DOCUMENT RESUME

ED 199 102 SE 034 597

AUTHOR Cocka, Paul M.TITLE Science Policy: USA/USSR. Volume II: Science Policy

in the Soviet Onion.SPONS AGENCY National Science Foundatkon, Washington, D.C.

Directorate for Scientific, Technological andInternational Affairs.

PUB DATE 80NOTE 345p.: For related document, see SE 034 596. Prepared

through U.S.-U.S.S.R. Working Group on SciencePolicy.

AVAILABLE FROM Superintendent of Documents, U.S. Government PrintingOffice, Washington, DC 20404 (Stock No.038-000-00457-3, $6.50).

!DRS PRICE MF01/PCI4 Plus Postage.DESCRIPTORS *Cross Cultural Studies: Government Publications:

*Policy Formation: Science Education: ScientificEnterprise: *Scientific Research: *TechnologicalAdvancement

IDENTIFIERS *Research and Development: *USSR

ABSTRACTThe second volume cf a 700-page, two-volume study

presents comparable studies on Soviet research and development andscience policy, delineating the different structures, ideologies, andsystems. A final chapter compares major areas of science policies inthe USSR and USA. This publication arose from efforts cf two U.S.members of a cooperative research working group under the OSA/USSRJoint Commission of Scientific and Technical Cooperation whichcompared major science policies of the two countmes in the planningand management of research and development. (CS)

***********************************************************************Reproductions supplied by EDRS are the best that can be made

from the original document..************************************************-x**********************

Science Policy:USA /USSR

VolumeScience Policy inthe Soviet Union

Report prepared for National Science FoundationDirectorate for Scientific, Technological and International Affairs

avision of International Programs

"1

U S DEPARTMENT OF HEALTH.DUCATION & WELFARE:TIONAL INSTITUTE OF

EDUCATION

T S DOCUNENT -0AS BEEN REPRO-DUCED ExACTLv PECEIvED FpOMT E PEP soN Oa oPC.ANIZATIoN sz G N-Z. TING IT POINTS OP VIEW... OR OPINIONSSTATED DO NOT NECESSARILY REPRE-SENT (:)FiCIAL NATIONAL INSTI TOTE OFEDUCATION POSI T ION OD POLICY

;.16,

This research was conducted with support fromthe Division of International Programs,National Science Foundation. However, anyopinions, findings, conclusions, or recommen-dations expressed in this document are thoseof the author and do not necessarily reflectthe view of the National Science Foundation.

SCIENCE POLICY: USA/USSR

Volume II

Science Policy in the Soviet Union

Paul M. Cocks

and Technology 1

Centralization of R&D Planningand Management 4

The Separation of Science andIndustry 9

The Systems for Guiding TechnicalProgress 13

THE ORGANIZATION OF R&D 18

Overall Structure and InstitutionalSetting 18

The Top Governing Machinery 22

The Three Institutional SubsystemsPerforming R&D 45

The Basic Units 64

The Organizational System: Wholeand Parts 76

C THE FORMULATION OF R&D PLANS ANDPROGRAMS

Overview of Science and TechnologyPlanning

Resource Planning and Allocation forResearch and Development

The Selection of Research Topics andTasks

iii

5

83

83

92

106

The Disaggregation and Assignment ofResearch Tasks 128

The Decision to Import Technology . 149

The Structure and Content of R&DPlans 155

The Planning System and Its Parts 159

X THE EXECUTION OF R&D PLANS AND THEUTILIZATION OF RESULTS 176

Managing the Research -to- ProductionCycle: An Overview 177

Organization of the R&D Center . 181

Conduct of R&D 184

Utilization of R&D Results 197

Evaluation of R&D Results andPerformers . . 234

Diffusion of R&D Results 238

XI CURRENT ISSUES AND TRENDS IN SOVIETSCIENCE POLICY . 251

The Contemporary Science PolicyDebate: Context and Content 251

Integrating Science Policy andEconomic Policy 255

Switching to an Intensive GrowthStrategy for Science and Technology . 258

Achieving Organizational Flexibilityand Institutional Restructuring . . 262

Improving Planning and ResourceAllocation 269

Raising Management Effectiveness . 275

Strengthening the Bonds ofMotivation 281

Science Policy Reforms: A BalanceSheet 284

iv

XII A COMPARISON OF SCIENCE POLICY IN THEU.S. AND U.S.S.R. 298

The Science Policy Environment . 298

Relationship of Scientific R&Dto Industry 304

Selection of S&T Goals and Evaluationof Results 311

Incentives and Obstacles toInnovation 322

Institutional Responses to NewComplexity of S&T Problems 328

LIST OF FIGURES

8-1 Overall Structure of the Soviet Systemof R&D Planning and Management 19

8-2 Top Level Governmental OrganizationsResponsible for Science Policy Makingin the USSR 27

8-3 Organizational Structure of SciencePolicy at the Union Republic Level . . 33

8-4 Structure of the USSR State Committeefor Science and Technology 39

8-5 General Organization of the USSR StatePlanning Committee (Gosplan) 42

8-6 Structure of the USSR Academy ofSciences 48

8-7 Organization and Management of R&D ina Union Level Industrial Ministry 58

8-8 The Administrative Network of the USSRMinistry of Higher and SpecializedSecondary Education (MinVUZ) 63

8-9 Organizational Structure of a ResearchInstitute of the USSR Academy ofSciences 66

8-10 Organizational Structure of a ResearchInstitute of :n Industrial Ministry . 67

8-11 Organization and Management of R&Din a Higher Educational Institution(VUZ) 69

8-12 Organization and Management of R&D inan Industrial Enterprise 72

8-13 Management Structure for a TypicalScience-Production Association (NPO) . . 75

9-1 Overview of the Content and Networkof Soviet Economic Planning 85

9-2 Structure of Soviet Research, Develop-ment and Innovation Plans and Forecasts 87

9-3 Components of the System of Research,Development, and Innovation Planning inthe USSR 115

9-4 Organization of R&D for the Solution ofan Important S &T Problem 141

9-5 Organizations Involved in the Develop-ment of the T-250/300-240 ThermalElectric Turbine 145

10-1 The System of Material Stimulation ofScientific and Technical Progress inthe USSR 193

10-2 Exemplary Planning Chart for Techno-logical Preparation for Production inthe USSR. Ministry of the AutomobileIndustry 200

10-3 Organizational Structure of theSvetlana Production Association 205

10-4 Basic Scheme of the System of Plannipc,,Financing, and Economic Stimulation ofS&T Development in the Soviet Electri-cal Engineering Industry

vi

233

LIST OF TABLES

8-1 USSR, Union Republic, and BranchAcademies of Sciences (at the endof 1976) 51

8-2 Regional Affiliates and ScientificCenters of the USSR Academy ofSciences (at the end of 1976) 54

8-3 Distribution of Scientific Workers byBranch of Science: 1973 (ScientificResearch Institutes and Higher Educa-tional Institutions)

10-1 The Structure of Bonus Awards forTechnological Innovation in the USSR . 196

10-2 Structural Makeup of Science-Production Associations 213

vii

TNTRODUCTION

Beginning in i972 the Governments of the UnitedStates of America and the Union of Soviet SocialistRepublics signed a series of bilateral agreementsfor cooperation in various areas of science andtechnology, of which there are now eleven in number.The senior of these, the Agreement on Cooperation inFields of Science and Technology, was signed byPresident Nixon and General Secretary Brezhnev inMay 1972 and is implemented through a U.S.-U.S.S.R.Joint Commission on Scientific and Technical Cooper-ation, chaired on the U.S. Side by the President'sScience Technology Advisor. One of the twelveactive Working Groups carrying out cooperativeresearch under ele Joint Commission is in the areaof Science Policy, which in turn focuses on two majorareas of mutual interest: the Planning and Manage-ment of Research and Development, and FundamentalResearch Systems.

The present two volume study, Science Policy:USA/USSR, prepared by members of the U.S. side ofthe working group, is based on the first phase ofwork in Science Policy by the group concerned withR&D Planning and Management,' which lasted fromapproximately 1973 to 1977. The goal of this phasewas to build a base of information which could thenserve to orient U.S. participants to more discreteand sophisticated analyses of the policy-making sys-tems in the respective countries concerned withscientific and technical research; the principalmode of operation during this phase was exchange ofvisits, written information, reports, and specificquestions and answers between the U.S. and Sovietmembers of the group. It became quietly apparent,although not to anyone's great surprse, that there

I viii

would be a number of problems in emerging with satis-factory products, from information access and admin-istrative difficulties to, perhaps most significantly,entirely different perceptions of the content of thestudy of science policy, incompatible terminology,and divergent analytical traditions, not to mentionthe important substantative differences in the makingof science policy in the two countries. In manysenses, we were speaking entirely different languagesto one another and for this reason our initial prog-ress was often slow and painful.

By 1976-1977, however, enough progress had beenmade to encourage U.S. participants to think aboutcompiling what we had learned, both about ourselv,and the Soviet Union, into monograph form in orde_-_make this information accessible to the public atlarge. Again, not surprisingly, the job of compila-tion was beset by many of the same difficulrf.=,, men-tioned above. An initial summary prepared by BattelleColumbus Laboratories was reviewed and commented uponby U.S. participants, after which Mr. Nat C. Robertson,a distinguished technical administrator and researchscientist with broad experience in the U.S. industrialsector, and Dr. Paul M. Cocks, a leading specialist onscience policy in the U.S.S.R., utilized the data pre-pared by Battelle in writing the present volumes. Theresults, I believe, merit close examination by schol-ars, scientists, government and industrial officials,and the lay public.

The time and effort of an unusually large number ofindividuals went into vaious phases of this project.Nat Robertson and Paul Cocks deserve special praisefor taking on the extremely challenging task of sift-ing through the mass of accumulated material, verifyingdata, and integrating it with their own expert knowl-edge to yield an intelligent and illuminating finalproduct. The initial summary by Battelle ColumbusLaboratories was, of course, highly instrumental ingetting the study off the ground and the contributionsof the Battelle staff are gratefully acknowledged.The information contained in the volume on the U.S.S.R.could not have been obtained in the first place were

Ix

it not for the enthusiastic participation - -which wasseverely tested at times--by the U.S. members of theScience Policy Worklog Group, most particularly itsformer U.S. Chairman, Dr. David Z. Beckler, and of themembers of the Subgroup on R&D Planning and Managementwho participated In the project's first phase (inalphabetical order), Joseph Berliner, Lewis M.Branscomb. Paul M. Cocks, Murray Feshbach, Richard T.Gray, Herbert Levine, Franklin A- Long, Nat C.Robertson, Lowell W. Steele, and Robert L. Stern. Thestaff of the Arlington, Virginia office of SRI Interna-tional assisted with the final editing and preparationof the manuscript. Although these studies are notofficial publications of the U.S side of the workinggroup and only their authors are responsible for theircontent, I wish to take this opportunity to thank allthose who assisted in their preparation. Financialsupport for the project was provided through theNational Science Foundation.

William D. CareyU.S. Chairman, U.S.-V.S.S.k. Working

Group on Science policy

June 1980

'Until 1979 there were four subgroups of theScience Policy Worklag Group: R&D planning and Manage-ment, R&D Financing, Training and Management of S &TManpower, and Systems for Stimulating the Developmentof Fundamental Research. Other Publications resultingfrom the Working Group's efforts include Louvan E.Nolting and Murray Feshbach, "R&D Employment in theU.S.S.R.," Science, v. 207 (February 1, 1980), pp. 493-503; and S stems for Stimulatin the Develo-nent ofFundamental Research (Report. Prepared by the U.S. -U.S.S.R. Working Subgroup on Systems for Stimulatingthe Development of Fundamental Research of the NationalAcademy of Sciences/National Research Council), NTISOrder Number PB80-162316.

AUTHOR'S ACKNOWLEDGMENTS

In the preparation of this volume, I wish toacknowledge the contribution by John P. Young, Alvin M.White, Hugh L. Shaffer, and L. Ben Freudenreich, whowrote the initial draft report for Battelle ColumbusLaboratories on which this study is based. Although Ihave added a few new chapters and altered others, Ihave retained much of the information and insightincluded in their original analysis. At the same time,I have drawn heavily on other source material, especi-ally the rich and extensive science policy literaturethat has evolved in the USSR since the late 1960s. Indiscussing the Kremlin's policy problems and practices,I have also tried, where possible, to cite self-criticalSoviet studies in order to illuminate Russian percep-tions and problem-solving approaches.

I am deeply indebted to Murray Feshbach, LouvanNolting, Joseph Berliner, and Herbert Levine for sharingtheir expertise on the USSR and for offering helpfulcriticisms, comments, and suggestions. I am equallygrateful to the Soviet members of the Science PolicyWorking Group for the opportunity to interact in thiscommon effort to enhance our mutual knowledge and under-standing of the other's system, though we may disagreein our views and conclusions.

My warm thanks also go to my American colleagues onthe Working Group for providing me with a tremendouslearning experience and "short course" on US R&D plan-ning and management that proved invaluable in preparingthe chapter pn comparative American and Soviet approach-es to S&T policy. Special thanks in this regard are dueto Nat Robertson, Bill Carey, and Lowell Steele fortheir analytical leads and thoughtful advice.

xi

3

Lastly, I also wish to thank Deborah C. Andrews forediting the manuscript and making it far more readablethan it otherwise would have been.

Paul M. CocksAugust n2, 1980

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The importance attached to scientific and techni-cal progress in Soviet ideology has encouraged theacceptance of large expenditures on R&D, especiallyin the postwar period. The rate of growth of expend-itures on science for the past 25 years, in fact, hasoutstripped the rate of increase of both national in-come and industrial production. Unlike the UnitedStates, there has been no "flight from science" dur-ing the past decade. While allocations for R&D rosein the US to 2.5 percent of the GNP in 1965 and havefallen ever since, official expenditures on scienceas a portion of national income have risen in the So-viet Union from 1.3 percent in igso, to 2.7 percentin 1960, to 4.8 percent in 1975. If we add develop-ment activity at the enterprise level, which is notincluded in "official" science figures, then the to-tal share of national income has probably been about7 or 8 percent throughout the 1970s. While officialallocations for science have tended to stabilize inrecent years at around 5 percent of the national in-come, this rate is still significantly higher thanthat of any nation in the Western world.

At the same time, certain tensions and conflictsbetween science and ideology impede scientific andtechnological developments. The commitment to sci-ence is "conditional." The Soviet government, likeits Tsarist predecessor, has been ambivalent towardscience. On the one hand, it sees science as indis-pensable for economic modernization and for enhancingSoviet military power; on the other hand, the regimedistrusts the scientific spirit with its critical at-titude towards authority and individualistic approachto problem - solving. The evolution of science as anautonomous social activity carries the dangers ofprofessional exclusiveness, elitism, and the asser-tion of rationalistic modes of thought. Manifesta-tions of dissent in recent years among scientiststestify to the reality of these dangers and make ide-ological problems a gontInuing- basic concern of So-viet science policy. Dzherman Gvishiani, a deputychairman of the USSR State Committee for Science andTechnology, emphasizes that "all socialist statescannot but grant great significance to the mastering

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11

to attempt to formulate a policy towards science andtechnology as a whole. It began conducting statisti-cal and organizational surveys of scientific person-nel and institutions a decadg before other countries,including the United States.

Despite all the talk about science planning andpolicy during the twenties, however, little actionwas actually taken in this direction. The first na-tional conference on plimming of scientific researchdid not meet until 1931. A. member of the CommunistParty was not elected to the Academy of Sciences un-til 1929, and only in the thirties did the scientificaffairs of the Academy begin to reflect Party desires.Actually, the innovative posture of the government inthis policy sphere in the 1920s gave way to a sterileapproach under Stalin. From the early 1930s untilStalin's death little was dons about the formulationof science policy and the planning of science. Thoughresearch organizations, like all Soviet institutions,drew up annual plans, these were not meaningfu3. Ser-ious attention began to be given to the plalBing andmanagement of R&D only after the mid-1950s. By then,the USSR, the initial pioneer in national scienceplanning, lagged behind iinumber of Western industri-al nations in this area.

Similarly, the search for one central coordinatingagency to oversee the development of science and tech-nology was gradually abandoned by the mid-1930s. NoCommissariat of Science was ever created. Instead,responsibility for R&D planning and management restedfor the next 20 years primarily with the industrialcommissariats and later ministries as well as severalcentral departments. Much like the American pattern,the Soviet R&D effort was structurally and adminis-tratively fragmented among multiple mission-oriented

6

agencies with conflicting jurisdictions and interests.Though formal control existed at the all-Union level,there was no effective coordination of policy at thecenter. Basically, there were four main organiza-tional actors in science and technology policy: theUSSR Academy of Sciences, the State Planning Commit-tee, the industrial commissariats or ministries, andthe commissariats or ministries of education. Of thesefour the most important was the Academy. While indus -trial R&D was formally coordinated by the State Plan-ning Committee, each ministry in reality looked afterits own research needs until 1957 when the ii.inister-Lai system was substantially reorganized.12

Thus, nationa_ :. science planning and policy as suk_his as much a postwar phenomenon in the USSR as it isin the United Statas. The development of science andtechnology began to be planned on a general state ba-sis rather than on the level of separate institutionsonly in 1949, when an annual plan for the introduc-tion of new technology was formulated for the firsttime.13 Only in 1956, however, did the plans beginto include assignments for scientific research. Sec-tions on the financing of research and on the provi-sion of materials and equipment were not added to theplans for science and technology until 1_962. Also atthis time plans for training scientific manpower be-gan to be compiled. In 1967, for the first time, tar-

gets for the application of computer technology andmanagement information systems were included in the

annual plan for S&T. The following year the All-Union Scientific and technical Information Centerbegan recording all research projects in the country.Efforts to develop a comprehensive plan for nation-wide technical standards did not start until 1971.The state registration of all experimental designprojects did not begin until 1973.

Moreover, the planning of science remained con-fined to a one year time frame until the mid-1960s.In 1P66, for the first time, a list of 250-odd prior-ity R&D problems was drawn up and included in the

five year macroeconomic development plan. Only towardthe end of the 1960s did systematic lollg-range (10/15

7

21

years) studies begin to be organized in scientificforecasting and technology assessment on the develop-ment of industrial branches and on national problemssuch as the future fuel and energy balance, develop-ment of the transport system, the use of metal andlumber, and the provision of an adequate food supily.Work on a "Comprehensive Development Program for Sci-ence and Technology and Its Social and Economic Con-sequences" up to 1990 started in 1972, and a draft ofthis program was largely completed by the fall of1975. The issue of ecological development ham onlyrecently become an object of central planning. TiAlsthe current Tenth Five Year Plan (1976-1980) includesfor the first time a separate chapter on the rationalutilization of natural resources and environmentalprotection.

Organizationally, too, the first real step towardsan overall coordination of R&D was taken only in 1961with the creation of the State Committee for Coordi-nation of Scientific Research. In 1965 this body wasreorganized into the present State Committee for Sci-ence and Technology. Taken together, then, all thesemeasures give substance to the statement by Gvishianiin early 1972 that "the various forms of state activ-ity in the sphere of science are, on the whole, stillin the formative stage. While some of them have beenapplied for decades, others have emerged relativelyrecently. u14

Inspire of some advances, however, the Soviet S&Testablishment remains highly deficient as a model ofeffective systems planning, management, and control.Research and development continues to be housed in amyriad of institutions and fenced off by strong de-partmental barriers that slow and impede the innova-tion process. Efforts to strengthen integratingstructures and functions have met with only partialsuccess. The whole system still bears the heavychalk marks left by the branch ministries and cen-tral agencies which participate in and share respon-sibility for science policy.

8

It is important to stress that Kremlin authoritieshave not abandoned their basically centralized ap-proach and holistic perspective toward science policy,even in face of the growing size and complexity oftheir R&D effort. On the contrary, a perceived needto accelerate science and technology has led them top- ;s all the more strongly in the 1970s for new tech-niques of systems planning and management. Their com-mitment to central planning rcmains firm. "The scaleand complexity of these problems," says Gvishiani,"are such that in present-day conditions they can betackled only on the level of state policy."15

Today, modern systems technology and terminologyhave become the fashion of the times in Soviet dis-cussions of science policy. The new systems movementand management mentality are very much in keepingwith the conventional centralized approach to sci-ence policy. At the same time, however, the new sys-tems rhetoric continues to suggest an image of unity,coherence, and wholeness that are still lacking inreality.

THE SEPARATION OF SCIENCE AND INDUSTRY

Science and industry in the USSR have always beenlargely separate worlds, more coexisting apart thanmutually cooperating and pulling in the same direc-tion. They are, to use Pravda's recent imagery, like"two flagships proceeding on different courses, indifferent seas."16 Or, to phrase the analogy slightlydifferently, they often appear like two ships "pass-ing in the night," unaware of the other's presenceand activity. This basic 0.1nd persistent feature ofthe system forms an essential background to an under-standing of the Soviet situation, especially the ser-ious interface problems involved in technological de-velopment and delivery.

On the one hand, a bias in favor of theoreticalwork pervades the world of scientific research and

9 23

development. Lacking usually their own experimentalfacilities and generally neither rewarded nor penal-ized for the success or failure of their results, re-search scientists and design engineers tend to dotheir work with little reference to its practical ap-plication. Development work does not usually holdthe excitement and drama of fundamental research,particularly in the civilian sector. Soviet highereducational establishments offer practically no spe-cialization for designers and technologists. The no-tion that "small is beautiful" remains overshadowedby an infatuation with "big science" and "big tech-nology."

Historically, too, Russian science has been knownfor its strong theoretical orientation. Its greatestfigures were theoreticians, such as M. Lomonosov andD. I. Mendeleyev in chemistry, P. N. Lebedev in phys-ics, and N. I. Lobachevsky and P. L. Chebyshev inmathematics. In contrast to American culture littleplace or prestige was given to the practical tinkererand innovator, much less the technological entrepre-neur. The Imperial Academy of Sciences, from the timeof its foundation in 1725, was primarily theoreticalin orientation and relatively isolated from industry.The continuing predominance of the Academy as the or-ganizational center of Soviet science assures thetheoretical bias of the national scientific tradi-tion. In general, both pre- and post-revolutionaryscientific R&D have not affected contemporary econo-mic life significantly.17

Since the earliest days of Soviet rule effortshave been made to bring science closer to practicalmatters and social concerns. Scientists have beenconstantly instructed to serve socialism and to helpsolve problems facing society and the economy. TheR&D establishment has been repeatedly reorganized toachieve a better coupling between research and pro-duction. Nonetheless, the translation of scientificideas into use remains a major problem to this day.The bias of the official ideology and of the regimefor applied science and technology still acts as anineffective corrective to older entrenched scientif-ic traditions.

10

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with one another. The coupling processes must ac-cordingly be organized "so a% to achieve a fast andeffective flaw of scientific and technological ideasinto industry and an equally fast and effective coun-terflow of orders from industry to science." Only bybuilding better structural crosslinks can productionbe made "to soak up nes; sciehtific ideas like asponge."22 While the iateracti.ons between scienceand industry have indeed become more direct and com-plicated in recent Years* organizational and motiva-tional bonds have not yet been formed that are capa-ble of breaking down the barriers separating thesetwo worlds.

The strong military orientation of scientific R&D,along with the secrecy that surTounds it, has con-tributed to the underdevelopment of industrial tech-nology. Much like the United States, the Soviet re-gime has spent enormous sums oa defense, aerospace,and t uclear R&D while uuderinve sting in industrialR&D. Nor has there been any substantial spin-offfrom these national security and high technology re-lated projects in terms of civilian applications tonatior-11 needs and improvements in the quality oflife. The resulting pattern has been a high con-centrat4 :n of talent and money 14 defense and spaceand a seT:lously distorted deployment of S&T resources.This pattern is not new to the Kremlin. A Preoccupa-tion with defense technologY and the political-mili-tary orientation of the state..41rected effort aredeeply rooted in Russian history. From the time ofPeter the Great Tsarist goner eats were interestedin applying technology largely to military purposes.

Still another thread of continuity in the Russian/Soviet complex of science and technology deservesmention: the role of esternal influences in Russia'sdevelopment. Throughout its history, Russia's scien-tific and technical ties with foreign countries, es-pecially the Western world, have been limited and in-termittent, if at times quite energetic. Internalregime attitudes, Tsarist and soviet, have fluctuat-ed between two extremes. At ties the government re-sorted to artificial and imposed isolation. At other

12

6

times, it actively sought international cooperationand exchange. Since Russian science was tradition-

ally in advance of Russian technology, the breakdownof foreign contacts tended to intensify, in particu-

lar, Russia's technological lag.23 Consequently, the

government would periodically rely upon heavy doses

of imported foreign technology to strengthen its mil-

itary power and to help overcome Russia's economic

and technological backwardness. From this perspec-

tive, Moscow's intensified efforts in the 1970s to

expand scientific cooperation and technology trans-

fer, especially with the nations of Western Europe

and the United States, should be seen as part of an

older tradition and development strategy.

TWO SYSTEMS FOR GUIDING TECHNICAL PROGRESS

As a result of the particular course followed by

the Soviet Union in science, technology, and economic

growth essentially two systems have evolved for guid-

ing technical progress. The primary line of influence

is the basic economic system. This structure was cre-

ated in the prewar years and evolved in response to

the demands of rapid industrialization. Science and

technology did not provide the principal motive force

for its operation. Bearing a strong anti-innovationbias, this system remains fundamentally oriented to

the expansion of existing patterns of production and

technology. A secondary line of influence is exer-

cised by a special set of structures and mechanisms

which began to take shape around the mid-1950s with

the burgeoning growth of the Soviet R&D effort. This

supplementary system attends to the problems of sci-

ence and technology policy and performance. Accel-

eration of the rate of innovation is one of its main

goals. Each system has its own plans, budgetary

practices, incentive schemes, and integrating admin-

istrative organs. Typically, however, there is lack

of coordination between the basic and supplementary

systems. Indeed, they frequently work at cross pur-

poses to each other.

13 )II

In general, the focus of Soviet S&T policy in the1970s centered largely on how to improve these twoguidance systems. As regards the supplementary ma-chinery, some elements are still lacking. Among themare effective procedures and organizational solutionsfor creating and applying new technology that involvesthe joint cooperation of multiple ministries and agen-cies. Second, some elements of the supplementary sys-tem, such as the policy of pricing new technology,need to be improved. Third, the separate parts ofthis system are not well coordinated. Finally, thesupplementary system for scientific research, devel-opment, and innovation needs to be better integrateswith the general system of economic planning and man-agement. Controversies abound over how to solvethese problems.24 As yet, no grand systems solutionhas been found, though the search goes on. We can besure, then, that these issues will continue to occupya prominent place on the Kremlin's S&T agenda for the1980s (see chapter 12).

In sum, these are some of the basic features andunderlying traditions of the contemporary science andtechnology establishment in the USSR. An awarenessof them adds to our understanding of particular So-viet patterns and problems of organizing, planning,and managing R&D, which are discussed in more detailin the following pages.

9S 14

FOOTNOTES

1. Loren R. Graham, "The Development of SciencePolicy in the Soviet Union," in T. Dixon Long andChristopher Wright, eds., Science Policies in Indus-trial Nations (New York: Praeger Publishers, 1975),p. 13.

2. Ibid., p. 19.

3. Pravda, October 8, 1975.

4. Loren Graham, "The Place of the Academy of Sci-ences in the Overall Organization of Soviet Science,"in John R. Thomas and Ursula M. Kruse-Vauctenne, eds.,Soviet Science and Technology: Domestic and ForeignPerspectives (Washington, D.C.: George Washington Uni-versity, 1977), pp. 44, 56. See also Raymond Hutch-ings, Soviet Science, Technology, Design: Interactionand Convergence (London and New York: Oxford Univer-sity Press, 1976), pp. 116-119.

5. E. I. Valuev, L. S. Glyazer, V. P. Groshev, V.I. Kushlin, M. P. Kokonina, G. A. Lakhtin, V. G. Leb-edev, Yu. K. Petrov, S. V. Pirogov, and S. M. Ryumin,"Osobennosti finansirovanlya nauki v SSSR (UniqueCharacteristics of the Financing of Science in theUSSR)" (Moscow, December 1976), p. 7. Report preparedfor the US-USSR Joint Working Group in the Field ofScience Policy, Subgroup IV: Financing of Research andDevelopment.

