The document summarizes plans for the Skolkovo Innovation Center in Moscow. Key points include: 1) The vision is to establish a high-tech center focusing on five priority areas: energy, IT, space, biomedical, and nuclear. 2) An operating model and organizational structure is being defined, with a focus on attracting talent and private sector participation. 3) Research, development, and commercialization clusters will be identified in areas where Russia has competitive advantages. 4) Skolkovo will function as a catalyst to accelerate the creation and commercialization of ideas through research funding, business incubation, and venture capital support.

1. Moscow, September 30th 2010
Skolkovo Innovation Center
Executive Summary

2. The current effort has begun focusing on defining an overarching
strategic vision and an initial view of the operating model
Key Deliverables
 Definition of the mission and vision for Skolkovo
Focus of Current Effort Vision & Mission  Definition of desired outcomes and specific
targets
Define preliminary vision for  Development of an approach that addresses the
Skolkovo, including Approach
specific needs and requirements of Skolkovo
– Initially during start up
 Potential Operating and – Eventually during steady-state
Business Model  High-level description of functional elements of
 Organizational Structure the ecosystem across core functions with regard
to purpose, requirements and interactions
 Incentives for stakeholder  Detailed description of key units of the
participation Business & ecosystem such as Skolkovo Foundation,
 Desired outcomes & potential Operating Model university and research institutions, business
incubators, VC / PE institutions, business
measures of success services units, non-business services units
 Attraction & solicitation  Development of a roll-out strategy for Skolkovo
requirements ecosystem
 Physical and intangible  Development of a “high level” implementation
Preliminary plan including responsibilities and milestones
requirements Implementation
Plan  Development of implementation initiatives
grouped by priority
Preliminary
 Development of high level budget for initial
Budget for
phase of operations
2010-2012
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3. Clusters promote innovation and stimulate new business
formation
Innovation Cluster Success Factors
By Michael Porter Clusters - key characteristics
 Open and vigorous competition  Clusters are geographic
among local rivals  Government concentrations of interconnected
 A local context that Context for Other  Opportunistic companies, specialized suppliers,
encourages investments and Strategy  etc service providers, R&D institutions etc.
sustainable upgrade and Rivalry in a particular field, self-sustainable and
with a decisive sustainable competitive
advantage
 A core of
sophisticated  Clusters foster high levels of
Input Demand
local customers productivity and innovation,
Conditions Conditions
 Unusually high stimulate the formation of new
local demand in businesses and lay out the
Availability of: specialized implications for competitive strategy
 Physical Infrastructure sectors and economic policy
 Human Resource Related  Availability of
 Capital Resource and sophisticated locally  Clusters are typically based on
 Information Infrastructure Supporting based suppliers and comparative advantage of the
 Administrative Industries related firms geography or local knowledge base,
Infrastructure
 Natural Resources e.g. have geographically advantageous
 Scientific and position for certain type of business or
Technological strong academic and research
Infrastructure capabilities as a core
 Academic Institutions
Source: M. Porter, Clusters and the New Economics of Competition, HBR, 1998
Skolkovo Foundation
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4. The President and key political leaders have defined the
preliminary vision and goals for Skolkovo
Vision Goals
“Establish a high-tech center for research,
development and commercialization of 1 “Jump start” innovation and venture creation in the
knowledge based economy
innovative technologies in five presidential
priorities: Energy, IT, Space, Biomedical 2 Support high-tech R&D by leveraging Russia’s
and Nuclear” inherent strengths in science & engineering and
President Dmitry Medvedev attracting “world class talent”
“Skolkovo Project should become an 3 Select, promote and commercialize most promising
high-tech innovation in an entrepreneurial ecosystem
open platform with shared access to
research, where new technological 4 Become the test-ground for national economic reforms
products will be created”
Vladislav Surkov 5 Become self-sustainable after 10-15 years
6 Diversify Russia’s economy from being dependent
“Regulations in Skolkovo is a test of upon natural resources as the engine for economic
ideas for the country as a whole to growth
change the regulatory framework and
improve the administrative regime ” 7 Modernize the Russian economy to be more
competitive globally
Arkadi Dvorkovich
Skolkovo Foundation
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5. Further work is needed to define the Clusters where Skolkovo
should prioritize its efforts
Substantiation process: ILLUSTRATIVE
 The presidential priorities for Skolkovo
development are defined broadly Clusters
 To make Skolkovo a success, the Presidential
 Computational
Foundation needs to determine where Priorities
Biology
Russia has the right to win and then  Energy  Smart utilities
prioritize its efforts on select sizeable
 IT  Nuclear Medicine
clusters Substantiation
 Space  Artificial Intelligence
 Clusters are subsets of the presidential  Biomedical  Satellite
priorities
 Nuclear Telecommunication
 To define the clusters, a filtering exercise  etc.
