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The Russian revival

CNET's Michael Kanellos says that Russian companies are making advances in the tech industry.

When you look back at the Cold War, it's a wonder sometimes that it took so long to end.

Back in the heyday of the Soviet Union, the KGB managed to smuggle highly confidential white papers out of IBM and other companies on a somewhat regular basis, according to Vadim Temkin, who worked in computer research in the country years ago and now serves as software quality engineering manager for Java Card and Wireless Java Technology at Sun Microsystems.

Some of these documents were only a few weeks old. "Hot off the presses," Temkin told me a few weeks ago at the U.S.-Russia Technology Symposium at Stanford University, where he was an attendee.

Although researchers often used these papers to build supercomputers that could rival some of the capabilities of those in the West, the spy system didn't work perfectly. The external KGB agents who oversaw the theft were different to the internal KGB agents at the lab that oversaw photocopying. Occasionally, when the internal agents saw the "Confidential" warning stamped on a paper by IBM, they erroneously assumed the warning came from one of their supervisors. Instead of passing the document to the researchers, the agents would lock it in a desk drawer.

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Another time, an external agent pilfered a 5-inch magnetic floppy disk from a U.S. corporation. Unfortunately, another agent stapled a piece of paper to it, destroying the ability to extract the data. "Somebody probably risked their life getting that," Temkin recalled.

Even bigger bungles occurred. In "At the Abyss: An Insider's History of the Cold War," former Air Force Secretary Thomas C. Reed tells how the CIA planted deliberately buggy software with a double agent for the KBG that eventually got implemented into the control systems for a natural gas pipeline between the Soviet Union and Western Europe. This Reagan-era bit of skullduggery (reported also by William Safire) caused the pipeline to explode and may have contributed to the downward economic spiral of the U.S.S.R.

Still, the Russians did manage to steal quite a bit of confidential information, and the United States must have had its own plodding, bureaucratic blockheads.

The countries that came out of the old empire could become some of the more significant players in the global tech economy in a few years.
Another crucial aspect of this history of espionage is that it's in the past. Now, Russian scientists are working with U.S. and European companies and, as a result, the countries that came out of the old empire could become some of the more significant players in the global tech economy in a few years.

The IBS Group, a Moscow-based technological company that performs research and programming for hire, is performing offshore programming for, among others, Dell and IBM, for example.

Sea Launch--a joint venture of U.S., Norwegian, Ukrainian and Russian companies--has become the world's first, and only, commercial rocket-launch service, according to Valery Aliev, the technical director of development for the program. Since 1999, it has conducted 12 launches for EchoStar and XM Satellite, among others.

Western venture capitalists will get a more clear glimpse of emerging technology in September when the Russian version of Tech Tour takes place. The tours are essentially three-day conferences at which local companies pitch themselves to U.S. venture investors. A key change for Russian companies is that scientists can now qualify to keep the rights to the inventions they developed at national institutes.

Do the tours work? Apparently, yes. Media Lario, a manufacturer of precision mirrors in Italy, received funding from Intel after a Tech Tour through that country. Its products are potentially useful in developing mirrors for Extreme Ultraviolet (EUV), which will enter production lines in 2009.

Russia has a long way to go to catch up with China and India in establishing links with Western companies. It also doesn't have the same sort of large population.

On the other hand, the country does have a fairly long history of math and science. (Russian scientists came up with Velcro as part of its space program, according to Andrey Fursenko, the head of the Ministry of Industry, Science and Technologies, among others, although many credit a Swiss researcher.)

In the end, Russia could become a larger competitor for the white-collar jobs now leaving the United States. And this time, the country won't have to worry about someone wielding a stapler.