smith director of intel capital and we're also joined by yvonne sure starts he is the director of research at skolkovo institute of science and technology all right gentlemen let's start up with a shoe that a lot of people talk about and it's start ups in russia. talk us through that dimitri i mean is this one of the center of focuses of the i.t. sector right now well i don't think is there if you sort of can really exist with all the start ups so you can certainly use this to maybe service in government and watch corporations but if you really want some growth you want some things we sure you see consumer oriented and certainly we're talking about startups is russia known as the market for that. well in the market for startups is a strange sort of phrase i would say that yes there are startups in russia we can count them in many hundreds maybe thousands of some war three i do startups but certainly the infrastructure and the ecosystem and of course especially the success stories are much fewer and much was developed the silicon valley or maybe some

other places like new york city to your ear along the. what are you how do you in the late your competitors or do you want to do something completely different so in this sense i would just to say that i am somehow not completely related to the eighty business itself so i'm representative for instance of science and technology which is there's a lot to do which is a second which is a practically the university and we're standing a little bit on another side of the pipeline so we have to field this pipeline for creation of new startups with new talent sort of hard. taking into account that we just started what's the biggest barrier so the biggest barrier right now is you have to create the whole infrastructure more or less from a scratch. so and particular for the u.s. this call was created so why is it tell our viewers why was it created in the first place so the initiative was created by a russian government somewhere around two thousand and ten to actually did

diversify the russian economy and move towards in a very different to bring europe. ground i would say so the initiative is about like actually was first to create this cocoa fundie shouldn't as actually the source of support in particular start start ups and develop into print all spirit in russia so and as a part of the. suit of science and technology it's called to which i am represented here was created as a key point of actually supporting the whole infrastructure and the whole. dipping your real. enterprise actually to create this and to bring in a spirit soul because this call of science or technology has to create actually exactly the talents for or make sure people don't go to silicon valley it is showing ok so in some sense skolkovo institute of science and

technology has to help. stop the brain drain all that we see if you go sabrina green because it's called coincidence that's you know as to how russian terence to realise their potential you know what is the most interesting attractive thing about the ivy market in russia today we're excited about the draw proves it frank you need to distinguish between two over two buckets of opportunities here one is related to. internet services which is being driven by the master. but it was called demand here i mean brochure is number one in that measure and in europe in terms of the number of what you have to million yet with over fifty million of you or so you can. it ignores opportunity and creates a lot of business for you commerce companies you commerce market alone is estimated or at all were probably billion dollars and then the second bucket is more

a macor. acknowledge a sector which is software and services and read on is really being driven by strong technical education which russia has. to do with the one with most i'm just saying that it's really hard for russians to create projects which are relevant on the global scale at least what's the biggest power you need to know what's really is needed right now you need to know the cutting edge of many technologies cutting edge of the markets cutting edge of everything. it seems to me like it's very nature is pretty transparent i mean you can see what's going on out there can't you know but one thing is to see and the other thing is through being plugged in they really understand the sort of intricacies of the business models intricacies of. i don't know integration and scaling up your how well integrated is the russian market you know it would have it's not the sort of the russian market is pretty well integrated in the way that people know what's going on outside of the market

but. there's one story about the corners but i want to stress on the story of russians building projects in one thousand that are relevant globally because our mission is digital october is specifically to try to if we can to bring the best brains from the west or from the east we can bring in through some telepresence lectures we can and if we can get the cutting edge knowledge to rush into print. so the create projects which are applicable globally that have customers not just in russia but also around the world in and you want to plug into the local market but how do you plug in elsewhere so first i would like to actually add to what the this i completely agree with me three so russian market itself is actually and i would say the direction of indonesian which was chosen is pretty much related to the historical strands of russia we typically species nuclear and energy so these

