Russians to open city for entrepreneurs in 2014

Russia is spending $4 billion (and potentially up to $8 billion) to build an entirely new city just outside of Moscow complete with its own immigration status, its own police, its own courts, and its own intellectual property regime, a notorious problem for companies doing business in Russia. It plans to open in 2014 when it will play host to the G8 Summit.

Katia Gaika, deputy director for education and research for the Skolkovo project, said the aim is to position Russia as a center of innovation and to invest its oil and gas revenues into future industry.  Planned as clusters of biomedicine, energy, IT, nuclear, space technologies and communications, it has also attracted significant investment from established global companies such as Siemens, IBM, Intel, Cisco and Russian oil giant Rosneft.

The ecosystem is both virtual – funding and the legal framework, and physical, the city, a new university, real estate for start ups and so on. Of the $4 billion, she said, $3 billion is going on the fabric of the new city, the remaining $1 billion will go on funding entrepreneurship and running the program.

It is hard to overstate the scale of this project. A city of 30,000 people, a new university, and centres for all the major areas of innovation.  Grants of $10 million, not loans, are available to at least 800 startups, and companies can enjoy a tax holiday of up to 10 years if their turnover is below $30 million.  Pioneer visitors to date include Mark Zuckerberg, Sir Richard Branson and US Vice-President Joe Biden.