Pitching to become the new Silicon Valley

California's governor Arnold Schwarzenegger led a group of billionaires to Russia this week in search of innovative business ideas.

Business RT spoke with Silicon Valley Pioneer Franklin ‘Pitch’ Johnson about his perception of venture capital in Russia and the need to promote a more entrepreneurial culture.

PJ: “There is a lot of rich people here who are not, as far as I know of, investing in venture capital. They’ve built their own companies, they’ve got a lot of money. Foreigners would love to see at least some of that money going into Russian venture, private money. I think that is an obstacle. There is a perception about corruption, and difficulty in doing business in an honest way. There is also market size. They have to believe, Russia is not a huge country, it’s a nice size country, not growing particularly, but you have to be able to believe that Russia can export. That means that the technologies and the products developed from those technologies address the world markets, because the markets here are probably not large enough to attract, by itself, American investment in young companies here.”

RT: In what sectors of the economy do you see Russia’s greatest potential? What are the industries it needs to focus on?

PJ: “For international markets I think instrumentation, very fine instrumentation, software, and, breakthroughs in the biological sciences can be done here. So I am very encouraged by Rosnano, I am also encouraged about what they are trying to do. I think the main thing they should try to do over the next ten years, is get entrepreneurship going, get it moving. Ironically to use a phrase from Marx, they should wither away.”

RT: So, what do you think Russia needs to do to develop entrepreneurial culture here?

PJ: “I think the way they can catch up is to encourage entrepreneurs, train them, give them a chance to start companies, like Skolkovo might help, Rosnano is helping doing, and the government can do things to get going, but the government has got to get uninvolved, they’ve just got to get out of the business world and let the private sector take over, even though, theoretically, would like very little government activity, Russia is a case where the government has go to do something. And they are, and they are doing it right. The danger that Rosnano, and its true, at Skolkovo. If the government, the balance between doing too much and not doing enough. They do too much, then they’ll discourage the private capital coming in, and if they do too little then the entrepreneurial community will not form. They are doing it about right now.”