World Russia Wants Innovation, but It’s Arresting Its Innovators

02:01  13 august  2017
02:01  13 august  2017 Source:   The New York Times

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A version of this article appears in print on August 10, 2017, on Page A1 of the New York edition with the headline: Russia Wants Innovation , but Jails Innovators .

A version of this article appears in print on August 10, 2017, on Page A1 of the New York edition with the headline: Russia Wants Innovation , but Jails Innovators .

AKADEMGORODOK, Russia — Dmitri Trubitsyn is a young physicist-entrepreneur with a patriotic reputation, seen in this part of Siberia as an exemplar of the talents, dedication and enterprise that President Vladimir V. Putin has hailed as vital for Russia’s future economic health.

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They see it as the Russian government undermining its own stated economic goal — to nurture enterprises that harness Russian brain power Despite official state support for innovation under Mr. Putin, the growing power of Russia ’ s security services and rampant official corruption frequently push

August 10, 2017. NYT - Russia Wants Innovation , But It ’ s Arresting Its Fraudsters. Russia is BAD we are told on a daily base. The " Innovator " CEO of the company was arrested for fraud and will have to go to jail.

Yet Mr. Trubitsyn faces up to eight years in jail after a recent raid on his home and office here in Akademgorodok, a Soviet-era sanctuary of scientific research that was supposed to showcase how Mr. Putin’s Russia can harness its abundance of talent to create a modern economy.

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A court on Thursday extended Mr. Trubitsyn’s house arrest until at least October, which bars him from leaving his apartment or communicating with anyone outside his immediate family. Mr. Trubitsyn, 36, whose company, Tion, manufactures high-tech air-purification systems for homes and hospitals, is accused of putting the lives of hospital patients at risk, and trying to lift profits, by upgrading the purifiers so that they would consume less electricity.

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They see it as the Russian government undermining its own stated economic goal — to nurture enterprises that harness Russian brain power Despite official state support for innovation under Mr. Putin, the growing power of Russia ’ s security services and rampant official corruption frequently push

«Yes, Russia is capitalist, but it is capitalist in a bad way.» Thus we get this NYT headline and story: Russia Wants Innovation , but It ’ s Arresting Its Innovators : AKADEMGORODOK, Russia — Dmitri Trubitsyn is a young physicist-entrepreneur with a patriotic reputation

Most important, he is accused of doing this without first getting the changes certified by state regulators.

It is a case that highlights the tensions between Mr. Putin’s aspirations for a dynamic private sector and his determination to enhance the powers of Russia’s security apparatus. Using a 2014 law meant to protect Russians from counterfeit medicine, investigators from the Federal Security Service, the post-Soviet KGB, and other agencies have accused Mr. Trubitsyn with leading a criminal conspiracy to, essentially, innovate too fast and too freely.

The situation has outraged fellow scientists, would-be entrepreneurs and others in Akademgorodok, a freethinking settlement of broad avenues and forested pathways built around 35 Soviet-era research institutes near the Siberian city of Novosibirsk. They see it as the Russian government undermining its own stated economic goal — to nurture enterprises that harness Russian brain power instead of just sucking oil, gas and minerals out of the ground.

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Russia ’ s stated goal of fostering a Silicon Valley-style culture of innovation is frequently undermined by rampant official corruption, scientists here say. They see it as the Russian government undermining its own stated economic goal—to nurture enterprises that harness Russian brain power

A version of this article appears in print on August 10, 2017, on Page A1 of the New York edition with the headline: Russia Wants Innovation , but Jails Innovators .

More than 5,000 people have signed a petition appealing to Mr. Putin to stop “this shameful example of forceful pressure on a law-abiding business.” Mr. Trubitsyn and his company, the petition said, “are, without exaggeration, the pride of Akademgorodok. They are a strong symbol of a prospering Russia in which real technological business can develop to world standards.”

Aleksei Okunev of Novosibirsk State University in Akademgorodok, who has worked closely with Mr. Trubitsyn’s company, called the situation “incomprehensible.” He added, “We have very few success stories in Russia, and this explains why.”

Mr. Putin has not responded but his business ombudsman, Boris Titov, issued a supportive statement that called Mr. Trubitsyn “a young, energetic representative of the innovation sector, the development of which is most needed for a modern Russia.”

But Mr. Titov has made similar statements before, to little effect. Despite official state support for innovation under Mr. Putin, the growing power of Russia’s security services and rampant official corruption frequently push in the opposite direction.

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Thus we get this NYT headline and story: Russia Wants Innovation , but It ' s Arresting Its Innovators : AKADEMGORODOK, Russia - Dmitri Trubitsyn is a young physicist-entrepreneur with a patriotic reputation, seen in this part of Siberia as an exemplar of the talents

They see it as the Russian government undermining its own stated economic goal — to nurture enterprises that harness Russian brain power Despite official state support for innovation under Mr. Putin, the growing power of Russia ’ s security services and rampant official corruption frequently push

The first sign of the storm approaching Akademgorodok came early in 2016, when Mr. Trubitsyn and his colleagues began hearing that their competitors were telling hospitals that Tion’s air purifiers were dangerous and were being investigated by Roszdravnadzor, a state agency that regulates medical equipment.

State television then aired a report accusing the company of jeopardizing the health of hospital patients. State hospitals began removing Tion devices.

“For years we were praised as a success story and then all these strange things suddenly started happening,” recalled Mikhail Amelkin, Tion’s chief technical officer.

Mr. Amelkin said the company was approached by the regulatory agency and acknowledged that it had changed its design and removed a supplementary filtering device that laboratory tests had shown was redundant and wasteful of electricity. The company then amended its registration documents and thought the matter was over, Mr. Amelkin said — until armed police showed up in June to arrest Mr. Trubitsyn and search for evidence of what later court documents described as a “conspiracy” to produce counterfeit medical supplies. (No co-conspirators have been named, but a conspiracy charge allows prosecutors to seek more jail time.)

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Russia Wants Innovation , but It ' s Arresting Its Innovators https://www.nytimes.com/2017/08/09/world/europe/vladimir-putin- russia -siberia.html … pic.twitter.com/GkshDre0MV.

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Natalia Pinus, Akademgorodok’s elected representative to the regional council, is one of many locals who see Mr. Trubitsyn’s troubles as rooted in a business rivalry, with unscrupulous operators able to manipulate law-enforcement agencies to wipe out competitors.

“This is not just about a single company,” she said, but “whether you can conduct honest business in Russia or whether that is impossible.”

Police raids and arrests figure prominently in many Russian business struggles, particularly those involving assets like oil, over which the state has steadily reasserted control since Mr. Putin came to power. Private companies that clash with Rosneft, Russia’s state-owned energy giant, for example, frequently face criminal investigation.

The decline in global oil prices has, however, also meant less money is available for siphoning off by venal officials. That has turned even relatively small companies into attractive targets by the police and the courts operating in partnership with business.

Anton Latkin, a computer programmer who has known Mr. Trubitsyn since boyhood science clubs, said Tion had fallen prey to attack by government officials who “don’t understand anything about physics, don’t understand anything about chemistry and don’t understand anything about biology.”

Mr. Amelkin, Tion’s chief technical officer, said he and his staff had been unable to figure out who or what was behind the investigation. “If you try to find out who is responsible for anything in this system you will only find an echo in the cave,” he said, adding that the Russian state “is not a single organism with one brain” but a sprawling mass of separate and often competing fiefs.

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Russia Wants Innovation , but It ’ s Arresting Its Innovators (nytimes.com).

« NYT - Russia Wants Innovation , But It ’ s Arresting Its Fraudsters | Main. It needs to make clear its stance to all sides and make them understand that when their actions jeopardize China’s interests, China will respond with a firm hand.

Mr. Putin has been a forceful advocate of ending Russia’s long record as an economic also-ran in all spheres other than oil and gas, repeatedly hailing Russia’s technical and scientific prowess as an asset on which it can build a vibrant and diversified economy.

Last month, at a meeting of his Council for Strategic Development, Mr. Putin again lectured officials on the need to move Russia’s faltering economy — now smaller than that of Italy and 11 other countries — beyond its reliance on natural resources: “We need a breakthrough, and we must ensure it,” he said.

The troubles of Mr. Trubitsyn, however, may help explain why such a breakthrough has proved so elusive: The Russian state, which Mr. Putin has made the main vehicle for his plans for the nation’s resurgence, often stifles growth.

A bureaucracy empowered by a steady erosion of democratic checks and balances can often smother new ideas. Grand state-directed projects to promote innovation — like Skolkovo, a Moscow-area technology park set up by Kremlin fiat as Russia’s answer to Silicon Valley — have mostly fallen flat.

Mr. Trubitsyn’s company began in such a state-funded park, one of a dozen such zones set up across Russia after Mr. Putin visited India’s tech hub in Bangalore in 2005. Mr. Putin had been so enthusiastic about what he saw in Bangalore that he stopped in Akademgorodok on his way back to Moscow to talk with scientists and officials here about how Russia could copy India’s example.

Dmitri Verkhoved, a mathematician who was appointed to run the operation, said Tion was “one of our first start-ups,” opening in 2006, and had proved that innovative Russian companies can compete on the global market.

The objective, he added, was “to show that you can do business and make money here in Russia and don’t need to go abroad.” As one of the few Russian companies outside the energy sector that exports to China, Tion grew steadily to employ, 250 people in Akademgorodok, Moscow, China and Kazakhstan by 2017. It has won a string of tributes from government-linked bodies, including being named Innovation Company of the Year by a Siberian forum in 2012.

(Mr. Verkhoved is entangled in a separate dispute and was fired in January as director of the Akademgorodok technopark.)

Irina Travina, the founder of a software start-up and head of the local technology-business association, said Akademgorodok is “the best place in Russia,” with “outstanding schools, low crime and a high concentration of very smart people.”

But she said Mr. Trubitsyn’s arrest had delivered a grave blow to the community’s sense of security.

“In principle, anyone can fall into this situation,” Ms. Travina said, praising Mr. Trubitsyn as a patriot because he had not moved abroad and had invested time and money in science education for local children. “It can happen to anybody,” she added. “Everyone has some sort of skeleton in their closet. Maybe nothing big but they can always find something to throw you in jail for.”

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