Russia Bids to Become a Tech Tiger

It has been fifty years since the Soviet Union launched Sputnik, proving to an astonished world that the Russians could beat the West at its own scientific game. Now a vastly different Russia is once again back in the technology race. Spearheaded by President Vladimir Putin, with backing from leading businessmen and investors, the country has embarked on a sweeping program to promote a high-tech economy. The prize this time: a position in the emerging technologies that will shape the future global economy.

Putin set the tone in April when, in his annual address to the Russian senate, he announced a massive $7 billion program, financed from the state budget, to promote the development of nanotechnology—a new science that involves manipulating matter at the microscopic level, with applications from industry to medicine. Russia's fledgling venture capital industry also is getting a shot in the arm, thanks to a $1.2 billion state-backed technology fund. And construction began last year on seven new technology parks at locations around Russia, aimed at encouraging technology businesses to set up shop near scientific research centers. To head the technology drive, Putin has tapped one of his most trusted lieutenants, Deputy Prime Minister Sergei Ivanov, who is widely seen as the favorite to become President when Putin steps down next March.