6. See Julian N. Cooper, "The Organizatior and Plan-ning of Research and Development in the USSR," Paperprepared for the Conference on Technology and Commu-nist. Culture, Bellagio, Italy, August 22-28, 1975. Seealso Alexander Vucinich, Science in Russian Culture,1861-1917 (Stanford, Caliiz.rnia: Stanford UniversityPress, 1970), p. xi.

7. D. M. Gvishiani and A. A. Zvorykin, eds., Osnov-nyye printsipy i obshchiye problemy upravleniya naukol(Moscow: Nauka, 1973), p. 39.

159

skw 9

8. Graham, "The Development of Science Policy inthe Soviet Union," pp. 38-41.

9. Ibid., pp. 12-13, 22-23.

10. mid., pp. 23-24, 27-29.

11. E. Zaleski, J. P. Kozlowski, H. Wiennert, R. W.Davies, M. J. Berry, and R. Anann, Science Policy inUSSR. (Paris: Organization for Economic Cooperationand Development, 1969), p. 25.

12. Graham, "The Development of Science Policy inthe Soviet Union," pp. 29-30.

13. Prior to this time, the USSR and republic stateplanning committees and the USSR and republic acade-mies of sciences did little more than tabulate re-search plans submitted by performing institutions.They made nocieffort to pass on priorities, to coordi-nate the plans and to eliminate duplication, or tolink them to national and branch plans for industrialproduction and capital investment. Before 1949 noconsolidated plan sections for R&D existed in the gen-eral annual and five year plans for development of thenational economy. Though expansion of production fa-cilities entailed planning new technology, most of thetechnology was acquired from abroad and the planningwas submerged in the production plans of branches andenterprises. See Louvan E. Nolting, The Planning ofResearches Development, and Innovation in U.S.S.R,U.S. Department of Commerce, Foreign Economic Reports,No.14 (Washington, D.C., 1978), p. 7.

14. D. M. Gvishiani, "Centralized Management of Sci-ence: Advantages and Problems," Impact of Science onSociety, XXII (January-June 1972), P. 97.

15. D. Gvishiani, "The Scientific and TechnologicalRevolution and Scientific Problems," Social Sciences(Moscow), I (7) (1972), p. 47.

16. Pravda, July 3, 1977.

16

17. Hutchings, Soviet Science, Technology, Design,pp. 4-5. See also Ronald Amann, "The Soviet Researchand Development System: The Pressures of Academic tra-dition and Rapid Industrialization," Minerva, VIII(1970), pp. 221-224.

18. Pravda, March 31, 1971.

19. For the best discussion of the problems of in-novation, see Joseph Berliner, The Innovation Decisionin Soviet Industry 'Ialmbridge, Massachusetts: MITPress, 1976).

20. Graham, "The Development of Science Policy inthe Soviet Union," pp. 25-27. See also his excellentessay, "The Formation of Soviet Research Institutes:A Combination of Revolutionary Innovation and Inter-national Borrowing," Social Studies of Science, No. 5(1975), pp. 303-329.

21. L. S. Blyakhman and A. F. Ivanov, "Nauchno-pro-izvodstvennoye obedineniye kak forma sistemnoi organ-izatsii tsikla issledovaniye-proizvodstvo," IzvestiyaAkzhdemii nauk SSSR, seriya ekonomicheskaya, 6 (1971),p. 39.

22. V. G. Afahasyev, Nauchno-tekhnicheskaya revolyu-tsiya, upravleniye, obrazovaniye (Moscow: Politizdat,1972), Pp. 26-27, 312-313.

22 See the discussion by Hutchings, Soviet Science,Technology, Design, pp. 9-11 and the three volumestudy by Anthony C. Sutton, Western Technology and So-viet Economic Development, 1930-1965 (Stanford: HooverInstitution Press, 1971-1973).

24. On these two guidance systems, see G. Kb. Popov,Effektivnoye upravleniye (Moscow: Ekonomika, 1976),pp. 128-136.

17

VIII THE ORGANIZATION OF R&D

OVERALL STRUCTURE AND INSTITUTIONAL SETTING

In keeping vIth the Kremlin's basically central-ized approach to sc;:ence policy, the organizationand conduct of R&D the USSR are highly structuredalong strong hierarchical lines. Soviet authoritiesattempt to plan and manage the research-to-productionprocess as a single unit. Accordingly, the institu-tional structure that has been created to promote theprocess is regarded as an integrated "organizationalsystem" with relatively detailed formal roles and re-sponsibilities assigned to the vast array of individ-ual actors and special agencies that make up its con-stituent parts.

Generally speaking, as many observers have noted,'the overall institutional framework resembles the in-ternal organization of a large business enterprisethat operates on mainly three levels (Figure 9-1). Atthe top or apex of the pyramid is the corporate "head-quarters" that includes the chief executives and theirmain staff assistants and offices. Their task is todevelop broad strategy and to set organizational pol-icy and procedure. In the USSR the central decisionmaking authorities include both Communist Party andgovernmental units at the all-union or national level

. as well as the republic level. There a.:e also what wemay term "functional" agencies which are responsiblefor the formulation, coordination, and monitoring ofpolicy in a given area for all establishments in theeconomy. Most of these agencies are designated"state committees" and report directly to the centralgovernmental policy-making organs. Such functions asplanning, finance, and supply are the responsibilityof bodies of this type.

32 18

FIGURE 8-1 OVERALL STRUCTURE OF THE SOVIET SYSTEMOF R&D PLANNING AND MANAGEMENT

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33

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Below this top governing structure, on a secondlevel, are the specialized and relatively autonomous:"product" divisions and "line" agencies which are re-sponsible for directing all activities of a collec-tion of performing establishments which operate in aparticular area. In the Soviet context there arethree such major divisions or institutional subsys-tems. Each tends to concentrate on specific stagesof the R&D process. Academies of sciences special-ize in basic research while industrial branch minis-tries focus on applied research, design, development,and production assimilation. The Ministry of Higherand Specialized Secondary Education constitutes thethird performing network and includes universitiesand independent R&D facilities. Such organizationsengage in fundamental or applied research, dependingupon the orientation of the facility or individualresearcher. Finally, at the base of the structureare the individual units which actually conduct re-search, development, education, and production ac-tivities.

At each level operating policy tends to be setwith the direct or indirect participation of thefunctional agencies in their respective domains. Thenature and role(s) of pertinent specific or generictypes of organs noted in Figure 9-1 are describedbriefly in the following discussion.

To be sure, the highly centralized pattern of or-ganization and conduct of R&D is the most distinctivefeature of Soviet science policy. This characteris-tic also clearly distinguishes the Kremlin's approachfrom the American format. However, our understandingof the basic functioning and fundamental problems ofscientific RAP in the USSR will be imperfect if wesee only the dominant hierarchical lines of the for-mal organizational blueprint.

Though strongly centralized, the Soviet system isfar from being a monolith. The institutional worldof R&D is, indeed, a highly com?lex and compartmen-talized structure. Power is dispersed and authorityis divided among a myriad of organizational centers.

20

In 1972, for example, nearly 140 ministries on eitheran all-union or union republic level had under theirjurisdiction R&D establishments.1 This fragmentedadministrative structure, in turn, influences--if notdictates--the fundamentally bureaucratic character ofscience policy making and implementation. Adhering tothe principle that "science cannot be administeredexclusively from a single center," Kremlin authori-ties emphasize the joint realization of planning andmanagement functions.'- That is, the basic modus ope-randi in Soviet R&D revolves around joint decisionmaking, power sharing, and cooperative actions in amulti-organizational context.

To a large extent, the overall structure itselfgenerates certain "pluralist" forces and tendtmciesin Soviet R&D. Though admittedly of a different kindand degree than in America, organizational pluralismexists and exerts substantial influence on the policyprocess. The research-to-production cycle must passthrough a variety of decision paths and clearancepoiats. Disagreements and delays over choices andstrategies occur at every turn. Cooperation isachieved and maintained with great difficulty. Noth-ing works smoothly. Given this context, a heavyburden ;.ails particularly on those agencies responsi-ble for coordinating R&D. As the principal refereesand synthesizers, they are the ones whc must developand display effective managerial abilities in balanc-ing mixed coalitions of opinion, criticism, and advo-cacy in the pursuit of national goals.

While these behavioral features of Soviet R&Dplanning and management are treated in more detailin subsequent chapters, we mention them here becausethey are largely rooted in and shaped by organiza-tional factors. Moreover, structure per se is inher-ently static. In any brief description of formal in-frastructure it is easy to lose sight of the organi-zational dynamics around which the whole machineryturns.

It is also important to note that the Soviet S&Testablishment has evolved over several decades. There

21

is no evidence that the distribution of power amongthe central agencies concerned with administering R&Dhas changed significantly during the last 10 years.At the performing level, on the other hand, consider-able experimentation and some change have taken placein the organization of R&D in this interval. In gen-eral, though, institutional continuity and stabilityhave been distinct hallmarks of Soviet science andtechnology.

At the same time, science analysts and politicalleaders in Moscow have begun increasingly to take asecond look at basic organizational approaches in re-sponse to complaints that R&D institutions sufferfrom too much stability, that they have become struc-turally rigid and unresponsive to changing conditionsand new demands. Subsequently, some efforts are un-derway to create new, or at least modified, institu-tional arrangements and more effective organizationalforms linking and integrating the innovation process.We return to a discussion of these contemporary or-ganizational issues in the final part of this study.

For the moment, our task is to present the formalorganizational chart and to outline the main entitiesmanaging and supporting Soviet research and develop-ment. This panoramic sketch helps orient subsequentdiscussions of the formulation and implementation ofR&D plans. The latter, in turn, provide explanationsof the terminology employed in the brief descriptionsof the roles of the participating organizations.

THE TOP GOVERNING MACHINERY

All threads of decision making in science policy,as in other major issue areas, come together at thepeak of the Soviet political pyramid. Though powertends to be highly concentrated, there is, even atthe top, structural and functional differentiation,which is reflected in separate institutions chargedwith executive, legislative, and administrative func-

22

tions. Thus, the organization of authority continuesto take the form of an intricate, weblike structureof specialized agencies, divided responsibilities,and complex relationships.

Central Policy- Making OrKansAt the All-Union and Republic Levels

Policy-making authority is formally exercised bythree organs at the all-union and republic levels.These are (1) the leadership elements of the Commu-nist Party, at the all-union level the Central Com-mittee and its elected Politburo and Secretariat;(2) the legislative organ, at the all-union level theSupreme Soviet; and (3) the Councils of Ministers.The authority wielded by the Party derives from itsstatus as the only ruling party and sole repositoryof legitimacy in the system rather than from any for-mal responsibility within the Soviet governmental hi-erarchy. The highest organ of state authority, asspecified in the Soviet constitution, is the SupremeSoviet, while the USSR Council of Ministers, report-ing to the Supreme Soviet, is the central administra-tive organ of the government. There are counterpartbodies for the Supreme Soviet, the Council of Minis-ters, and the Central Committee of the Party in eachof the 15 republics of the Union* with the exceptionof the Russian Soviet Federated Socialist Republic,where there is no republic Central Committee.

This general tripartite division of institutionsand functions, however, should not be taken to implya genuine separation of powers or checks and balancesalong American lines. In actuality, it has alwaysbeen clear that final authority in the USSR restswith the Communist Party and its own executive ap-paratus. The legislative and executive branches ofgovernment are of secondary importance in the formu-lation of fundamental policy, and, sometimes, in de-

*These are the Russian, Estonian, Latvian, Lithu-

anian, Belorussian, Ukrainian, Moldavian, Armenian,Georgian,-Azerbaidzhan, Kazakh, Turkmen, Tadzhik,Uzbek, and Kirgiz Soviet Socialist Republics.

233?

ciding even operational questions. Though a more ra-tional division of decision making responsibility hasrecently evolved, the real political bargaining overbasic policy still occurs within the executive organsof the Communist Party.

The Communist Party of the Soviet Union (cpst)

Although the Party has no formal responsibility inR&D planning and management, the de facto authorityof the Party is extensive. The highest organs of theParty--the Politburo and the Secretariat--generallyare acknowledged to be, respectively, the leading de-cision-making body and chief executive arm in the So-viet Union. The Politburo defines national priori-ties and determines the broad contours of policy forthe economy, science, and technology. Directives ofthe Politburo, in turn, are reflected in the policydeliberations and formulations of the USSR Council ofMinisters; indeed, questions of fundamental impor-tance are decided jointly by the Central Committeeand the Council and are published as joint decrees.As evidence of the close working relationship betweenthe Party and government leadership elements, virtu-ally all members of the USSR Council of Ministers arealso members of the Central Committee and, in somecases, also of the Politburo.

The Central Committee Secretariat is the chief ex-ecutive body of the Party charged with operationalcoordination and day-to-day decision making. The Sec-retariat reserves the right to intervene in the work-ings of the ministries and other government agenciesto enforce priorities. Its Department of Science andHigher Educational Institutions exercises broad over-sight responsibilities in science-related matters. Inaddition, this department has been a major trainingground f( high level science and educational admin-istrators. For example, M. A. Prokofiev, the Minis-ter of Education, was at one time its head as wasV. A. Kirillin, the Chairman of the State Committeefor Science and Technology. Other departments ofthe Secretariat that appear to play important rolesin SST policy ar.t those of Defense Industry, Heavy

24dr)

Industry, Chemical Industry, and Planning and Fi-nance. In general, though, our knowledge of the na-ture and distribution of functions within the appa-ratus of the Central Committee in this policy sphe.eis very limited.

It is clear that considerable influence is exer-cised by the Party machinery through its general '-on-trol of personnel selection. All major appointmentsin scientific and educational institutions are firstscreened and approved by the Central Committee or itslocal counterparts, depending upon the significanceof the post.

Below the level of the Central Committee, Partyorganization to a Large degree parallels the organi-zation of the government and economy. Party crgansare established on a territorial basis (republic§province, and city). Party cells or at least repre-sentatives are also created in all significant per-forming establishments. Down the hierarchies of pub-lic administration, Party officials supervise andpenetrate the legislative and executive organs ofgovernment, in a complex pattern of cooptation andinterdependence. A. principal reason for this kindof organizational arrangement is to enable Partyauthorities to monitor economic and technical plan-ning and performance through channels independent ofthe government hierarchy and, when necessary, to fa-cilitate plan fulfillment with such measures as Partyassistance in resource allocation.

In general, Party organs have a pronounced impacton science policy formulation and izelementation,particularly at the highest levels of the Party.While the informal or unstated nature of the impactrenders it difficult to document systematically, theParty remains a potent force.

The Supreme Soviet of the USSR

The Supreme Soviet is the highest legislative bodyin the Soviet government. About 1500 deputies areelected to this "parliament," usually every five

25

years, from among the "leading elements" of Sovietsociety. As a general estimate, about 35 percent ofthe deputies are "outstanding" workers and peasantsby occupation, 35 percent are Party officials andgovernment administrators, and the remainder are var-ious kinds of professionals, including scientists andengineers. Though membership in the Communist Partyis not required for election, about three quarters of

the deputies elected to the Supreme Soviet in 1974were Party members. The internal organization of theSupreme Soviet and the relationship of the Soviet tothe Council of Ministers is illustrated in Figure 9-2.

The Supreme Soviet generally meets in full sessionno more than six to seven days a year. During thesesessions the deputies briefly discuss and approvelegislation formulated and presented by the Councilof Ministers and the Party Central Committee. Betweenmeetings, the authority of the Supreme Soviet is ex-ercised by its Presidium. This body includes 39 mem-bers: a chairman, a first deputy chairman, 15 deputychairmen (comprised of the chairmen of the supremesoviets of the 15 union republics), a secretary, and21 ordinary members. Of the latter group elected tothe Presidium in 1974, 11, including Brezhnev and 5other members of the Politburo and Secretariat, weremembers or candidates of the CPSU Central Committee.The composition of the membership again shows the in-terlocking character of Party and government authori-ties at the top of the political command structure.The Chairman of the Supreme Soviet Presidium, it maybe noted, is referred to as the president of the USSR.In June 1977 Leonid Brezhnev assumed this post in ad-dition to his position as General Secretary of theParty.

In general, the Supreme Soviet has great constitu-tional authority but little effective political pow-er. While the Soviet is officially the head of thegovernment, the sessions of the Soviet are too shortto permit meaningful deliberation of policy. Its pri-mary concern is to legitimize and propagandize poli-cies made elsewhere.

26

FIGURE 8-2 TOP LEVEL GOVERNMENTAL ORGANIZATIONS RESPONSIBLEFOR SCIENCE POLICY MAKING IN THE USSR

Supreme Soviet of the USSR

Council of the Union CcAvaisl of Nationalities

Permanent Commissionson Education, Science,Culture, Planning andBudget

Other Permanent Com-missions Involved withScience Policy

Presidiumof the

Supeme Soviet

Council of Ministersof the USSR

Presidiumof the

Council of Ministers

Permanent Commissionson Education, Science,Culture, Planning andBudget

Other Permanent Courmissions Involved withScience Policy

Source: "USSR Short Answers to US Questions Relating to USSR Research and Develop-ment Planning and Management," p. 13.

41

The de jure functions of the Supreme Soviet rela-ting to R&D planning and management include discus-sion and approval of national plans and of legisla-tion regarding the organization of state administra-tion of science and technology. Overall, the in-volvement--if not influenceof the Supreme Sovietin policy making may have increased somewhat in 1966with the creation of permanett standing commissionsfor such matters as education, science, and culture;planning and budget; industry; agriculture; andtransportation and communir_ations. These commissionshave the formal authorlt: to do the following:

1. Supervise activities of organs of state ad-ministration in appropriate fields

2. Make preliminary studies of appropriate sec-tions of the national economic plan

3. Present findings on matters submitted fortheir consideration

4. Initiate legislation and present it to thefull Soviet4.

The Council of Ministers of the USSR

The Council of Ministers is the most powerful or-gan of state administration and the final authorityon the organization of Soviet ministries. Composedof nearly 100 members, the Council includes the headsof the most important government agencies, and ex of-ficio, the 15 chairmen of the councils of ministersof the constituent union republics. With the excep-tion of the latter group, each member of the Councilis responsible for -dministering specific sectors ofthe nation's economic, political, military, or so-cial-cultural life. His administrative domain mayinclude, for example, a branch of industry; a nation-al level or interrepublic service, such as the run-ning of the railroads; a functional area, such asplanning or finance; o= such agencies as the Minis-tries of Foreign Trade, Education, and Justice.

28

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3. The State Committee for Material and TechnicalSupply (Gossnab)

4. The State Committee for Construction Affairs(Gosstroy)

5. The State Committee for Inventions and Dis-coveries (Goskomizobretenlya)

6. The State ComMittee for Standards (Gos-standart)

7. The State Bank (Gosbank)

8. The Central Statistical Administration (TsSU)

Other minor agencies of the Council whose activitiesrelate to science and technology are:

1. The State Comm..Attee for Utilizat-lon of AtomicEnergy

2. The Main Administration for Geodesy and Car-tography

3. The State Committee on Hydrometeorology andEnvironment

4. The Main Administration of MicrobiologicalIndustry

5. The Committee for Lenin and State Prizes inScience and Technology

Given the unwieldy size of the Council of Minis-ters, cohesion and coordination are provided by itsPresidium, a kind of inner cabinet. The Presidiumincludes the chairman, two first deputy chairmen, andabout 10 deputy chairmen. Among the deputy chairmenare the heads of four state committees which inter-face most importantly with SST policy (the GKNT, Gos-plan, Gossnab, and Gosstroy). The Chairman of theUSSR Council of Ministers is designated "Premter" andis the effective, operational leader of the govern-ment.

30

I el

The Council of MinisterIA, as the principal policy-making organ of the government, has general responsi-bility for organizing and administering all scientif-ic, technical, and production activities in the So-viet economy. As illustrAted in Figure 9-1, allstate facilities ultimat report to the Council.Overseeing the critical planing function is a ma-jor occupation of the Council. 2Tans for all sub-ordinate organs and facilities are derived from thenational plan, which is inspired, prepared under theguidance of, and approved by the Council of Minis-ters. In the sphere of R&D planning and management,the scope and breadth of the Council's ultimate auth-ority are illustrated by the following Soviet enu-meration of pertinent Council responsibilities:

1. General administration of R&D

2. Resolution of all questions concerning the or-ganization and administration of R&D

3. Development of measures to improve the manage-ment of R&D

4. Examinalon and approval of the "main direc-tions" cif R&D

5. Establishment ofsprocedures for developing R&Dplans and for introducing research results in-to the national economy

6. Development of the plan for S&T progress

7. Orgauizat ion of S&T information

8. Finance of R&D

9. Resolution of questions on wages and workingconditions of scientists and engineers

10. Training of scientific and engineering person-nel

11. Resolution of questions about copyright, pa-tents, and laws on invention and discovery.4

31

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of Risher and Specialized,.Secondary Education

1---

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Links between union and union-republic organsof ad:ministration and the Academy of Sciences,and organs of state administration in a anionrepublic

Links between organs of state administrationat the all-union and republic levels

"USSR Short Answers ," p. 2.

33

47

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the words of one Russian critic, the whole decisionprocess becomes. "overloaded and frozen." Accordingto another, sm.ch_an. arrangement of structures andfunctIOne contradicts the demands Loran optimalsystem of SST planning and management.6

Functional Agencies Engaged in R&DPlanning and Management

The role of state committees and other agenciesdepicted in Figure 9-1 essentially is to manage asubset of policy mechanisms on behalf of the Councilof Ministers of the USSR and the republic councils.Administration of branch scientific and productionactivities, which is the responsibility of the min-istries, depends upon provision of a number of com-mon services, such as planning, finance, and supply.The Soviet leadership has chosen to concentrate pro-vision of these services in particular state commit-tees and functional ministries. Of these services,planning has the most immediate and widespread im-pact. Agencies concerned with planning of R&D andrelated activities are the State Committee for Sci-ence and Technology, the State Planning Committee,and the USSR. Academy of Sciences. Other agenciesmanage complementary activities, such as finance andsupply, or specialized operations which support plan-ning and management, such as the maintenance of stan-dards. While there are few R&D and production facil-ities administratively subordinate to these agencies,the agencies have broad powers to establish proce-dures and to issue binding orders on matters withintheir competence. These orders significantly influ-ence the operation of all facilities throughout theSoviet economy.

The basic task of this network of functional in-terbranch agencies is to coordinate the vast and di-verse Soviet R&D effort. On paper, these organiza-tions possess formidable powers to enforce centralpriorities and to facilitate uniform S&T policies.In practice, however, they frequently lack the auth-ority and means necessary to perforM their integrat-ing functions. Instead of regulating developments

35

in their tangled branch constituencies, they arethemsel-les at times heing regulated and ignored. Theministries do not always accept the recommendationsof these central agencies; instead, they pursue theirown ways and wishes

To be sure, the actual workings of this machineryof coordination are much more complex than impliedby the formal organization chart. The key to under-standing Soviet policies lies not so much in thestructure of Institutions as in the fundamentally bu-reaucratic context in which they operate. The auth-ority and activity of state committees are frequentlycircumscribed. Caught in a constant cross fire ofpressures from competing and powerful organizations,each promoting Its own interests and R&D goals, thecommittees find themselves challenged and constrainedat every turn. Given the nature of their overlappingand shared responsibilities for R&D planning and man-agement, the state committees are frequently forcedto seek the approval of and some kind of accommoda-tion with various branch ministries, government ge-partments, and other state committees, not to mentionParty agencies. They are integral parts of a giantmaze of bureaucratic subsystems and circles of admin-istrative confusion, rather than standing apart fromit. As a result the state committees are forced toperform a continuous and difficult balancing act inwhich national goals and priorities are reconciledwith the special interests of the numerous organiza-tions that comprise and conduct the Soviet R&D ef-fort. This process inevitably involves them in heavypolitical conflict, bargaining, and compromise. Al-though we still know little about the actual mechan-ics of power and processes of negotiation within theSoviet system, the reality of bureaucratic politicsand its imprint on science policy are unmistakable.

With these caveats in mind, we can now brieflydescribe the formal functions of the major agenciesinvolved in :IAD planning and management at the cen-tral level. Discussion of the Academy of Sciences istaken up in the next section, as the Academy combines

36

5 u

The GKNT, an all-union agency, was formed in 1965,eplacing the union-republic State Committee for the°ordination of Scientific Research. Other predeces-or organizations of the GKNT performing a similarunction were the State Scientific and Technical Com-ittee (1957-1961), the State Committee for New Tech-ology (1955-1957), Gosplan (1951-1955), and thetate Committee for the Introduction of Advancedachnology into the National Economy (1947-1951). Un-il 1947 the planning of science and technology was

within Gosplan.9

The State Committee itself consists of about 70mbers, about a third of whom are members of the3SR. Academy of Sciences and other academies. Somemernment ministers and prominent industrial leadersIt on the GKNT. Among the ex officio members areie President of the USSR Academy of Sciences, theiairman of the State Committee for Standards, theiairman of the State Committee for Inventions andLscoveries, the Minister of Higher and Specializedtcondary Education, and a deputy chairman of Gos-Lan. Some top executives from the Committee staffNa also members of the GKNT. The State Committee,such, meets only once or twice a year to consider

to main directions for the development of sciencetd technology as well as to approve the list of pri-.ity R&D problems to be included in the five year

37

The executive body of the GKNT is the Collegium,composed of fewer than 20 members and chaired by G.I.Marchuk, the Chairman of the State Committee. Be-sides the various deputy chairmen, the heads of cer-tain departments and divisions plus a few Academi-cians make up the membership. The Collegium meetsweekly and examines all problems that come before theGKNT. Though the Collegium acts as an advisory body,its decisicms become decrees signed by Kirillin, andits orders are followed by all departments of theState Committee.

A simplified scheme of the internal organizationof the GKNT is presented in Figure 9-4. In additionto various functional divisions charged with hand-ling international liaison, information dissemina-tion, science organization, and other tasks, depart-ments have been established to monitor S&T develop-ments in particular branches of industry, such aschemicals and machine building. Functioning underthe GKNT is also an elaborate network of advisorybodies which assist in the analysis of institutionaland policy problems of science and technology. Inte-crrl to this special consultative machinery are more

-I scientific councils on major interbranch S&Tsuch as oceanography, new welding proces-

ses, and catalysis and its industrial utilization.Some 5,500 persons participate in the work of thesecouncils, including nearly 160 academicians and cor-responding members of the USSR and republic academiesof sciences, more than 1000 doctors of science andabout 1600 candidates of science.1° The councilsmonitor and forecast developments in a particularfield of science and technology, and/or progress insolving important, national engineering and economicproblems.

The GKNT, as suggested by the above description,is the principal state agency concerned with overallS&T policy and performance. While possessing limiteddirect authority over the actual conduct of research,development, and innovation, the GKNT exercises im-portant guidance and liaison functions for other min-istries and agencies in R&D planning, coordination,and performance.

38

FIGURE 8-4 STRUCTURE OF THE USSR STATE COMMITTEEFOR SCIENCE AND TECHNOLOGY

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purce: Louvan E. Nolting, The Structure and Functionsof the U.S.S.R. State Committee for Science andTechnology (Washington, D.C., 1979), p.21.

39

53

With respect to RED planning and interagency co-ordination, the GKNT

1. Prepares S&T forecasts and approves proceduresfor developing such forecasts

2. Draws up proposals for the main directions ofR&D

3. Drafts a list of major S&T problems to besolved during the next five year plan

4. Cooperates with Gosplan, Gosstroy, and theAcademy of Sciences In developing proposalsfor the five year plans for S&T

5. Cooperates with Gosplan and the Academy inproposals for'introducing R&D results intothe economy.

TheThe planning and coordination functions are particu-larly apparent on large, important projects which ex-tend beyond the boundaries of a particular ministry,i.e., so-called "interbranch" problems. Such pro-jects proposed by the ministries or other agenciesare submitted to the GKNT for approval. The GKNTcontrols an important share of the financing of suchprojects and tries to settle disputes between parti-cipating organizations. The State Committee alsooversees the implementation of these projects.

The GKNT also has a significant role in support-ing and monitoring ongoing R&D. The GKNT works onthe development of indicators to measure S&T progressand exercises control over development of the R&D re-source base. It may decree the establishment orclosing of institutions, and it approves overall re-quirements for machinery and equipment in the draftenterprise plans. Together with Gosplan and Gossnabit participates in supplying equipment to priorityprojects. With Gossnah it plans the financing ofmaterial and technical supply and finances the dis-tribution of materials and equipment. In collabo-ration with the State Committee for Labor and Social

40

Gosplan has overall responsibility for the formu-lation of economic plans which guide the activitiesof middle-level management organs and their subordi-nate facilities in pursuit of the objectives laiA_

down by the central leadership. Functioning essen-tially as the "nerve center" of the Soviet economy,Gosplan possesses considerable power over establish-ments in every field. As a unionrepublic agency,Gosplan's authority extends to activities throughoutthe economy. A simplified internal organizationalchart for Gosplan is provided in Figure 9-5. Gosplanmaintains departments for at least 3a differentbranches of the economy and also has departments con-cerned with general policy matters.