people but this same time there are absolutely clear russian demands and one of the demand is a different the second one i would say by i mean it's so in the in this sense for example and so we are pretty much integrating all these five farias together so when we are trying to really establish the introduced to a new research which will help for example specialists to know the whole horizontal for petunias use in different areas including like i did also. for speed. cation for energy and so on to these major sectors crowd out the other issues in areas as we just heard what the government is interested in provisionally yeah absolutely i think if you look at the enterprise if you are in the press software you know which is what a demo was referring to i think you should hear it is to build a successful business and you really need to be able to compete on the global scale not just work really hard of hearing that from russia i think

a lot of people are going to promote the heart of the why is it hard to the carrier i mean what is the barriers are some strong you know companies all very was a few successful cases take for instance at your parallels you know i think russia you know got more potential and can definitely do better i think what have you. i mean for instance russia house very strong technical education right which is cost of what if you look at things like. market. you know which is just not a good you have to be able to not only build a competitive product but you know to also market it and to market yourself you have to marry to get the different areas going to be european consumer to remember other people. will work. just sort of straight to make it forward that will truly missing in russia start ups is a good product management so people who really understand what market needs and how this can be product eyes to make it to the service so and so you're saying geeks

are not good at marketing. just marketing and it's also partly in russia for the seventy years of communism time is a service mentality so the genuine desire to make create something of value for somebody else whether it's being paid for it or it doesn't get paid but that's kind of i think deep rooted disservice when tended to be just kind of coming back but still with all the private property it's totally. you can't really see me like in the west it's more service driven in less technologically if i go ahead so i completely agree with me the trick here from my point of view is that it's pretty much historical background sold it's not only in the service but also into bring your own spirit is completely missing i mean so russia is. it's a really good discussable so i've been here for fifteen years and i've seen it grow we made it's growing right now because the new generation is getting in this

business and actually trying to benefit from from all of petunias use what they have actually it blind their knowledge and. i would see the main problem before was the making isn't how the knowledge will be blight in also how the how the result will be achieved because pretty much it was government. system where the main consumer were like i don't know russian. scientists. whatever so military or something like this so and at the moment we are trying to change the direction monads and actually to be oriented on the market on the people and try to solve the practical tasks for life i would see progress being made yeah i'd like to be a little comment on that because what seems not to be doing enough is looking at other countries and what they're doing because realistically we're not alone in this problem i mean the competition for telling his global you know we have drawn

we we have u.k. competing for same interpret your same pellant which could always be based in silicon valley and russia has the same issues as you know all the other countries in europe also were and i would say that even just a recent example when mark zuckerberg came to russia he came specifically to speak to developers and when he was he talked over for a couple days that was the main audience please book also is looking for talent here likewise we are russian companies or investors we often have to import some kind of quality to tell him the specifically men's you will tell him and sometimes scientific tell and always take a dim acknowledgement on from other countries this this is actually very funny situation so they're. hearing that from the interpret you're a party you're really need the people who is actually on implication side but i would see exactly the same story is on. so the reason right now the global

community shell all run towards starting from the developing countries i don't know like like saudi arabia and finishing with fear established company countries like ok gentlemen to jump in here we're going to go to a short break and after the show bristol continue our discussion and watch this technological sector stay. you know sometimes you see a story and it seems so you think you understand it and then you glimpse something else you hear or see some other part of it and realize everything you thought you don't know i'm tom harpur welcome to the big picture.

we speak your language another day of. school music programs and documentaries in spanish what matters to you breaking news a little tonnage of angles keaton's stories. for you here. in troy altie spanish to find out more visit i. climb in sochi to know your city in europe i'm the host of a twenty fold t. in winter the pick a. song see. thank you. saatchi . thank you the. way a. dog days are. the pride days it. makes common. to

see it's so true. download the official publication to yourself choose your language stream quality and enjoy your favorites from alzheimer's if you're away from your television just doesn't do so now with your mobile device you can watch on t.v. any time anyway. choose your language. kelly mccann would know if to say still so much that. she knows that the consensus here is a. chance to opinions but invigorating to. choose the stories that in the light choose to access to often.

