Esther Dyson’s hopes for Russia

By Felix Salmon
January 25, 2012
Esther Dyson this afternoon and get a dose of refreshing optimism -- and about Russia, of all places.

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In the general atmosphere here in Davos of worry and apprehension, it was great to be able to sit down with Esther Dyson this afternoon and get a dose of refreshing optimism — and about Russia, of all places. There’s an elite group of Russian technologists here — Dyson, a lifelong Russophile who’s fluent in the language and on many boards of Russian technology companies, introduced me to both Arkady Volozh of Yandex and Anatoly Karachinsky of IBS. And she’s convinced that the success of the Russian technology sector can not only make for thriving companies but also for a much improved country.

I was skeptical, but Dyson made a number of good points. For one thing, it’s really hard to build a successful software company through corruption and bribery and other dark arts — especially when you’re creating websites which are judged on their broad popularity. And while natural resources can be stolen, human resources really can’t be.

More importantly, a whole generation of Russians is growing up on the internet, freely using Russia-developed websites which are every bit as good as their US counterparts. Their life online is transparent and not controlled by large and oppressive bureaucracies, and Dyson is convinced that once they’ve experienced that much freedom online, they’re going to start demanding it in real life as well.

Not immediately, of course: Putin is going to win the next election, and he’s going to do so legitimately. But at some point a majority of the Russian population will have no memories of the Soviet era. And already that younger generation is both demanding change and driving growth.

They’re fantastic engineers, for one — look at the way, for instance, in which Boeing does a large part of its engineering work in Russia. Or, more generally, at the Israeli technology sector, much of which is powered by Russian emigres. Russia has many problems, but there’s no doubt that its computer-science colleges are churning out a lot of smart graduates, and that the likes of Karachinsky are hiring those people at a rate of thousands per year. And they’re not robots, either: these kids are creative.

Dyson is intimately familiar with projects like Digital October in Moscow, and she’s a huge fan. Meanwhile, of course, there are the much larger phenomena which get a lot of global attention — things like Mikhail Prokhorov’s bid for the presidency, or the massive Skolkovo science park. If these things fail — and there’s a good chance that both of them will — that’s not necessarily a bad thing: free and successful societies have lots of failure. And importantly, when you look at both of them, you see hope and optimism. Which are not what you might call classic Russian traits.

I’m not entirely convinced. The population of Russia has been declining for the past 20 years, and is continuing to shrink: there are 14.2 deaths per 1,000 people per year, and just 12.6 births. And if you look at the weirdly-shaped population pyramid, you can see that the post-Soviet generation is dwarfed by its more conservative elders. It’s going to take a very long time indeed before they can or will effect any real change.

Still, if there’s any hope for Russia, it’s in the idea that democracy will percolate up from youth and the internet, rather than being demanded in some kind of revolution. As Prokhorov says, “every time we have a revolution, it was a very bloody period”. Russian democracy is not going to mean a US-style free-market economy: Russia tried that, in the 1990s, with disastrous results for the broad population. But a wired country is, by its nature, always going to be a little less corrupt. And a little more hopeful.

11 comments

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I don’t mean to sound too nasty, but if Esther Dyson is bullish on Russia, I’m going short.

She ain’t Goldman, by which I mean that she doesn’t short what she recommends to her clients, but when she goes bullish on something, I figure that it’s pretty much played out.

Posted by Matthew_Saroff | Report as abusive

You should look again at the Russian population numbers, Felix, since the country’s demographic situation seems to have improved in recent years. Russia had a real population increase in 2009–independent of immigration. And there are some experts who think that the actual immigration numbers are far higher–maybe three or four or five times higher–than the official numbers. One more thing. A population crisis caused by an unusually high mortality rate (Russia’s problem) is a lot easier to fix than a population crisis caused by an unusually low fertility rate (not Russia’s problem). Russia isn’t Japan–which has the opposite issue.

Posted by malcolmgladwell | Report as abusive

I’m a bit tired of the technology folks describing their economy and culture as the one-size-fits-all-solution to all problems.

It hasn’t exactly made California heaven for everyone but the golden few who either 1) held equity or 2) held real estate.

And no, high tech does not lead to greater “freedom.” It just makes young white guys overconfident about the future before they are riffed at age 42 and replaced by low cost Asian workers.