One of the latter is the Department for Comprehen-sive Planning of the Introduction of New Technologyinto the National Economy, established in 1966. Theconcern of this department is indicative of the ori-entation of Gosplan in R&D planning and management.While general R&D planning is primarily the respon-sibility of the GKNT and of the Academy of Sciences,Gosplan cooperates with these agencies in planningthe introduction of R&D results into the economy.Specifically the pertinent functions oi'Gosplan in-clude:

1. Collaboration with the GKNT in considerationof large interbranch (interministerial) S&Tprojects

2. Planning the IntrodUction of new technology

3. Consideration of the overall vol =...-re of capitalinvestmett for SAT

41

Staf fOrganizations

AdministrativeLegalFinancialGeneral

Administrationof Affairs

Part Committee

Main ComputerCentor

Main Administrationsand Departments

Branches of theNational Economy

Councils Institutesand Attached to

Commissions two sp.Lan

42

4

4. Collaboration with the Ministry of financeand the GKNT to determine the levels of fund-ing for SST projects:

5. Collaboration with Gossnab on planning materi-al and technical supplies for R&D institutions

6. Participation in developing plans for trainingscientific manpower

7. Collaboration-with the State Committee on la-bor and Social Problems and with the All-UnionCouncil of Trade UntonS on wages and workingconditions for scientific personne1.13

Overall, a major concern of Gosplan is the integra-tion of technical plan targets with. Gosplan's princi-pal concern, production plan targets.

The State Committee for Materialand Technical Supply (Gossnab)

In the Soviet 'Paton the allocation of commoditiesis centrally planned in accordance with the outputtargets specified by Gosplan. Supply of the most im-portant articles is planned by Gosplan itself whilesupply of the remainder is planned by all-union orterritorial organs of Gossnab, a union-republic agen-cy. Inputs for industrial R&D are included in theoverall material and tc;..-LL.'-tal supply system, willespecial provision has beer made for acquisition ofinputs by Academy and university facilities.

Faciliti -s requiring inputs submit their requeststo Gossnab, manager of the material and technicalsupply system. The transfer of items takes placeonly when Gossnab issues orders for their delivery.In general, Gossnab's authority is used to resolveconflicting demands on supply and to balance the ma-terial needs of producers and consumers.14

The State Committee for Construction Affairs(Gosstro7)

Gosstroy, a union-republic agency, plans and mon-itors capital construction and major renovation of

43

facilities in the USSR. In S&T, Gosstroy developsand implements uniform policies directed at acceler-ating technical progress in construction to raise theeffectiveness of this branch of industry.

Specifically, Gosstroy is charged with identifyingbasic S&T problems in construction, construction ma-terials, and architecture; with developing plans forresearch to address such problems; and with coordi-nating the relevant R&D. Gosstroy's S&T plans aredeveloped in collaboration with the GKNT and minis-tries as well as other agencies of the Council ofMinisters.15

The State Committee for Standards (Gosstandart)

Gosstandart, an all-union body, assigns and di-rects work on the development of technical and eco-nomic standards, approves new standards that havebeen developed, and conducts statewide inspectionsto assure introduction of and adherence to approvedstandards.16 Recently, Gosstandart has become in-creasingly coL,cerned with the elaboration of uniformprocedures for such activities as design and produc-tion assimilation. The growing importance attachedto standardization relates to stepped-up efforts toimprove product quality as well as to economize ondesign resources.

The State Committee for Inventions and Discoveries(Goskamizch7etenlya)

The State Committee for Inventions and Discoveriesmaintains the state register of inventions and dis-coveries and seeks to promote innovation in Sovietscience and industry. Among the responsibilities ofthe Committee are the issuance of "author certifi-cates" and patents, the introduction of inventionsinto the economy, and the protection of state inter-ests in inventions. Scientific discoveries are recog-nized through the issuance of diplomas. Author cer-tificates, the most common form of recognition, dif-fer from patents in that the rights to the inventionaccrue to the state, rather than to the inventors.

44

The certificates give the inventors/authors publicacknowledgment, and if use of the invention or inno-vation results in production cost savings monetaryrewards often are given to the inventors. i7

An important function of the Committee is the na-tional dissemination of information about inventions.This is accomplished through the Committee's CentralScientific Research Institute of Patent Informationand Technical Economic Investigation and through thejournal Discoveries, Inventions, Industrial Proto-types, and Trade Marks (Otkrytiya, izobreteniya, pro-myshlennyye obraztsy, tovarnyye znaki) .

The Higher Certification Commission (VAK)

The Higher Certification Commission approves theawarding of advanced degrees, makes all appointmentsto senior academic positions, and selects _lie highereducatiorial institutions for advanced training in re-search. The Commission also has the authority to re-voke degrees. The Commission is made up of profes-sors, doctors of science, and members of the USSR andrepublic academies of sciences. Since 1974 VAK hasbeen an agency of the USSR Council of Ministers. Pre-viously, it was subordinate to the USSR Ministry ofHigher and Specialized Secondary Education.

THE THREE INSTITUTIONAL SUBSYSTEMSPERFORMING R&D

Structurally, scientific R&D in the USSR is basedwithin three different instituticnal subsystems: (1)academies of sciences; (2) Industrial branch minis-tries; and (3) higher educational institutions orVUZy. The terms "academy science," "branch sci-ence," and "VUZ science" are commonly used in re-ferring to this tripartite division of the researchsec zor. Indeed, Soviet science is divided predomi-nantly along institutional and administrative linesrather than according to different kinds of activity,

45

such as "basic research," "applied research," or "In-novation." The planning and financing of R&D arealso conducted primarily on an institutional basisrather than by stages, projects, or programs.

Each of these subsystems has a distinct orienta-tion. According to Nolting's estimates, fundamentalresearch is concentrated overwhelmingly in the acad-emy system, which accounts for roughly 67 to 79 per-cent of the total. About 10 to 13 percent is per-formed in the VuZy and from 8 to 23 percent in branchR&D organizations. The latter, however, conduct thevast bulk (90 to 95 percent) of officially reportedapplied scientific research and development. Onlyabout 5 to 10 percent of official applied R&D is doneby the academies of sciences and the VUZy together.18Though the amount of R&D performed in the VUZy hasgrown recently, higher educational institutions re-main preoccupied with pedagogical functions. Thispredominantly teaching orientation reflects the So-viet pattern of research and education which has longbeen based on a degree of separation of the two thatis much greater than in the United States.

In terms of expenditures and manpower, the academysystem employs 9 percent of all scientific workersand receives 8 percent of official allocations forR&D. Branch scientific institutions of all kindshave 58 percent of the scientific workers and 80 per-cent of the official science budget. Higher educa-tional institutions account for 28 percent and 9 per-cent, respectively. Only 3 percent of all scientificpersonnel and 2 percent of official scieLLce expendi-tures are concentrated in production enterprises andorganizations.19

Organizational dissociation and administrativefragmentation are important features--and conse-quences--of this tripartite division of the R&D sys-tem. Each of these institutional networks is a re-latively independent administrative hierarchy. Eachhas its own distinct focus, set of interests, rewardstructure_ and approaches to the R&D function. Allthree subsystems, moreover, are separated generally

46

not only from each other but from the world of pro-duction as well. In short, structural features helpcreate and reinforce functional autonomy and nonin-tegrative attitudes throughout the Sovie R&D commu-nity.

The following sections present the composition andorganization of these three hierarchical subsystems,and briefly describe the R&D planning and managementfunctions undertaken by the central management organ.The structure and functions of a typical industrialministry are also outlined.

Academies of Sciences

The academies of sciences are prestigious organi-zations composed of scientists and engineers who areselected for membership in recognition of their pro-fessional competence and achievement. There arethree types of academies--the all-union academy, re-public academies, and branch academies. Subordinateto each academy are a number of institutes, .abora-tortes, observatories, experimental stations, librar-ies, museums, and research ships. Most are organizedaround scientific or technical disciplines. As arule, academy institutes tend to concentrate on fun-damental research and generally constitute the lead-ing Soviet facility in the particular scientificfield.

This scientific leadership is particularly true ofthe facilities of the USSR Academy of Sciences. Theinternal organization of this Academy is illustracedin Figure 9-6. All full and corresponding membersconstitute the General Assembly of the Academy. Be-tween sessions of the General Assembly, a Presidiumconsisting of elected full members of the Academy(Academicians) administers the Academy's affairs. ThePresidium supervises 16 discipline-oriented divi-sions. These divisions oversee the activities of theAcademy's research institutions. Between sessions ofthe Assembly, each Division is run by a Bureau headedby the Scientific-Secretary of the Division. Membersof the Bureaus and the directors of research insti-

47

FIGURE 8-6 STRUCTURE OF THE USSR ACADEMY OF SCIENCES

General Assembly

Presidia: nationL-1.4Council for Coordi- Republic

nation of Scientific AcadeelActivities of the ofRepublic Academies Sciences

Organisations, Councils sadCommissions Attached to the

Presidium

Affiliates

last cutesInscitutes Councils

:ommission

Assione.A. Iffiliacesand Scientific Cancer*

..notitutes Councils Cmmislism4

:As Administrative Apparatusof the Presidium

Physi TechnicaMathemacical Sciences

Section

Mmemic ,schnical`and Biological

S41SUCOS Section

Earth SciencesSection

Social SciencesSection

Sciencific Councilsfor Problems

Attached to Sectiona

Divisions Divisions

Mathematics General and Tech-General Physics and n.cal ChemistryAstronomy Physical ChemistryNuclear Physics and Technology ofPhysical..Technica1 Pro- Inorganic MaterialsLees of Energetics Biochemistry. Biophys-.

Mechanics and Control ice and Chem airy ofProcesses Physiologically

Active CompoundsPhysiologyGeneral Biology

Scientific

Olmisiona

Geology, Geophys-ics and Coaches-istry

Oceanography,24ysics of theAtmosphere andGeography

Jivissons

AisccryPhilosophy and .wEconomicsLiterature andLanguages

Scientific Councilsof Divisions

ScientificLostitutions I tnatitutions

SciencificInstitutions

Source: Gvishiani et al, Osnovnyye printsiyy i obshchiyeproblemy upravleniya naukoys pp. 182-183; Nolting,The Structure and Functions of the USSR State Com-mittee for Science and Technology, p. 28.

48"ti

tutee are elected by the Assembly of the Academy.

The institutes of the Academy tend to be centeredin Moscow and in the Leningrad and Novosibirsk Divi-sions. However, the Academy has established a numberof affiliates and scientific centers to promote thescientific and economic development of various re-gions. Their expressed purpose is to advance sci-entific progress on specific topics of more local im-portance so that the area can develop economically.The Soviet Academy has affiliates and centers:Bashkir, Dagestan, Karel.lan, Kazan, Kola, Komi, theFar East, and the Urals. Each affiliate or center ismanaged by a presidium, consisting of heads of insti-tutes and affiliate subdivisions, plant managers, andrepresentatives from higher educational institutionsin the region.

The Siberian Division of the Soviet Academy isunique in the Academy system. Unlike the discipline-oriented departments, it is governed by its own gen-eral assembly and presidium. It is administratielysubordinate to both the USSR Academy and the Councilof Ministers of the Russian Republic (RSFSR). Fundingis provided by the RSFSR, which has no republic acad-emy of its own. Thus, the Siberian Division has acertain measure of independence vis-a-vis the SovietAcademy. The principal facilities of the SiberianDivision are located in Novosibirsk in what is knownas Akac..emgorodok, or the Academy City.

The republic academies are dually subordinate tothe USSR Academy and to their respective republiccouncils of ministers. Funding and administrativesupervision are the responsibility of the councilsof mints:,,rs; technical and functional supervisionis provided by the USSR Academy.

The republic academies are more oriented towardsolving industrial problems of their respective re-public than is the Soviet Academy. To avoid dupli-cation of effort, republic academies tend to be some-what specialized and limited in scope. In a numberof cases, however, the institutes of republic .cad-

49

emies are on a par with those of the USSR Academy,and some, like the Paton Institute of Electric Weld-ing of the Ukrainian Academy, are recognized as theleading Soviet institutions in their fields.

Despite efforts to decentralize and disperse sci-entific resources, however, Soviet science remainshighly concentrated in a few large urban centers.Moscow alone boasts one-fourth of all scientificworkers, 34 percent of all doctors of science and 26percent of all candidates of science. Here also arethe most qualified researchers: 45 percent of allscientists with the title of professor; 72 percentof all full members and 64 percent of all corresponding members of the USSR Academy. In just three cit-ies--Moscow, Leningrad, and Kievare concentratedone fourth of all scientific institutions, nearly 40percent of all R&D being performed in the country,and more than 45 percent of the total allocations toscientific research and development.20

Finally, in addition to the Soviet and republicacademies of sciences, there are several specializedbranch academies under t_he ministries of their re-spective fields. Some significant research facili-ties are subordinate to these academies, particularlyin biomedicine. The specialized academies of interest in R&D planning and management are the Academy ofMedical Sciences under the USSR Ministry of Health,the Academy of Agricultural Sciences under the USSRMinistry of Agriculture, and the Academy of Pedagog-ical Sciences under the USSR Ministry of Higher andSpecialized Secondary Education. It may be notedthat the branch academy system was considerably re-duced in the 1960s and many of its institutionstransferred to the republic academies. Table 9-1supplies data concerning the size and compositionof the all-union, republic, and branch aL_demies.Table 9-2 provides data on the scientific centers ofthe USSR Academy of Sciences.

The planning and managerial authority of the USSRAcademy in fundamental research is extensive. Report-ing directly to the USSR Council of Ministers, the

TABLE 8"1

USSR, UNION REPUBLIC, AND BRANCH ACADEMIES

OF SCIENCES (at the end of 1976)

WITH

NUMBER OFADVANCED DEGREE!

FULL AND NUMBER OF NUMBER OF DOCTOR CANDIDATE

YEAR CORRESPONDING SCIENTIFIC FULL-TIME OF OF

ACADEMY FOUNDED MEMBERS INSTITUTIONS SCIENTISTS SCIENCES SCIENCES.

iftiliinalliliMENSIIPMINIOMIN1110111111=FIMMIPPIMMIMMEr

vi USSR

Academy of Sciences 1724 733 244 42,951 3,943 18,785

Ukrainian SSR

Academy of Sciences 1919 300 70 12,250 904 5,7,3

Belorussian SSR

Academy of Sciences 1928 126 32 4,736 187 1,336

Uzbek SSR

Academy of Sciences 1943 92 30 3,545 189 1,509

Kazakh SSR

Academy of Sciences 1945 129 31 3,736 183 1,541

Georgian SSR

Academy of Sciences 1941 106 38 5,356 344 1,778

TABLE 8-1 (continued)

Azerbaydzhan SSR

Academy of Sciences 1945 102 28 4,242 249 1,704

Lithuanian SSR

Academy of Sciences 1941 49 11 1,555 60 724

Moldavian SSR

Academy of Sciences 1961 41 19 895 59 521

Latvian SSR

Nj Academy of Sciences 1946 51 16 1,688 76 744

Kirgiz SSR

Academy of Sciences 1954 44 18 1,460 68 515

Tadzhik SSR

Academy of Sciences 1951 46 17 1,262 51 512

Armenian SSR

Academy of Sciences 1943 88 31 2,898 182 933

Turkmen SSR

Academy of Sciences 1951 46 14 883 40 410

Estonian SSR

Academy of Sciences 1946 42 13 952 63

EG

TABLE 8-1 (continued)

USSR Academy of Art

AllUnion Academy of

Agricultural Sciences

1947 127 4

c349 16 131

imeni Lenin 192 9 203 169 11,315 497 5,660

USSR Academy of

Medical Sciences 1944 254 42 5,488 929 3,262

USSR Academy of

Pedagogical Sciences

b1943 127 14 1,687 128 809

RSFSR Academy of

Communal Economics 1931 5 428 10 206

aThe Academy opened in 1725

bUntil 1966, The Academy of Pedagogical Sciences RSFSR

cIncluding 2 VUZy

Source: Narodnoye khozyaystvo SSSR za 60 leq yubileynu statisticheskiiez1(

(The National Economy of the USSR for 60 years: Jubilee Statistical Yearbook)

(Moscow, 1977), p. 144

TABLE 6-2

REGIONAL AFFILIATES AND SCIENTIFIC CENTERS

OF THE USSR ACADEMY OF SCIENCES

(at the end of 1976)

HUMBER

OF

INSTITUTIONS

WITH

NUMBERADVANCED DEGREES

OF DOCTOR CANDIDATE

SCIENTIFIC OF OF

WORKERS SCIENCES SCIENCES

Siberian Division of the

USSR Academy of Sciences

Including Affiliates 49 6,289 436 2,982

Buryat 4 285 15 145Eastern Siberia 9 1,068 53 49Yakutsk 6 511 20 220

Scientific Centers of the

USSR Academy of Sciences

Far Eastern 19 1,976 78 762

6

TABLE 8 -2 (continued)

Urals 13 1,179 102 698

Affiliates of the USSRAcademy of Sciences

Bashkir E 501 30 219

Dagestan 4 363 12 151

Karelian 8 360 17 187

Kola 8 763 15 225

c.nul

Komi 4 307 9 124

Kazan 5 517 31 256

Source: Narodnoye khozyaystvo SSSR za 60 let; yubile) statisticheskiy yezhegodnik

(The National Economy of the USSR for year:,: Jubilee Statistical Yearbook)

(Moscow, 1977), p. 145.

69

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FIGURE 8-7 ORGANIZATION AND MANAGEMENT OF R&DIN A UNION LEVEL INDUSTRIAL MINISTRY

Iriniscer

!finial:re Collation

licisar=fic-Tocnnica41reumm....11

Tocroical

'17schnica). Technical.notion Tostituto

Scionce.4roeuccionAssocincion CNPO)

3oni 3,10

All-Onion LedostriaL Association ( PO)or Main Administration (=owe)

'OrganizationProductionDesi Organgn -ixaclocum

ZAD. Prodoction andDesign Organixac+oof Seed rosciturs spcisosco-troduction

Associacion CIPO)1.,.....11.1.1Snag IAD

Orgossisacina

Productims andDesign Orgsgooat ionoof Seed Znaticnts

I

SAD. Productions andDesign Organimacions

of mho NPO

ProductionAssociacion (PO)

Rood Production77 ,at

PronuctionAssociation CPO)

SiD. Production andDaniels Organism:lona

of Load Plant

Sand Produce onPiano

DAD. Prodoccion andDosign Organic= ion

of 3sad ?LaneI

316D. Produccioa modDesign Orposicat

of mho PO

SAD. Production andDesign Organisations

of tea PO

Source: Adapted from "USSR Short Answers," p. 44and Eugene Zaleski, "Planning and Financingof Research and Development in the U.S.S.R.,"in John R. Thomas and Ursula M. Kruse-Vau-cienne, eds., Soviet Science and Technology:Domestic and Foreign Perspectives` (Washington,D.C., 1977), p. 304.

58

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TABLE 8-3

DISTRIBUTION OF SCIENTIFIC WORKERS BY BRANCH OF SCIENCE: 1973

(SCIENTIFIC RESEARCHINSTITUTES AND HIGHER EDUCATIONAL INSTITUTIONS)

Modes of Wows

Met ofWestin,

.112 /111 ondVVZ Ytth AdrencodDE nrr

Doctor, Candidate

of of

Sefton ?want Sciences hreent

Nuke of MOr

Went 1 f lc Doctor

7tecillr./ of

;iodate 5elanete fuck

and

of

Se Itneee went

1!tleies141etkietleol0112 260 7.3 11403 23.5 46499 1216 LI 11311 26.3

Niles! 45815 1)20 7.9 13284 25.0 15111 556 ).1 )940 39.0

11ologleel31342 7410 C6 17182 16.0 11196 149 7.1 9312 47.9

Ceololy and 111wrology 10341 1415 5.2 1141 38.1 3779 333 C 8 In) 45,9

'Whales!40410 4138 1.1 3312 15.5 12058 737) 2.1 29010 31.1

Agrleidtert and

'wigwag Medicine 35446 1348 3.8 4511 41.1 9162 791 8.1 5107 53,8

Eatery sod ThIlotophy 37111 1681 4.3 11047 40,5 23178 886 3,1 10908 41,0

females37518

1.4 1490 25.9 22011 319 2.4 8410 38.5

?1alolo8y41111 882 1,1 1/10 19,1 41416 510 LI 6814 16,6

Ceopephy1141 341 4.7' 2678 36,9 1611 148 3.2 1141 43.2

glifliptdioto4165 26) 7.1 VII 49.9 1143 141 8.8 1446 57,8

hislog721113 159 0.5 4411 14.4 21501 94 Q.4 3789 14.1

14tdielat sod tlferalcy 49957 5011 10,0 185)9 57,1 24607 2511 1,1 14111 51.3

An12182 1)9 1,1 1161 10.3 1958 70 0.6 701 1.1

Archltretvet2590 It 2,3 811 31.4 MO 33 2.5 411 3'.3

?iyekeloty1924 100 5.1 741 39,9 1228 45 3.9 321 47,4

Oder30113 321 1,1 5527 11.0 11358 231 13 3113 19.2

facet427709 11116 1,5 224490 14.1 341872 1164) 3,3 11104 31.8

Source: B. M. Remennikov,Vysshaya shknla v slsteme vosproizvodstva

rabochey

sily v SSSR(Moscow, 1973), p. 155.

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FIGUR2 8-8 THE ADMINISTRATIVENETWORK OF THE USSR MINISTRY OF HIGHER

AND SPECIALIZED SECONDARY EDUCATION (MinVUZ)

MinVUZ USSR-1r-----Union Republic I..

Council of Ministers

Union Republic

State Planning Committee

INtroommtra

Union Republic

MinVUZ

Scientific and Technical

Council of MinVUZ USSR

Scientific and Technical

Council of the Union

Republic MinVUZ

Independent Scientific

Research Institutions

of MinVUZ USSR

Hi her Educational

Institutions (Vey)

of MinVUZ USSR

Source: "USSR Short Answers," p. 46.

Higher Educational

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Union Republic

MinVUZ

Union Republic

Academy of Sciences

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research institutes do only design orprototype work and no research, othersdo only research and no development,some research institutes concentratealmost entirely on experimental testingor assisting industrial plants in in-novation, and many design agencies havelarge research subdivisions, some ofthem operatins primarily as research or-ganizat lons.24

At the same time, S&T activity is becoming stead-ily integrated with industrial production. Organi-zational dissociation of functional performers is in-creasingly giving way to new, more integrated struc-tures, like the associations. The whole organiza-tional edifice, particularly at the lower levels, isin motion. This point should be kept in mind whenreading the following descriptions of the basic unitsperforming R&D.

Research Institutes

Basic and applied scientific research and a numberof design tasks are accomplished at institutes underacademies of sciences, MinVUZ, and the branch minis-tries. While some institutes are quite small with nomore than 40 to SO persons, others are major researchorganizations with several hundred, or even thou-sands, of scientists and engineers. Institutes varywidely in the presence or absence of design, techni-cal drafting, and testing facilities. Some researchinstitutes are "broad-profile," engaging in all stag-es of R&D, and others are "specialized," limited toapplied research, to development, or to testing pro-totypes. Some also act as "head" institutes deter-mining technical policies and research assignmentsfor a group of institutes, and others operate inde-pendently or subordinately.2'

The internal structure of a typical research in-stitute of the Academy of Sciences is depicted inFigure 9-9. Similarly, Figure 9-10 provides an over-view of the organizational structure of a research

65

IkSpecislizedesearch Grow

LaboratoryExperimentalStations

Observatories

rfDesign Projectand Bureau

ScientificExperimentalExploitations

Departmentof Research

Laboratories(

RasesrchGroups andSectors

Research 1

Groups andtSectors I

Departmentof

Education

1 Library

IArchives

[..-

InformationSection

Source: E.3ene Zaleski et al, eds., Science Policyin the USSR (Paris, 1969), p. 220.

66

FIGURE 8-10 ORGANIZATIONAL STRUCTURE OF A RESEARCH INSTITUTE OF AN INDUSTRIAL MINISTRY

0047 Oiler(opines

Dliwtripte

kw I lachsolcslispaIr 1 Cawing-

ties Shop

Technical Stoetity

leper Wald

Wet liskops

Services Division

of ratio, andAmur Irfq tratru-

onto

DsportoentoWm0Sciontific-fsdakellocholoel Docrontstio

$1 1 inforosilaiiketonto 1 Lions

letioneilistioad invention

Orianizothe

el Libor

bre letting aditorvierdIrstica

lavvetion

Scientific-iodates)Nevi 1

Director

first Ospety Olrsctor

ler Scientific Affairs/

(Die thiof (oefroor)

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hoeuch

Division Divisive

olln...MMOMPI

DokeOverload

kedosic

COVOCii

1.1.M11.11/1011.1.011.m....66.11111.M.I....14m=10161.

Orgoniretlons iffillsted

with the inotituts

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Director Director

for for

Seism Naomi

Scientific

I

Awedis viola

Lobe

Pommel

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ospatost

Dior

(coals!

DopAy Depifty

Moder. Dl rotor

for for

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fonetruct

noputy

OifCtor

for

frporienntsi

Production

(Plant Di-

rector)

Ilopertavals Overlent. **tont

Hating and Genets' Ad- apt tat Coporioontel

Product ion ol olotrotioo Anotruction Pleat

&galloping

fifiNC.

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Source: D. M. Gvishiani et al, eds., Osnovnyye printsipy I obshchiye zroblemy upravleniya

ProblemsintheMlentofScience)

(Moscow, 1973), p. 226.

51

Institute attached to an industrial branch ministry.In general, the structural format cf an Academy in-stitute is leas complex than that of a branch insti-tute. The Academy system as a whole, in fact, isless bureaucratically organized and run than the R&Dsubsystem of the ministries.

Design Bureaus

Desigr nd development engineering tasks are car-ried out z.y organizations known as design bureaus orinstitutes. The design bureaus range in size fromsmall groups within production enterprises to largeindependent organizations of several hundred designengineers and technologists known as experimentalplants. While some design facilities limit theirwork to designing new products and machines, othersbuild and test prototypes as well. Still other or-ganizations are primarily engaged in process design-ing, or designing of machinery and installations,and development of processes for the manufacture ofnew products or the modernization of production.They are variously titled design-technological bu-reaus, project-design and technological 7Ju::7.aus, orscientific research project-technological ins,.4tutes.In addition, there are so-called project institutesthat specialize In the designing and planning of newplants or renovation of old enterprises. Althoughscientific research is conducted at design bureaus,it is of secondary importance to work on product andprocess development and the building of prototypes.Some design bureaus, however, do extensive industri-al research and are often indistinguishable fromresearch institutes.26

Higher Educational Institutions

Most educational institutions conduct research ofsome kind. These Include (1) comprehensive univer-sities, such as Moscow State University, where abroad curriculum of natural sciences and humanitiesis offered; (2) higher schools such as the BaumanMosccw Higher Technical School and the polytechnicinstitutes, where a variety of engineering courses

68

FIGURE 8-11 ORG:IZATION AND MANAGEMENT OF R&DIN A =HER EDUCATIONAL INSTITUTION (TUZ)

AdministrativeDivisionsof :tie VUZ

Rector

Scientific Research...aboratories of the VT=

Learned Council1 of the 17C4:

Deputy Rectorfor RAD

IOffice of theDeputy Rector

Scientific ResearchInstitutes of the VUZ I

L1 Other Facilities!

1 Deputy Dean of Dean of the; the Faculty

f--1Faculty

1 for R&D

Faculty

Faculty Learned 1

Cooaeil

Scientific ResearchLaboratories of the

Faculty

Other Departments Department

[ Seed of theDepartment

Scientific Research'Znatitutes of

Faculty

Scientific Councillof the Department

Problem ScientificResearch Laboratories

Branch Scientific ReseerchLaboratories

Source: "USSR short Answers," o. 88.

