* Cisco CEO caught off guard by Medvedev's openness
* Russia plans tech city with Silicon Valley a model
* Medvedev shrugs off pessimism about ability to change
* Country needs to diversify economy from energy, metals
(Recasts with Medvedev speech at Stanford, new dateline)
By Peter Henderson
PALO ALTO, Calif., June 23 Russian President
Dmitry Medvedev was "inspired" by a tour of Silicon Valley on
Wednesday and left determined to replicate the U.S. technology
hub at home, despite pessimism that Russia could create a
sufficiently open environment to nurture success.
Medvedev sent his first "tweet" message on Twitter and
tried out video conferencing at Cisco Systems Inc (CSCO.O)
before conferring with Apple Inc (AAPL.O) CEO Steve Jobs.
Dressed in jeans and an open collared shirt, Medvedev, 44,
gave a speech at Stanford University reading from an Apple
"I wanted to see with my own eyes the origin of success,"
he said in Russian. "I'm inspired with what I saw here in
Silicon Valley and at Stanford. In a very good way, I am kind
of jealous of all you here."
Medvedev wants to curb Russia's dependence on energy and
raw materials. A decade long growth spurt ended with a crash
last year -- the economy contracted 7.9 percent -- and leaders
are now looking for new industries.
One plan is to build an innovation city outside Moscow, and
Medvedev began a trip to the United States hoping for pointers
in California from Jobs and other tech titans.
Previous Russian leaders have made similar pushes to
diversify the economy, without changing the country's
reputation for bureaucracy and corruption. Medvedev's own
efforts to curb corruption have yet to bear fruit.
There is also a wariness about the ability of Medvedev,
seen as a junior partner to Prime Minister Vladimir Putin, to
"Naturally you see a certain pessimism," a Russian-speaking
questioner at Stanford said of the plan for the innovation
center. "It's difficult to believe in it."
Medvedev took the question in stride and said the new town,
with its own regulations, tax code and more, would be built
from scratch to indicate a new beginning. He repeatedly invited
the Russian-speaking audience to come and help build it.
CALIFORNIA AND THE 'RESET'
President Barack Obama, who has tried to "reset" ties with
Russia after tension with the previous U.S. administration,
welcomed Medvedev's trip to California and cast it as an
example of how relations between the countries have warmed.
But the United States still insists Russia must focus on
improving protection of intellectual property if it wants to
join the World Trade Organization, a subject Obama and Medvedev
are expected to discuss on Thursday in Washington.
"The Russians are going to have to take the practical steps
that any other prospective member of the WTO needs to take," a
senior U.S. official said on condition of anonymity.
"This isn't a favor to us or to the WTO. It's deeply in the
self-interest of protecting the intellectual output, the
innovation that comes out of Russian industry," the official
said. Medvedev promised to protect intellectual property and
make Russia open as part of to-do list for his country.
Medvedev began the day in San Francisco, where he sent his
first microblog from Twitter's offices.
"Hello everyone, I'm at Twitter and sending my first
message," he wrote in Russian. The small messages broadcast
over the Internet have become a technology hit.
Later, Medvedev was surprised at the nearly life-sized
video conferencing gear at Internet equipment maker Cisco in
Silicon Valley. "This is amazing," he said in English.
Cisco CEO John Chambers told Reuters after the tour that
Medvedev was candid and that Cisco was ready to take "good
business risks." Cisco will plow $1 billion over the next
decade into Russia, including helping to build the innovation
city and putting $100 million into venture capital.
"He is remarkably open. I mean, business leaders go back
and forth with him. It took me almost off guard," Chambers
said, calling Russia a country in transformation.
One tech star born in Russia that Medvedev did not meet is
Google Inc (GOOG.O) founder Sergey Brin, who once called Russia
"Nigeria with snow."
His assessment shows the challenge ahead of Russia, which
rated a 2.2 out of 10 in a measure of business confidence in
the 2009 Corruption Perception Index from Transparency
International -- behind Nigeria.
Its best score of the last decade, 2.8 in 2004, tied Russia
with Tanzania and Mozambique.
(Additional reporting by Jim Christie, Arshad Mohammed and Guy
Faulconbridge; editing by Chris Wilson)