MANHASSET, N.Y. Moscow has established the Russian Venture Co. to boost technology investments and diversify the economy away from energy resources.
According to reports from Moscow, President Vladimir Putin's cabinet approved an investment "fund of funds" totaling $15 billion rubles (about $565 million) on Thursday (Aug.10).
The company will create eight to 15 venture funds to be managed by private companies, German Gref, economic development and trade minister, told a cabinet meeting, Interfax reported. "We aim to attract more than 30 billion rubles ($1.12 billion) to the Russian high-tech sector by the end of 2007," Gref was quoted as saying.
Gref said Russian Venture will be operational by the end of the year, and that fund-management companies will be chosen in tenders in early 2007.
Analysts warned that this is only the first step towards high-tech diversification. Russia still lacks intellectual property protections and private property laws are still being worked out.
Some Russian start-ups even tend to patent their technologies abroad to gain better protection for their IP, and the Russian fund may improve IP rights protection, said another analyst.
Russian Venture Co. will be financed by the government's infrastructure fund. Its venture funds will manage up to $60 million each, according to Interfax reports.
Direct foreign investment in Russia's economy in the January-June timeframe almost tripled year-on-year to $26 billion. The Russian government and top Russian business leaders have also pledged to build infrastructure for high-tech companies, including IT parks. The government has also boosted technical education investments.