Monday 20 May 2019

Lenihan has key role in $8bn plan for Russia's Silicon Valley

Ex-Fianna Fail minister says that the Irish were key to massive project

FROM RUSSIA WITH LOVE: Conor Lenihan, on Moscow's Red Square
FROM RUSSIA WITH LOVE: Conor Lenihan, on Moscow's Red Square

Nick Webb

Former Fianna Fail Minister for Innovation Conor Lenihan is at the heart of a hugely ambitious $8bn (€6.5bn) plan to establish Russia's Silicon Valley.

Speaking at length for the first time since leaving Irish politics after the 2011 general election, Lenihan told the Sunday Independent of his pivotal role in the massive Skolkovo project taking shape just outside Moscow. The plan is to create a vast hub of innovation and research anchored by the Skolkovo Tech University -- a Silicon Valley with more vodka, stray bears and furry hats.

"I was asked to join by Victor Vekselberg," Lenihan said. Vekselberg is a billionaire Russian oligarch who has been tasked with making the project happen. "I conduct active negotiations with large global corporations -- usually at CEO level. That's my role," he says. In effect, Lenihan is a one-man IDA.

There's a bigger budget than anything the IDA has to offer though. The Russian state has already spent $4.2bn (€3.4bn) on the project but the overall bill could be up towards $80bn. "About 70 per cent of that is in city build. This will be a city of 31,000 people," Lenihan said.

"It would take three to six years to move something like this in the EU. It's a great tribute to the Russians that they have been able to mobilise their resources. It has been hugely impressive," he said.

Some 25 global companies ranging from IBM, Microsoft, Cisco and Boeing have set up research and development operations at Skolkovo. The key strands of research are bio-technology, IT, clean tech, nuclear and space technology -- with the project anchored by a major partnership with the world famous MIT.

"The main objective for them is in talent, market access and alignment with a high-profile government- backed project," according to Lenihan. The key thrust of the project is to move the research along through to market -- when it can actually make money. "The heart of the project is the commercialisation of research," he confirmed.

There is also a pipeline of 500 start-up companies at Skolkovo. "We've funded 100 companies," he says. Grants range from $2m to $5m and don't have all the bells and whistles that Irish grants have. The Russians don't have claw-backs, equity stakes or profit shares.

"There's a number of Irish companies interested, with quite a few in active negotiations," according to Lenihan. The Irish companies are involved in sectors such as IT, bio-medical and energy efficiency sectors.

"Enterprise Ireland has been over here and they are very interested in the idea," he says. "Irish universities are also in active negotiations."

Lenihan feels that Ireland has traditionally had a strong relationship with Russia, with Shannon Airport flights and the development of the Moscow Duty Free by Aer Rianta seen as key links between the two countries.

The Skolkovo project was also hugely influenced by the Irish model, according to Lenihan, pointing to the role of Science Foundation Ireland in commercialising research and helping attract foreign direct investment.

Given that he's rubbing shoulders with some of the top insiders in Russia as well as hugely powerful CEOs of global companies, Lenihan has a unique viewpoint on how Ireland is perceived abroad by influential players.

"I think that the Russian view is that Ireland is a different case to the other countries in difficulty like Spain, Portugal or Greece.

"It's recognised at international level, when I talk to CEOs of major companies, that Ireland was one of the first to move to get its costs down," he said.

Lenihan is positive for the future of the Irish economy: "Ireland would be one of the first countries to come out should an economic recovery occur across the EU. This is a tribute to the last and current Government, who are not weakening under the pressure of austerity."

However, the former politician and member of the famous Fianna Fail dynasty has gone cold on party politics at the moment.

Lenihan says that he has no plans to return to Irish politics "in the short or medium term". Skolkovo is going to take up all of his time.

"It's very interesting and it's very significant that Victor -- a billionaire -- is giving up so much of his time. He's devoting about 70 per cent of his time to Skolkovo It's a great privilege to work here," he said. "I'm well employed and very grateful. After three or four years, who knows?"

Sunday Indo Business

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