From Moscow to Buenos Aires – Is Silicon Valley a Model to be Copied?

This past week, Russian executives and government officials visited the San Francisco Bay Area to promote their Government’s plan to invest US$5 billion to develop a home-bred version of Silicon Valley in the Moscow suburb of Skolkovo.[1]

This is nothing new. On a weekly basis, delegations from the four corners of the world descend onto the Bay Area to learn its most treasured secrets, best practices, and recipes to recreate its success in their own locales. I call these visitors the “alchemists of the XXI century,” since they are searching for ways to enrich their countries by transforming plentiful and inexpensive materials – such as sand or silicon – into new sources of wealth.

It is not too difficult to identify a set of best practices that make Silicon Valley (or “The Valley” as it is often called) the premier innovation and entrepreneurship ecosystem. In fact, the fundamental lessons learned by our visitors to take back home center around three principles:

a)    Circulation of People and Ideas

b)    Circulation of Capital

c)     Promotion of a Risk-taking Culture

Drilling deeper into each principle, we can identify specific areas of public policy, cultural changes in society, and institutional adaptations that can together enable entrepreneurs to take risks, unleash creativity, and promote innovation across all sectors of society. However, it is in the specifics that the best intentioned changes can result in failure.

In my travels, during conference Q&As, and when I welcome visitors to my office, I am often asked why it is so difficult to replicate Silicon Valley. I have concluded that recreating any semblance of the Valley in any other locale (regardless of its socioeconomic stage of development) is VERY DIFFICULT, if not impossible.

In fact, Silicon Valley probably could not have invented itself today. By many measures, Silicon Valley’s genesis was a fluke of nature. The Valley flourished with “golpes de sol y agua”[2] without a master plan and without a blueprint from enlightened bureaucrats. Instead, it resulted from the aligned self-interest of multiple stakeholders, a favorable geography and climate, and a series of historical circumstances.

While there is no “secret sauce” to recreate Silicon Valley in new geographies, countries can take pro-active steps to improve the odds of success:

a)    Act on ALL ecosystem stakeholders simultaneously to affect change

b)    Plan and commit the actions for a transformation that will take decades

c)     Manage expectations accordingly to sustain long term support. Initial progress will be painfully slow and early successes will need to be well-publicized and celebrated.

The Skolkovo Project’s construction is on hold until the snow melts. Unfortunately, the transformation sought by Russia and other emerging countries from resource-intensive to knowledge-innovation based economies will take more than a change in seasons.

Instead, the transformation will take concerted and sustained effort by multiple stakeholders.  Politicians tend to focus on the crisis of the day or the urgency of the moment. However, initiatives like the Skolkovo Project will require long-term commitment, over decades, to bear fruit. Business and civil society leaders will also need to look beyond the horizon to focus on accelerating the transformation of their economies’ competitiveness. A successful transformation will create a legacy of prosperity for future generations.  Achieving it will require political, business and civil society leaders to think and commit to a lasting vision. Are they up for the challenge? 

What do you think? Please stay tuned for my next post — Carlos B.

[2] “flashes of water and sun”, from the Joan Manuel Serrat song “Tu Nombre me Sabe a Hierba”

About Carlos S. Baradello

Investor, thought leader, university professor, and advisor in areas of corporate innovation, born global entrepreneurship and venture capital investing.
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1 Response to From Moscow to Buenos Aires – Is Silicon Valley a Model to be Copied?

  1. Pingback: Everything I Know and Think About Estonia – Carlos Miceli

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