Cisco will pump $1 billion (€813 million) into Russia over the next decade in a bid to find its next billion-dollar business and help the country reduce its reliance on natural resources.
The networking firm made the commitment yesterday during a meeting between Russian president Dmitry Medvedev and chairman and CEO John Chambers, claiming the move fits with its global strategy of investing in countries that are committed to innovation.
Some of the funds will go towards establishing a second global headquarters for its Emerging Technologies Group, which will be located in Skolkovo, an area Russia is determined to turn into its own Silicon Valley.
Cisco will also invest another $100 million in Almaz Capital Partners, the Russia-focused venture capital firm in which Cisco made an anchor investment of $30 million in 2008, and has allocated $175,000 to a third-round of its I-Prize competition that aims to identify and back promising start-ups in the country.
Chambers said the Russian investment fits with its strategy of backing countries that are investing in “education, infrastructure and innovation,” a view echoed by Medvedev, who wants to transform Russia into a country where “the welfare and the good quality of life is ensured by its intellectual, rather than natural, resources.”
However, analysts and country experts were skeptical about Cisco’s investment, with Hoover Institution economic demographer Michael Bernstam, telling the San Francisco Chronicle that Russia’s president can’t be taken seriously and Samuel Charap of the Center for American Progress questioning the readiness of a market still riddled with corruption.
John Earnhardt, Cisco’s director of social media communications, defended Medvedev, claiming that he and “other world leaders understand that innovation is the new playing field,” in a company blog.