But there is never a shortage of Esther Dysons suggesting that Russia, or Singapore, or Seattle, or Sheffield, adopt the “Silicon Valley Model.” And then they get back on their planes and head back to their weekend places in Half Moon Bay….

Posted by Dollared | Report as abusive

Word to Dollared.

Russia has produced fantastic, wire-and-duct-tape engineers since early soviet times, and it never did much to produce a civil society. If anything, engineers tend to be susceptible to technocratic, top-down, command-and-control ideas of societal optimization.

I have no doubt that, when the next Russian revolution comes, the revolutionaries will use social media. They will also use telephones, printing presses, and probably guns. But that doesn’t mean that social media are culturally transformative in the way the techno-utopians like Dyson seem to imagine.

Posted by DCWright | Report as abusive

I remember similar theories about China 10 or 15 year ago, that the Internet would doom Chinese censorship and then authoritarianism would inevitably be swept aside. Certainly not happening as quickly or inevitably as the techno-optimists thought.

Posted by realist50 | Report as abusive

@ Felix – I assure you with 100% certainty that Mikhail Prokhorov’s bid for the Presidency will fail. He was selected for a reason, the reason being his demonstrated inability to manage even the tiny “Union of Right Forces” which collapsed in acrimony last summer.

@ Matthew Saroff- the RTS trades at a p/e of 5. Is that usually the price earnings multiple that you find in a theme that is “played out”?

@MalcolmGladwell- is that the real Malcolm Gladwell who wrote a book about not thinking? The World Bank puts Russia’s fertility per woman at 1.54. I guess that’s not “unusually low” because a lot of European countries have fertility rates below replacement?

@DCWright both the Bolotnaya and Sakharova protests were organized on Facebook. No firearms were present at either event BTW

@Realist50 Does Russia censor the Internet? Okay then. Why are you here

Posted by johnhhaskell | Report as abusive

In answer to your questions, yes and yes–although I would describe my book as a thoughtful book on not thinking. :-) On the second, 1.54 is also not unusually low if you consider that as recently as 1999 it was 1.16. And if you also consider that there is probably undercounting of recent immigrants with substantially higher birth rates.

Posted by malcolmgladwell | Report as abusive

There is definitely undercounting of “recent immigrants,” you will see them at just about any building site or meat packing plant in European Russia.

They are not here legally, which is why they aren’t counted. We can use Uzbek and Tajik immigration to argue that Russia is not facing a demographic problem, but we would be looking at the problem in a manner which is, let’s say, very different from the way the Russians look at it.

Posted by johnhhaskell | Report as abusive

I’d like to see some drilldown into the Russian mortality rate as well. I thought that lifespans were mostly held down by heavy smoking, heavy drinking, crap in the environment (pollution, poor standards of food safety, Chernobyl etc. etc.) and lack of disposables in most people’s medical care. This could be out of date — has progress been made on any of these fronts, or is it likely?

Posted by SelenesMom | Report as abusive

Russian Total Fertility Rate has been steadily growing (from 1.16 in 1999 to 1.54 in 2009, even higher now) and mortality falling (life expectancy at birth went up from a rock bottom of ca. 65 years in early 2000es to estimated 70.3 years in 2011). Correspondingly, natural decline went from about 6.5 ppm in early 2000es to likely 1 ppm in 2011. Even with grossly under-counted migration, the population was essentially stable in the last three years. Latest Census (2010) found about 1 million more people in the country than expected (0.7% of expected population), in contrast to Latvia where Census discovered 158 thousand missing (7% of expected number). It is much more likely than not that in the next decade to population will be either stagnant or increase marginally.

While upwards of 1.54 TFR is much lower than replacement rates, in Europe this number is beaten only by Scandinavian countries, Netherlands, Belgium, UK, France, Ireland, couple of Baltic countries, and Serbia. The rest of Europe has it worse.

So, the demographic trends are unambiguously positive, unlike in many other places. On immigration – whatever the way local population looks at it, this is fact of life. Immigration-related tensions are causing the rise of right wing parties across the whole of Europe, which makes Russia not exceptional at all. A normal (and improving) country.

Posted by verdigreen | Report as abusive

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