Siberia - The Next Silicon Valley?

eldavojohn writes "CNN Money is running a story about Siberia's rising tech industry.The movement towards tech is centered in Akademgorodok (Academy Town), with a 15 percent annual increase in the number of firms. Even though the area industry's worth is still fledgling compared to other areas, the growth cannot be ignored. 'President Vladimir Putin has also taken note, backing the construction of a $650 million technology business district with $100 million in state funding for infrastructure. "We simply mustn't waste this chance," Putin declared in Akademgorodok following a 2005 trip to tech-savvy India, "especially as other countries have achieved success without such a strong starting position." High tech is the sort of thing that the Kremlin, realizing that Russia's natural resources can't last forever, would like to develop.'"

The Russian Hacker

[eldavojohn]

It's long been known that Russia [wired.com], the Ukraine [slashdot.org], Poland, etc. contain a vast wealth of programming talent. Look at the rankings of the world wide programming contests [slashdot.org]. Unfortunately, with their dismal economies, these talents are often used for ill rather than good [slashdot.org]. I, myself, have two anecdotal stories of my friend's user accounts being hacked by unknown parties in the Ukraine. All in the name of 50 USD.

Why?

Surely, I reasoned, with the amount of time they took to set up that scam and avoid authorities, they could have gotten a job like I have and done something good for even more cash--but, that's my naïve American attitude for you. The job market probably doesn't exist there where they live.

Nothing would make me happier than to see these people given an opportunity to move somewhere close to make money, help their economy, establish an industry/infrastructure for future generations & to get these programmers off the street and into a job ... however, that could just be my naïve American attitude again.

On an offtopic note, I used to "cool" my computers in Minnesota by placing them next to the window during the winters, I'm certain you could cut down cooling costs in Siberia using similar strategies.

NOT Silicon Valley

[zoomcloud]

Having lived for six years in Russia, and five years in Silicon Valley, I feel somewhat qualified to opine. There is a HUGE factor lacking in Siberia: Rule of Law. A hard working programmer or IC designer can expect to have his work (IP) *stolen* within one month of publication or commercialization. Russia does not observe copyright or patent law. Yes, they have a lot of highly intelligent people. I married one. Yes, they have some buildings and power stations. Unfortunately, it's not enough to build a strong information economy. Russia will eventually bring Rule of Law to their economy - out of necessity - but it won't be soon. Ydacha!

Banished to Siberia

[mu51c10rd]

Does this make it a good thing to be banished to Siberia? If not, what are they saying about their high-tech workers?

Re:The Russian Hacker

[AKAImBatman]

Look at the rankings of the world wide programming contests.

According to your link, we should be hiring the Polish. The Russians did better than the US's 4 out of 48, but they still didn't take any sort of lion's share at 8 out of 48. And in any case, TopCoder is not a useful metric of anything except for, perhaps, cowboy coding. Many of the key skills required to launch a successful technology business are not measured by simplisitic coding riddles.

On an offtopic note, I used to "cool" my computers in Minnesota by placing them next to the window during the winters, I'm certain you could cut down cooling costs in Siberia using similar strategies.

I hope you realize that Siberia is not a frozen wasteland. Siberia covers such an area (where you'll find many of the Chukcha tribes), but it also covers more temperate climates. Not to mention that these programmers wouldn't be a bunch of smart guys packed into a cold little shack. They'll probably be in a building not much different than those found here in America. Which means that they'll have the same cooling and heating problems as we do. (We have horribly cold Chicago winters, I can assure you that they help cool our servers very little.)

Surely, I reasoned, with the amount of time they took to set up that scam and avoid authorities, they could have gotten a job like I have and done something good for even more cash--but, that's my naïve American attitude for you.

The truth is that most of those who have the willpower to do something "good" for even more cash, also have the will to go where the dollars are. Which means that many of them immigrate to other countries rather than hang around in Russia. With Moscow's economy booming, that may eventually change. But for now, Russia has a difficult time holding on to their talent. That talent that they do hold onto may feel their talents underappreciated in the nascent Russian tech economy.

Re:NOT Silicon Valley

[yada21]

a HUGE factor lacking in Siberia: Rule of Law. Russia does not observe copyright or patent law.

Good for them! This will allow market forces to make their economy more efficient. I guess it's not obvious to most people here, so I'll explain how it works(1).

