On my way to Stanford to take part in the annual US-Russian Technology Symposium. Quite why I have to fly 11 time zones around the world to meet a bunch of people I could have lunch with in Moscow defeats me. Well it doesn't actually, and that's really the point of this post.
At some point on Thursday or Friday, and quite possibly both, someone (at least) will bemoan the lack of venture capital available for start-up Russian technology companies. No one will actually have the balls to point out that the money will be available when the companies, not the technologies, are ready to be funded. And there is the crux of a great paper by Gil Avinmelech, Martin Kenney and Morris Teubal; A Life Cycle Model for the Creation of National Venture Capital Industries; Comparing the US and Israeli Experiences. No one will ever accuse academics of using marketing techniques to get us to read their papers.
They argue that many government attempts to sponsor a venture industry are failures (no news there) but that they are doomed to fail because they address just one aspect of the technology ecosystem - the venture industry. The assumption is that cash makes companies. Most VC's and all entrepreneurs will argue that there are a number of more important factors. They could equally argue that any attempt to address one area of the ecosystem (technology, entrepreneurs, customers, capital, banks, service providers, markets) will fail unless the other areas are equally addressed.
It would be fairer to say that expectations for early government intervention should be appropriate to the stage of the ecosystem. Somewhere in today's FT is a piece on the growth of Silicon Fen in Cambridge, UK. Echoing the sentiments of the three academics the writer notes that government funds aimed at Cambridge will probably be "pork-barreled" to other parts of the UK where their impact will be zero. In short, they prescribe a focused long-term i.e. beyond the end of the conference, strategy that helps with all elements of the spectrum. It will take a while - but that is what strategy is about. Tactics are for tomorrow.
So what's in store for the FSU tech industry, and by extension its venture industry? A home grown Google is not on the cards for a while. But that does not mean that their will not be some great FSU-tech successes along the way. It is likely that the first successes will be Russian-inspired but managed by US-Russians or non-Russians and only in later iterations will they be Russian-inspired and led. Certainly that is the philosophy that we are taking with DFJ Nexus. As Russia's business environment improves and it sorts out its corporate law, and enforcement, more of these companies will be Russian as opposed to Cayman, Cypriot, US or anything else. In the meantime the rise of Russia's technology industry will be a global affair.
There are a huge number of areas that the Government can help with; broadband infrastructure, taxes, corruption, corruption, corruption, IP law, WTO, targeted funding of academia, changing the Prime Minister in favor of someone who knows what an economy is, removing the ex-KGB from positions of economic power....... Handing out cash to VC's will achieve little (see corruption/pork-barrels above.) Take all the cash that would otherwise go to people with no experience or understanding and give it to the academics. At least there should be something to fund.
As I have said ad nauseum the Israeli experience offers a better pointer to the future of Russia's technology industry than India. Albeit that they both invested heavily in their industries with a vision. Talking 11 time zones around the world is not going to improve the lot of Russian scientists, software engineers, entrepreneurs and venture capitalists (don't feel sorry for the rest. They are gourging themselves on $40 oil.)
Subscribe to:
Post Comments (Atom)
17 February 2005
The Development of Russia's (FSU) Technology Industry and Venture Capital
On my way to Stanford to take part in the annual US-Russian Technology Symposium. Quite why I have to fly 11 time zones around the world to meet a bunch of people I could have lunch with in Moscow defeats me. Well it doesn't actually, and that's really the point of this post.
At some point on Thursday or Friday, and quite possibly both, someone (at least) will bemoan the lack of venture capital available for start-up Russian technology companies. No one will actually have the balls to point out that the money will be available when the companies, not the technologies, are ready to be funded. And there is the crux of a great paper by Gil Avinmelech, Martin Kenney and Morris Teubal; A Life Cycle Model for the Creation of National Venture Capital Industries; Comparing the US and Israeli Experiences. No one will ever accuse academics of using marketing techniques to get us to read their papers.
They argue that many government attempts to sponsor a venture industry are failures (no news there) but that they are doomed to fail because they address just one aspect of the technology ecosystem - the venture industry. The assumption is that cash makes companies. Most VC's and all entrepreneurs will argue that there are a number of more important factors. They could equally argue that any attempt to address one area of the ecosystem (technology, entrepreneurs, customers, capital, banks, service providers, markets) will fail unless the other areas are equally addressed.
It would be fairer to say that expectations for early government intervention should be appropriate to the stage of the ecosystem. Somewhere in today's FT is a piece on the growth of Silicon Fen in Cambridge, UK. Echoing the sentiments of the three academics the writer notes that government funds aimed at Cambridge will probably be "pork-barreled" to other parts of the UK where their impact will be zero. In short, they prescribe a focused long-term i.e. beyond the end of the conference, strategy that helps with all elements of the spectrum. It will take a while - but that is what strategy is about. Tactics are for tomorrow.
So what's in store for the FSU tech industry, and by extension its venture industry? A home grown Google is not on the cards for a while. But that does not mean that their will not be some great FSU-tech successes along the way. It is likely that the first successes will be Russian-inspired but managed by US-Russians or non-Russians and only in later iterations will they be Russian-inspired and led. Certainly that is the philosophy that we are taking with DFJ Nexus. As Russia's business environment improves and it sorts out its corporate law, and enforcement, more of these companies will be Russian as opposed to Cayman, Cypriot, US or anything else. In the meantime the rise of Russia's technology industry will be a global affair.
There are a huge number of areas that the Government can help with; broadband infrastructure, taxes, corruption, corruption, corruption, IP law, WTO, targeted funding of academia, changing the Prime Minister in favor of someone who knows what an economy is, removing the ex-KGB from positions of economic power....... Handing out cash to VC's will achieve little (see corruption/pork-barrels above.) Take all the cash that would otherwise go to people with no experience or understanding and give it to the academics. At least there should be something to fund.
As I have said ad nauseum the Israeli experience offers a better pointer to the future of Russia's technology industry than India. Albeit that they both invested heavily in their industries with a vision. Talking 11 time zones around the world is not going to improve the lot of Russian scientists, software engineers, entrepreneurs and venture capitalists (don't feel sorry for the rest. They are gourging themselves on $40 oil.)
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment