After the breakup of the Soviet Union, the world swept in to scoop up Russia's skilled engineers and scientists. Now they have not only become behind-the-scenes movers and shakers in the global tech industry, they are also the key to Russia's resurgence.
Russian BrainpowerBy Shu-ren Koo
From CommonWealth Magazine (vol. 426 )
In 1995, four years after the breakup of the Soviet Union, one Mr. Melnikhov (a pseudonym) was a physicist working in specialized applied materials research at the Russian Academy of Sciences. One day a colleague showed up at his door and asked if he was interested in working overseas.
Given the chaotic political, economic and social conditions extant following the breakup of the U.S.S.R., the extremely poor pay researchers were getting, if they were paid at all, and hazy future prospects, Melnikhov decided to try his luck abroad. Lugging a cheap suitcase, he first flew to Europe. There, he boarded a plane for Hong Kong to catch a connecting flight to his ultimate destination, one entirely strange to him: Taiwan.
During the 1990s, tens of thousands of Russian scientists followed paths similar to Melnikhov's, leaving their homeland to seek their fortunes abroad. It was not only their own dire economic circumstances that spurred them to action but also the efforts of a steady stream of foreign governments – including Taiwan's – and corporations setting up research centers or recruiting operations in Russia, drawn by the famed expertise of Russian scientists in fundamental scientific research. The shadow of Russian engineers lies behind many breakthroughs by Taiwanese businesses in sectors such as machinery, opto-electronics and communications.
Among the earliest organizations to arrive in Russia seeking local skills was the Industrial Technology Research Institute (ITRI).
Securing a Russian Beachhead
Shortly after the dissolution of the Soviet Union in 1991, then ITRI president Chintay Shih sent a team to investigate the possibility of technological cooperative ventures, hoping to bring advanced Russian military technology to Taiwan for use in commercial applications.
Given Russia's highly advanced communications capabilities, ITRI initiated its first cooperative efforts through its Information and Communications Research Laboratories, partnering with the Russian Academy of Sciences to bring Russian engineers to Taiwan. Melnikhov was one of them. ITRI still has six or seven Russian engineers in residence.
In 1995, ITRI decided to set up a branch office in Moscow to facilitate the formation of joint ventures, the third ITRI overseas branch office to be established after the United States and Japan and even pre-dating the establishment of ITRI's European branch in Berlin by a full year, indicating the importance with which Taiwan viewed acquisition of Russian technology.
From the initial contacts up to the present day, ITRI has participated in more than 30 joint research projects with the Russian Academy of Science and Moscow State University, including such applied materials technologies as LEDs, nanotechnology and flat-screen monitors, as well as communications and satellite guidance technologies.
Among the key joint research projects is development of ultra-wideband wireless communications technology – a low electricity consuming wireless communications technology seen as crucial for IT products in the coming years. Two years ago, ITRI's Center for Measurement Standards and the Moscow State Aviation Technological University jointly developed "ultra-wideband non-contact heart rate and respiration monitoring technology." Currently under mass production testing, the technology offers future opportunities for Taiwanese companies to get a share of the $60 billion global electronic medical devices market. This technology may be a key wireless transmission technology used in future notebook computers, and manufacturers from Taiwan and several other countries are now actively pursuing its development.
In addition to ITRI, Taiwan's National Science Council began cooperative efforts with the Russian Foundation for Basic Research five years ago, to support research projects jointly proposed by Russian and Taiwanese research institutions.
According to Dr. Liang-Han Hsieh, representative of the ITRI Moscow Office, who has been continuously involved in joint venture projects from the earliest stages, what Taiwan's technological development lacks the most is basic scientific research. Cooperation with Russia has helped to fill that gap and assist Taiwan in making breakthroughs in its technological development.
"Russia is a developer of technology, while Taiwan's specialty is manufactured goods, so it's a perfect symbiotic match," Hsieh says.
"ITRI's goals are, first, to fill the gaps in Taiwan's advanced technology and, second, to help Taiwanese businesses find technologies."
From the Russian perspective, cooperation with Taiwan offers the chance to absorb Taiwan's experience in commercializing technology products.
Alexei Khokhlov, vice rector of Moscow State University, is one of Russia's biggest boosters of Russian-Taiwanese cooperation. He believes Taiwan's experience and capabilities in rapidly bringing technologies to the consumer market is what Russia needs the most. Among the 100-odd nations involved in cooperative research with his university, Taiwan and South Korea are the best at commercializing technologies and are more willing to share the results.
"Americans don't like to cooperate with Russia," Khokhlov says, "They just like to recruit Russian scientists to their country."
Following in ITRI's footsteps, Taiwan's private sector also began to take notice of Russia's vast talent pool at the close of the 1990s, aggressively pursuing a variety of channels to bring in technologies, particularly various advanced applied materials technologies applicable in the machinery, LED lighting, and flat panel display sectors.
Shadow Dancers of Taiwan's Tech Sector
In 1998, a South Korean client suddenly approached a Taiwanese machinery concern to inquire whether it would be interested in taking over their research laboratories in Moscow. Still unfamiliar with Russia at the time, the Taiwanese company directed its German subsidiary to dispatch an evaluation team to Moscow. With the longstanding good relations between Russia and Germany and numerous cooperative ventures between the two sides in the opto-electronics and LED fields, the team immediately recognized the value of taking over the South Korean facility, which today has expanded its initial research staff of eight to twenty.
The executive of this Taiwanese enterprise observes that Taiwanese researchers have numerous opportunities to jump ship for other companies, and they do so frequently. Researchers will commonly run off to start their own companies as well, so it is often difficult to build up research results. The function of the Moscow research facility is to focus on developing applied technologies that will be used five to ten years hence and to assist in resolving any current technological bottlenecks that may arise. During the initial stages, the company discusses the direction of the research with the Russian researchers, and at the end, it brings the technology back to Taiwan for production.
"Russian salaries have risen rapidly in the past few years. Nowadays, you need to offer NT$100,000 a month to hire a senior research engineer," the executive says. "But it would be tough to hire a top-flight researcher in Taiwan for the same price."
About 10 years ago, the Taiwan Association of Machinery Industry (TAMI) also began going through ITRI channels and sending personnel to Russia to scout out new technologies. According to TAMI president C.C. Wang, with the relatively high similarity among Taiwanese and Japanese machinery products, they are to a certain degree competitors, so Japan tends to be cautious with sharing any technology with Taiwanese companies; meanwhile, German technology is not necessarily suited for Asia. Consequently, Taiwan benefits from bringing in Russian applied materials technology in its quest for technological breakthroughs, and the cost of bringing it in is relatively low.
Recently, a number of major companies have been racing to get into the LED business, with Russian engineers playing a key role in assisting Taiwanese companies in successfully developing upstream raw materials, thereby breaking the American and Japanese technological stranglehold.
Of course, it's not just Taiwanese companies that are aware of Russia's impressively deep pool of human resources. South Korea has been even more aggressive than Taiwan in recruiting Russian personnel.
Samsung Electronics established a research facility in Moscow in 1993, a facility that routinely receives dozens of patents per year. Much of the key communications technology responsible for the ubiquitous presence of Samsung mobile phones around the world came from Russia.
"Russia is our number-one destination for technology outsourcing," reveals Cha Dae Sung, an executive who oversees Samsung's global technology joint ventures.
In addition to Samsung, other South Korean companies such as LG, Daewoo and numerous small- and medium-sized enterprises are involved in joint ventures in Russia, raising their technological capabilities. The Korea Techno-Venture Foundation provides funding and assists startup companies in utilizing Russian technology.
And that's not to mention European and American companies. By far the largest number of Russian scientists that headed abroad following the collapse of the Soviet Union settled in relatively nearby Europe, followed by the United States and, only then, Asia.
According to estimates from the Russian Academy of Sciences, engineers from Russian and Slavic speaking countries developed about 30 percent of Microsoft's software products, and Intel currently maintains a research center in Russia employing more than 1,000. Aerospace technology also remains a key focus.
"Actually, it's quite difficult for Taiwan to scoop up the very best Russian personnel," ITRI's Liang-Han Hsieh concedes.
American and European companies not only are able to offer better pay for senior researchers, they also make use of cooperative ventures with universities to sign deals with Russia's most promising students while they are still in school.
"This is an avenue Taiwanese businesses must urgently pursue," Hsieh says.
A Resource More Valuable than Oil
But with so many countries vying for Russian talent, Russia is now facing a serious brain drain, a problem whose resolution has been one of the country's top priorities since the beginning of the Putin administration.
With the collapse of the Soviet Union, Russia's scientific research institutions lost their government support overnight. Sharp cuts in research spending led to salaries falling to miniscule levels, with university professors earning less than US$500 per month. This led to a massive exodus of Russian scientists. According to internal Russian government statistics, in the 10 years following the fall of the Soviet Union, about 400,000 Russian scientists – nearly half of Russia's current technological research workforce – left their homes for points abroad.
Once Putin assumed the presidency, regulations were instituted requiring foreign organizations wishing to hire Russian scientists to first register with the Russian government.
"We still have a brain drain problem, but it's not as bad as before," says Moscow State University's Khokhlov.
Because of its huge technical research capacity and wealth of talent, Russia was once the powerhouse of the communist world, a formidable rival to the United States. In today's Russia, how to rebuild and maintain that research capacity and turn it into a locomotive for economic growth to benefit the people figures as one of the key issues for its future development.
For Taiwan, ITRI's Liang-Han Hsieh believes, "Russia is like an encyclopedia – whether or not you can find a treasure inside depends on what you're looking for."
Translated from the Chinese by Brian Kennedy
Chinese Version: 台、韓科技業的祕密武器