eleven. little under.

oath. welcome back to on the money with the business of russia's business i'm peter old l.t. mind you we're talking about russia's innovation in technology but first let's look at how wretch's innovation scene is developing. the russian technology sector the first thing that comes to mind are russian scientists toiling away at a top secret lab somewhere in siberia a savage stereotype that persists to this day however the reality is much more exciting i.t. nuclear space and other technologies are experiencing dramatic growth with the state support and encouragement the sector has been getting in the past several years russian high tech ideas have great potential to turn into

a world class businesses many of them are developed here at the skolkovo innovation center which is russia's largest innovation supporter and a new global technology hub already nearly eight hundred startup ideas at skolkovo have resident status and many of them receive financial assistance according to bloomberg global innovation and techs russia ranks the world's fourteenth most innovative country its peers with norway and belgium and is well ahead of china and even israel one of the signs for this is hyper development of the russian internet russian has become the internet second most used language according to a recent web survey by w. three techs russian internet giants such as yandex and mail dot ru group are prospering their revenues rose around forty percent in two thousand and twelve yandex share of russian web searches is more than double that for google and other fast growing website is conduct which is europe's largest social network

investments into the high tech is growing remarkably both to. second foreign investments into russian firms more than doubled in value from two hundred twenty million dollars in two thousand and ten to five hundred fifty million in twenty eleven russian resourcefulness and ingenuity our modern competitive advantages the challenge now is matching these great talents with financial and business acumen and this challenge is accepted we still look and on the money our team. india is a government supportive of this sector i mean it i mean we presence we know that of course but i mean a lot of people say you don't need the government you know incubate or it's things like that i mean if there's money out there and there's innovation and there's entrepreneurship that's all you really need but things you can do without the government and if you want to be. there are sort of either walking fruits or things that really could benefit all the people so you can do it on your own so we're

private center so we most of the things we do ourselves but for certain activities we ask for government support and so supportive you know they are supportive so we had to. come to talk to sort of support sort of things the minister of communication. can talk about things and also what about iraq we're seeing and we all live in this coerce it's just a matter of execution sort of typically in rushing through that we all pretty high up there we can manage through the bureaucracy it takes and effort and time but still it's manageable you know your endeavor is a good investment it's definitely a good thing so far yes so i would just to add that this is not only government money involved in this it's pretty much also involvement of the big companies including state owned companies for example right now running program to create fifteen center for research education innovation in some sort of distributed

research center in. cross-cutting areas so it's actually again. will be concentrated on within five farias it's the nuclear id by me unseen energy or space so and each center is typically between like six to twelve million u.s. dollars per year and the funding for this center is reserved for five years so this is who funds it is this is the same percent fund it leaves the customer is that much money right now for example we have several occasion in our pipeline to create the centers for all of which are strongly supported by the b. companies the companies like ross. like like are they internet. for example go and we are a lot of people would say that you know when you think of the companies that you just mentioned or i don't think of them as being very savvy technologically at times ok to be on this is this is exactly the point i mean so this company they

understand that they have to increase their level of being technological companies and go towards like not to extracting resources but rather to develop new technologies always least use these new technologies instructing these new resources whenever with whenever the government is involved they always ask the question do they get it ok. for example you don't care if it will be the largest mentioned fund in the world and also being a corporate venture fund and this theme of corporate venture funds in is no very. popular but this is a hot topic within the russian. big industry community so there is even a quote for e r. and d. directors who are talking about corporate venture capital. i don't think people really perceive capital as a corporate fund because. believe that there is or lose connection with the specific instances for him thought but we can maybe i mean we've been doing this for several decades go out what we're looking for truth is private sector over

