Plunging deeply into one of the world’s most muscular, and volatile, economies, Cisco said it will invest $1 billion in infrastructure and start-up projects in Russia over the next decade. The pledge was made by Cisco CEO John Chambers during a visit by Russian president Dmitry Medvedev to Silicon Valley yesterday.
Russia’s economy has been bolstered by vast reserves of oil and natural gas, but Medvedev – with the apparent approval of Prime Minister Vladimir Putin – has vowed to remake the economy to make it more reliant on technological innovation, not just energy resources.
"During the next decade Russia should become a country in which the welfare and the good quality of life is ensured by its intellectual, rather than natural, resources, and its innovative economy,” Medvedev said, in a statement released by Cisco.
To a crowd at Stanford University at the conclusion of his Valley tour, he added that he came to Northern California "to see with my own eyes the origins of success in how innovative businesses are set up," according to The San Jose Mercury News.
Medvedev’s ambitious goals, which include creating a “Russian Silicon Valley” at Skolkovo, outside Moscow, are clouded by an economy that remains state-controlled, a corrupt bureaucracy, a non-transparent judiciary system, and serious questions about intellectual-property protections. Medvedev, 44, has promised to do away with all of those barriers.
Cisco’s Russian investment will take several forms, including a “dedicated physical presence” at Skolkovo, where it will build an advanced networking architecture (based, naturally, on Cisco gear); $100 million in venture money for innovative Russian startups; a “second global headquarters” for its Emerging Technologies Group, headed by senior vice president Marthin De Beer; and $175,000 for its I-Prize competition, open to Russian entrepreneurs with “the potential to become Cisco's next billion dollar businesses.”
"Simply put, we're all in," Chambers said at the company's San Jose headquarters, according to SFGate.com.