Ruminations on Russia

Everything that is tagged “Russia” or “russia” for that matter on del.icio.us ends up in Endo, my RSS feed reader.  The most common subject over the last week or so has been a piece on Russian Web2.0 apps.  I have been harsh before on just how slow Russia has been to catch on to Web2.0 but I was genuinely shocked at the paucity of the offerings and the complete lack of original thought.  Nearly all the sites listed are direct copies or clones of popular US sites; My Space, Linked In, Flickr etc., (no link love - if you can't find them on your own it's probably time to stop reading.)

This week the Government's VC fund-of-fund effort took another step towards its laboured birth.  I have been here before and don't intend to recover old material in length; the precis - good idea, will lose money, should help build the ecosystem.

Meanwhile the Poster in recovery mode from a somewhat surprising consumption of gin martinis, champagne and vodka (in that order, I think) on Friday night has been in slow recovery mode all Saturday (I'm a lot better now - thanks for asking) which involves catching up on a bunch of reading.  The Economist had an article from the beginning of August titled Venturesome Consumption the principal theme of which is the ongoing US angst over losing its “upstream” technical lead to India, China and Russia with their greater share of science graduates.

There is a dissenting voice who speaks sense - Amar Bihde, a Professor at Columbia business school.  You can find his presentation here.  His thesis, or my take on it, is that the origination of technology is (reasonably) irrelevant.  Its the ability to:

• Make money from innovation - business model application
• Improve business through the use of technology - willingness to adapt management procedures and take risk to improve business
• Consumers who are willing to try new products

which is more important. I am not qualified to comment on the US end of innovation.  I can say that Russia has a lot of brains and academia and almost no innovation.

I feel a little like a stuck record (or is that a faulty DVD laser?) on this issue.  Russia can churn our as many scientists and programmers as it likes but until it starts to churn out entrepreneurs who know enough to take risk - just taking risk because you don't understand what you are risking is not enough - it will not profit from academia or its supposed benefit in scientific schooling.

Silicon Valley/ the Bay Area and a couple of other US centers (Boston, Dallas/Austin, NY) continue to have a disproportionate affect on new technology adoption because:

• They have access to entrepreneurs and managers who understand how to sell new products
• Companies which are genuinely willing to try new technologies to give them a competitive advantage
• Consumer and early adopters who will try new products
• An environment which believes that it is better to try-and-fail than not to try at all

• Compare this with a Russian youth who believe that the best job that they can get is as a Chinovnik

The smothering hand of the bureaucrats, or chinovniki in Russian, is a constant problem. “Mr. Chinovnik is like a parasite on people like me,” he said.

Its business not technology that makes technology business work.

[composed and posted with ecto]

Technorati Tags: Innovation, Russia, Venture Capital, Web2.0