69

may be pursued; and (3) a large number of specializedsingle-curriculum institutes such as the LeningradInstitute for Aviation Instrument Construction andthe Mendeleyev Moscow Chemical Technical Institute.The institutes concentrate on applied research, mostof which is funded through contracts with industry.University research generally is conducted within de-partmental structi.l.es by an individual professor; butin some universities special scientific research in-stitut_ts have beer. formed.

Figure 9-11 presents a generalized organizationalchart of the administration of scientific researchwork in VUZy. As the chart illustrates, a VUZ sci-entific research iustitute may be subordinate to arelated faculty of the VUZ or to the VUZ as a whole.The research laboratories may be similarly subordi-nated. VUZ labs may be branch laboratories or prob-lem laboratories. The former conduct researr:: anindustrial organization's needs for new matezials,processes, and equipment, whereas problem lal)orato-ries are created for the execution of major scien-tific, engtriee-L.i.g, and experimental design pro-jects. In VUZ3 =nder the USSR Ministry of Higherand Specialized Secondary Education at the end of1971 there were 55 scientific research institutes,419 problem laboratories, and 528 branch laborato-ries.27

Industrial Enterprises

An enterprise is a legally independent entity corgicerned almost exclusively with production. It hasits own technical, production, and financial plan(tekhpromfinplan) containing production, organiza-tional, and technical chapters and targets, inprinciple well integrated. It has its own assets,including working capital. When on an independentbalance sheet, it has an account in the State Bank.It most frequenzly includes a single plant.

The term enterprise (predyriyatiye) is alEo a ge-neric term that cov-,rs a number of form cif produc-tion organization. One is the plant (zavod), which

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FIGURE 8-12 OZANIZATION AND MANAGEMENT OF R&D IN AN INDUSTRIAL ENTERPRISE

Chief Engineer -First

Deputy Director

Director

Chief Designer Chief TehlologiatLaboratories Chief Mechanic' Chief Fewer Engineer Department

of

Technical

Control

Design Depart-

ment (Bureau)

Technological De-

partment (Bureau)

Department of

the Chief

Mechanic

Department of the

Chief Power

Engineer

11[1

Experimental

Shop

Department (Bureau)

of Inventions and

Rationalization

dgioNsmimemalesb

Source: D. M. Gvishiani et al, eds., Osnovnyye printsyy I obshctliye.

leniya naukay (Moscow, 1973), p. 230.

In general, "factory science" has not been a prom-inent feature of the Soviet industrial order. Histo-rically, the organizational approach has emphasizedthe separation of industrial research from productionas well as the centralization of R&D forces in insti-tutes designed to serve the needs of the branch as awhole rather than of individual enterprises. Conse-quently, most enterprises lack adequate in-house R&Dfacilities. The enterprise-level R&D system of fac-tory laboratories, design offices, experimental shops,and other scientific subdivisions serves primarilythe needs of current production. In fact, enterprisescientific subdivisions are not classified under the"science and science services sector" category ofeconomic and Social organizations, and their activityis not included in the national plan section for fi-nancing research and design work. The organizationand stru-tture of technical management within a typi-cal enterprise is presented in Figure 9-12. In manyinstances, ho;ever, the enterprise R&D system doesplay a vital role in the application of new technol-ogy, in the creation of new products and processes,_he improvement of product quality or production ef-ficiency, and the maintenance of quality control ortechnological control of operations. 28

Associations

Production associations (proizvodstvennyye obyed-ineniya--POs) and science-production associations(nauchno- proizvodstvennyye obyedineniya- -NPOs) aretwo entities replacing the independent enterprisesas the basic units of industrial organization. Even-tually, almost all of Soviet industry will be con-verted to the associational form of management. Bythe fall of 1976 there were more than -000 POs inindustry. Though they incorporated less than 10 per-cent of all enterprises, production associations al-ready accounted for nearly 40 percent of total in-dustrial output. At t a same time, NrOs--a more se-lective form of organization--numbered less than 120.

The associations were created in part to acceLer-ate technological progress and to reduce the leadtimes in the implementation of new technology. There-

73

fore, both the PO and NPO forms may include insti-tutes and design bureaus. In the production asso-ciation, scientific organizations are usually of lo-cal significance and confine their research-develop-ment-innovation activity primarily to the productionneeds of the association. In the NPO, on the otherhand, these units are expected to conduct general-purpose or branch-wide R&D, developing innovationsfor the branch as a whole. The "head" organizationalso differs. While this role belongs to an indus-trial enterprise in the production association, itis performed generally by a powerful research insti-tute in the science-production association.

The NPO fulfills the functions of a branch scien-tific-technical center. Its chief task is to createand apply new technology within the shortest possiblerime. It is not predominantly a producing organiza-tion but is intended primarily to carry out R&D onnew products and processes. Ideally, when a newproduct has been brought successfully through itsfirst production runs by an NPO, the mass productionof the article is taken up by the production asso-ciations. In line with :"-eir concern for the entireresearch-to-production cycle, ::stveral NPOs have spe-cial start-up plants and installa ion units which as-sist other production facilities in introducing anddebugging new technology.

Some NPOs specialize in the creation of new prod-ucts. Others develop production technology and con-trol systems. Still others concentrate on the de-velopment and assimilation of new technological pro-cesses- Among the most important tasks of NPOs arereported to be the installation and adjustment of newtechnology, the conduct of patent/licen3e work, themaintenance of S&T information services, the fore-casting of new product demand, and the development ofestimates of labor and mater-als requirements.

In internal organization and management the aso-ciations exhibit a range of alternative formats. edegree to which the enterprises in a production as-sociation lose their autonomy varies widely. For ex-

74ti l.f

FIGURE 8-13 MANAGEMENT STRUCTURE FOR A TYPICALSCIENCE-PRODUCTION ASSOCIATION (NPO)

Council of Directors Director of the NP7-7cientific-Technicalof =he 'TPO

1Council

Deputy Directorfor Science

libbeearchDepartments

Technological.Department Project Design

DepartmentComputerCenter Dopers-moat of

SST Intarmecion.Petents S Licenses

Department ofStandardisationa Norm-eettiog

7Deputy co toDeputy Director

for Science

Department ofTechnicalDocumentation

7echnicalDepartment

Department ofLaboratory the Chief hechAnicfor Tests S and Power Engineer

,Mleasuremen:

Bureaufor Technical

Securicy ii

Deputy Directorfor =a:nay/acid=

:Innovation Department

Engineering Depar=ent

Production ControlDepartment

Exporimental workshops

Experimental ?Lent

Shop of TechnologicalLEquipment S Listruments

.rasa Office

Divisiofl of Cost/Effect-tveness Analysis

Department of ManagementRationalization

Department of TechnicalControl

Thief 3ockkeeper

Deputy DireC777---1for Economic'Niestiops

Planning and EconomicsDepartment

Dope:m=1mm of Laporand 7,1ages

Finance and ZSCLAIILLIIMDepartment

Sookkeeping Department

Department of Middle-range Planning for Devel-opment :ha 3:mach andof Techileal S EconomicResearch

Deputy Director!or Deneral Questions

Department of CapitalConscruction

Deparrmenc of Material-Technical Supplies andDaily Services

Personnel Department

Department of kdoim's--a--° tiara and Economic `tama4e-mmtLegal 3ureau

Source: A. I. Bcgdanov, Problemy upravlenlya nauch-o-tekhnicheskim progressom: obzor (Moscow, 1977),P. 54.

75

ample, in the Leni.igrad Optical-Mechanical Associ....-tion the general management of the PO fully replacesthe plant managements. At the Svetlana Associationeach enterprise retains a measure of autonomy, andonly the basic management functions are centralized.The management of the PO is the same as the manage-ment of the largest and most modern of the plants inthe association, i.e., the "head" organization of thePO. The other plants are organized as branches ofthis leading plant. At the Elektrosila Associationsome of the plants are fully merged with the PO,whereas others have retained some autonomy. A sim-ilar pattern of structural diversity also character-izes the science-production associations. Accordingto a model organizational statute on the NPO, issuedby the central leadership at the end of 1975, how-ever, all units joining the association lose theirindependence. Nonetheless, practice continues todiverge from this uniform pattern. Figure 9-13 il-lustrates the model management structure for a sci-ence-production association.

THE ORGANIZATIONAL SYSTEM:WHOLE AND PARTS

The previous discussion of the organization of R&Din the USSR suggests certain features and themes thatdesert. _ emphasis. Most basic, of course, is the for-mal design of the whole edifice for science and tech-nology as an "organizational system" of multiple andwen integrated parts, with elaboratz. but generallyinternally consistent assignments and responsibil-ities. This image of a highly centralized and coor-dinated Soviet system that is able to pursue compre-hensive and coherent SST policies often prevailsabroad.

The image, however, conceals as much as it re-veals. Though highly centralized, the organizationalstructure of Soviet science and cechnology is farfrom monolithic. On the contrary, it is highly frag-mented. An official at the top feels sometimes, in

76

fact, that he sits at themid," that the vast bulkare beyond his influence,

apex of an "inverted pyra-of decisions and actionsmuch less his control.

Among the prominent structural properties of thesystem is the segregation of activities by level inthe respective hierarchies. Although there are ex-ceptions to the general pattern, the focus of plan-ning and managerial responsibility is centered atthree levels- (1) all-union or national; (2) branchor ministry, Academy, or republic; and (3) performerorganization (research, design, educational, and pro-duction establishment). When a republic organizationor element of local industry is involved, a fourthor fifth level of planning responsibility may be in-terjected accordingly, but in general the three enu-merated levels designate the three types of relevantplans. For example, while republic councils of min-isters are subordinate to the USSR Council of Min-isters, their plans have similar orientation and for-mat. There is similar correspondence in the branchplans at the union and republic levels of a union-republic ministry, although the superior-subordinaterelationship is clear, with plans at the subordinatelevels incorporating directives of the superior lev-el.

There is a clear intent to delineate organization-ally line (or dministrative) and staff (or function-a.) activities at each of the three levels. Certainorgans, such as the ministries, are responsible ad-ministratively for all activities of a subset of eco-nomic and technical establishments, usually in a par-ticular industry. Other organs, such as the statecommittees, arc responsible for at least the formu-lation and monitoring of a functionally oriented setof policies for all Soviet establishments. The ais-tinction is carried through to the branch and per-former organization levels as well. Within the min-istry and performer organizations, certain adminis-trations, departments, or individuals are responsiblefor overall performance of the organization as awhole or for particular subdivisions, whereas plan-ning, finance, supply, and other departments mange

777

their respective functions for ,.he organization asa whole. The distinction between line and stafffunctions in the acadcbmies of sciences is somewhatless clear, cbte in part to their relative autonomywhich in turn is related to the 'nature of fundamentalresearch. The academies themselves conduct a rela-tively large shar, of the planning and other func-tional activities for their subordinate facilities,although academy facilities are also subject to thepolicy formulated by the various specialized statecommittees and, overall, by the GKNT.

Within this context the three principal centralmanagement agencies which are concerned with R&Dplanning and administration are the GKNT, the USSRAcademy of Sciences, and Gosplan. Of these, theGKNT's functions may be described as comprehensive,incorporating overall managerial responsibil.,ty forSoviet SST policy and particular concern with inter-branch coordination problems and with facilitatingintegration between academy, university, and indus-trial R&D. The Academy and Gosplan are more special-ized, concentrating respectively on fundamental re-search and on industrial R&D and technology utiliza-tion. They, in turn, are more heavily involved inoperational management in their respective areas,either by formal administrative responsibility inthe Academy's case or b). the significant de factoauthority of Gosplan in managing the economic andtechnical activities of industrial establishments.The three organs jointly issue mazy position or pol-icy statements setting forth regulations and guide-lines on one or another aspect of R&D planning andmanagement.

In general, the basic principles which :_nderliethe organizational structure also tend to andermineits "systemic character and cohesivenes. . The keyto effective organization in the Soviet Union, justas in the United States, lies not in structure bv-:

in relationships between individuals and 'nstitu-t:ons. With parts but no coupl:ngs between the partsthere can be no system. The traditional designprinciples of extreme func-onal specialization by

78

organizations and of institutional dissociation havecreated structural barriers rather than bonds betweenthe various organizational actors at all levels ofthe Soviet SST establishment. As we have seen, thes:ructure of decision malc.Ing is predominantly verti-cal and thus substantially inhibits lateral communi-cation, cooperation, and coordination.

Similarly, structural features help create and re-inforce functional autonomy and non-integra*Ii-ye atti-tudes among the organization-xl parts to the detrimentof the whole. With parts ani no common purpose therecan be no coupling and no system. Soviet authoritiesnaturally intend that the various organizations andagencies complement each other in pursuit of objec-tivec specified by the leadership. In practice, how-ever, the parochll aims and special interests of theparts frequently rr,:vall over the centrally definedpurposes and needs of the nfttion or "system" as awhole. Soviet orgaal-stions have been built largelyon the princ4ple c. total or near total self-suffi-ciency. Eac ministry is an empire of its own, oper-ating al lost independently of the others. Each ofthe central administrative and functional agencieshas acquired entrenched bureaucracies which competewith and frustrate each other. The very structureand nature of the R&D administrative system--with itsemphasis on multiple authorities, mixed sovereign-ties, and incomplete functional mandates--inevitablyexert their influence on the policy process and onperformance. Though of a different kind perhaps thanexists in the United States, bureaucratic politics- -with all the realities of interagency payer, clashesof priorities, and conflicts of interests--nonethe-less is a pros- Event and permanent feature of the "or-ganizational system" for scienca and technology inthe USSR. It is no accident that better "linkage"and "integration" are important organizational issuesin Soviet science policy today.

79

3-4.

4. Ibid., pp. 4-5.

5. Ibid., pp. 12-14.

6. Dorokhova, "Sovershenstvovaniye sistemy organovupravleniya naukoy," pp. 64-65; Piskotin et al, Organ-izatsionno-pravovyye rukovodstva naukoy v SSSR, pp.187-192, 205. It is not surprising that the idea ofcreating state committees for science and technologyin various republics, modeled after the Moscc.: body,has been urged and discussed, apparently at the high-est See Dorokhova, "Sovershenstvovaniye sis-temy organov upravleniya naukoy," p. 65. There is astate committee for science and technology in Georgia,but it is subordinate tc the Georgian republic Coun-cil of Ministers, not to the USSR GKNT.

7. For example, the USSR State Committee on Inven-tions and Discoveries is "predominantly oriented toregulating the initiatives and pro sals coming frombelow." Only 30 percent of its recommendations areaccepted by the ministries and departments. See Ye.Artemyev and L. Kravets, Izobreteniya-- novaya

(Moscow: Ekonomika, 1974), pp. 63,179-180. Another Soviet critic similarly notes that

f ..1 80

the state committee does not possess the authorityand means necessary to fulfill its functions. SeeA. A. Podoprigora, Pr-,vovyye voprosy sozdaniya i vne-dtenlya novoy tekhniki (Kiev, 1975), p. 85. In draw-ing up the annual economic plan for 1975 the StateCc..7..ittee on Inventions and Discoveries recommendedthat 90 inventions and innovations be adopted but theministries accepted only 9 or 10 percent. See G.Alekseyev, "The Effect Derived from Production,"Pravda, September 13, 1976.

8. Dorokhova, "Sovershenstvovaniye sistemy organovupravleniya naukoy," p. 61. For a more detailf_d dis-cussion of the GMT, see the excellent study by Lou-van E. Nolting, The Structure and Functions of theUSSR State Committee for Science and Technology, U.S.Bureau of the Census, Foreign Economic Reports,No. (Washington, D.C., 1979).

9. Zaleski et al, Science Policy in the USSR, p. 54.

10. B. F. Zaitsev, "Struktura organov upravleniyanaukoy i tekhnikoy v usloviyakh nauchno-tekhnicheskoyrevolyutsii," in Organizatsiya upravleniya (Moscow,1975), p. 36 and V. Disson, "Primeneniye programmno-tselevogo metoda pri reshenii nauchno-tekhnicheskikhproblem," Planovoye khozyaystvo, 7 (1977), p. 92.

11. "USSR Short Answers," pp. 5-7.

12. Ibid.

13. Ibid., p. 8.

14. Zaleski et al, Science Policy_in the USSR,pp. 83-88.

15. V. A. Rassudcvskly, Gosudarstvennaya organiza-tsiya nauki v SSSR (ftscow: Yuridicheskaya literatura,1971), p. 30 and G. T. Prokhotskiy and V. G. Khryachen-ko, Effektivnost raboty nauchno-issledovatelskikh or-ganizatsii (Minsk, 1973), p. 31.

16. "USSR Short Answers," p. 8.

81

18. Louvan F. Nolting, The Financing of Research,Development, and Innovation in the USSR, By Type ofPerformer, U.S. Department of Commerce, Foreign Eco-nomic Reports, No. 9 (Washington, D.C., 1976), pp. 3-4.

19. A. I. Shcherbakov, Sotsialno-ekonomicheskiyeproblemy effektivnosti nauchnogo truda (Novosibirsk,1975), p. 48.

20. V. I. Duzhenkov, "Problemy tk!rritorialnoynauchnoy deyatelnosti," in Problemy deyatel-

nosti uchenogo i nauchnykh kollekttvov (Moscow-Lenin-grad, 1977), VI, pi,. 48-49.

21. "USSR Short Answers," pp. 42-45.

22. I. D. Ivanov, "Preodoleniye prepyatsviy i stimu-lirovaniye pri vnedrenli novoy tekhniki I novykh me-today upravleniya" (Overcoming Obstacles and ImprovingIncentives in the Introduction of New Technology andNew Methods of Management"), p. 20. Soviet Side ofthe Joint US-USSR Subgroup on Planning and Managementof Research and Development. Unpublished (draft) pa-per, 1976; V. G. Shorin and A. A. Popova, "Organiza-tsiya nauchnoy raboty v vuzakh," in Gvishiani et al,Osnovnyye printsipy i obshchiye problemy upravleniyanaukoy, p. 200.

23. Ibis;., pp. 203-204; Nolting, The Financing of-Resear'-h, Development, and Innovation in the USSR,pp. 13-14.

24. Ibid., p. 8.

25. Ibid.

26. Ibid., pp. b-9; Zaleski et al, Science Policyin the USSR, pp. 406-408, 541-546.

27. "Shorin and Popova, "Organizatsiya nauchnoy ra-boty v vuzakh," p. 203.

28. Nolting, The Financing of Research, Develop-ment, and Innovation in the USSR, pp. 14-15.

82

IX THE FORMULATION OF R&D

PLANS AND PROGRAMS

ollEgKIgR OP SC1ZNCE AND TECHMLOGY PLANNINC,

plans is the Soviet Union are the fundamental in-strumeat for integrating and controlling productionactivities of all kinds and at all levels of aggre-gation, ranging :ram the state as a whole through avariety of economic units to the individual. By as-suming this burden, plans must be not only directive,convoying the vlshes of the leadership, but also suf-ficiently Informative on factors external to the plan-ring wait to permit effective coordination. Plansmust also incorporate a system of incentives and pen-

to insuresUre the accomplishment of assigned tasks.

By its very nature, R&D seems incompatible withthis type of Planning. Optimally, plans predetermineresults, while R&D in varying degrees involves explo-ration of unknown or uncertain territory. Problemsof uncertainty and risk are particularly great at thefundamental research stage and subside increasinglywitiloovement toward the development end of the R&Dspectrum' and the more deterministic world of produc-tion. In general, this factor is recognized in So-viet science Policy. Laricbev, for example, notes

f-formulation of the goals of planning dependssubntantially

degreethe means of determining with a suf-

of certainty the expected final re-sults of R643-"1 Becau-4-it of the difficulties of pre-dicting and evaluating R&D results, their aggregationis also appreciably harder than the aggregation ofproduction targets. Indeed, until well into the 1950sactivities under research, development, and innova-tion is the USSR were seen as "too complex and numer-

aad the results too unpredictable and indefiniteto be worth the effort of joining them into a singlecoherent plan."2 For that matter, R&D was still re-

83

garded as being too aloof from general economic prob-lems and processes to permit any convergence of sci-ence policy with economic policy.

Increasingly, however, the planning of science andtechnology has become a separate and consolidated ac-tivity in the Soviet Union, especially since the late1960s. Like the basic approach to organization andstructure, the orientation in planning is to treatthe research-to-production cycle as a single complexof activity integrated along highly formal and hier-archical lines. Containing a variety of individualand sequential components that together constitute anintegrated unit, the R&D plan itself is but one ele-ment of a larger plan governing all aspects of pro-duction activity. In the State Plan for the Develop-ment of the National Economy, the chapter incorpora-ting the Plan for the Development of Science and Tech-nology is accompanied by chapters devoted to planningsectoral development (including industry, agriculture,transport and communications) and capital construc-tion, as well as to planning functional areas, suchas labor and manpower, various financial indicators,and foreign trade. There are similar collections oftargets at all plan levels, and each collection forall types of indicators in principle is mutually re-inforcing and internally consistent.

Figure 10-1 demonstrates the interrelatedness ofthe separate features of the various plans as well asthe hierarchical structure of plans described in chap-ter 9. At the national level, S&T problems are clear-ly one of the several types of national problems. Theproblem orientation of the plans must be rendered con-sistent with the task of establishing the appropriate"proportions" in the national economy, or in otherwords, ensuring that sectoral and regional develop-ment is proceeding as intended and that the plan asa whole is internally consistent. At the intermedi-ate level, the task of reconciling plans with differ-ent orientations -- branch of the natioral economy orindustry, program, and geographical region--is illus-trated. At the level of the performing organization,the establishment generally must be responsive to the

84

9 0

FIGURE 9-1 OVERVIEW OF THE CONTENT AND NETWORK OF SOVIET ECONOMIC PLANNING

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FIGURE 9-2 STRUCTURE OF SOVIET RESEARCH, DEVELOPMENT, AND INNOVATION

PLANS AND FORECASTS

USSR 5 -year National

Economic Plan

USSR SIT Forecasts and

Perspective Plan

USSR 5-yea Plan for

Development of Science

and Technology

SIT Pro rims

Scientific Organization

and Enterprise 5-year

RDI Plans

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Development of Science

and Technology

Scientific Organizatild

and Enterprise 5-yea:

RDI Plans41.1111.1116

4t...._

Republic and Branch

5-year Pians for

Development of Science

and Technology

Republic and Branch

Annual Plans for

Development of Science

and Technology

Republic and Branch

Forecasts and Per-

spective Plans

Source: Louvan E. Nolting, The Planning of Research, Development, and Innova-

tion in the U.S.S.R. (Washington, D.C., 1978), p. 23.

I in

erally lagged. Such notions as "innovation process,""technology transfer," and "commercialization cycle,"which figure prominently in Western writings, are re-latively unknown in the USSR. Soviet analysts, onthe contrary, tend to use terms like "research-produc-tion cycle," "scientific and technological complex ofwork," and "complex of preproduction work" to des-cribe the sequencing, organization, and stimulationof scientific R&D. For the most part, their conceptshave revolved around phase-dominant models of innova-tion with emphasis on separate functions and individ-ual work efforts performed in isolation from one an-other and cut off from the application of results in-to production. Only recently have they begun to takea more process view of innovation with the focus onfinal results and overall integration.

Also only recently has a predominantly linear-caus-al view of Innovation been called into question. Thismodel emphasizes a relatively simple and orderly for-ward flow of work from theoretical conception topractical use. The notion that innovation involvesa complex and helix-like stream of events and stageswith significant feedback coupling is not commonlyheld. Accordingly, various stages of work are plannedpredominantly in sequence rather than simultaneouslyand in parallel. The result is significant losses oftime between different phases and a lengthening ofthe process as a whole.3

Though important strides have been made in recon-ceptualizing R&D and _r moving toward a more sophis-ticated analytical base for deciding problems of sci-entific choice, deficiencies remain. As two expertson R&D note, "a number of questions in this complexprocess have not yet been studied, and some have noteven been posed in the literature."4 There is stillconsiderable ambiguity and inconsistency among Sovietwriters who describe and label the stages of the R&Dcycle. "No official methodological instructions byGosplan or the Central Statistical Administration areavailable which delineate the precise stages," Nol-ting points out. Moreover, he adds, the conceptualdivision of stages is not necessarily followed in

88

planning, financing, and reporting of R&D. The basisfor planning and financing -remains primarily the "in-stitutional performer," not the stages of the research-to-production cycle.5 Again the heavy organizationalbias of the system is evident. Planning and the al-location of resources are organized mainly around in-stitutions rather than projects and programs.

Furthermore, R&D has been perceived and planned inrather narrow terms and time frames. The planningprocess has usually ended with the creation of exper-imental prototypes or at best with small batch pro-duction of new products. The actual introduction ofR&D results has been beyond the boundaries of scienceplanning. The focus has been on building up scien-tific and technological "potential." The Russianword for the latter, zadel, means literally a stockof semi - finished articles waiting to be processed. Ashort time horizon, usually only a year, has also pre-vailed. Only since the late 1960s has attention Seengiven to developing the concept of scientific andtechnical progress, to elaborating its meaning andimplications for both the research sector and the in-dustrial sphere, and to making it the object of plan-ning. Such an extension of the boundaries of plan-ning complicates the task considerably. V. Yu. Buda-vey and H. I. Panova observe, "The essence of thematter is that the problem involves drawing up notjust a separate section of the national economic planbut a second plan." Yet, they add, "Without globalevaluations of scientific and technical progress forthe long term it is impossible to work out a strate-gic planning policy in this area and to determinecorrectly the tasks of a uniform technology policy."6No uniform conception of the future shape of science,technology, or of the economy has emerged to guidethe planners, however.

Science policy analysis and planning still sufferfrom inadequate indicators, norms, and information.By 1974 nearly 300 different indicators were usedthat directly or indirectly characterized scientificand technical progress. However, they did not forma sufficiently goal-oriented system of indicators to

89

103

Insure the integrated planning of science, technol-ogy, and economic gr.:wth. In addition, their appli-cation was usually not concerned with the planningand evaluation of production efficiency.7 Scientif-ically-based norms are still lacking for financingresearch and for supplying it with human and materialresources. Norms governing the performance of R&Dare absent, as are norms regulating the length ofprojects and their stages. When schedules are in-cluded in planned assignments, they are often fixedarbitrarily without any sufficient basis.8 Nobel lau-reat and Academician Kantorovich noted in 1976 that"In practice consideration of the time factor is notsystematic and is frequently non-existent" in R&D de-cision making.9 Yet, without taking time into ac-count, all Soviet science analysts agree, it is vir-tually impossible to evaluate any other indicators,such as the technological novelty or economic advan-tages of an idea. All depend directly on "time," onhow rapidly scientific ideas move from the laboratoryinto use.

Serious deficiencies also exist in the data basefor planning and evaluating R&D. Decision makers arefrequently faced with fragmentary and contradictoryinformation. Statistics on expenditures for funda-mental research, for applied research, and for de-velopment are not regularly collected and reported.The absence of standard concepts for various stagesand categories of R&D results in unsystematic infor-mation and conflicting calculations. The informationgap is particularly glaring with respect to expendi-tures for innovation and the introduction of newtechnology. Since most R&D units at industrial en-terprises and associations are not formally classi-fied as "scientific institutions," statistics on R&Dperformed at production establishments are n sys-tematically gathered, nor are they included in "of-ficial" science allocations. The lack of accountingand reporting of these expenditures seriously "ham-pers the objective measurement of inputs on scientif-ic and technical progress," note S. Golosovsky and G.Yeremenko.10 Essentially, the later stages of theresearch -to- production cycle fall outside--or, more

14

90

accurately speaking, "between the cracks" of--thesystem of planning and control. Finally, a constantflow of operational information is lacking on thecourse of plan implementation. Information comes atregular reporting periods which may not coincide withthe planned completion of projects and tasks. Thus,the information may come too late to permit timelycorrective action.1-1

It is also important to note that the "technology"of Soviet planning is still relatively primitive.Simple and semi-intuitive methods of evaluation andmanual calculations predominate. The inadequacy oftechnique becomes all the more apparent in the lightof the increasing scale and complexity of the task itmust tackle. In preparing the annual plan alone Cos-plan works up 47 million indicators. One variant ofthe national macroeconomic plan requires 83 billi.711separate calculations. At present nearly four bil-lion documents circulate on various levels of theplanning and management hierarchy. Within industrialenterprises, associations, and other economic organ-izations almost five billion work orders and morethan two billion supplementary requests are formula-ted each year .12 The head of the Main Computer Cen-ter at the USSR Gosplan zeported with some pride thatabout 20 percent of the Tenth Five Year Plan (1976-1980) wilAq prepared on the basis of computer tech-niques. On the eve of the 1980s the pocket calcu-lator has not yet arrived in the Soviet Union, andthe dominant tool at hand remains the abacus. "It isno accident," observes Boris Milner, now of the In-stitute for Systems Studies, "that a serious contra-diction has developed between the growth of the vol-ume of information and the traditional methods of da-ta collection and processing."1'

The need for more "science" in R&D planning andmanagement is generally recognized among Soviet auth-orities today. Defects in the conduct of analyticalwork in scientific organizations are decried at alllevels of the planning ladder.15 Special attentionis being given to enhancing integrative capabilities,both analytical and administrative, of central deci-

91

sion makers to formulate comprehensive and coherentpolicies. Accordingly, interest is increasing oflate in developing and applying the modern tools ofsystems planning and management and more sophistica-ted decision aids in this area. Indeed, "systemsanalysis" and "the systems approach" have become fa-vorite terms as the regime seeks to build a more ef-fective conceptual framework for R&D problem-solving.