to identify and determine the most
attractive clusters needs to be undertaken
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6. Skolkovo’s function is to serve as catalyst to accelerate idea creation
and commercializing them into marketable products and services
Skolkovo - Value Creation Overview
Build self-sustaining eco-system
to support developing local Attract world-class
Enable efficient access to advanced R&D business and scientific
capital and expertise; ensure talent; take advantage of
strong IP protection Russian talent Skolkovo Success Measures
 Number of successful new
Entry Points commercial ventures
 Number of IP patents generated
 Number of successful product
Commercialization
Research Development Exit Operations launches
Early stage - Late stage -
Pre-market Market entry
 Job creation
 Growth in private capital
Early Stage, Advanced, Advanced,
Basic Focused Technology
Prototype Prototype Market formation and investment
Development Production Launch
Research Research Development  GDP growth and global market
share in targeted clusters
 Revenues and profits generated
Exit Points through Skolkovo
Build global leading business, Help to generate external
regulatory and venture support Create a home for independent market demand
environment stakeholders: academic,
corporations, researchers, venture
finance, etc.
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7. Skolkovo Participants and Services - Structured Along Innovation
Value Chain
Skolkovo Management
Required and Enabling Capabilities Core Engine for Skolkovo’s Value Creation
Infrastructure
Support
Planning and Research Development Commercialization Exit Operations
Services
Development
Academic & Research
Real Estate Services Commercialization Support
Basic Infrastructure Institutions (SIT)
Cluster 1 Development
Start-Ups Corporations
Business Services
Shared Research Developing Companies
Cluster 2 Infrastructure
Development Education Services Corporate R&D Centers
Third Party Grants Government Contracts
Cluster 3 Business IT / Telco Services Agencies Support
Infrastructure
Development Seed Financing (e.g.
Export Support
Business Incubation)
Municipal Services
Cluster X VC Equity Investments
Non-business
Infrastructure
Debt
Development Other Services Corporate Financing
Financing
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8. Five core principles are guiding the design of the operating
model
1) Skolkovo should be attractive for world-class talent, institutions and businesses
2) Skolkovo ecosystem should become self-sustaining over time
Foundation should strive to maximize private participation, stimulate competition and only
3) assume responsibility for the activity if it can not be performed by private businesses
Physical and network-based (virtual) components of Skolkovo should be developed
4) simultaneously
5) Conflicting functions should always have separate governance
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9. Skolkovo will provide cluster agnostic and cluster dedicated
support along the innovation value chain
Skolkovo Foundation Monetary Support 1
Research Development Commercialization
Early stage - Pre-market Late stage - Market Launch
Foundation
Support Cluster SIT Seed Early Stage Mezzanine
(Cluster Endowment Endowment Support VC Support Support
Agnostic)
Private Sector
Participation VC
Business VC
Business
(Cluster Funds
Incubators Funds
Incubators
Agnostic)
Business
Cluster Incubators Skolkovo
Skolkovo
Exit
Cluster Business Business
Dedicated VC Funds Operational
Dev. Funds Incubators Incubators
Funds
Support
Project
Participants SIT Start-ups
Start-ups
Value Chain Developing Operating
Companies Companies
Corporate R&D Centers
Corporations
Legal, Business Services, GR, Export, Government Contracts Commercialization
Municipality, Real Estate Services, IT, Education, Health
Infrastructure
Grants Access to shared research infrastructure
Skolkovo (Public) Entities
Loans and equity capital (which could be
1)Public participation prevails in upstream and decreases in downstream Equity Private Sector Entities
converted to low interest loan)
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10. Skolkovo will operate with a matrix organization of functions and
clusters
Matrix Structure of Skolkovo Foundation
Functional Support Along Value Chain Cluster Development
 Skolkovo ecosystem will be divided into four vertical  Cluster Development (CD) will evaluate clusters along
functional areas corresponding to the segments of the their value chain to identify opportunities where Russia
innovation value chain: research, development, early has a Right To Win in the global economy by
and late stage commercialization developing new innovative enterprises
 Institutions operating within each function area will be  Each CD will be led by a Cluster Development Officer