If a company is using more resources (labor, gold) than it produces it's not adding value to the economy. This is expressed as profit's or in this case, a loss. Faced with theft/piracy firms will adapt their business processes, i.e. keeping staff's children as hostage or hiring former Spetznas trouper's to kill anybody who pinches their wares. On the other hand, if the company pirating (as you'd say - I'd call it 'liberating') their stuff is able to afford better goons, or to bribe off the first companies' heavies, then it is by definition more efficient - if not it wouldn't have the money to do so.

In summary, rule of law is for wussies and communists.

(1) taken from one of my speeches on the subject that I give regularly around the world

Re:Good Essay on the Matter

[The-Bus]

Think of it as a lofty, maybe unreachable goal. Of course you can't replicate Silicon Valley in Siberia. Some random town Wyoming can't decide to become "the next Tokyo" either. There's systemic problems in Russia that no amount of buildings, fiber, and computers will fix. But it's a start.

And they've got land to spare, or so I hear.

Re:Good Essay on the Matter

[igny]

From Graham's article, Might there not be an alternate route to innovation that goes through obedience and cooperation instead of individualism?

In my opinion there is. After all the Cold War was a competition between the two different ideologies, and no matter what you might think, Soviet Union did not lack innovation.

Re:NOT Silicon Valley

[Silver Sloth]

So when a band of Hell's Angels have beaten you up and are busy gang raping your 12 yr old daughter that's fine, because they're obviously, by definition, 'more efficient'.

The rule of law is for people who want to live with other people. That's why every successful society has one.

Re:A definite plus

[Xync]

The joke is good, but keep in mind that "Siberia" is a really big place. Everywhere in Russia east of the Urals qualifies which means 2/3 of the largest country on the planet is Siberia. Since Novosibirsk and Akademgorodok are in the southern part of that huge region, the summer temperatures get "hot" (80+ F), and since Akademgorodok sits next to a large lake, it's muggy to boot. Come July the people are going to want some temperature control (which is hard to come by), not just the servers.

What's this, the 9th "Next Silicon Valley"?

[trimbo]

We've had "Silicon Prairie" (Champaign, IL). "Silicon Alley" in New York. There's more I'm forgetting right now.

Ultimately all of the talented people who live in places designated to be the next Silicon Valley end up moving to Silicon Valley! We live in a beautiful area and get paid better. Top talent won't stay in Siberia, or Champaign, when they can live in San Francisco.

If there's any "Next Silicon Valley", it would be Los Angeles. Recently it seems that more of the interesting startups are in LA than the Bay Area. Given that so many of the Web 2.0 properties are more about entertainment [myspace.com], this kind of makes sense. And the proximity to Silicon Valley makes it easy for traditional tech investors to go down there.

Re:Good Essay on the Matter

[Red Flayer]

I'm not a big fan of the complacent notion that America succeeds because God made us better, whether God is and old guy in the sky or some kind of historical determinism that has finally created the perfect human disposition.

Manifest Destiny as a political idea has been dead for a long time.

The problem with Russia is that its political and legal systems are crap. The same with China.

And yet China still manages to have top scientific researchers in every field -- and continues to liberalize both economically and politically. See this [stanford.edu].

But any system whose priority is to keep the powerful in power will eventually find it convient to quash that talent.

And how does that differ from the US? Economic power is being concentated in fewer companies and individuals, who will be more easily able to affect government -- we've seen it already. Will the pendulum swing back? I don't know, in the age of mass media, whether we can check the power of the few.

What happens is that the friends of the government get their returns guaranteed by the exercise of state power.

Again, how does this differ from the US? KBR. Diebold. ExxonMobil. Boeing. The ones who write the laws are the lobbyists for the companies that benefit from them.

China, Russia, and the US are approaching each other in terms of politicoeconomic systems. The major difference still remaining is that of IP regulation and protection. If the rigid IP control system is doomed to fail (as many slashdotters believe) then China and Russia are poised to dominate -- since IP is relatively worthless in those countries, and is ignored almost at will. Seems to me that they would have a competitive advantage, in having hugely successful businesses in that climate already.

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Re:NOT Silicon Valley

[bberens]

So what you're saying is that there's extensive opportunity for businesses based on open source and the 'software as a service' model to flourish to solve various business needs throughout the country and region? What it will not do is allow monolithic conglomerates to take over. Small and medium sized shops should be able to be fairly successful in this environment.