These underlyiag aspects of S&T planning are im-portant to note at the outset, because the formalstructure and procedures of planning tend to dc...minateSoviet discussions of science policy and sometimesovershadow these dimensions, which not only impactupon the structure but, more importantly, influenceappreciably the quality of R&D decision making.

RESOURCE PLANNING AND ALLOCATIONFOR RESEARCH AND DEVELOPMENT

In a centrally planned economy like that of theSoviet Union, control over real resources, and notmerely the availability of funds, is the essentialprerequisite for the conduct of R&D.16 In otherwords, work undertaken at the initiative of the per-forming or sponsoring organization depends in largepart upon whether the activity itself and the expec-ted capital, labor, and material inputs are each ac-counted for in respective plan chapters. Ruble val-ues serve as the principal means of measuring and ag-gregating performance, but in most cases it is notpossible to bid resources away from other organiza-tions as a means of expanding the scope of work. Atthe least, then, funding serves as an essential ifpassive indicator of the magnitudes of various cate-gories of R&D. Whether funding can serve as an ac-tive control mechanism, furnishing command over realresources, is a function of the level of aggregationof the decision, the specific fund and/or organiza-tion involved, and the priority and nature of the re-search.

1.,64 92

While characteristics of the "concrete" projectmay predominate in decision making at the level ofthe performer organization, with funding a secondaryconsideration, high-level decision making in prac-tice cannot be made entirely dependent on a carefulstudy and aggregation of the characteristics of spe-cific projects. At the highest level, when estima-ting the total share of national income and determi-ning the total share of the state budget which willbe devoted to science,the Council of Ministers mustconsider not only the potential for scientific ad-vance in necessarily broad categories of researchand development but also the impact of expanded tech-nical advances on economic and social developments.J7The growth rate of expenditures on science is .4-le-r-ally set somewhat higher than the growth rate ra-tional income and industrial production to insul:c:scientific and technical progress.18 Indeed veryrapid and sustained rise in total offici.ti Soviet al-locations for science, equal to 2.4 billion rubles in1958 and 17.4 billion rubles in 1975, is indicativeof the leadership's awareness of the growing relativeimportance of technological development as a factorcontributing to economic growth.

The sum allocated to science, as well as its in-tended breakdown by user category and purpose, isspecified in a chapter of the annual and five-yearState Plans for Development of the National Economy.Here the total volume of outlays for scientific re-search projects and the sources of financing arestipulated, along with the overall wage fund fogworkers at scientific institutions.19 These indices,in effect, determine the extent of money, manpower,and materials for conducting R&D. Provisions forcapital investments for the construction, expansion,and renovation of scientific facilities are also in-cluded in another chapter of the macroeconomic plansas part of the total volume of capital investmentsfor the development of various sectors of industryand the economy .20 The science ezcpenditure plans areformulated by the GiCNT in collaboration with Gosplan,the Academy of Sciences, and the Ministry of Finance,on the basis of proposals submitted by the USSR min-

93

istries and departments as well as the union republiccouncils of ministers. The plans emphasize, then,both the association of financial and real resourcesand the relationship of broad aggregates to the rec-ommendations of intermediate level management organsand institutional subsystems.

There are two broad sources of financing R&D: (1)the State Budget and (2) the fiscal resources at thedisposal of ministries and agencies at the intermedi-ate level and of enterprises and scientific organiza-tions at the performer level. In Soviet terminologythe second source is designated "own funds." Mostown funds are, in fact, centralized by the ministrythat administers them. Only a portion are decentral-ized and used directly by enterprises and organiza-tions to contract for R&D with scientific institu-tions.21 The amount of these resources for each min-istry and agency is stipulated in the plan for finan-cing scientific research projects as a source of fi-nancing.

Slightly less than one-half of all science expen-ditures is financed by the State Budget. Budgetaryallocations encompass, first, R&D aimed at solvingnational priority or so-called "basic scientific andtechnical problems" specified in the macroeconomicplan. These "basic problems" are usually interbranch,involving the joint efforts of multiple ministriesand agencies_ The State Budget also finances re-search in the natural and social sciences as well asR&D projects linked to the solution of the most im-portant branch-wide tasks.

As a rule, State Budget grants are heavily used inthe financing of theoretical or exploratory scientif-ic research where R&D results cannot be closely asso-ciated with ultimate economic savings. In 1975, forexample, 97 percent of expenditures by research in-stitutes specializing in public health, 90 percent ofexpenditures by those in agriculture, and 80 percentof expenditures by the USSR and republic academies ofsciences were financed through the state and republicbudgets.22 These same sources generally seem to fund

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made by the State Committee, Gosplan fixesa global sum for the Ukrainian Academy ofSciences for the coming year. This sum in-creases from year to year at a more or lessstandard rate of four to six percent.

Once the global sum has been fixed, the in-stitutes of the Ukrainian Academy forwardtheir claims to their Division and to thePresidium, which is aided in its delibera-tion by a special department broken down in-

. to s subdepartment for overall planning. ThePresidium has a number of other special de-partments for finance, capital construction,equipment and accounting.

Figures are then prepared for each of thethree Sections of the Academy which indicatethe provisional sum to be made available tothem for equipment and for other expenditures.The Vice President of the Academy, responsi-ble for each section, decides on the distri-bution of funds among the institutes concerned.25

The experience, Particularly the virtually automaticincrease in annual funding, also demonstrates thatbudgetary allocations play an important active roleat higher levels of aggregation and particularly inAcademy fundamental research. There are similar ac-counts regarding re search conducted in higher educa-tional institutions.. In the 1960s, Wienert notes,there was no relation between the nature of researchprojects and the available financial means. Researchfunds were distributed to the VUZy according to thenumber of departments.26 -.0ar general, Zaleski con-cludes that the traditional criteria for allocationare the gross value of work on an historical basisand/or the number of research topics.27

Evidence suggests that institutional funding rath-er than project funding is still the predominant prac-tice in Soviet R&D as is the tendency toward simpleaggregate planning and incremental play-fling "from theachieved level." P. N. Zavlin and a group of science

96

analysts in 144Nrosiblvsk attribute the persistence ofthese practices to the absence of formal cV;teria forplanning science and allocating resources. Thelack of any Precise norms has allowed personal in-fluence and establishment reputation to carry undueweight- Dissatisfaction with existing methods causesG. PosPel-°v: a Corresponding Member of the USSR Acad-emy. to declare, "We. must finance not only organiza-tions, rises, and associations but also goalsand tasks' Projects and programs."29 The system ofinstitatil funding is also seen as a cause of in-definite fig of responsibility and poor coordina-tion among R &D stages and projects.

Still otherbetween the

writers point -;:o the contra-diction the conservative structure of expen-ditures based an financing of immobile scientific or-ganizati°ns and the inherently dynamic character ofscience-

30 The inertia of existing institutions andongoing prof ects is hard to break. Indeed, it is al-

ImpOSSI.e. it seems, to "shut off" any unsue-gcessfu1 pro rate, much less "shut down" an -maproduc-

tive institution.. As A. M. Birman notes, "While pro-viding ostensthle regulation and supervision, thepresent system of financing research allows some in-

stituti.ons to go for years without producing any sig-nificant results ..`31 At the same time, it is diffi-

to get new _,cult ideas and projects accepted. Mount-concern. Over these defects of the existing system

led to rising emphasis in the 1970s on the need toexpand application of a "programmed-goals approach"to planning and financing of R&D. Such an approachoriented toward projects and end results is frequent-ly used in the military and space sectors. Praisingthis method, -

1)ospelov notes, "The new will not haveto 'fight Its Way up' from below, proving its rightto exist' Under such a system of financing, allshoots of the new will be visible from above and canalways be given timely assistance."32 But programplanning and zero-based budgeting have not yet becomedontin87-IC

forces in Soviet civilian R&D activities.

To return to the issue of budgetary distribution,Industrie-1-215'13 conducted within the ministerial sys-tem has e heavy component of state and ministry bud-

97

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dustry, the share of contract financing had climbedto roughly 20 percent and 38 percent, respectively.In some academy facilities in the Ukraine this figureis much higher. In the Institute for Superhard Ma-terials and the Physico-Mechanical Institute, for ex-ample, contracts accounted in 1975 for 69 percent and70 percent, respectively, of the total work.35

The degree of contract financing in university fa-cilities also varies considerably. In some technicalschools and departments, the share is extremely high.Overall, in fact, contracts account for about 80 per-cent of all VUZy R&D. This high share reflects theconcentration of VUZy research and development inbranch laboratories, which are entirely financedthrough contracts made with the branch ministries.36During the period 1971 through 1975 the volume of R&Dfinanced through the State Budget rose by 38 percentwhile contract receipts increased by 78 percent.37

In the enterprise or production association sever-al sources of funds are available for financing inno-vation and R&D-related work. These include the Spe-cial Fund for Financing Scientific Research of itsparent ministry as well as State Bank credits. Thelargest source of financing is its own special pur-pose funds: (1) the Unified Fund for the Developmentof Science and Technology; (2) the Fund for Assimila-tion of New Technology; (3) the Fund for Developmentof Production. These funds are used to finance re-search, development, and innovation conducted both byenterprise scientific subdivisions and by outsideperfr-mers under contract.38 In general, Berlinerconcludes that "the organization of the supply of fi-nancial resources for R&D appears to be no problemfor the innovating enterprise."39 The real problemis to create the will to innovate. Human motivationis the commodity in short supply, not material andfiscal resources.

On the whole, financial allotments at this levelof R&D tend to be passive. Decisions at the level ofthe institute, design bureau, enterprise, and asso-ciation can be related more easily to specific pro-

100

jects and input requirements without the necessity ofallocation by lump sum. Similarly, the l_esser prior-ity attached to decisions at this level implies thatfunding is by no means a guarantee that real resour-ces can be commanded if not allotted in productionand distribution plans. Thus, the importance andpriority of the particular input in question deter-mines the extent to which funding decisions can havean active role, especially at this level.

Taken together, then, these various factors andconsiderations illustrate that the allocation of fi-nancial resources to research and development is anintegral feature of Soviet planning. They also de-monstrate the predominantly hierarchical nature offinancial planning as well as the relative importanceof various sources of funding. The degree to whichfinancial mechanisms are an "active" planning controlinstrument is largely a function of the level andpriority of the decision and decision maker.

In addition to these features, a few other basicpoints about Soviet resource planning and allocationmerit brief mention.

First, insufficient attention is given to theutilization of resources. Only since the late 1960shave authorities gradually become aware of constraintson resources and concerned about the effectiveness oftheir use. He sever, analytical work is still defi-cient in this sphere, in large part because the wholesystem of planning, finaacing, and management of R&Dremains basically input-oriented rather than output-oriented.

A. major aim, in fact, of the increased stress onthe programmed-goals approach is to help shift thefocus f planning, policy, and performance toward endresin . "By directly connecting goals and resources,expenditures and output, programming methods of plan-ning create a real basis for objectively evaluatingthe effectiveness of resource utilization, for choos-ing rational decisions, and for optimizing inter-branch proportions," according to one group of So-

101

viet decision analysts-40 Academician Fedorenko alsodescribes this as an effective method of "dovetailinggoals and resources and of coordinating regional,branch, and programmatic aspects of the plan for thedevelopment of the national economy. ,=41 That is,program planning is regarded by some Soviet writersto be not only a more effective analytical device forproblem-solving, but also a better way of allocatingresources and balancing expenditures so as to insurethe appropriate "proportions," noted earlier in ourdiscussion, between the solution of key national S&Tproblems and the development of various economic sec-tors and regions. The preponderant weight of the ex-isting branch approach to planning and financingmakes it difficult to concentrate R&D resources onpriority interbranch projects, to eliminate waste,and to accelerate innovation.

Second, the State Budget in the Soviet Union is anannual budget. There is no five-year budget that canbe linked to the five-year macroeconomic plan. Funds- -as the basis for obtaining material and technical re-sources--are distributed only for one-year periods.Such a short time horizon prevents the development ofa genuine investment mentality toward R&D outlaysthat is oriented to long-term returns. On the con-trary, it reinforces the dominant tendency to plan"from the achieved level" and to focus on inputs rath-er than results. Since unspent funds revert back tothe budget, there is a strong tendency for R&D per-formers to use up all resources and thus "zero out"at the end of the year. There is little incentiveto reduce expenses and to economize on materials andlabor under the existing system.

Third, there is the problem of coordinating fi-nancing with material and technical sunply. In prin-ciple, each financial flaw is to be matched by a cor-responding physical flow, and whenever possible bothare to be planned. In practice, however, the linkagerarely works smoothly and rapidly, and sometimes itis not made at all. Part of the problem is that R&Dorganizations frequently cannot anticipate their re-quirements for materials, equipment, and scientific

102

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ever, is that scientific institutions have engaged inmuch the same kind of hoarding practices as industri-al enterprises. They are reluctant to share, muchless give up, valuable and scarce resources, even ifthey do not use them. The establishment of a rentalsystem is a means by which to free the quantity oflittle used, highly expensive, greatly needed, butessentially "frozen" equipment that is growing at anappreciable rate. It represents a device by which tobreak down some of the institutional barriers betweenthe "haves" and the "have nots," to bring togetherthe demand of some organizations and the supply ofothers.

Suffice it to note that in the early 1970s therental of scientific instruments and lab equipmentbegan to be organized, initially in the Leningrad re-gion. Plans have been worked out to develop suchrental services in a number of major scientific cen-ters throughout the USSR, such as Moscow, Minsk, Tbi-lisi, Kiev, and Irkutsk. Along with filling one-timeorders, the servicing of customers on the basis oflong-term contracts has begun to be practiced. Rent-al arrangements sometimes involve the ;rovision notonly of equipment and supplies but also of importantservices, such as testing and measurement. This isparticularly important for extremely complex andcostly instruments, which can be easily damaged ifnot handled properly. Given the present shortage oftechnicians, this is a good way to maximize the ser-vices and skills of existing specialists and to main-tain quality control. Interestingly, other organiza-tions like the USSR State Committee on Standards, theUSSR Ministry of Chemical Industry, and the USSRAcademy of Sciences have also begun to set up rentalservices involving very sophisticated equipment andprecision instruments.44

Nonetheless, the inadequacy of supplies and theinefficiency of their administration remain constantcomplaints in the Soviet press. Here it is importantto bear in mind that the supply function, like plan-ning and financing, is fragmented among numerous or-ganizations. There is no single master and alloca-

104

I

tion holder of material resources, though the StateCommittee for Material and Technical Supply (Gossnab)presides over one of the most extensive and powerfulbureaucratic empires in the country. Still, morethan 75 percent of the 7000 supply and marketing or-ganizations belongs to various ministries and depart-ments. "Subdividing supply functions," an article inPr- la notes, "has the undesired consequence thateach branch of the economy strives to supply 'itsown' enterprises first, frequently to the detrimentof the state as a whole."45 The cumbersome multi-level and multi-agency distribution system gives riseto poor coordination in planning, complicates work,and impedes the solution of even routine matters.Describing the defects of the system, the head manag-er of supplies for the Moscow region observed re-cently:

The organizational structure of the USSR Gos-snab and it3 agencies does not yet fully meetthe demands of the national economy in as muchas the share of material resources sold throughthis system is law, not over SO percent.

The nationwide system has still not become thebasic, prevailing system of supply either atthe center or in local areas. As a result,production associations, enterprises, construc-ton and research organizations are compelledto use numercius additional channels to findand acquire the materials and equipment theyneed to fulfill their plans and meet theircommitments.

At present there are no firmly establishedprocedures for planning and distributing thegoods on the itemized lists stipulated by theUSSR Gosplan and by the i.tate economic plan.Naturally, this makes for considerable du-plication in the work of the USSR Gosplanand Gossnab."

Largely because of the difficulties in obtaining ma-terials and equipment through Gossnab, R&D facilitiesand production units continue to bypass the whole ma-

105

119

terial supplies system and try to satisfy their needsillegally and by direct acquisition from producingorganizations.

THE SELECTION OF RESEARCH TOPICS AND TASKS

Program and project selection in Soviet R&D facil-ities reflects the combined impact of possibilitiesand objectives. Important factors influencing tech-nical possibilities are current Soviet state-of-the-art; the state-of-the-art abroad and potential forforeign technology acquisition; and the quality andquantity of material, labor, and capital inputs thatcan be directed to technology generation and acqui-sition. Important factors influencing objectives arethe level of the decision maker, his independent orderived aspirations, and the urgency of the technicalproblem at hand in comparison to other claimants onresources. Influencing both possibilities and ob-jectives is the productivity of investment in partic-ular programs and projects, or in other words, thevalue of the results which may be expected from agiven amount of inputs. While the selection proce-dures and criteria clearly differ depending upon theagency and type of R&D, and though our knowledge ofthe details of Soviet decision making is still limit-ed at all levels, the following description suppliesthe important principles and general procedures.

In all organizations and at all levels of the hi-erarchies the selection generally proceeds in threestages: (1) an evaluation of where the organizationor entity (the nation as a whole, republic, or branchof the economy) is at a particular time; (2) an as-sessment of where the organization or entity is like-ly to be under the assumptions of combining possibil-ities with several variants of objectives; and (3) aselection of alternatives. The chief concern in thefirst stage is the set of indicators employed toevaluate status; in the second, techniques of fore-casting; and in the third, the designation and hier-archy of plans, programs, and projects and the cri-

u 106

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Is to be oriented to accelerating the rates of scien-tific and technical advance and to raising the effi-ciency of production along the following broad lines:

1. The creation and introduction of fundamental-ly new tools, materials, and technologicalprocesses which surpass the best domestic andworld standards

2. The comprehensive improvement of product qual-ity in all sectors of the national economy

3. A rapid rise in the technical level of thestock of technological equipment and a fasterpace of replacement and modernization of ob-solete machines and units

4. A reduction in the amount of materials con-sumed in production by improving the productmix and the design of machinery, by using ad-vanced technology, and by utilizing more ful-ly raw and other materials

A rise in the level of electrification of pro-duction and in the efficiency of energy use

6. 'the creation of machine systems for completediechanization and automation of the most im-p,rtant production processes in industry,-onstruction, agriculture, and transportation

7. The renovation of existing and introductionof progressive standards and specificationsfor achieving a high technological level andquality of output

8. The broad introduction of modern methods ofplanning, organizing, and managing production,including the use of up-to-date business mach-ines and computer technology. 48

These broad directions, expressed in terms of appro-priate volumes, rates, and proportions, have subse-quently been referred to by Soviet science policy of-ficials as "basic indicators" for measuring scientif-ic and technical progress.49

108-)°

In fact, the 1974 planning instructions included,for the first time, a list of "basic technical andeconomic indicators" for industrial production, whichare directly related to the broad evaluative consid-erations noted above. Constituting a new subdivisionof the plan for the development of science and tech-nology, these technical standards are designed toserve several purposes. First, they provide crite-ria for determining the usefulness and desirabilityof proposed research, development, and innovationmeasures, and in particular for calculating the re-turn on investment. Second, they induce enterprisesto enhance technological performance, raise economicefficiency, and improve product quality. Third, theyaim at enforcing the utilization of R&D results inproduction.50

In effect, these technical standards are to serveas the basic indicators for evaluating status and fordetermining technological advance throughout the plan-ing hierarchy. The indicators are couched in generalterms for application to the economy as a whole andto the republics, in intermediate terms for the var-ious branches of the economy, and in highly specificterms for separate production units. The general in-dicators include, for example, the following:

1. The proportion of products matching or exceed-ing the best world standards

2. The volume of sales of such products

3. Changes in proportion and volume of substan-dard and obsolete products

4. The proportion of obsolete products withdrawnfrom maaufacture to total products

5. The amount of production assimilated for thefirst time or assimilated in less than 3 yearstime

6. The degree of mechanization and automation oflabor

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1 3

Relative reductions in the labor force due tothe rising technical level of production

8. Incx_ases in labor productivity

9. Economies in the use of materials

10. Reducations in cost.

Indicators for each branch or enterprise specify theproduction standards required to meet the general in-dicators, such as, the average content of nutrientsin chemical fertilizers, the drilling speed of oiland gas drilling equipment, and the proportion of to-tal steel output er plant produced by the contil.Aloussmelting method.51 The orientation of these indica-tors is clearly economic and demonstrates that pres-sure on the scientific community is strong and grow-ing to induce all researchers, designers, and engi-neers to serve the needs of the economy.

It is of course difficult to conceive of a set ofconcrete indicators which might represent the levelof achievement in a particular scientific discipline,especially in fundamental research. This is also at-tributable to the fact that no single organizationalunit is held responsible for advance in a specificfield, though leading Academy of Sciences departments,councils, and facilities would come closer to assum-ing this role than may comparable American facility.Accordingly, the state of advance in a scientificdiscipline is evaluated in informal discussion withinthe relevant scientific community and more formal de-liberation in a scientific problem council of theAcademy or of the GKNT responsible for the area. So-viet status relative to the rest of the world is alsocertainly an important consideration.

Prospective paths of scientific and technical ad-vance are determined through forecasts, a procedurewhich really constitutes the first stage of planning.Much attention has been given in the USSR in recentyears to S&T forecasting. Its development has beenencouraged in large part to broaden the short time

110

horizon and to alter the incremental style of Sovietdecision making and thereby improve strategic plan-ning in both science policy and economic policy.

SEeT forecasts are projections of alternate trendsin major areas of science and technology. The vari-ants ultimately selected as a basis for planning re-flect established priorities and preferred options,ideally arrived at by comparative evaluation of ex-pediency, costs, and benefits. The approved fore-casts are the foundation for so-called "basic direc-tions in the development of science and technologyduring the five-year plan period." The incorpora-tion in forecasts of the combined impact of possibil-ities and objectives is reflected in the fact thatsubsequent "basic directions" are designated as theframework for addressing the "basic S&T problems"listed in the five-year plan.

Forecasts may be short term (5-7 years), mediumterm (10-15 years), and long term (20 years and over)and impact on the respective plan periods according-ly. Short-term forecasts are used in machine build-ing and metalworking to project new models of machin-ery and equipment. The longer term forecasts areused to project new types of products or engineeringsystems. They are commonly made for problems or ar-eas of national importance, and sometimes for branch-es when the problem is clearly within the confinesof a particular branch. Long-term forecats havebeen prepared, for example, for the fuel and energybalance up to the year 2000, for hydro-electric pow-er, long-term chemicalization, and development ...)fbranches of heavy industry.52

Thougi more than 150 diffe,:...ut forecasting methodshave been developed, they fall generally into threemajor types: extrapolation, expert judgment, and mod-eling. Techniques of extrapolation are usually usedin areas where changes are gradual and not disruptedby radically new discoveries. The future is projec-ted largely on the basis of the continuation of pre-sent tendencies of development. In expert judgment,forecasting involves analysis of trends by groups of

111

experts in particular fields and the weighing of opin-ions as to predominant probabilities in science andtechnology. The method of modeling consists of build-ing information models, games models, mathematicalmodels, and other systems of logic incorporating pre-sent and future technical and economic characteris-tics in particular fields of R&D.53

In general, methods of collectiveevaluation are most frequently used,when broad or nebulous questions aretion, such as prospective advance indamental science. Modeling is least

expertise andparticularlyunder examina-an area of fun-used. This is

certainly in part due to the heavy demands placed onextensive and consistent data panels and on carefulspecification of parameters. Modeling is more ame-nable to such tasks as the projection of performancecharacteristics for certain categories of machineryand the development of branch-of-the-economy fore-casts. 54

On the procedural side, the forecasting of R&D ofnational or interbranch scope is directed and moni-tored by the "Big Four" planning agencies: the USSRAcademy of Sciences, the GKNT, Gosplan, and Gosstroy(the USSR State Committee for Construction Affairs).The Academy and the GKNT, in particular, are the mainagencies in this activity. Each maintains an elabo-rate structure of special probl-- councils and expertgroups which separately and jointly conduct forecast-ing studies. S&T forecasting that is limited to anintrabranch focus is the province of relevant branchministries, though subject to constraints imposed bycentral forecasts. Branch-wide forecasts selected bythe ministries are also submitted to the "big four"agencies for review and approval.55

It needs to be noted, however, that the whole areaof scientific forecasting and technology assessmentcontinues to suffer from serious deficiencies. Long-range planning and forecasting are still relativelyundeveloped on the branch level. Some branches, Nol-ting points out, do not even bother to draw up fore-casts or perspective plans of intrabranch R&D. Fore-

112

casting in these ministries is confined to that por-tion of R&D conducted in connection with major inter-branch S&T programs.56 Serious complaints are regis-tered regarding the quality of forecasts. The latterfrequently do not take into account economic return,eocial consequences, the dynamics of prices, etc.57The real problem is that no universally acceptablemethods have been found for evaluating these factors,nor is there any agreement on how they interface. Be-cause of these general evaluative deficiencies, fore-casting continues to 71:ve so-celled "black spots"that reduce its value as an instrument of Soviet plan-ning and analytical tool for deciding problems ofchoice. Nonetheless, with evaluations of current sta-tus and forecasts in hand, planners are prepared toselect programs and projects.

The selection of programs is an iterative processamong experts and councils in a position to know theconstraints placed on R&D by the availability of in-tellectual, human, and material resources, on the onehand, and the economic and political authorities whoprovide the objectives and orientation for science onthe other. The selection of programs and projectsand their subsequent eit.iaggregation generally followadministrative lines corresponding to the infrastruc-ture depicted in chapter 9. In important instances,however, problems are of interbranch significance,and R&D conducted on the problem requires coordina-tion between Academy, university, and/or industrialfacilties of several ministries. Similar, multi-fa-cility programs are developed within ministries. Thedelegation and management of programs and projects,both administratively and functionally oriented, isdiscussed in greater detail later in this chapter.For now, attention is given only to the selection oforiginal projects at various levels and particularlythe criteria of selection.

National and branch long-range plans for S&T areessentially a bridge between forecasts and the five-year plan. The long -range plan is "apparently a ten-tative selection of the variants of basic directionsyielded by the forecasts and sets forth in broad

113

terms the new technology to be developed."58 Five-year and annual plans are the operational periods forprogram sei_t_r:tion and control, and the basic S&T prob-lems that are included in the national economic planform the orientation for much of the R&D performedin the Soviet Union, both because of their magnitudeand the high priority attached to their solution. Inthe Eighth (1966-1970) and Ninth (1971-1975) Five-Year Plans the basic problems reportedly consumedabout 40 percent of the allocations to science, whilein the Tenth Plan (1975-1980) they garnered about 25percent of the official science budget. The numberof problems has also ',een reduced from nearly 250 toaround 200. The links between S&T forecasts, basicdirections, and basic problems as well as the lat-ter's subsequent breakdown into programs and pro-jects are depicted in Figure 10-3.