time has demonstrated that it can do better than government and so well in this area roger is right about both. obvious but if it still to be when it's going to you michelle face an issue and that is the government needs to step up and needs to expand their hand in whatever shape or form you know develop a tea and technological community i think that's important and if you look at some of our portfolio companies. geography in russia they have in one shape or form help from scald going to think about you know goes a long way towards attract international capital into russia and i'm not talking about how it works is when people here are saying thing to be honest now what's the driver what would you sell to an investor the reason why to come here. you know russia has a lot to offer interims of again first of all domestic demand it's the largest internet nation in europe over a fifty million of internet users if you look at the disposable income about it has also been growing in the last ten years in the double digits or high single digits

remaining so there's a lot of consumer demand that needs to be taken care of and it's really tough for foreign players to come and compete here so local companies have this advantage of knowing local know in ways that the infrastructure issues you know do you mind and yvonne talked about and we really have an edge against local players sort of foreign players and we have this opportunity to create barriers or build up on the barriers and you know create a loyal customer base before you know any foreign players will come in i just didn't ask questions. so you have a thousand percent of the companies all around the world four hundred one hundred just one hundred ok one hundred. four hundred one so. i'm sure that some of those companies would really benefit from entering russian markets. for example we had a few examples and again right now there are very few preach a large advance your start ups for example one was air b.n. b.

the other was a survey monkey who came to the russian market and actually we had some p.r. activity said you talked already had an event and things so the came to us to get some expertise about how they actually enter into russian consumer internet market but i'm sure you with your even the russians are able to have all the facts parties so that maybe another thing that you know absolutely nothing about maybe a little less relevant for startups because traditionally you know you would want to. build up on your market treatment for expanding into emerging markets like russia but for established companies and you know we don't need to go far here look at the bill in full debate in russia as a corporation cern's ninety is eighty one and we have all we're eight hundred engineers now in russia working on projects not something that is law called for for this market so i think you could definitely see large you know corporations like. dory and business in russia for you know years now decades you know people

always talk about brain drain and before we started the program to me you said that people are coming back can you elaborate a little bit. because people not getting that much do you want to come back and you work for russia but in california well i want to live in the states for eight years and they came back so i would be an example for exactly. what i call the. old move the in the russia at this time both politically maybe in the economical is so people just kind of going back in huge crowds on the plains but there are other ways of people who get engaged here and those examples we have maybe a small examples giving somebody give a lecture of sorts in the presence of example somebody coming back and establishing a lead. maybe they have somebody higher former or caution speaking person to become a top manager in a startup of the funded so that's going to be the small things but each of those things are important and so maybe just to illustrate i've always better to to

demonstrate some success story i could tell that's right now it's called we have twenty fields monster students and they have like where they are within the year master program and. all these very talented boys and girls they spend at mit you know really actually after this year so we have like several ringers in a very prestigious internet. including eighty four so and something like this so we can fly five projects we're really in which i really took to be a start up absolutely. brilliant ideas behind it and this is like twenty people we have right now five or five projects to the soul running and probably another ten coming soon so and this is just demonstrating actually what happen if you put a russian tail and within the right in

a very tough and supportive eco system you're almost certainly when more people started so that when the word rush is mentioned they will think technology. well i hope somehow rover will soar over there every way we've been discussing various therefore some success cases to be looked at and you know it can be build upon we're not quite as yet in terms of really have been on the wall the ecosystem able to generate new high quality to acknowledge a company were able to compete globally i think you know. still you know something we need to continue working on the last word. in indulgence thirty couple russian companies could lose to the new york stock exchange and have a market cap that's sort of for over there we ended up on a very good nope many thanks to my guests here in the studio and thanks to our viewers for watching us here on the money see you next time in state with our team

. dangerous experiments on prisoners they want to make money and they have healthy guinea pigs in the regular society they're not able to use prisoners i mean they wish they could. drug tests on human guinea pigs. hate to pop the deadly pills you get passed away he was killed. he didn't pass away they let him down. is pharmacy really about helping people.

say oh. oh . that limbo. clinton.

speech. which. look. good. and i'm. fine i'm a little.