supported by development organizations and (CDO) who will oversee Cluster Development
endowments/funds Endowments (CDE)
 The endowments/funds aim to accelerate new venture  The CDE will support “upstream” development of a
creation: cluster by providing:
– SIT Endowment will support organizational, – Research grants to SIT labs working on cluster
infrastructure and graduate program development of related research
Skolkovo Institute of Technology – Development grants to BIs to finance start-ups which
– Seed Support Fund will provide early stage equity aligned to cluster objectives
and loans to BIs  CDO will also support downstream development of the
– VC and Operational Support Funds will provide cluster by providing guidance on investment decisions
equity and non-recourse loans to incentivise private made by Skolkovo VC and Operational Support Funds
VCs to invest and reduce their costs and risks – As investments proceed closer to market
 Each Endowment/Fund will be led by a Skolkovo commercialization, it is essential that the role and
Manager and supported by a development organization stake owned by private VCs increase
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11. Skolkovo organization evolves over time
Phase 1: „Start-up“ Phase 2: „Permanent“
Migration
Oct. 2010 - Q3/2011 Q4/2011 - onwards
Organizational Principles Organizational Principles
 Systematically recruit mgmt. / exec. talent into the  Complete ramp-up of organization
organization  Management processes and governance instruments are
 Organization will contain project based elements as in place and in full swing
the „nucleus“ for driving the operations  Success of operations is primarily defined through
 Flat and lean management hierarchy - operations organizational and individual KPIs along annual planning
primarily defined by milestones according to the and 3-years outlook
masterplan („fit for purpose“)  Gradually reduce project management instruments
 Limited number of key stakeholders defined, towards more systematic management processes and
supported by „interim managers“ to drive ramp-up governance - however, keep flexibility and high degree of
 Organizational and institutional development effectiveness
(processes, governance, structure) in parallel  Ramp-up of adjacent support services being given to
 Grow the overall organization in a pace that independent operating entities reduces need for
ensures appropriate integration and identity dedicated Skolkovo staff
No. of No. of
FTEs: 87 FTEs: 50
Skolkovo Foundation
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12. Skolkovo launch organization (Oct 2010 - Q3 2011)
President
Total: 87
Communications
10 Advisory
& GR
Chief of Staff
General Counsel Audit
Board
Secretariats
10 10 10 13 14
Academic
Chief Operating Chief Financial Site Chief
20 Cluster Officer
Development
Officer
Officer Development Administrative
development Officer Officer
officers
Technology
International
transfer and Project
Cooperation
business Support Team
Development
services
 Develop cluster  Develop value  Develop network of  Plan and control  Conduct due-  Develop master  Develop and
strategies proposition, attract and academia and budget allocation diligence plan for Skolkovo provide necessary
 Originate and govern regulate: research institutions and spending analysis campus services to
projects – BIs, VCs and other  Initiate planning and  Treasury  Prepare  Select Foundation:
financial set-up activities  Facilitate materials for the architecture EPC – HR
 Provide research and institutions Skolkovo Institute of establishment of Fund providers – IT
development grants
– Corporate Technology and SRI Skolkovo funds committees  Special Economic – General
partnerships  Coordinate
 Financial and Zone services affairs
– Business and operations of
legal – Statutory
technology transfer investment
structuring, reporting
service providers committee
executing and – Government
– Shared Research  Management supporting the financing
institutions reporting deal
 Manage tenant affairs
Skolkovo Foundation
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13. Committees will coordinate the activity in the organization
Title Description
 Approve overall strategy for Skolkovo, cluster development strategies, Skolkovo Institute of Technology
Strategy Panel development strategy
 Headed by the Skolkovo Foundation President
Executive  Coordination of various units within the organization in order to ensure innovation process execution
Committee  Headed by the Chief Operating Officer. Includes Cluster Development Officers, Academic
Development Officer, Chief Financial Officer, General Counsel
Investment  Ensure investment process execution, approve investment decisions
Committee  Headed by Chief Financial Officer
Site Development  Approve the park development plans aligned with strategies of other units (university, clusters etc.)
