Russia to Duplicate Silicon Valley? Good Luck With That

Which country wouldn’t want to duplicate the success of Silicon Valley? What leader wouldn’t want to be the one who brought their country to the technological forefront? TMCnet’s Erin Harrison reports that Russian President Dmitry Medvedev toured Silicon Valley on Wednesday to explore the so-called “origins of success,” at Twitter’s San Francisco headquarters. Medvedev reportedly set up a Twitter account under the name KremlinRussia and sent his first tweet. Hello everyone. I am now in Twitter, and this is my first message is what was shared with the world via a Twitter account which now has 32,198 followers.

He later met with Steve Jobs and John Chambers and had cheeseburgers with US president Obama. I expected the Twitter account to have one post when I checked it out but was thrilled to see a steady stream of information which I needed to translate with the help of Google’s toolbar.

A few tweets are presented below:
China has done a great job of growing its technology base by forcing companies outside the country to partner with local companies and share proprietary technology. This is generally a condition to getting access to the Chinese market. Moreover the country has worked on proprietary wireless and other standards to help local industry.

But let’s face it – when you end up manufacturing virtually every piece of technology in the world it is quite easy to launch a slew of knockoffs for almost any product meaning you are launching new companies and an entire new economy by “borrowing” the intellectual property of the entire world’s best and brightest.

Russia can’t do these things… Their markets are smaller and they have a history of making life difficult for foreign investors. Many Russians come to the US to study because of our open and free society with minimal corruption. They come here because anyone can make it and if you have talent and drive you can become a billionaire.

But it is interesting to note that one person Medvedev should have met with and didn’t is Google’s Russian born Sergey Brin. Wouldn’t it make sense as the leader of a foreign country looking to learn about entrepreneurial success in Silicon Valley to meet with someone from the place you just came from? Especially if this person is world-famous and is co-founder of a service used daily by virtually every able-bodied human on the planet? You could even have a dialog in Russian. Wouldn’t that be very logical?

It turns out the Russian delegation will meet with Google but Eric Schmidt will be heading up the meeting. Perhaps the reason Brin took a pass has to do with the communist, big government oppression which forced Google cofounder Sergey Brin and his family out of Russia. Being Jewish in the Soviet Union meant you couldn’t go to university and subsequently Brin’s family was forced to move to the US and as a result this world-changing company ended up being started in Silicon Valley and the Russian president had to come to our shores over a decade later to try to figure out what went wrong.

But rather than focus on what a potential conversation between Brin and Medvedev might be like I will instead share some details of Brin’s turbulent Russian childhood which comes courtesy of Wikipedia. If you are curious about the aforementioned talk be sure to Google uncomfortable silence and awkward.

Childhood in the Soviet Union

In 1979, when Brin was six, his family felt compelled to emigrate to the United States. In an interview with Mark Malseed, author of The Google Story,[10] Sergey’s father explains how he was “forced to abandon his dream of becoming an astronomer even before he reached college. Although an official policy of anti-Semitism didn’t exist in the Soviet Union, Brin claims Communist Party heads barred Jews from upper professional ranks by denying them entry to universities; “Jews were excluded from the physics departments, in particular…” Michael Brin therefore changed his major to mathematics where he received nearly straight A’s. However, he said, “Nobody would even consider me for graduate school because I was Jewish.”[11] The Brin family lived in a small, three-room, 30 square meter (350 square foot) apartment in central Moscow, which they also shared with Sergey’s paternal grandmother.[11] Sergey told Malseed, “I’ve known for a long time that my father wasn’t able to pursue the career he wanted”, but Sergey only picked up the details years later after they had settled in America. He learned how, in 1977, after his father returned from a mathematics conference in Warsaw, Poland, he announced that it was time for the family to emigrate. “We cannot stay here any more”, he told his wife and mother. At the conference, he was able to “mingle freely with colleagues from the United States, France, England and Germany, and discovered that his intellectual brethren in the West were ‘not monsters.'” He added, “I was the only one in the family who decided it was really important to leave…”[11]

