Touring Silicon Valley this summer, Russia’s president, Dimitry Medvedev, didn’t just bag himself a free iPhone 4. He received some free advice from Apple CEO Steve Jobs: if Russia wants to spur similar innovations, it must change its entire mindset.

The advice could just as well apply to Europe as a whole. Many countries, Russia included, see technological advancement as the answer to creaking, post-industrial economies. They look enviously at Silicon Valley – California’s fabled ecosystem of universities, start-ups and risk capital – and wonder why such an entrepreneurial hotbed cannot be cloned on their own soil; especially as Silicon Valley is powered by so much imported brain-power, including that of Google’s co-founder, Moscow-born Sergey Brin, or Apple’s British designer-in-chief, Jonathan Ive.

Certainly there is no shortage of European pretenders: Silicon Fen in Cambridge; Chausseestraße in Berlin; Delft’s Technopolis Innovation Park; and Otaniemi near Helsinki to name but a few.

The Kremlin’s solution is Skolkovo, an agricultural tract being developed 20km west of central Moscow. A total of 4.6 billion rubles (€120m) is being lavished this year on laying the groundwork for a giant new science and business park. But to succeed Skolkovo will need more than pots of cash and big ambitions – something that Medvedev acknowledges. You also need an attitude, particularly at the financial sharp-end.

“Unfortunately for us, venture capitalism is not going so well so far,” the Russian head of state told the high-tech priesthood at Stanford University. “No one wants to run the risk. It’s a problem of culture. As Steve Jobs told me: we need to change the mentality.”

However, this problem is not unique to Russia. Most European venture capital firms are not instinctively entrepreneurial; by contrast, many American VC outfits are spearheaded by financiers who once ran their own start-ups. Jeff Bussgang, himself an entrepreneur before becoming a Boston-based VC with Flybridge Capital Partners, typifies this hybrid. “The Venture Capitalist is a unique animal,” explains Bussgang. “It’s not just about money. Venture capitalists are blended. They are not financial managers, they are entrepreneurial investors. So if you are a financial manager in London or Berlin, you are not necessarily wired to be a great early-stage technology investor.”

Indeed, while US firms are said to be more comfortable in backing brand-new ideas, their European counterparts prefer coming in late to companies that need an infusion of capital. A key reason why Skype co-founders Niklas Zennström and Janus Friis raised a new $165m (€125m) fund for investing in disruptive Euro tech ideas through their London-based Atomic Ventures is that local VC outfits have virtually abandoned early-stage firms.

Even Russia’s Digital Sky Technologies, perhaps the highest profile IT investor, would rather make big bets on proven concepts that are well on the path to profitability, such as Facebook, Zynga and Groupon, than take a punt on truly embryonic ventures. DST’s approach may seem shrewder, but the admission price is that much higher. Twitter and Foursquare, among DST’s rumoured future targets, will both carry stratospheric valuations by the time any such investment arrives.

Paradoxical as it might sound, history has tended to side with those who make those bold leaps into the dark. The greater the systemic appetite for risk, the better the apparent returns. But whether such an appetite can be instilled elsewhere through top-down interventions in places such as Moscow is open to question.

Warren Lee, a venture partner at Canaan Partners, which has €2.5bn under management from offices in the US, Israel and India, is skeptical. “There are plenty of ways to innovate out there, both incrementally and radically. Certainly density is something that really matters – density of entrepreneurs, worker bees, academics, lawyers, accountants – as well as good living conditions. Those are things that you need if you want to attract bright, hungry talent. But what is missing and which people don’t understand, is something more qualitative and ambiguous: it’s the attitude. Governments can spend a lot of money creating nice universities and incubator spaces, they can import technology people, hire lawyers etc; but what is harder to recreate – which is what is magical about Silicon Valley – is the maverick personality, that disregard for conventional wisdom, and the mindset that it’s okay to fail. That’s something that cannot be dictated by policy.”

The fact is, Silicon Valley is far more crucible than it is cradle. Some 90% of start-ups die. But at least they do so without the stigma that comes with failure in many other countries. If anything, such setbacks are embraced in the US, not so much as friends but as teachers; they are part of the learning curve to transform good ideas into commercial breakthroughs. But don’t expect VCs to rush to your corner in the event of failure; in one of Silicon Valley’s many paradoxes, VCs are prejudiced in favour of those who have already succeeded.

If anything, venture capitalists are becoming less venturesome. Having lived through one too many burst bubbles and seen their lucrative exit strategies curtailed by a cooling IPO market, they are sticking to their comfort zones. Contrary to popular belief, VCs are not in the business of finding mould-breaking quantities with no precedents. Instead, to quote both Bussgang and Lee from the TechCrunch Disrupt conference in New York in May, “pattern recognition” is what they are into.“Certainly, you should not expect true innovation – the 5% of ideas that are not incremental – to come from VCs,” says Lee.

After 22 years in the game, Canaan Partners can spot the recycling of familiar business concepts, albeit dressed up in new tech clothing. “All these ideas that we’re talking about have been thought of or tried at some point, but maybe the time was wrong or the execution poor”, says Lee. “I’d say that 95% of the deals simply involve incremental improvements and that’s okay. Will the next generation of enterprise automation be that much better than www.Salesforce.com? Probably not. But if they are 15%–20% better, there is value to someone. The courage and craziness to pursue innovation don’t come from VCs; they come from a few entrepreneurs.”

Lee holds up as an example Facebook founder Mark Zuckerberg, who “came up with a brilliant idea, bootstrapped it, stole ideas from others – which is fine in the start-up world – and created something that is massive. Zuckerburg gave a tried concept a twist then it spawned its own imitators. There are no new ideas”

Bussgang, who has just authored Mastering the VC Game, focuses on recognising familiar personal traits. He is on the lookout for “the paranoid optimist: people who believe the future will be better but who are paranoid about how to get there and everything that can go wrong”. Bussgang calls that paranoia an extraordinary quality: “When people pitch us it is far more compelling if they identify the risks and articulate their plan for mitigating them than try to hide them.”

Justifying the pattern approach, he cites a Harvard Business School study that demonstrates how repeat entrepreneurs who have made money are most likely to be successful next time round relative to first-timers or failed entrepreneurs.

“This shows that entrepreneurship is learned. One large VC firm with decades of history did a regression analysis on the key attributes and found that success is driven by a team that made money before as a team doing it again as a team. The interpersonal dynamics here are so salient. And if the team knows how to get along and they know their roles and how to be successful as an operating unit they are even more likely to succeed the next time. In fact, when I find teams who have been successful as a team, I lean forward on those situations. Of course, this begs the question how do you even get started?”

The answer, increasingly, lies not with VC but with the seed funds and angel investors now institutionalising small investing. Many of the investors are successful entrepreneurs aiming to make their next fortune from nurturing others. Bussgang says that 2009 saw $17bn worth of VC investment, and the same again in angel investment: “The $17bn of VC went to around 1,500 firms whereas the angel investment went into around 50,000. But you hear about the VC outfits because they’re shooting for the bigger win.”

That trend towards smaller-scale investments is likely to continue as the entry barriers keep lowering; for example, the profusion of open-source software and other online resources has made it cheaper for entrepreneurs show proof of concept to potential investors – even those entrepreneurs who have failed before. Of course, if those same firms are going to scale-up properly, they will have to hire people, buy servers and rent offices. “Sure, it might take them only a few thousand dollars to get up and running” says Lee, “but for the great companies, they take a lot of money. With a few exceptions, they’re going to require $20m–$30m.”

Europe are you listening?