Committee  Approve budgets for site development
Tendering  Approve procedures for various tenders for the Foundation
Committee  Approve tendering strategies and tender commissions
 Headed by the Chief Financial Officer
Disciplinary Expert  Analysis of the compliance of applying projects to the selection criteria
Panels  Formed by the Foundation on the basis of recommendations of the Scientific Advisory Board
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14. Project support team will drive immediate investment
opportunities at Skolkovo
 Skolkovo foundation will jump-start the program by deploying funds available in 2010 to selected projects before the
end of the year
 Project Support Team (PST) will be assigned to drive screening, due-diligence, decision making, deal execution
and development support process
 A transparent, criteria-based process will be installed to approve the investments. It will include review by
investment committee
Investment Process for Early Initiatives
Funds
Cluster Cluster
Investment
Development PST PST Development
Committee
Officers Officers
Government
 Originate project  Conduct due-  Review results of due-  Execute the deal  Govern project
leads diligence analysis diligence analysis: development
Corporations  Identify success  Legal and strategy and
criteria for Early financial investment memos
Initiatives (subject structuring prepared by PST
to board approval)  Prepare materials  Make strategic and an
 Screen the project for the investment investment decision
against the success and strategy
criteria committees
review
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15. Proposed reference structure
Control and
Skolkovo Foundation and its Institutions Registration
Chamber
Chief
Site Development Skolkovo Institute Clusters General Chief Financial
Administration
Officer of Technology Development
Cluster Heads Administration Officer
Officer
Institutional Functional
layer layer Director -
Director Site Shared Research Director -
Director Strategy Treasury &
Planning Infrastructure General Affairs
& Planning Investments
Industrial &
Project take-on
Director Research Director -
Teaching and
Construction & Consolidated Legal Council
Research Director
Development Business Planning
Research Grants
Incubators &
Accreditation
Financial
Director
Institutions Financial Director -
Municipal & SEZ Director Project Controller Corporate Affairs
Services Management Technology
Transfer & Compliance
Services Director -
Director -
Communications
Corporate IT
and GR
Tariffs
Director -
Govern. Financing
& Statutory
Reporting
Institutional
development
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16. Skolkovo will be build in three phases. Network-based and
physical Skolkovo will be developed simultaneously
Plan Phase Build Phase Run Phase
Today Scale Up
(3-6 Months) (2011-2012) (After 2013)
Early Initiatives
Migrate to Network-based
Skolkovo once it is
operational
Network-based
Master Plan
Develop and Ramp-up
Operate
Migrate to
Skolkovo
Master Plan, Prepare for Build Phase campus once it
Physical-based
is built
Build Infrastructure and Real Estate
Ramp-up the Park with Project Participants
2010 2011 2012 2013 2014
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17. Key milestones 2010 till 2011
PRELIMINARY
2010 2011
Milestones Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Early
Investments into early initiatives made
Initiatives
Master plan and Operating model finalized
Initial organization launched
Network- Initial cluster strategies developed and signed-off
Based
Skolkovo Value propositions for Corporations, BIs and
VC developed
Academic relationships established and first
university program launched
Park architecture competition initiated
Park concepts are submitted
Physical
Skolkovo
Territory planning completed
First volume object planning completed
BM 11.10.10
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18. The overall budget requirement until 2015 equals to 172 bln RUR
172 Total Budget and Budget Drivers PRELIMINARY
Cumulative by 2015
18 8.6 0.5 12 17
56
SRI SIT Seed VC Early Stage VC Late Stage
6 Bln allocated to Skolkovo GPs for Cluster development needs
10
 250 Professors  100 Early stage  35 Late stage companies
 200 Start-ups in portfolio
 300 Post doctoral companies in portfolio in portfolio
 6 Business incubators
 1000 Graduate Students  10 Early stage VC funds  7 Late Stage VC funds
Cluster  Average spent per start-
supporting supporting
up $ 0.1 m per company
 $ 200 mln Invested in  Average investment $ 3  Average investment $ 7
for 2 years
research operations mln per company mln per company
44 30 14 12
100 713’000 m2 280’000 m2 194’000 m2
Basic
Real Estate Residential Campus and Business and
Infrastructure
Housing Labs non-business
4 1.5
5.5 Foundation Operations Internal Outsourced Services
x Funding requirement in Bln RUR x Subtotal Funding requirement in Bln RUR
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19. Budget requirements from 2010 till 2015
Budget Requirements
PRELIMINARY
Foundation
In Bln RUR
Clusters
Seed + Early and Late Stage VCs
SIT + SRI
Real Estate
43
41 1
1
40 1
1 1
1 5
4
4
5
5 10 (3%)
9
29 5
(17%) (3%)
21
1 19
1 172
3 1 99
1
34 (57%)
5 29
26 26 7 (20%)
7
0 0 6
13
7
5
0 0
2010 2011 2012 2013 2014 2015
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20. Foundation needs to raise 87 Bln rubles to cover the budget gap
Budget Requirements and Government Support PRELIMINARY
In Bln RUR by Year (Left), Total (Right)
43
40 41
22
18 24
21 87 85
19 172 (49%)
(51%)
6
7 22 22
17 19
15
9
-2
2010 2011 2012 2013 2014 2015
The Budget Gap / Surplus ( - ) Committed by Government
Foundation needs to find 87 Bln to cover the budget gap. Potential sources include:
 Government (No commitment made for 2015 yet)
 Private equity investments and loans
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