Sergey’s mother was less willing to leave their home in Moscow, where they had spent their entire lives. Malseed writes, “For Genia, the decision ultimately came down to Sergey. While her husband admits he was thinking as much about his own future as his son’s, for her, ‘it was 80/20’ about Sergey.” They formally applied for their exit visa in September 1978, and as a result his father “was promptly fired”. For related reasons, his mother also had to leave her job. For the next eight months, without any steady income, they were forced to take on temporary jobs as they waited, not knowing whether their application would be granted. During this time his parents shared responsibility for looking after him and his father taught himself computer programming. In May 1979, they were granted their official exit visas and were allowed to leave the country.[11]

At an interview in October, 2000, Brin said, “I know the hard times that my parents went through there, and am very thankful that I was brought to the States.”[12] A decade earlier, in the summer of 1990, a few weeks before his 17th birthday, his father led a group of gifted high school math students, including Sergey, on a two-week exchange program to the Soviet Union. “As Sergey recalls, the trip awakened his childhood fear of authority” and he remembers that his first “impulse on confronting Soviet oppression had been to throw pebbles at a police car.” Malseed adds, “On the second day of the trip, while the group toured a sanitarium in the countryside near Moscow, Sergey took his father aside, looked him in the eye and said, ‘Thank you for taking us all out of Russia.'”[11]

Obviously Russia has evolved over the years and thankfully for the better but stories of corruption just a few months old which detail how western multinationals are thinking of pulling out of the country can’t be the solid foundation required for recreating Silicon Valley. Just last year in fact BusinessWeek ran a story titled Why IKEA is Fed Up with Russia explaining the corruption, bureaucracy and red tape the company had to deal with. These problems further show why the New York Times ran a story last summer explaining that after a $4 billion in investment, IKEA will cease spending in the country. Here is an excerpt:

Russian President Dmitri A. Medvedev has acknowledged that corruption is a national problem, and curbing official corruption is one of the goals of his tenure.

Mr. Medvedev has signed a law prohibiting surprise inspections from fire and health authorities of the type often used to extort companies, and has required bureaucrats to disclose not only their own income and assets but their spouses’, a once common conduit for bribes. Beyond embarrassing Mr. Medvedev’s administration, the Swedish retailer’s public stance could mark an economic turning point if it leads to more Western businesses speaking out against corruption here.

Hopefully his goals of reducing corruption will not only be met but exceeded.

So how does the US do it? Well, we are far, far from perfect but we have a pseudo-capitalist system with a fairly level playing field allowing anyone to make it to the top with minimal resistance. It is in fact this low resistance which is being changed by the higher taxes and increased regulations being imposed upon the country by our current government. So while the rest of the world tries to emulate our system so they can be more successful and lift more people out of poverty, our current government is looking to emulate the bloated bureaucracies of other governments. Hey, I can’t figure it out either. Although we have excessive lobbying and lobbyists which I consider corruption once-removed, thankfully our direct corruption from public officials and workers such as policemen is lower than many other countries.

In addition, the US excels by being diverse and our tolerance of other races, religions and cultures is quite high. This is a huge part of the reason for our success. Again, we are far from perfect but we are an amazing melting pot. The best and brightest come here because they know this is the land of opportunity. Let’s hope US citizens remember in all future elections that limited government, freedom and capitalism – with a sufficient safety net for those who aren’t able to provide for themselves due to illness or disability, etc is what made this country the envy of the world.

For many decades the US looked to export democracy and freedom by using guns and warships. These actions resulted in limited success. Imagine if we have reached a point in time where leaders from the globe all come to the US looking to duplicate our financial success and standard of living and conclude that more freedom, smaller government and zero corruption are the keys to their own country’s success. That would be quite an achievement and an admirable goal for the US to strive for.

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