The list of basic S&T problems is prepared by theState Committee for Science and-Technology in collab-oration with Gosplan and the Academy of Sciences. Ap-parently only about 10 percent of the problems--themost important--actually go to the Council of Minis-ters (and most likely the Politburo) for approval atthe highest level, but this portion probably absorbsmore than half of all expenditures. The rest aremore likely then approved on the spot by the "BigFour" central planning agencies.59 The largest ofthe work programs associated with these problems un-dergo expert evaluation at the State Expert Commis-sion of the USSR Gosplan. For individual programs,the GKNT organizes the expert judgment. The basiccriteria for the selection of these problems of na-tional priority are their interbranch im?ortance,their social significance, and the technical-economicbenefit to be derived from their solution. The listof basic roblems reportedly contains no militaryprojects.b

p°

A basic S&T problem is defined as a complex of in-terrelated tasks, the fulfillment of which plays animportant role in accelerating technological modern-ization of the national economy as a whole. The "so-lution" of a problem takes generally one of the fol-

114

FIGURE 9-3 COMPONENTS OF THE SYSTEM OF RESEARCH,DEVELOPMENT, AND INNOVATION PLANNING

IN THE USSR

Variants of Scioncilic andTechnical Forecast

i

-

"V/3esic Direction

in It= forPerspective or5-year Period(chosen variant)

Party and GovernmentEconomic Decisions

d-canonic and Social

Forecasts

Sciencific and TechnicalExpertise and tnformation

Panic Directions inDevelopmenc of theNacional EconomyFor ?erspective at.d5-year Periods

Basic SZT Problemof 5-year Period

Program ail5-year Period

211hilleamIGeneral

Assignmenc orTarget

GeneralAssignment or

Target

Specific SpecificProject: or Job 1Pro!ect or Job

Source: Louvain E. Nolting, The Planning of Research,Development, and Innovation in the U.S.S.R.,p. 20.

115

lowing forms:

1. Development and assimilation of new systems ofmachines, new equipment for mechanization andautomation, and new materials and products

2. Development and assimilation of improved tech-nological processes and methods of reducingenvironmental pollution

3. Improvements in production organization andmanagement, including the introduction of au-tomated control and management informationsystems

4. Work on problems in the fields of construc-tion, architecture, agriculture, and publichealth.

To solve the 200 basic S&T problems in the currentTenth Plan, nearly 1900 new kinds of machines, in-struments, and products, 900 new economical materi-als, more than 1000 new technological processes, andshout 700 automated control systems are slated fordevelopment.61

In general, fundamental research problems are notincluded among the basic S&T problems but are listedamong the problems in the natural and social scien-ces, which are also funded from the State Budget.For example, only six percent of the basic problemsin the Eighth Plan incorporated the fundamental re-search stage, but none was limited to it. More thanhalf of the problems were confined to areas of ap-plied research ..ad/or development. Only about 40percent of the problems extended through the stageof innovation and production assimilation.62 In ac-cord with the increasing emphasis in science policyon the need to utilize R&D results in the economy,the list of 200 basic problems in the Tenth Plan con-tains a greater proportion of innovation-directedprojects. More than half of the new hardware, tech-nology, and materials in development are planned tobe carried through to the phase of trial lot 7produc-

0'/ i16

tion or to the successful operation of productionprocesses.453

To illustrate the nature and variety of basic S&Tproblems, let us offer the following examples fromthe Tenth Plan. There are programs devoted to thedevelopment and expanded use of numerically-controlledmachine tools and the development of modern equipmentfor mechanizing and automating local materials han-dling and warehouse operations as well as timber cut-ting. Other programs focus on raising the unit ca-pacity of machines and equipment, especially for thechemical, power, and ferrous metallurgical industries.These include building large ammonia producing plants,and turbines and generators with a capacity of 500,800, and 1000-1200 megawatts; developing ultra-long1500 kV DC and 1150 kV AC transmission lines and nu-clear power plants equipped with 1500 megawatt reac-tors; and designing special excavating machines with40, 65, and 180 cubic meter bucket draglines for coalmining.

On another level are basic problems in the devel-opment of furnaceless metallurgy, spindleless spin-ning, and shuttleless weaving. New methods of pro-ducing metal and high-grade steels, including oxygenconverters and electric smelting, are the subjects ofother programs. At the Oskol ElectrometallurgicalCombine technology will be introduced for the produc-tion of steel by direct reduction of iron ore withoutblast furnace processing. Still other programs con-centrate on the production of efficient materi-als, such as synthetic resins and plastics. Develop-ments in laser technology and in industrial rcbotsalso figure among the basic S&T problems.

Finally, problems in applied research--rather thandevelopment or innovation--include programs on theuse of scientific principles of superconductivity andmagneto-hydrodynamics, space and oceans research, mo-lecular biology, and seismology. A basic S&T problemin the field of public health concerns the develop-ment of methods and means for the prevention, diagno-sis, and treatment of cardiovascular disorders. Other

117

programs deal with ways to protect the soil againsterosion as well as research on plant nutrition andways of raising soil fertility. 64

The procedure for project selection at lower lev-els of the hierarchy is similar, although correspon-dingly shorter and simpler with fewer organizationsinvolved. In Academy and university facilities,"Initiative" fundamental research not associated withproblems of superior bodies or contractual obliga-tions materially reflects the professional interestsof the individual or research .-311ectives. In indus-try, ministries define problems of branch importancein the same way that all-union R&D problems are de-fined. The ministry scientific-technical council isthe chief consultative body. Large production asso-ciations and other establishments may engage in asimilar procedure. In general, while personnel inindustrial institutes, design bureaus, and produc-tion establishments may have some latitude to pursuetheir professional interests, the heavily applied na-ture of the work at these facilities severely limitsthe scope of R&D.

Indeed, the selection process itself is influencedby the character of the R&D in question. While theconsumer of the results frequently influences projectselection in industrial R&D, the resource base--thequalifications, creative potential, and experience-- -of the fundamental research organization also tendsto limit the scope of its work. In planning funda-mental research, Larichev notes that "the resourcesof the executors predetermine to a considerable de-gree the goals that are achieved." On the other hand,for predominantly development-oriented projects "thecomposition of the performers has comparatively smallinfluence on the goals that are achieved; the sameR&D can be assigned to different groups of perform-ers." Applied RAD occupies an intermediate positionin this regard.65 Academician Kapitsa also observesthat with fundamental research planning "the choiceof talented individuals should have priority, evenover the choice of subjects." As he points out, "Alame man cannot be taught to run however -.Duch moneyis spent on him."66

118

Precise figures are not available on the propor-tions of R&D directly planned by central authorities,the branch ministries, and local R&D performers. Al-though the 200 basic S&T problems account for onlyabout 25 percent of total official R&D, central plan-ning is not limited to these programs and may approach40 to 50 percent, in Nolting's opinion. Ministerial-ly planned R &D activities constitute probably about30 percent of the total effort while lower level per-formers account for the remainder.67

Throughout the discussion of selection, we havereferred to the pertinent criteria. In general, atall levels and in all organizations criteria may begrouped in three categories--economic, technical, andsocial--with emphasis on the first. The criteriathemselves also are similar throughout the economy,with allowance for the pertinent arena of the deci-sion maker. Both the problems and the answers shouldgenerally be formulated in a language appropriate forthe given planning environment. That is, scientificevaluation, Larichev explains, "in spirit should bea concrete response to problems of the planning or-ganization." "Logical models of information conver-sion which use verbal definitions of qualities aremore practical than mathematical ones," he adds.68In general, strong preference exists for relativelysimple evaluative methods and indicators rather tLanfor highly sophisticated analytical techniques andcomplex quantitative formulas. For the moat part,R&D questions are seen by Larichev and other Sovietscience analysts to fall into the class of "weaklystructured decision problems," for which modern sys-tems analytic techniques, including cost/effective-ness methods, are not very useful. Only in the moredeterministic world of production-oriented develop-ment projects are these conceptual aids deemed to beof value in planning and deciding problems of choiceand uncertainty.69 Also as a general rule, Kapitsanotes that the figures to be watched in project plan-ning are not the absolute ones but the relative In-dicesthe percentages of the total used for sala-ries for administration, for scientific equipment,etc. ,0

119;)

Until the late 1960s, economic criteria did notfigure prominently in Soviet R&D decision making.Scientists and engineers were generally not sensitiveto parameters of "cost" and to constraints on re-sources. Their dominant attitude, as expressed inthe Academy's main journal, was that "there is no un-equivocal criterion for the resources that should beallocated to science. All of us must try to obtainthe greatest amount of resources possible."71 Oncewhen commenting upon the difficulties the leadershipfaced in drawing up the first list of basic S&T prob-lems, Academician Kirillin, Chairman of the GKNT, ob-served that scientists did not always help policyma-kers resolve the problems of choice. They willinglygave positive endorsements and sometimes were indeci-sive about a particular problem. But almost neverdid they render negative opinions.72

Similarly, the economic benefit or return of pro-posed R&D was not always considered, much less cal-culated, in the selection process. In 1968, for ex-ample, the branch plan for the development of newtechnology prepared by the Ministry of Instrument Ma-king, Automation Equipment, and Control Systems in-cluded estimates of the economic return for only sixpercent of its applied research work, for about 30percent of the undertakings devoted to the creationof management information systems, and for about 60percent of the projects dealing with the degqlopmentof new instruments and means of automation. Theabsence of calculations of economic return is ex-plained in large part by the fact that they were notobligatory at this time. "Without estimates of eco-nomic return," E. V. Kosov notes, "It is impossibleto evaluate and compare the activity of organizationsworking in the field of science and technology."74

Suffice it to say that mince the late 1960s Krem-lin authorities have mandated that all R&D projectsin the plan must be supported by calculations of eco-nomic return redounding to the users of the new tech-nology and to the economy as a whole. The main aimof this requiromer.t is to weed out nonpaying, imprac-tical R&D, to promote technological innovation, and

3.; 120

to raise the general cost-effectiveness consciousnessof the R&D sector. For basic S&T problems of nation-al priority, the prescribed indicators of economiceffectiveness include specific capital investments,Labor costs, expenditures on materials, electric pow-er per unit of increase in production capacity, andgeneral expenditures in terms of cost. For each prob-lem there is also compiled a technical level chartwhich compares the projected new technology with thebeat domestic and foreign technology, indicates thebranches of the economy in which the new technologyis to be applied, and gives rough projections of thedemand and export potential for the new or improvedtechnology.75 The economic orientation of the cri-teria and their similarity to the indicators of de-velopment described earlier are apparent.

Nonetheless, the requirement to include calcula-tions of economic return in R&D planning is not uni-versally observed and enforced. Basic science ap-pears generally to be excluded from this policy andfrom the subject matter of the "economics of re-search," a special field of study that has emergedin the USSR since the mid-1960s. As one of its lead-ing experts observes,

It is not possible to reduce the labor embodiedin Mendeleyev's discovery of the periodic tableto the cost of the cards on which the atomicweights of chemical elements are entered and tothe cost of the sheets of paper on which Mende-leyev recorded his idea of the periodic law.76

More broadly, too, cost/effectiveness estimates tendto be neglected or arc elaborated pro forma simply tojustify decisions already made. The crux of the mat-ter is that no uniform set of procedures has been es-tablished for defining and calculating economic re-turn applicable to individual branches and enterpris-es. In general, L. Gliazer notes, "Almost all eco-nomic calculations that are presently made in sciencehave a low degree of reliability. Here broad use ismade of various kinds of analytical techniques thatimpart the appearance of objectivity to all manner of

121

subjective constructions."77 S. M. Yampolskiy alsoconcludes that the calculation of economic return hasbeen made mandatory, in effect, only fo: projects ofmajor importance approved by the USSR Council of Min-isters or for special bonus projects in which an en-terprise assimilates a technology new to the USSR.78

Even for the highest priority basic SST problems,however, economic analysis has limitations and defi-ciencies. Among the current 200 basic problems eco-nomic return was not determine.1 in a number of cases ,nor were the technical level charts always completeand accurate. In some instances, information waslacking on important indicators. Analogies were some-times used and not the latest achievements in compar-ing technological merit. As a GKNT official notes,"All this prevented the conduct of careful analysisand expert review for all the problems. It is neces-sary to give more attention to analysis and evalua-tion of new technology, to make more precise the in-formation on the technical level charts."79

Studies by Soviet science policy specialists inthe early 1970s exposed a number of analytical andmethodological deficiencies in the handling of thisspecial class of decision problems. Commenting onthe experience of cost overruns--sometimes quite stag-gering--among the 246 basic SST problems during theEighth Five Year Plan, Kosov and Popov concluded that"cost" was not, in fact, substantiated in the systemof coordination plans for these problems. No relia-ble or universal methodology was used in calculatingthe cost of either individual projects or programsas a whole. Nor was there any consistent effort torelate cost to economic return. Economic return wasnot an important or obligatory object of planning.There was also some duplication among the problems sothat parallel programs existed, for example, on de-veloping new kinds of paper, new types of irrigationsystems for agriculture, and data processing systemsfor handling S&T inf,irmation.80 Other specialists,including O. I. Volkov, Boris Zaitsev, and Boris La-pin, also conclude that the coordination plans for1966-1970 were deficient in "economic effective-ness."81 For the most part, the methods of planning

1 3G 122

basic problems did not change until the Tenth Plan,when central authorities tightened up on proceduresand laid down the "basic technical-economic indica-tors" to guide the selection process.

All the same, despite improvements in calculatingeffectiveness, economic return on R&D is not an ab-solute criterion for selection of basic problems.There are other factors, such as national prestige,defense, social and even technological goals, thatmay override considerations of economic benefit andcost/effectiveness ratio. V. N. Arkhangelskiy, a ma-jor authority on the planning and financing of R&D,labels this the "criterion of necessity." In caseswhere this criterion applies, he writes, only thecost and not the economic return need be estimated.82Though he gives no specific examples of basic SATproblems that fit this category, we can surmise that"necessity" may have determined the choice of someof the research-oriented problems in the areas ofspace, oceanography, public health, and atomic ener-gy. Examples of past technology-oriented basic prob-lems that may have been perceived in these terms werethe development of the Soviet supersonic transportplane, the TU-l44, and the new series of Arktik classatomic ice breakers.

Even more difficult to quantify than economic cri-teria are the two others, technical and particularlysocial criteria. But these exert significant influ-ence on project selection. The project to mechanizeproduction operations at the large ZIL truck plant IPa case in point. As a Soviet case study of the deci-sion-making process that underlay this modernizationprogram notes:

The program of reconstruction had great economic,technical, and social significance.

The economic significance of the program consistedin that it was viewed as the creation of signifi-cant economic return: the growth of labor produc-tivity, increase of profitability of production,and guaranteeing stability of quality production.

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plains, "In fact, planning done by higher and lowerorgans is generally simultaneous, and the directivesand approvals are ogten replaced by bargaining andmutual agreement."91

Chronologically, for the annual plan, general di-rectives for the plan year should be formulated earlyin the preceding year by the Politburo and Council ofMinisters. The Academy of Sciences, Gosplan, and theGKNT, representing their respective areas of R&D, co-ordinate and establish the basic objectives, render-ing them more detailed and comprehensive. The GKNT,in particular, has overall responsibility for planformulation on the functionally oriented programplans. "Control figures," or preliminary plan as-signments, are transmitted down the respective hier-archies--Academy, ministry, republic - -to the perform-ing organizations. This stage should be completed bythe middle of the year.

Establishments prepare draft plans which are rout-ed up through the hierarchy, aggregated at each stage.They are considered and reconciled (with bargaining)by the triad of central management organs noted above.This stage should be completed by the end of Septem-ber. Plans are then approved by the Council of Min-isters and the Politburo, approved by the Supreme So-viet, and transmitted down the administrative ladderwith formal and official plan assignments specifiedat c- .h level. Preparation of five-year plans pro-ceeds in a similar fashion with, of course, a differ-ent time frame.

Integration of the various sets of plan targetscontained in the separate plan chapters is highly im-portant and sometimes essential. At the least, forexample, supply and production targets must be large-ly consistent, but the same is true for R&D and es-pecially innovation targets. The latter assignmentsgenerally disrupt normal establishment operations and,if not accounted for in the plan, may thereafterthreaten fulfillment of primary production tasks. Onthe positive side, primary production assignments canfunction as a strong stimulus to innovation if they

130

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versely, the role of planning agencies, certainlyGosplan and probably to some extent the GKNT, is lim-ited. While their formal powers are well-defined,they normally function in the more deterministicworld of production and innovation. The relative au-tonomy enjoyed by the Academy system clearly is at-tributable more to the nature of fundamental researchthan to any conscious decision on the part of the re-gime. Indeed, any degree of autonomy is likely to begranted grudgingly.

This leaves open the question of how the leader-ship influences the course of Academy and universityfundamental research. While certainly not well de-fined, the process of issuing "basic directions" forscience and technology appears to be significant. Un-like plan targets, basic directions do not have theforce of law. In an important way, however, theypartly substitute for plan targets in areas where(1) superior agencies are not qualified to fix de-tailed plan assignments, or (2) superior agencies arenot administratively capable of determining approllri-ate targets.9' The former concerns situations wherethe performers themselves are uniquely capable of de-termining the specific course of their work (e.g.,Academy departments). Political authorities, for ex-ample, would not regularly presume to judge the mer-its of this or that research project in theoreticalphysics, but, by specifying the broad objectives towhich a department's research program should contrib-ute, the leadership guides the selection of assign-ments.

The second condition is more interesting becauseit is pervasive in science and the economy. Optimal-ly, decision making at all levels should be channeledby a combination of specific orders, incentives, andpenalties to assure that all activities contribute tothe accomplishment of goals set by the central lead-ers. In fact, decision makers frequently have sub-stantial autonomy, either because activities undertheir jurisdiction have not been adequately encom-passed by the instructions of superiors or becauseelements of these instructions may conflict. In such

132

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instances, the basic directions provide a set ofhighly visible priorities to which decision makerscan flexibly relate in deciding problems of choice.Basic directions facilitate the practice described byAmerican observers as "decentralizing through prior-ities." In an important way, then, they form "aparallel mechanism to the plan, ideally correctinfor the plan's limitations and contradictions. 1,10u

g

Finally, the significance of the "basic directions"has been attested to in a message by General Secre-tary Brezhnev to the Academy of Sciences on its 250thBirthday:

Scientists and specialists in the variousbranches of the natural sciences, technol-ogy, and the social sciences have given andare continuing to give the Party enormoushelp in accomplishing all these tasks andin working out plans and implementing them.For this, the Party gives them all heartfeltthanks.

However, comrades, in the future you willhave to work even harder, more persistentlyand more effectively. We have no intentionof dictating to you the details of researchtopics--that is a matter for the scientiststhemselves. But the basic directions of thedevelopment of science, the main tasks thatlife poses, will be determined jointly. 101

In the industrial ministry hierarchy, research,development, and innovation objectives must be incor-porated with other economic goals. The character ofR&D at this stage, especially the increased predict-ability of results, eases the task somewhat. The dis-aggregation is usually straight-forward, although dif-ficult to realize in practice. Targets of all-unionimportance, by way of the GKNT, are included in plansof ministries along with tasks of branch significanceinitiated at that level. As a rule, the technicaladministration of the ministry is charged with formu-lating branch targets, a process which in principleis conducted in close coordination with the economic-

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incentive funds. In short, contractual condv.ct isnot a primary performance indicator for Soviet insti-tutions or a significant force in Soviet economiclife. Furthermore, contractual relationships andcommitments between performer and consumer establish-ments do not include supply organizations and hencedo not influence the latter's behavior in meeting theneeds of contracting parties.106 The system of con-tracts as such does not and cannot insure the mutualresponsibility for the fulfillment of assumed tasks.It is not an effective legal instrument for conduc-ting business. Its bass deficiencies are a contin-ual reminder that the Soviet system is fundamentallya system of administrative rules and plans, not asystem of law, at least in the Western sense of theterm.

Multiagency Programs

Earlier in this chapter we discussed the procedureand criteria for designating inprtar4L S.ST problems.By design, all elements of the problems are. delineat-ed with relatively little c.,nsideration f the organ-izational infrastructure sL:1377ortf. research and de-velopment. The leadership in:_ends that the problemsbe defined on technical and economic grounds a=d notbe artificially circumscribed by organizational con-siderations. Partly as a result , most problems areof interbranch importance, sr,metimes involvin&- facil-ities from all of the R&D hie-.:-archies. Hence, spe-cial plans or programs are developed to direct workon such problems.

In she Eighth (1966-1970) and Ninth (1971-1975)Five-Year Plans the main managerial device for inte-grating the whole complex of tasks and projects in-volved in solving a priority SST problem was called a"coordination plan." In the Tenth Plan coordinationplans have been replaced by "scientific and technicalprograms," which are generally more comprehensiveand specify more clearly the introduction of results.There were approximately 2/.Cr coordination plans andare now about 200 programs, the reduction in numberlargely accounted for by the greater comprehensive-

138

ness of programs. Responsibility for a particularbasic problem is assigned by the GKNT to the most ap-priate ministry or department, designated the "headministry" or lead agency. As a rule, the latter isthe main consumer of the results of the solution tothe problem.

By their nature, basic S&T problems are large-scale, complex science policy efforts. The 246 prob-lems in the Eighth Plan, for example, were brokendown by the lead agencies into over 3000 assignmentsand projects and distributed to appropriate perform-ers. The USSR Ministry of the Chemical Industry, forexample, acted as the head ministry for 14 basic prob-lems. R&D organizations and production units frommore than 20 different ministries and departments wereenlisted to work on them. At the same time, R&D fa-cilities of the Ministry of the Chemical Industryparticipated as coperformers in nearly 150 projectsfor 51 problems under the auspices of 27 ministriesand departments. Similarly, the USSR Ministry ofHeavy, Power, and Transport Machine Building was re-sponsible for solving 10 basic problems In which 23other ministries took part. This ministry, in turn.worked on more than 240 projects dealing with differ-ent priority problems for which other ministries werein charge. In total, more than 65 all-union andunion-republic ministries died agencies as well asover 350 performing organizat'.ans were involved inthe activity related to this select list of problems.Some problems alone had as many as 50 or more insti-tutional paLz_icipants.1°7

The overall magnitude of effort remains about thesame for the current 200 basic S&T problems. The to-tal number of ministries and departments has climbedto over 70 while the number of performing establish-ments exceeds 400. With the transfer to more compre-hensive work programs that extend through the innova-tion stage, the average number of organizational ac-tors engaged on a given problem has grown. In addi-tion, the USSR Academy of Sciences is involved onmore than half of the 200 programs. About one-thirdof the basic problems also entail the participation

139

of various East European states who are members of

the Soviet-led Council for Mutual Economic Assis-tance.108

While the GKNT has a central role in establishingmethodology for program formulation, in approval ofdraft plans, in authorization of funding, and in mon-

itoring implementation, the branch ministry or organ-ization selected as the lead agency is accorded pri-

mary operational authority and responsibility. Thelead agency drafts the plan or work program for theproblem, distributes specific assignments, arrangesfor financial and material support, and accepts the

completed work from the various performers. In pre-paring the plan, the head ministry creates a commis-sion of experts from various organizations whichworks in close collaboration with the scientific-technical council and the technical administrationof the ministry as well as the R&D facility selected

by the ministry to be the lead scientific organiza-tion for the problem. Through the expert commission,

the ministry sets preliminary assignments, determinespossible prrarmers, including organizations underits own jurisdiction and subordinate to other minis-tries to whom certain portions of the work can be

contracted out, and fixes approximate deadlines for

implementation. These are then sent to the appro-priate ministries and agencies which, directly withtheir R&D units, consider the possibility of meetingthe targeted technical goals within suggested time

and cost c-)rstraints. Some performers come back withcounterproposals regarding deadlines, financing, andtechnical criteria. To settle unclear issues and tofacilitate final agreement, the head ministry organ-izes bilateral and multilateral discussions. Any dis-

putes that cannot be resolved by interagency bargain-

ing are arbitrated at the GKNT. The final draft ver-sion of the plan or program is also sent to the GKNT

for adjustment and approval. The organization of

work on a basic S&T problem is illustrated in Fig-

ure 10-4.

One issue which is still not settled is the extent

to which the lead agency can impose its authorityover the facilities of another ministry in the event

140

1 5 4

FIGURE 9-4 ORGANIZATION OF R&D FOR THE SOLUTIONOF AN IMPORTANT SST PROBLEM

ti

4

State Committee forScience and Technology

Scientific Council forthe S3.7. Problem

`finistry Responsiblefor Solution of the

SST Problem

Fe .11

_IScientiZic-TechnicalCouncil

I

11=11

a .

L

of the ,Iinistry

IIMP

-17

Ministr7 TechnicalAdmin4str3tion

was

Lead R&D Organization ----- -------for the Problem

.111. alb

Minist.'"es and Agencies of the :7SSR and'.:nion Republics, RSO Organizations, and:industrial Enterprises Participating in

he Solution of the SST Problem

--I

I

R&D Organizations and MndustrialEnterprises Participating in the

Solution of the Problem

Administrative Links

Functional Links

MP OD MI.I

Source: "USSR Short Answers to US Questions," p. 17.

141

of conflict between program and branch assignments.Clearly, the authorities attempt to preempt such.oc-currences by requiring that program assignments befully incorporated in branch and establishment plans.Presumably, this is an area where the authority ofthe GKNT can be exerted. Interestingly, one of thedevelopmen*-s in the transfer from coordination plansto programs is enhancement of the role of the GKNT.Where a single ministry does not dominate in a pro-gram, the State Committee can assume the responsibil-ity of project distribution and direction. Examplesof such areas among the current 200 programs are com-puter technology and environmental protection. 109

To illustrate both the size and complexity of suchplans and programs, it is of interest to recount insome detail the experience of developing the advancedthereto- electric turbine. Each of the involved organ-izations is represented in Figure 10-5 by administra-tive affiliation. The prototype T-250/300-240 tur-bine was created as part of the solution to the prob-lem, "To Develop and Take Measures to Ensure the Fur-ther Development of Centralized Heat Supply for Cit-ies and Industrial Enterprises." The latter was oneof the 246 basic S&T problems included in the EighthFive Year Plan. The lead agency in this instance wasthe Ministry of Power and Electrification. The fol-lowing tasks were included in the coordination planfor this particular project: -10

No. Nature of Tasks1. Issuance of the tech-

nical tasking for thedesign of the turbines

2. Examination and ap-proval of the prelim-inary project designof the turbine instal-lationb

3. Approval of the tech-nical project designof the turbines

1-4" 142

Responsible PerformerThe scientific-techni-cal council of the Min-istry of Power and Elec-trification

The scientific-techni-cal council of the Min-istry of Power and Elec-trification

The scientific-techni-cal council of the Min-istry of Power and Elec-trification

4. Outfitting the primarytest bench for the as-sembly and testing ofthe turbine

5. Building the prototypeof the turbine genera-tor

6. Manufacturing the feed-er turbine pump for theturbine installation

7. Constructing the teststands for full-scaletrials at the Sredne-Urals combined heat andpower supply station

8. Assembly of the pri-mary and auxiliaryequipment for the Mos-energo electric powerstation

9. Conducting start-upoperations and testingthe blocks with theT-250/300-240 turbineat the Mosenergo elec-tric power station

10. Checking the vibrationcondition of the ro-tors, stresses in thevanes, temperaturefields and transfer-ences under differentconditions of turbineoperation, and check-ing the system of con-trol and oil supply,the economy of the tur-

143

The Urals Turbine MotorPlant (UTMZ) and theMinistry of Construc-tion of the RSFSR

UTMZ

The "Ekonomayzer" Plantand the Kaluga turbineplant

The USSR Ministry ofPower and Electrifica-tion

The Mosenergo electricpower station, the Mos-energomontazh trust,UTMZ, and the Taganrogboiler factory

The National Trust forthe organization andrationalization of re-gional electric powerstations and systems(ORGRES), Mosenergo,UTMZ, TKZ

ORGRES, Mosenergo, theAll-Union Thermotech -nical Institute, UTMZ,TsKTI

-Lk)

a

bine generator, and char-acteristics of the heatexchangers in differentoperating regimes

The technical tasking is compiled by the organi-zations that order the equipment for the manu-facturer and contains all of the basic require-ments of the consignee: unit power, basic steamparameters (pressure, temperature); parametersof the extracted steam (pressure, temperature,amount), the magnitude of vacuum, assigned tem-perature and amount of cooler water, specific ex-penditure of heat per generated kilowatt hour,etc.

bThe preliminary project design is compiled by themanufacturer of the equipment and serves as thebasis for developing several variants of the or-dered turbine. The elaboration of several vari-ants is required for the final choice of the tur-bine by the consignee.

cThe technical project design serves as the basisfor the final development of the thermal and de-sign system of the turbine and is done in accordwith the approved draft design based on the va-riant selected by the consignee. In the techni-cal design all of the basic qualitative indica-tors of the turbine are finally refined: the spe-cific flow rate of heat, vacuum, internal effi-ciency of the cylinders, etc. The technical de-sign is examined by experts of the consignee andis approved by the latter. The technical designalso determines the manufactured price of theturbine and is the ba.sis for drafting the workingblueprints and other technical documentation ofthe plant which is manufacturing the turbine.

