comparison to the billions flowing to China and India, noted Drew Guff, managing director of Siguler, Guff & Co., an international investment firm. Most of the "foreign" investment in Russia comes from offshore funds created by local oligarchs, he added.

Recent events like the Yukos scandal have reinforced the country's reputation for instability, inefficiency and corruption.

"If we weren't there already, we would probably be waiting," said Claude Leglise, vice president of Intel Capital, commenting on the current business environment. Intel began