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SHANE ROBISON
"U.S.-Russia Growth Opportunities"
U.S.-Russia Technology Symposium
Stanford University
February 17-18, 2005
© Copyright 2005 Hewlett-Packard Development Company, L.P.
All rights reserved. Do not use without written permission from HP.
Mr. Minister, it is a great pleasure for me to join Secretary Perry, Secretary Schultz, Director Coit Blacker and Alexandra Johnson in welcoming you here to Stanford University.
As a representative of HP, It's a great privilege to speak here this morning. I'm looking forward to a great dialogue.
I'd like to acknowledge the fact that Carly Fiorina was originally invited to be here, and I know she would have liked today's discussion. As our Board of Directors conducts a CEO search, the HP management team is focused on driving improved execution to serve our customers, strengthen our competitiveness and improve shareowner value. And we sincerely hope that part of that growth happens in Russia. On that note, let me turn to the purpose of today's discussion - the U.S.-Russia partnership.
HP's and Russia's history of innovation
As you may know, the history of Silicon Valley is often traced back to this very campus - after two young graduates named Bill Hewlett and Dave Packard came together in 1938 to start a new company in their garage. In the subsequent 67 years, hundreds, if not thousands, of companies have been started by graduates of this great university - not just in Silicon Valley but across the country and around the world. They have fueled revolutions in science and technology in many industries.
It all sounds very impressive until you think about Russia's history and all that they have contributed to science and technology for more than two centuries - from the development of non-Euclidean geometry and the periodic table to the exploration of space. It's no surprise, then, that 10 percent of all Nobel Prize winners have come from Russia and the former Soviet Union - as have 25 percent of all recent significant inventions.
It's not just what Russian scientists and engineers have been able to accomplish, but how. This is a history of innovation, but it is also a history of innovative thinking, of thinking outside the box, of applying common sense solutions to complex problems. I'm reminded of the story of pens in space - not sure if this is an urban myth or not, but it’s a great story. When Russia and the United States first put cosmonauts and astronauts in space, one thing we both learned is that pens don't work in zero gravity. NASA's solution was a multimillion dollar project lasting a decade to develop a brilliant ink-delivery system for a ballpoint pen that would work in a gravity-free environment. Russia's solution was to send its cosmonauts into space with pencils.
Intellectual capital
It's a rich legacy - but it's more than a legacy. It's one of the reasons that HP and many other technology companies see such great promise in Russia; not just as a market for our goods and services but, as Alexandra [Denisova] Johnson has written, as a great source of intellectual capital.
Two decades ago, Russia had the world's largest community of scientists and engineers, exceeding that of the United States by almost a third. While those numbers leveled off during Russia's transition to democracy, the numbers are beginning to climb back to their historic levels, particularly in software engineering. In 2004, the number of Russian graduates with master's degrees in computer science or majors in software engineering was up 7 percent from the year before. And, the Russian Academy of Sciences is reclaiming its position as one of the world's foremost centers of research and innovation.
It's also no accident that Moscow State and St. Petersburg State are rated among the top 10 technical educational institutions in the world - or that international competitions in physics and math are routinely won by teams from Russia.
Future market opportunities
As the No. 1 IT vendor in Russia - as well as a company with a global research agenda - HP has a vested interest in the development of the country's technical community. The economic reforms and political stability that have defined Russia for the past 15 years have helped create new demand for IT solutions and products to support the country's economic growth and development. Today, not only is Russia one of the world's fastest-growing economies, it is also one of the world's fastest-growing IT markets.
We are also encouraged by the steps President Putin has taken recently to further develop a knowledge-based economy in Russia - from the recent initiatives to support software programming centers to the recent delegation President Putin led to India to learn how India's government helped develop high-bandwidth Internet capacity at more affordable prices.
It's a big part of the reason why, when HP's senior management team looked at global IT markets last year to determine where our best growth opportunities would be, we decided that Russia would be one of the top new market opportunities for investment. It was a decision we made after a lot of analysis and consideration - it reflects our confidence in Russia's future, confidence born from 37 years of doing business in Russia.
Moving forward
One of the most important steps Russia can take to attract foreign investment - as well as to support the development of its own intellectual capital - is to accelerate its efforts to become a member of the World Trade Organization.
We see increasing evidence of Russia's commitment to this process, whether it is of Western-style accounting standards and increased transparency - which many of our partners are starting to adopt – or reform of the customs clearance process in a way that balances the need for security with the efficient flow of commerce, or the protection of intellectual property.
This process is important, because the more that business and trading rules in Russia are predictable and in line with accepted standards, the more attractive Russia will be to foreign investment.
As HP's Chief Strategy and Technology Officer and leader of an organization that includes the top technologists in the company, the company's central research labs, and our strategy and corporate development function, I am interested in Russia's rich intellectual capital and how it can help HP advance its research agenda in a variety of key areas ranging from management software, rich digital media, mobility and security - all the way to quantum and grid computing.
As a global company, we believe it's in our best interests - and the best interests of our customers and partners - to build relationships with diverse technical and academic communities around the world. In Russia, that has meant building relationships with the Academy of Sciences and the mission control center of the Russian space program as well as with St. Petersburg Technical University and other leading universities.
Software development investment
One area of investment that we are targeting is software development, with a particular focus on telecommunications applications. But we have taken a different approach from some of our competitors - an approach based on our strategic imperative around leverage through partnerships. Rather than hiring developers away from Russian agencies and institutions, we are working in partnership with groups like the Academy of Sciences in a way that benefits both HP and Russia.
We buy the services of software developers by subcontracting the work from our partners. They benefit from our support, and we benefit from their development. This is the kind of partnership strategy we apply in everything we do. Using this kind of partnership approach has helped create about 20,000 jobs in Russia, from companies and employees working directly for HP.
What we've found in Russia is a large and skilled programming workforce as well as an excellent university system graduating an increasing number of engineers and other IT professionals. They not only have the hard technical skills in the important areas of software, but they also have experience developing and managing complex projects. Just as important, they know how to do more with less and they know how to think outside the box.
Those are some of the reasons why we recruited the Russian Academy of Sciences in 2003 to join what is known as the Gelato Federation - a consortium of companies and research organizations dedicated to enabling scalable, open-source, Linux-based computing solutions based on the Intel Itanium platform, which was codeveloped by HP. We see opportunities not only to expand that work but to engage Russian researchers in programs centered on grid computing.
In the academic world, HP Labs has worked closely with St. Petersburg State Polytechnic University on several projects, but we are expanding our university relations activities in Russia. Just as we have in other countries around the world, we want to forge partnerships with top researchers in the universities in support of HP's research-and-development agenda.
An exciting future
Based on these formidable strengths, I think you can see why HP has so much confidence in Russia, and why we're investing in Russia for the long run. We think Russia is a great place to do business and to invest, and we back up that commitment, not just with words, but with resources and with a track record that is nearly four decades long.
Again, as a company of scientists and engineers dedicated to innovation and outside-the-box thinking, we admire those same qualities in Russia today. The intellectual capital there is a tremendous resource, and we look forward to finding new ways to work together and use Russia's talent in a way that benefits Russia and its people, HP shareowners and the world.
For all the history that has defined Russia, we believe that its best days are yet to come, and we are delighted by the opportunity to work with the government institutions such as the Ministry of Education and Science - as well as customers, partners, universities and research organizations throughout the country - to help build that exciting future.
Thank you, again, for having me here, and I look forward to our upcoming discussion.
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