Each task was also divided into separate work stagesand projects.

Later, in the course of installing and adopting theturbine it became necessary to make certain changesboth in the design of the turbine and in the thermal

144

5 s

FIGURE 9-5 ORGANIZATIONS INVOLVED IN THE DEVELOPMENT OF THE T-250/300-240

THERMAL ELECTRIC TURBINE

05S1 MINISTERS

61....1140 16411AWIPM10~ .41 1...Ministry at Oa Ministry at heavy, POW ,Mlnlatry) of Pam'

tinctrotichntcal and Napoli MAW Ad Electrification

Industry Wilding (until SDI) ;Special

1.1 Criertlerldn I klent Itic-hchn

Council

Elektrorils

Main Atiministtat Inn 1:.ntral

for Antler

Tu,rbint Construct inn Turbine

Institute

(TUTUUrals Turbine

Motor Plant

_Kahle Turbine

Plant

lionomyter

.Vennkov Arwatime

Plant

laningrad Metals

Plant

All-Union Stele instioar

fur the Resign and Planning

of Thermal Electric Power

Plants (TErIDELITTIOtilinTEKT)

Trust (or kelp :Hid

Manning Energy

Installations

(FAIMPRITAZIIPROYEKT)

littl ler Cleaning Trust

KMINKAISTKATnmt

*044InIn Administrations

All-Anlon

Thereat Techni-

cal Nat tote

(VT1)

State ensmItier

for Science and

Technology (CENT)

National Trust fur

Organization and

bt lenal 'ration of

Regional Electric

Power Stations

Systems (WAS)

.no

Macon Regional All -onion

Power Systes Scient if it

Aden istrat ion Re4earch

(nOSOIERCO) Institute

of Hydro-

Englneering

(VNIIC)

........" Design it PlanningCentral Electrical

Office of MosenerguHPower installation

(roSMENAPROYErt)Trust

(ELEETIOTSrOtiOgrAZI1 Trust)

InntaliAlon-ApplIcstioo,

Adsinlatnalon

Source: Adapted from the case study by V. I. Vodichev et al, "Development and Adoption

of Combined Heat and Power Supply Turbines with a Capacity of 250,000 Kilowatts."

system of the generator. In general, the changesfell into three groups. The first group includedquestions involving modifications in the technicaldocumentation for the working design of the turbinegenerator. The answers to these questions, for themost 1-_,rt, were handled by the electric power stationin collaboration with the organizations that helpedinstall the equipment and put it into operation.Usually, by decision of the Chief Engineer of theelectric power station or the Moscow Regional PowerSystem Administration, a group of specialists was setup to handle particular problems. The group includedrepresentatives from the design, layout, assembly,scientific research, and other organizations, as wellas the manufacturers of the primary and auxiliaryequipment. After this group of experts arrived at adecision, the general designer made the appropriatechanges in the operating blueprints and the consigneeissued an order to the assembly and installation or-ganizations to carry out the work.

The second group of changes included technical de-cisions regarding alterations in certain componentsof the turbine installation. Responsibility for solv-ing these matters lay primarily with the manufactur-ers. who supplied the required new parts and attach-ments.

The third group of changes included problems thatwere first identified during operation and layout,involving aspects in the operation of the turbine in-stallation that were not noted earlier. Here theministries of the consignee and of the equipment man-ufacturer organized special expert commissions to ad-dress the problems. One of the most serious diff i-culties that arose during the initial period of in-stalling and operating the turbine concert d poor vi-bration stability of the turbine. In this instance,a decision was made by the Scientific-Technical Coun-cil of the Ministry of Power and Electrification,with the approval of the Ministry of Heavy, Power,and Transport Machine Building, to create a specialexpert commission to tackle the -roblem. Representa-tives from participating organizations in both minis-

146

tries took part in the work of the commission. Therecommendations of the latter were examined and ap-proved by the Sc-ntific-Technical Council of theMinistry of Power and Electrification. Finally, thetwo principal ministries involved made a joint deci-sion on the matter, which facilitated its solution ina relatively short time. 111 The whole process il-lustrates the role of expert commissions and theplace of bilateral and multilateral consultation inSoviet R&D decision making, and especially in thedistribution and coordination of tasks.

Not all coordination plans were as well formulatedand organized as the above example, however. Concep-tualization of problems was frequently inadequate sothat the coordination plans were "a hodgepodge in-stead of a network of logical systems. "112 Some planswere unwieldy and included activity that was not rel-evant to the problems being addressed. Other plansconsisted of small projects inappropriately named"basic problems." Various stages of work and pro-jects were not correlated. Many of the plans werenot oriented to goals. Some had no fixed objectiveat all. Ambiguity in defining goals and assigningtasks led, in turn, to gaps and incoherence in pro-gram development, which resulted ultimately in thedelays, cost overruns, and duplication noted earlier.As M. A. Gusakov concluded, "In essence, the mix oftasks for a bass c. problem is chosen to a large extentby intultion."11-5

The replacement of coordination plans by SST pro-grams seeks to remedy these deficiencies. Much morethan before, the accent is on the actual introductionof R&D results into the economy. Coordination plansusually reached only to the stage of creating proto-types of new items, trying out new processes, or is-suing recommendations for series production. How-ever, some new ma-'ines and designs were held up foryears at the recommendation stage. The new programsemphasize bringing the R&D forward through the inno-vation phase. Hence, more than 60 percent of themachines, equipment, and instruments as well as 80percent of the new processes, materials, and data

147

processing systems being developed in connection withthe 200 basic S&T problems in the Tenth Plan are "pro-grammed" to be put into production or use. Timetablesare fixed for intermediate work stages as well as forfinal completion. The design and construction of pi-lot plants, and the creation of industrial facilitiesassigned primary responsibility for the manufactureof new items, are also stipulated. The old coordina-tion plans rarely specified these assignments. A pro-gram, then, is a more comprehensive and systematicgrouping of assignments than a "coordination plan. 114

In addition, the procedure for drawing up S&T pro-grams has changed. In the past, coordination planswere prepared mainly by the lead scientific organiza-tions and the technical administratior.s of the minis-tries; these were not always coordinated with the oth-er functional divisions of the ministries. To inte-grate more effectively science and economic planning,the process of drafting S&T programs has been mademore of a collaborative effort involving the entireministerial staff. Comparing the old system of planswith the new system of programs, Nolting concludes,"Although both combined and coordinated all of theprojects relating to a given problem, the redesigna-tion is more than a change in name."115

At the branch level program-type planning, called"continuous" planning, has been implemented experi-mentally in a few ministries. Such planning is donein concert with a special form of financing R &D, theUnified Fund for the Development of Science and Tech-nology, which consolidates the funding of all stagesof the innovation cycle. A lead research institute,design bureau, association, or enterprise is designa-ted, and all work stages are implemented by an intra-ministerial contract called a work order. The struc-tural similarity to interbranch programs at the all-union level is apparent. Because such plans areclosely tied with implementation and incentive andfinancial policy, discussion of them is postponed un-til the next chapter.

In summary, the importance of multiagency programsis attested to first by the criticality of their

148

themes and the significant amounts of resources whichthey command. At the same time, formal proceduresfor multiagency planning techniques are a relativelynew development, still clearly undergoing modifica-tion. Multiagency programs offer great potential forimproving coordination across organizational lines,but they made create significant problems if merelysuperimposed on the traditional branch planning struc-ture. Soviet authorities recognize the importance ofcareful integration of program and branch assignmentsto avoid sending conflicting signals to the perform-ing facility. Evidence is still fragmentary concern-ing evaluation of the scope of application and manage-ment of multiagency programs; therefore, it is unclearwhether the significant benefits of such programs arebeing fully realized. It is also too early to tellthe extent to which the shift from coordination plansto integrated programs overcomes some of the faultysystems planning and management of the past.

THE DECISION TO IMPORT TECHNOLOGY

Though the Soviet Union has long imported technol-ogy and machinery from abroad, the decision to ac-quire foreign technology was not made until recentlyan explicit and integral feature of R&D policy plan-ning. A number of Soviet surveys conducted in themid-1960s disclosed that few research institutes pos-sessed, much less used, comparat data on foreigntechnology and Soviet products.1-'-) )uring the springmeeting of the USSR Academy of enzes in 1965, itwas noted that many of the items included in the planfor new technology and slated for development by 1970could, in fact, already be bought from the UnitedStates, Japan, and Great Britain.117 At this timelittle attention was given to the purchase of foreignpatents and licenses or, for that matter, to the pro-tection of Soviet inventions abroad. Only in July1965 did the USSR begin to adhere to the Paris Conven-tion for the protection of international property. Ingeneral, the idea that it may be cheaper and more ef-

149

fective to borrow technology than to develop it do-mestically is still somewhat novel for Soviet deci-sion makers. As Robert W. Campbell points out, "Theyhave surely often thought it would be convenient tosolve some problem with foreign equipment, but thenotion of a conscious policy choice to be made rou-tinely an systematically is probably still not verycommon."li°

Three factors in particular have contributed tothis situation. First, the planning of R&D has beenoriented to building up S&T potential that can serveas a basis for the solution of future problems. Theplanning of technological innovation and utilization,on the other hand, has been geared to solving currentproduction tasks. The two spheres of activity havegenerally been decoupled, and each has proceeded moreor less on its own. Second, the time factor and the"cost" of time have not figured prominently in R&Ddecision making. Only since the late 1960s have ef-forts been made to extend, the time horizons of plan-ners and to make the five-year plan rather than theannual plan the basis for S&T Third,the Soviet R&D establishment has been inward-lookingand has tended to display a "not-invented-here" sen-timent. As a recent article in the Gosplan journalnoted,

There are more than a few examples where min-istries and departments try for years to solvethrough their own efforts problems that havelong been solved in other countries. In a num-ber of cases the leaders and specialists ofcertain scientific organizations consider thedecision to buy licenses as testimony regard-ing their own S&T inadequacy. But only a pre-cise and competent opinion as to how each itemand process compares with the world standardand to its prospects for further improvementshould be an important consideration in thedecision to accelerate our own research anddevelopment or turn to the acquisition of aforeign license.119

150

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with, the types of patents and models to be acquired,the equipment and materials needed for the assi"ila-tion of foreign technology, requirements for capitalconstruction, the R&D performers and industrial fa-cilities to be assigned to the adaptation and instal-lation of the imported technology, legal rights andobligations in the use of this technology, and theestimated economic return from its adoption and dif-fusion. At the same time, a determination must bemade of what scientific R&D projects should be termi-nated after purchase of "Ireign patent.121

The extent to which these new procedures are ad-hE...d to and the overall impact of changes in importpolicy on the planning process are impossible to -

sess from available infomation. Calculation of theeconomic effectiveness of technology, we haveseen, is still fraught with many problems and defi-ciencies. Methods and criteria for evaluating theeffectiveness of foreign technology au? the compara-tive advantage of borrowing from abroad or buildingdomestic capability are only beginning to be devel-oped. According to one Western authority, "So farit appears that planning calculations of this typehave had little role in the actual planning of ex-ports and imports. 122 In addition, decisions to im-port technology are still limited to high priorityproblems and projects. For the bulk of Soviet R&D,the inside-outside choice simRly does not arise. Bor-rowing is not a real option.143

More generally, these changes in R&D policy plan-ning have coincided with considerable exp.t..n.ion ofSoviet participation in international tr-,de and tech-nology transfer. Reasons for such expansion are typ-ical: a combination of certain pressures which in-duce international cooperation, such as global envi-ronmental problems, and the standard benefits whichaccrue to all who take part in -!nternational di-vision of labor in science and L ology.124 In-

creasingly, Kremlin authorities a come to realizethat it is expensive--and not necessary--to reinventthe wheel and to be self-sufficient in all areas ofscience and engineering. They have also lome to re-

152

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3. Production assimilation of new industrialproducts

4. Introduction of advanced technological proces-ses and mechanization and automation of pro-duction processes

5. Sale of Soviet patents abroad, purchase offoreign patents and models of new products,and their utilization in the USSR nationaleconomy

6. Introduction of computer technology into thenational economy

7. Establishment of state standards governing themost important types of products and metrolo-gical support of the national economy

8. Introduction of scientific organization of la-bor

9. Basic indicators of the technical and economiclevel of production and output

10. Financing of scientific research

11. Training of scientific personnel and scienceteachers-130

The content of each chapter is self-explanatory. Cer-tain chapters are concerned with a general categoryof R&D, such as the introduction of new products;some pc-rtain to a special category, such as licensingor the application of computer technology; and stillothers focus on the establishment of operating andevaluative criteria, such as standards and technicalindicators, which support the remaining chapters. Inaddition, the universal correspondence between phys-ical and financial flows is exemplified by inclusionof the financial plan.

At the stage of the intermediate level m==lagementorgans, plans become more concrete. Plans incorpo-

156

rate targets specified in chapters of the nationalplan, but are organized differently in relation tothe character of the R&D in the hierarchy. In theAcademy and university systPrnci, the program or pro-ject is the centerpiece of the plan, with most indi-cators concerned with measures of inputs (e.g., wagefunds) and the scheduling of work. Emphasis is alsoplaced on specifying the ultimate user of results,and calculations of economic return are requiredwhere possible. Plans in industrial ministries areoriented to the application and introduction of R&Dresults. Branch plans contain divisions that corre-spond to and derive from the macro state plan divi-sions for tine assimilation of production of new typesof products and the introduction of new processes.There are also divisions for improving the stock ofequipment, the organization of production, and thequality of output. The annual plans of the branchministries also include a special division for sci-entific research and test-design, which lists the R&Dassignments under the special programs for solvingthe basic S&T problems.

At the performer level in the hierarchy, the struc-ture and ceIntent of plans correspond to the orienta-tion of the superior organization's plan and the char-acter of R&D activity. Independent research and de-sign facilities draft five-year and annual "thematic"or project plans in which the central object is theresearch project. Nolting observes, "There are nostandard methods and forms for drawing up projectplans among scientific organizations that are underdifferent ministries and perform different kinds ofwork, but there is a basic procedure and set of re-quirements."131 In general, project plans have twomain sections: one for R&D conducted within the fa-cility, the other for assimilation of finished R&D tobe transferred to the appropriate production organi-zations with the advice and assistance of the scien-tific facility. 132 Information in the yearly pro-jects plan includes the following: the general vol-ume of scientific research and experimental designwork for the plan year; the expected economic return;the periods for completion of work on each project;

1571 71

estimated costs; the sources of financing; the ra-tionale for including the work in the plan; and thedesignation of the industrial enterprise to receivethe R&D results for application.133 The emphasis ondefining ultimate uses is apparent and is to some ex-tent a new element, at least in degree. Along withthe thematic plan, a "calendar" plan is developedwhich schedules work by stages and designates per-formers and inputs.

In the production enterprise, the "plan for in-creasing the efficiency of production" or, as it isgenerally called, "the new technology plan" carriesthrough the applied orientation reflected in the min-istry's plan. In the past, five-year plans of thissort were drawn up only in the larger enterprises orproduction associations. With the Tenth Five YearPlan, however, they have apparently become mandatoryfor all enterprises.134 The annual enterprise newtechnology plan, which has been a basic feature ofSoviet planning since the late 1920s, is drafted inminute detail and contains the following subdivi-sions:

1. Assimilation of new types of products and im-provement of the quality of production

2. Introduction of advanced technological proces-ses and mechanization and automation of pro-ductfon

3. Introduction of scientific organization oflabor

4. Improvement of the organization, planning, andmanagement of production

5. Scientific research and experimental design

6. Basic indicators of the technical and economiclevel of production and output

7. Protection of the environment and rational useof material resources.135

158

In each subdivision the documentation required on aproject basis is extensive and similar in scope tothe other examples already cited.

THE PLANNING SYSTEM AND ITS PARTS

In pr; iple, these numerous sets of plans, dif-ferentiat_.2 along temporal and organizational linesas well as hierarchical branch and functional programlines, form an internally consistent and well inte-grated "system" of plans regulating the research-to-production cycle. In practice, however, there aremany "holes in the whole," and coordination fallsfar short of its target. Given the scope and compre-hensiveness of Soviet planning, this is not surpris-ing. Perfect coordination is unlikely in any system,partly because of the unpredictability of the resultsof scientific research and development. But as mol-ting observes, "Soviet R&D planning has been poorlycoordinated even if judged by standards less thanideal."136

Only since the late 1960s, it may be recalled,have Kremlin authorities pursued a policy of inte-grated systems planning of R&D, innovation, and pro-duction- Even today such a policy is applied, forthe most part, only in high priority projects. Sovietplanning is generally still of two kinds: "compila-tion planning" and "implementation planning." Theformer involves primarily a listing of assignmentswhile the latter entails more systematic and delib-erate efforts to specify targets, to assign respon-sible performers, and to coordinate tasks. Implemen-tation planning is limited primarily to the inter-branch S&T programs of national priority and to thecontinuous plans in certain branch ministries. Com-pilation planning remains the predominant form withresults that are less than optimal. Again Noltingprovides the best description of the system:

RDI Cresearch-development-innovation] plan-ning has often amounted to little more than

159

a simple listing of projects to be carriedout without relating them to broader pur-poses. In large part the projects are sug-gested by lower units in the planning chainand reflect the interests and expertise ofperforming organizations. Many such pro-jects are reported to be trivial and mar-ginal in their technological benefits. Theproposals submitted by lower echelons arenot always -roperly screened and those ac-cepted are not worked into coherent plansconsistent with the general technologicaldil_ctians of the higher planning echelons.In other words, RDI plans tend to be accu-mulations rather than syn..rieses.137

The demand for techniques to view projects in atotal systems perspective is clearly felt and pro-vides the impetus behind the systems movement in So-viet science policy today. Network planning and pro-gramming methods enable decision makers to perceiveprojects more broadly as systems and to depict theinterrelationships among tasks to be performed. Ingeneral, though, these are still new and untestedtools. "Many deficiencies in planning scientificand technical progress," explains one Soviet sciencepolicy expert, "are rooted in the lack of apprecia-tion of programming methods and in the narrow frontof their application."138 Even for basic S&T prob-lems, systems planning is still very much an evolv-ing technique. A deputy director and research ana-lyst at Gosplan's Central Scientific Research Insti-tute of Economics acknowledge, "We have still not ac-cumulated sufficient experience in drawing up long-term SST programs. It is possible to say that theformulation of programs in most cases is still in theformative stage."13° On the branch level, too, prog-ress has beer slow and limited in devel -ping program-type planning. By 1974 only three mini =ries hadtransferred to the system of continuous planning,though by 1978 this number had climbed to 11. Therest continue to plan R&D largely around separateorganizations rather than broad programs.

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rt 0 0 0 0 0 ,1 rt 1-1 0 ft 0 014 rt 0 0 II) 0 OQ N. ,0014 (.113,0 5. rot 11) riu)n a (v cr o (t (o ul w oci rt a Fi 1-1 ro H. rt CDtil fD 0` 04 u ID PO P. it91 VIII rt 0, H 0, rt 0 A) ID Hi n' od 0 0 0 H I'D M HO) 01 H I-4IA 00 OA 10 (i) M Og fD 0 M fDnnnetaart 5. grtoli4rtigNi 0 0 ft) (s) 0' P)44 g rl "` 5* g, cl, 2 ' H 5. ciTig ii (0) .4 R. ° m Pi nit V .. H. vo li H cr

t 0M 0 0' (r) 0 M 0 H P0 fD 1-6 0 0 M M 1-6 3 0 rt H fD 0 ID N.ID S 0 ID rt Fe. p.* fa, F.4 (D I V) fD CD 1 00 I I 1-6 M I 1-,. I I aH g' CI)) Cil 5* gi 1 °7 7I I 0 I OQ I M 0 ft) I

04

cy and quality. Adequate procedures have not yetbeen found for calculating the "cost/benefit ratio,""economic return," and "social effectiveness" of R&D.The new technical indicators policy is still in theexperimental stage.

Hence, rough rule-of-thumb methods are likely todominate S&T decision making for some time. They areindeed an inevitable and integral feature of managingmultiparticipant decision analysis in all societies.Even the arrival of more "powerful." modern planningtechniques will not appreciably alte.r the basic po-litical character of the Soviet decision process- Asa former Soviet planning specialist now in emigrationrecently observed about the system, "The iterativeprocess, balancing, 'coming to agreement' does infact occur but not on paper, not in calculation, butin life itself. u144

163

FOOTNOTES

1. 0. I. Larichev, "Dostoinstva i nedostatki sis-temnogo podkhoda k planirovaniyu I upravleniyu nauch-nymi issledovanlyami, vklyuchaya analiz tstolmost-ef-fektivnost"(Merits and Defects of the Systems Ap-proach to Planning and Management of Scientific Re-search ir-luding Cost-Effectiveness Analysis"), p. 4.Soviet Si_s of the Joint Soviet-American Working Sub-group on Planning and Management of Scientific Re-search and Development. Unpublished (draft) paper,1976.

2. Louvan Nolting, Thevelopment , and Innovationment of Commerce, Foreign(Washington, D.C., 1978),

Planning of Research, De-in the USSR, U.S. Depart-Economic Report No. 14p. 1.

3. See Yu. M. Kanygin, Nauchno-tekhnicheskiy po-tentsial (Problemy nakupleniya I ispolezovaniya),(Novosibirsk: Nauka, 1974), pp. 157-159, 179-182 andalso his Nauchno- proizvodstvennyi tsikl- Voprosy teo-rii i organizatsii (Novosibirsk: Nauka, 1.-1).

4. Yu. Kanygin and S. Kostanyan, "Nauchno-prolz-vodstvennyi tsikl," Voprosy ekonomiki, 12 (1976), p.62.

5. Louvan E. Nolting, Sources of Financing TheStages of the Research, Development, and InnovationCycle in the USSR, U.S. Department of Commerce, For-eign Economic Reports No. 3 (Washington, D.C. 1973),p. 3.

6. V. Yu. Budavey and M. I. Panova, Ekonomiches-kiye problemy tekhnicheskogo progressa (Moscow: Mysl',1974) , p. 19.

7. N. M. Oznobin and A. S. Pav--ov, Kompleksnoyeplanirovaniye nauchno- tekhnicheskogo progressa (Mos-cow: Mysli, 1975), pp. 155-156.

8. L. Sh. Gaft and Ya. S. Krasov, Podsistema uprav-

164°."."1:f

leniya nauchno-issledovatel'skimi rabotami v otrasli(Moscow, 1976), p. 53; P. N. Zavlin, A. I. Shcherba-kov, and M. A. Yudelevich, Trud v sfere nauki (Moscow:Ekonomika, 1973), p. 247; M. S. Mintairov, E. B. Fokko,O. E. Kovalevseiy, and A. A. Nikonov, "Planirovaniyezatrat na nauku na osnove normativnogo metoda," inProblemy deyatel'nosti uchenogo i nauchnykh kol1.k-tivov (Leningrad-Moscow, 1977), p. 29.

9. Leonid Kantorovich, "Economic Problems of Sci-entific and Technical Progress," Social Sciences, 3(1976), p. 87.

10. S. Golosovskly and G. Yeremenko, "Measuring theEffectiveness of Scientific and Technical Progress,"Voprosy ekonomiki, 12 (1975), pp. 142-145. See alsoB. Zaytsev, "Voprosy ucheta zatrat na issledovaniya irazrabotki," Vestnik statist:-...1, 1 (1977), pp. 10-14.

11. Gaft and Krasov, op. cit., p. 53.

12. B. Z. Milner, "Sovershenstvovaniye organiza-tsionnykh struktur upravleniya," in Sovremennye me-tody upravleniya narodnym khozyaystvom (Vilnius: Lit-ovskiy Nauchno-Issledovatel'skly Institute Nauchno-Tekhnicheskoy Informatsii I Tekhniko-EkonomicheskikhIssledovanii, 1974), pp. 4-5.

13. Statement by N. P. Lebedinskiy to a group ofAmerican specialists visting the USSR in the fail of1974 as part cf the Joint US-USSR Science Policy Work-ing Group

14. Milaer, op. cit., p. 4.

15. See, for example, I. P. Kozlov, V. P. Vorobyev,and A. S. Korotkov, "Voprosy analiza deya-el'nostl --raslevoy nauchnoy organizatsii," in Prob-lemy deyat'nosti uchenogo i nauchnykh kollektivov(1977), pp. 78-81 and Oznobin and Pavlov, op. cit.,pp. 148-149.

16, M. L. 3ashin, Planirovaniye rabot otraslevykhNII i KB (Moscow: Ekonomika, 3973), p. 171.

165

17- M. G. Kolodnyy and A. P. Stepanov, Planiro-vanlye narodnogo khozyaystva SSSR (Kiev, 1975), p. 90.

18. Valuyev et al, "Unique Characteristics of theFinancing of Science in the USSR," (Russian text),p. 43.

19. "Official" science expenditures in the USSRdo not include outlays on (1) R&D performed by enter-prise scientific subdivisions in. most ministries; (2)development and testing of "Industrial" prototypesunder factory conditions; (3) scientific and techni-cal assistance to and collaboration with enterprisesby branch, academy, and VUZ scientific organizations;(4) R&D financed under special innovation fund& inindustry or under capital investments in economicbranches; (5) the portion of VUZy R&D financed underthe specific budgetary allocation for VUZy; and (6)probably some categories of military and spa. R&D.See LGuvan Nolting, The Financing of Research, Devel-opment, and Innovation in the USSR, by Type of Insti-tutional Perfr.,-mer, pp. 2-3.

20. Nolting notes that "These investments are notconfirmed or allocated specifically as investments inscience, but rather as investments attributed to per-tinent economic branches, although the investmentsare monitored and audited by the State Comanittec forScience and Technology." See ibid., p. 26.

21. Ibid., pp. 17-19.

22. "Unique Characteristics of the Financing ofScience in the USSR," p. 48.

23. V. I. Kushlin, Uskoren:;_ye vnedreniya nauchnykhdostizhenly v proizvodstvo (Moscow: Ekonomika. 1977),p. 138.

24. Gvishiani, "Centralized Management of Science:Advantages and Problems," p. 77

25. Helgard Wienert, "The Organizat'.on and Planningof Research in the Academy System,' in Zaleski et al.,

166

Science Policy in the USSR, p. 250.

26. Helgard Wienert, "The Organization and Planningof Research in the Higher Educational Establishments,"ibid., p. 354.

27. Eugene Zaleski, "Central Planning of Researchand Development in the Soviet Union," ibid., p. 42.

28. Zavlin et al, Trud v sfere nauki (Novosibirsk:Nauka, 1971), p.

29. G. S. Pospelov, "Management and the Pace of theAge," Izvestiya, March 21, 1974.

30. E. I. Voyevodova and A. D. Zusman, "Nekotoryyevoprosy sistemnogo podkhoda k ekonomicheskim aspektamdeyatel'nosti nauchno-issledovateltskoy organIzatsil,"in Problemy deyatel'nosti uchenogo I nauchnykh kollek-tivov (1977), p. 56.

31. A. M. Birman, "What Finance Can Achieve," Eko-nomika I organizatsiya promyshlenuogo proizvodstva,1 (1978), p.

32. Pospelov, op. cit.

33. K. A. Yefimov, G Ya. Kiperman, anc C. M. Fedo-Low, "Development :-nr3 Realization of Prc ,rams of Com-plex Mechanization of Fundamental and Auxiliary Pro-cesses of Production at the Moscow Production Asso-ciation ZIL," p. 5. Soviet Side of the Joint Soviet-American Working Subgroup on Planning and Managementof Scientific Research and Development. Unpublished(draft) paper, 1976.

34. B. E. Paton, "Effektfvnost' nauchnykh issledo-vaniy i uskoreniye protsessa vnedreniya," VestnikAkadell Nauk SSSR, 2 (1977), p. 50.

35. Ibid.; Kushlin, op. cit., p. 138.

36. Nolting. The Financing of Research, Development,and Innovatior, in the USSR, pp. 29-30.

167

37. B. Labkovsky, "Higher Schools Help Science,Science Helps Higher Schocl," Izvestiya, May 20,1976.

38. Nolting, The Financing of Research, Development,and Innovation in the USSR, pp. 33-35.

39. Berliner, The Innovation Decision in Soviet In-dustry, p. 174.

40. B. A. Raiz-berg, E. P. Golubkov, and L. S. Pekar-skiy, Sistemnyi podkhoc: v perspektivnom planirovanii(Moscow, 1975), p. 128.

41. N. P. Fedorenko, "Urgent Tasks of Economic Sci-ence," Ekonomicheskaya gazeta, 21 (May 1976), p. 10.

42. Zaleski et al, Science Policy in the USSR, p.83.

43. I. Fetisov, "The Sales Service," Izvestiya,April 16, 1976.

44. V. Semenov, "Laboratory for Rent," Pravda, Sep-tember 6. 1973.

45. I. Fetisov, "Put Resources in a Single Pair ofHands," ibid., August 1, 1976.

46. Fetisov, "The Sales Service."

47. Ya. D. Gartsman and V. M. Ignatenko, "Sover-shenstvovaniye planirovanivn nauchno-issledovatel'-skikh rabot v n,inisterstvaic, i vedomstvakh," in Ekon-omicheskiye problemy nauchno-tekhnicheskogo progressesv _arodnom khozyaystve USSR (Ylev, 1974), pp. 14-15.

48. Metodicheskiye ukazaniya k razrabotke gosudarst-vennykh planov razvitiya narodnogo khozyaystva SSSR(Moscow: Ekonomika, 1974), p. 9.

49. "USSR Short Answern," p. .

50. Nolting, The Planing of Research, Develo?ment,and Innovacion in the USSR, pp. 6, 10, 17.

168

51. Ibid., pp. 17-18.

52. Budavey and Panova, op. cit., p. 186.

53. Nolting, The Planning of Resear_h, Development,and Innovation in the USSR, pp. 14-15.

54. Ibid., p. 15.

55. Ibid., p. 24; Thomas and Kruse-Vaucienne, So-Science and Technology, pp. 247-248.

56. Nolt1_3, The Planning of Research, Development,and Innovation in the USSR, p. 5.

57. Budavey and Panova, op. cit., p. 187; Yu. A.Zykov, "Nekotoryye metodologicheskiye voprosy postro-yeniya sistemy ekonomicheskikh prognozov nauchno-tekh-nicheskogo progressa," in L. M. Gatovskiy, ed., Ekon-omicheskiye problemy nauchno-tekhnicheskoy revolyutsiiSri sotsializme (Moscow: Ekonomika, 1975), pp. 173-182.

58. Nolting, The Planning of Research, Development,and Innovation in the USSR, p. 15.

59. Thomas and Kruse-Vaucienne, Soviet Science andTechnology, pp. 246-248, 278.

60. "USSR Short Answers," pp. 18, 20, 32.

61. V. Disson, "Primenenlye programnno-tselevogometoda pri reshenil nauchno-tekhnicheskikh problem,Planovoye khozyaystvo, 7 (1977), p. 7'.

62. Ye. V. K7sov and G. Kh. Popov, UpravleniyeMezhotraslevymi nauchno-teichnicheskimi programmami(Moscow: Ekonomika, I '2), pp. 42-43,

IT

63. V. Disson, "From Idea to Production Line," Iz-vestiya, January 20, 1976 and V. Kirillin, "PrL,E;rammynauchno-tekhnicheskogo progressa," ibid., May 15, 1976.

64. See 24. Vilenskiy, "Tekhnicheskiy progress v

169

desyatoy pyatiletke," Voprosy ekonomiki, 11 (1976),

pp. 47-55; Disson, "Primeneniye programmno-tselevogometoda," pp. 74-75; "USSR Short Answers," p. 18.

65. Larichev, "Dostoinstva i nedostatki sistemnogopodkhoda k planirovaniyu i upravleniyu nauchnymi is-sledovaniyami, vklyuchaya analiz 'stoimost'-effektiv-nostt,'" p. 5.

66. Peter L. Kapitsa, "Scientific Policy in theUSSR: The Scientist and the Plans," Minerva (Summer1966), p. 559.

67. Nolting, The Planning_ of Research, Development,and Innovation in the USSR, p. 1.

68. Larichev, op. cit., p. 8.

69. Ibid., pp. 7-8.

70. Kapitsa, op. cit., p. 558.

71. Vestnik Akademii Nauk SSSR, 2 (1965), p. 16.

72. V. A. Kirillin, "Nazrevshiye problemy tekhni-cheskogo progressa," Ekonomicheskaya gazeta, 21 ('May

1968), p. 12.

73. Ye. V. Kosov, "Ekonomicheskiye problemy uprav-leniya nauchno- tekhnicbeskim razvitiyem narodnogokhozyaystva," in Nauchnoye upravleniye obshchestvom(Moscow, 1971), V, p. 114.

74. Ibid., p. 115.

75. Nolting, The Planning of Researcn, Development,and Innovation in the USSR, p. 16; "USSR Short An-swers," p. 32.

76. L. Glyazer, "The Economics of Science an the

Science of Economics," Voprosy ekonomiki, 6 (1973),

reprinted in The Scviet Review, XV, 1 (Spring 1974),

p. 45.

1 17o

77. Ibid., p. 37.

78. Cited in Nolting, The Planning of Research, D -velopment, and Innovation in the USSR, p. 6.

79. Disson, "Primeneniye programmno-tselevogo metodapri reshenli nauchno-tekhnicheskikh problem," pp. 81-82.

80. Kosov and Popov, op. cit., pp. 44-57.

81. See 0. I. Volkov, Planovoye upravleniye nauchno-tekhnicheskim progressom (Moscow: Nauka, 1975), p. 153;B. F_ Zaytsev and B. A. Lapin, Organizatslyz planiro-vaniya nauchno-tekhnicheskogo progressa (Moscow; Ekon-omika, 1970), p. 213.

82. V. N. Arkhangel'skly, Planirovaniye i finansiro-vanlye nauchnykh issledovaniy (Moscow: Finansy, 1976),p. 61.

83. K. A. Yefimov et al, op. cit., p. 2.

84. These percentages are cited by Vilenskiy in hisarticle discussing the new 200 S&T programs. See his"Tekhnicheskiy progress v desyatoy pyatiletke," p. 50.

85. V. I. Vodichev, S. P. Goncharov, V. I. Dobro-khotov, E. K. Kuznetsov, and N. I. Serebryanikov,"Razrabotka i vnedreniye teplofikatsionnykh turbinmoshchnost'yu 250 tys. kvt" (The Development andAdoption of Combined Heat and Power Supply Turbineswith a Capacity of 250,000 Kilowatts), p. 4. SovietSide of the Soviet-American Working Subgroup on Plan-ning and Management of Scientific Research and Devel-opment. Unpublished Ldp- -'ft) paper, 1976.

L.6. N. P. Fedorenko, "Urgent Tasks of Economic Sci-ence," Ekonomicheskaya gazeta, 21 (May 1976), p. 10.

87. Nolting, The Planning of Research, Development,and Innovation in the USSR, pp. 3, 6, 12.

88. Kosov and Popov, op. cit., pp. 48-49.

171;Li

89. M. P. Ring, "Problemnoye upravleniye v nauke:pravovyye aspekty," Vestnik Akademii Nauk SSSR, 7

(1975), pp. 15-16, 13.

90. G. Kh. Popov, Effektivnoye u2ravleniye, pp. 24-25.

91. Disson, "Primeneniye programmno-tselevogo me-toda," p. 75.

92. See the discussion in Ronald Amann, Julian Coop-er, and R. W. Davies, eds., The Technological Level ofSoviet Industry (New Haven and London: Yale UniversityPress, 197o) , pp. 61-62.

93. Ibid., pp. 52-58.

94. Ibid., p. 62

95. Nolting, The Planning of Research, Development,and Innovation, p. 6.

96. Amann et al, op. cit., pp. 62-63.

97. Zaleski et al, Science Policy in the USSR,p. 82.

9L, Nolting, The Planning of Research, Development,and Innovation in the USSR, p. 16.

99. This discussion of the role "basic directions"arz._ws on the excellent study by John Young and AndrewHull, Mainz Directions as an Instrument in the Plan-ning and Management of Soviet Science Policy, BattelleColumbus Laboratories (Cclumbus, Ohio, 1976).

100. Ibid., p. 7.

101. Pravda, October 8, 1975.

102. "USSR Short Answers," p. 96.

103. Zaleski et al, Science Policy in the USSR,p. 466.

172

104. Labkovskiy, "Higher Schools Help Science, Sci-ence Helps the Higher School."

105. G. I. Levi, "Neprostoy put' vnedreniya," Vest-nik Akademli Nauk SSSR, 2 (1977), p. 11.

106. See the editorials,"Supply and Production,"Pravda, September 9, 1976, and "Strict Schedule forSupplies," ibid., May 16, 1977.

107. Zaytsev and Lapin, op. cit., pp. 129-130, 140.

108. See G. A. Dzhavadov, Upravleniye nauchno-tekh-.-nicheskim progressom. p. 14; E. S. Rakhmatullina, ed.,Strategiya i taktika kommunisticheskikh partil (AlmaAta, 1974), p. 15; P. Fedoseyev, "Krepit' svyazi nau-ki I praktiki," Kommunist, 9 (1976), p. 38.

109. Disson, "Primeneniye programmno-tselevogo me-toda," p. 76.

110. Vodichev et al, op, cit., pp..8-9.

111. Ibid., pp. 12-13.

112. Nolting, The Planning of Research, Development,and Innovation in she USSR, p. 11.

113. M. A. Gusakov, "Tekhrika programmno-tselevogometoda planirovaniya," in S. S. Kugel', ed., Problemydeyatel'nosti uchenogo i nauchnykh kollektivov (Lenin-grad-Moscow, 1973), p. 242.

114. Disson, "Primeneniye programmno-tselevogo me-toda," pp. 77-79.

115. Nolting, The Planning of Research, Develop-ment, and Innovation in the USSR, p. 19.

116. Zaleski et al, Science Policy in the USSR,p. 396.

117. Statement by Dr. I. L. Mandelshtam in listnikAkademil Nauk SSSR, 6 (1965), p. 17.

173

118. Robert W. Campbell, "Issues in Soviet R&D: TheEnergy Case," in Jolikt. Economic Committee. Soviet Eco-nomy in a New Perspective (Wash!_ngton, D.C., IS76),p. 111.

119. Planovoye 10-lozyaystvo, 11 (1975), p. 8.

120. M. Perakh, "Utilization of Western Technologi-cal Advances -n Soviet Industry," NATO Economic Direc-torate Colloquium, 1976, cited in Philip Hanson, "In-ternational Technology Transfer from the West to theUSSR," in Soviet Economy in a New Perspective, p. 806.

121. Nolting, The Planning of Research, Development,and Innovation, p. 17 and Metodicheskiye ukazaniya(1974), pp. 17-19.

122. Jack Brougher, "USSR Foreign Trade: A GreacerRole for Trade with the -est," in Soviet Economy in aNew Perspective, p. 686.

123. Campbell, op. cit., p. 111.

124. Ivanov, "Overcoming Obstacles and ImprovingIncentives in ,.he Introduction of New Technology andNew Methods of Managemtlt," p. 5.

125. Brougher, op. cit., p. 685.

126. Ibid., p. 679.

127. Campbell, op. cit., p. 112.

128. John P. Hardt, "The Role of Wester: Technologyin Soviet Economic Plans," NATO DireL:torte of Econom-ic Affairs , lloquium, 1976, pp. 9-12.

129. See Hanson, op. cit., pp. 786-812.

130. Metodicheskiye ukazani71. (1974), pp. 9-10.

131. Nolting, The Planni.of Research, Develop-ment, and Innovation in the USSR, p. 19.

174

132. Ibid., p. 21.

133. Bashin, Planirovaniye rabot otraslevykh XII iKB, p. 53.

134. Nolting, The Planning of Research Develop -ient, and Innovation in the USSR, pp. 21-22.

135. Tipovaya metodika razrabotki pyatilPtnogo planaproizvodstvennogo obyedinenlya (Kombinata), i,redpri-yatiya (Moscow, 1975), p. !S.

136. Nolting, The Planning of Research, Develop-ment, and Innovation in the USSR, p. 4.

li/. Ibid.

138. V. Budavey, "Kompleksnoye planirovanlye nauchn--no-tekhnicheskogo progressa," Voprosy ekonomiki, 11(1975), p. 18.

139. Budavey and Panova, op. cit., p. 181.

140. M. Viienskiy, "Planirovaniye effekta nauchno-tekhnicheskogo progressa," Voprosy ekonomiki, 1 (1978),pp. 106-107.

141. Nolting, The Planning of Research, Develop-ment, and Innovation in the USSR, p. 11.

142. Ring, "Problemnoye upravleniye v nauke: pravo-vyye aspekty," pp. 30-31.

143. Ya. V/adychin and I. Syrayezhin, "According toTomorrow's Normatives," Pravda, May 7, 1977

144. Igor Berman, "From the Achieved Level," SovietStudies, XXX, 2 (A ----i1 1978), p. 167.

X THE EXECUTION OF R&Z

AND THE UTILIZATION OF

PLANS

t...ESULTS

As we have seen, the R&D plan rommits the researchinstitute, design bureau, and production enterpriseto a comprehensive and detailed set of technical andeconomic objectives. The annual plan, subdivided in-to quarterly and monthly targets, is the basic opera-tional docuuient. It has the force of law, and is theprincipal stimulus to implementation.

Although certain objectives are imposed by superi-or organs, and the plan must be approved in detail bysuperior authorities, the performer establishmentmanager does participate plan formulation. Themanager has a certain degree of autonomy, especia3lycompared to earlier periods of Soviet history, but hestill lacks one common ingredient of autonomy: flexi-bility. Even if the approval by superiors is merelypro forma, the manager is still committed to the planfor its duration. Only rarely are superior bodiesinclined to permit alterations in annual plan targets.They discourage the raising and reducing of targetsbecause such actions can reverberate and disrupt theeconomy. The plan Is thus ambitious and inflexible:this consideration alone fosters conservatism andworks against unpredictable activities like R&D.

In this chapter we look at control mechanisms andincentive systems used to put the plan into practice.In their detail and comprehensiveness, plans providemore than general directions for the performer estab-lishment. Yet the manager still .exercises discretionin decisions concerning how plan tasks can be accom-plished. To aid the manager in selecting the mosteffective means of fulfillment, the state has creat-ed an organizational structure and a set of decisionrules aimed at engendering strong effort and effec-tiveness. Such incentives as the size of expected

I r

176

bonus funds with plan fulfillment are also incorpo-rated formally in plans, although these are derivedmainly post facto bl application of formulas tomatch indicators against actual establishment per-f!_mance. Organizational, economic, and managerialme.:zhanisms for plan implementation, like the plantargets themselves, shoulkl of course be internallyconsistent and move the establishment on the trackdesired by the central leadership.

In practice, however, the plan and the machineryfor its execution frequently break down. The trans-lation of scientific ideas into new products and pro-cesses becomes an obstacle course of endless delaysand difficulties. During the 1960s losses due to theslow transfer of R&D results into use ran between sixand eight billion rubles a year, or the equivalent ofone-fifth )f all funds allocated for innovation. Forthe period of the Seventh Five Year Plan (1959-1965)these losses amounted to about half of the total in-vestment in scientific research and development. Itis estimated that an additional five to six billionrubles can be saved annually if the time lag for in-novation is reduced by just one year. Even now notmore than 30 to 50 percent of completed R&D finds itsway into production. The remainder is either notused at all or ar-,:imilated so slowly that it is al-ready obsolete by the time of its introduction. Incertain fields as much as 80 percent of finished R&Dfalls by the wayside without practical utilization.)Clearly, a major challenge facing Kremlin leaders to-day consists in formulating a science policy to en-courage innovation and the utilization of S&T results.

MANAGING THE 7.ESEARCH-TO-PRODUCTION CYCLE:AN OVERVIEW

Technological innovation in the Soviet Union atpresent is essentially a bureaucratic function, withsituations referred upward through long organization-al lines for resolution. Indi-vid.,a1 and institution-al performers rarely collaborate directly. Most ex-

177(I )

ternal transactions among organizations are managedthrough ministerial offices and departmental chan-nels. A research institute or design bureau, for ex-ample, reports its results to a technical administra-tion, branch glavki, or industrial association towhich it is subordinate. The latter, in turn, de-cides on what should be the next phase of work, bywhom, and where.

This structure impedes innovation in at leas-important ways. First, the long approval route de-lays decisions and prolongs the zesearch-to-produc-tion cycle. To create a new machine, for example,requires typically 25 approvals at different levels.To build a new technological system of 10 to 15 ma-chines and mechanisms may require as many as 400 to500 clearances-2 In general these agreements are ob-tained sequentially and not in parallel.3 Forwardmovement is constantly stalled by rounds of negotia-tion; by waiting for approval of reports by depart-mental and interdepartmental expert commissions orfor the return of tests on prototypes; by the absenceof supplies, equipment, and financing; by the need tofind the right customer with the appropriate experi-mental base. Considerable time is spent on corre-spondence and on trips to ministries in pursuit ofsupport for innovation. The -ath from conception tocommercialization can be espe...ally long and precari-ous if the technology entails new processes or prod-ucts .inrelated to established interests and activi-ties or if it involves much interbranch negotiation.The effort devoted to gathering signatures of approv-al is due in part to statutory regulations. However,it also serves, Berliner explains, "as a device forlimiting; each organization's responsibility for itsava stage of the work and for reducing one's vulnera-bility in the event of difficulties encountered inlater stages."4

According to studies by the State Committee forScience and Technology it frequently takes as muchtime to secure agreements and to transfer documentsfrom one organization to another as it does to con,-duct the necessary scientific development-5 That is,the bureaucratic process of moving research results

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the technical administrations and coordinating de-partments of ministries lack specialists with any ad-vanced scientific degrees. Some responsible staffeven lack a higher education-8 Nonetheless, manybranch R&D organizations display great timidity to-ward their ministries. The studies they conduct areoften pro forma exercises that fail to expose defi-ciencies in the development of the branch, much lessin the leadership of the ministry.9

Generally speaking, the Soviet approach to struc-turing and managing innovation has been premised onan image of technology transfer that prevailed large-ly in the West until the early 1960s. According tothis view, the transfer process is envisaged as "thepassage of disembodied 'ideas and methods,' endowedwith some quasi-independence in the manner of genes,from one state of existence or milieu to another."The underlying assumption is that technology is pri-marily "an assemblage of pieces of information whichcan be extracted or expelled from one sector of or-ganized creativity and transposed to another to pro-duce different outputs."10 The whole process is re-duced to clerical reporting, to a mechanical trans-mission of documents and routing of information.

As has happened in the West, this perception oftechnology transfer is being increasingly questionedand replaced by a more dynamic and systems view. Oueof the major Soviet discoveries about innovatio -.. in

the 1970s, in fact, was the importance of the "man-agement connection." The very phrase "research-to-production" cycle is said to be a misnomer becauseaction throughout must be negotiated and mediated.It is better to speak in terms of a system of "re-search-management-production," to use the words ofsome Soviet analysts. Such phraseology, they note,conveys a more adequate image of this complex pro-cess. It also explicitly identifies and emphasizesthe management function and linkage-11 With gradualmovement away from a strictly phase - Dominant to amore, process view of innovation, the need for a sys-tems model of organization and management has becomemore and more apparent. Indeed, it is not too muchof an exaggeration to say that the Soviet research-

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R&D subdivisions at industrial establishments in theearly 1970s actually conducted scientific R&D. Theremainder were engaged in servicing the needs of pro-duction or in making minor improvements in the tech-nological base.12

In the new associational forms linking researchwith production, the status of the R&D center varies.In a science-production association (NTO), a researchinstitute or design bureau is ordinarily the lead or-ganization, while in a production association a re-search institute, design bureau, or general R&D de-partment is generally subordinate to production man-agement. In these new complexes and integrated struc-tures, management must be concerned, in varying de-grees, with both production and R&D, and functionaldepartments typically service performers of both ac-tivities. Because these organizations are heavilyconcerned with the application of results in produc-tion and use, we consider them further in that con-text later in this chapter.

Recently, Soviets have become more interested inthe organizational problems of R&D and production fa-cilities. The drive to create an optimal system ofintervelationships between individuals and groups istermed "scientific organization of labor," and it maybe recalled that a section of the S&T plan is devotedto this subject. For the most part, this concern de-volves into "time and motion" studies and analyses ofmaterial flows on the shop floor, but there is alsomounting concern with organizational structure andthe management process. The Soviet regime has longformulated standard organization tables for estab-lishments by function and by size of labor force.However, these have generally not been scientificallysubstant.Lated and have been characterized by extremespecialization of functions with emphasis on verticallines of command. The lack of organizational flexi-bility has

13indeed been one important obstacle to in-

novation. Scierv:Ific work has been organized likeindustrial activity. Little attention was given tothe optimal size and structure of personnel and oper-ations. As a rule, leaders of R&D units have demand-

182

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The most ambitious research complex is theone that has grown up in the Academic Cityof Novosibirsk, which is taking on some ofthe characteristics of the research-basedindustrial clusters around Boston, PaloAlto, and Houston.16

The Academic City at Novosibirsk incorporates predom-inantly Academy facilities of different departments,some of which have developed close ties with branchdesign bureaus and pilot plant facilities. Science-production centers are also planned to be built aroundinstitutes of the Lithuanian Academy of Sciences inchemistry, chemical technology, and the physics ofsemi-conductors. Similarly, in Kurgan the recent for-mation and expansion of facilities of four ministriesconcerned with ground vehicles, including automotive,agricultural, railroad, and construction equipment,reflect this enhanced belief in industrial "crossfertilization." Bureaucratic barriers, rooted in andreinforced by the organizational and spatial separa-tion of R&D performers, are increasingly recognizedas harmful.

The structure of the Soviet R&D establishment isthus influenced first by the nature of the activityin question. Beyond this, organizational structurestend to permit little flexibility compared to Westernstandards. Extreme specialization of activity andvertical lines of command are the norm. Basically,the research-to-production cycle has been broken upin time, task, and territory. Recent developments ofparticular interest sm-e the closer organizational tiesbetween research and production in the "association"unit and the development of research complexes char-a=terized by geographic collocation.

CONDUCT OF R&D

Execution of R&D plans depends on acceptable cri-teria of fulfillment. While production targets maybe measured by tone, units, rubles, or other physical

184

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of the Council of Ministers. State committees, inturn, monitor exe%_ution of important tasks (e.g., theGK NT) or a functional area of the establishment plan,such as supply (Gossnab). In addition, Go sbank hasan important role in overseeing the financial flowswhich are planned to correspond to physical flows,and the CPSU exercises a general oversight function.

Within the performing establishment, program con-trol techniques incorporated in various plans facil-itate conduct of the R&D project. We noted, for ex-ample, that thematic plans of research institutes anddesign bureaus are based on "calendar plans;" for-mulz.ted on a project basis, these subdivide the workinto stages, designate responsible individuals, andschedule completion dates. Recently, a more formalresearch management technique has been developed:"network planning and control." In broad terms, anetwork model is any construct which is "dynamic,informational, and reflective of the process of per-forming a complex of tasks directed to the achieve-ment of a single goal."18 In practice, this can meanlittle more than such tools as grid schedules andGantt charts for diagramming activities in sequenceand for monitoring time, cost, and quality parame-ters. However, it also includes Soviet developmentand application in the early 19E0s of more sophisti-cated techniques which resemble PERT and criticalpath methods-19

In the mid-1970s, network methods aregotten their "second wind," according toMaksimov. Three factors have stimulated

said to haveDr. Yu. I.this recent

growth: (1) the introduction of management informa-tion systems that provide the necessary information,norms, and technology for their application; (2) in-creased utilization of multistage econome'zic modelslinking the stages of planning, design, and produc-tion; and (3) the development of analytical aids andcomputer programs for calculating and optimizing notonly specific network charts but also alternativestochastic network models. Examples of more sophis-ticated network techniques along the lines of CPMand PERT that surfaced in the 1970s for complex in-

186

terbranch projects are the so-called "Sputnik" and"Skalar" systems. In addition to evaluating timeand cost elements, network methods are also improv-ing handling of materials and technical supplies andallocating manpower in R&D organizations. On thewhole, however, their application remains limited;they are still largely confined to the major scien-tific centers, notably Moscow, Leningrad, Kiev, andNovosibirsk, and to major large-scale projects.20Such planning and control techniques, it may be no-ted, are compatible with the Soviet predilection forstructured, planned activities. Their developmentand application to date have been constrained, inlarge part, by structural factors and the organiza-tional-managerial fragmentation of the innovatio1cycle.

Other features of program control in the Sovietperformer_establisixment center on the creation of theoptimal inte=rnal organizational structure for supportof R&D. As previously indicated, much interest hasbeen expressed in the development of "organic" linksbetween R&D and production, the topic of the nextsection. But even within the independent R&D estab-lishmen-:, Soviet authorities have found it advanta-geous to associate and link R&D personnel responsiblefor distinct stages or aspects of a complex project.Two pertinent dimensions may be identified: associa-tion between individuals working on separate stagesof product or process development, and associationbetween individuals working at the same stage of, re-spectively, product and process development. Thebenefits of such close contacts are said to have beeninstrumental in developing the ceramic tile manufac-turing process.21 Accordingly, numerous research in-stitutes and design bureaus are expanding direct formsof cooperation and collaboration among the variousparticipants in the research-to-production cycle.

In addition. some performer establishments havebegun to experiment with forms of project managementand matrix organization to break down intrainstitu-tional barriers, departmental and functionz1, and to

187

2 LI

accelerate the innovation process. A discussion ofthe pressures generating the conversion to matrixmanagement is found in chapter 12. The deficienciesand limitations of traditional hierarchical forms ofadministration are thus being increasingly felt, andefforts are underway to develop new and more dynamicstructural designs to cope with the problems of ad-vancing technology and complexity.

As regards methods of conflict resolution the ex-perience of modernizing production operations at ZILIs instructive. Whenever delays or deviations inprogram development arose, a meeting was convened ofrepresentatives from ZIL, organizations participatingin the project, local organs, and pertinent minis-tries. Problems were settled through joint agree-ments of the interested parties with the formulationof the appropriate protocol. Any conflicts betweenorganizations subordinate to the Ministry of the Au-tomobile Industry which they could not settle them-selves w=re resolved by the leadership of the min-.istry. The solution was binding for both sides. Ifdisagreements arose between organizations of differ-ent ministries, the matter was examined by the appro-priate ministerial authorities. Sometimes a jointdecision by the interested ministries resolved theissue. Disagreements over questions of planning wereexamined by Gosplan, supply problems were handled byGossnab, and SST problems were mediated by the GKNT.22

The formality and rigidity of these procedures toresolve conflict prevent rapid application of correc-tive measures. Such procedures also breed conserva-tism in the performer at the time of plan formulationand, in a sense, frustrate central control by insula-ting the performer with layers of paper and delays.23

Conflicts are inevitable in any project. Coordi-nation is the process of managing conflict. Conflictmanagement practices keep different units together asthey work tc'ward integrated goals. In the SovietUnion organizational separation and administrativefragmentation of the innovation process complicategreatly the task of coordination and necessitate cum-

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tion of personnel, then, generally is assured, withone major exception. Maximum salary levels are fixedin relation to the nature of the organization atwhich the scientist or engineer is employed. Accord-ingly, the best S&T personnel have tended to gravi-tate away from industry to the Academy system, andwithin industry from production to R&D establishments.This doubtless has hindered industrial R&D and asso-ciated production assimilation, although in recentyears the relative position of industry seems to haveimproved somewhat.

At the same time, certain deficiencies of the sys-tem of planning and training scientific manpower mer-it brief mention. Surpluses of specialists exist insome, more traditional fields of science and technol-ogy and shortages in other areas, such as computers,biochemistry, and microelectronics--the main paceset-ters of modern S&T progress. Experts in the modernsocial sciences and management sciences are alsolacking. The orientation of planning and profession-al training has not kept pace with changes in science,technology, and organization. "Existing programs ofeducation are not designed to train specialists inthe subjects needed by modern society and by research,planning, and design organizations," observes Gvishi-ani.24 The acceleration of technical progress alsomakes obsolete information, knowledge, and acquiredskills, so that the retraining of scientific, engin-eering, and managerial personnel is becoming increas-ingly necessary. This need is all the more pressingin view of the mounting constraints on manpower re-sources which require greater attention to qualita-tive improvements rather to quantitative increases inthe size of the S&T establishment.

Acquisition of material supplies, another controlmechanism, generally is planned at the same time thatbasic R&D and production assignments are formulated.Gossnab is the principal agency in charge of planningand distribution of supply. The Soviet material andtechnical supply system is conducive to large-scaledeliveries of fairly standardized products, but notto the typical small-lot deliveries of special pur-

190;

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FIGURE 10-1 THE SYSTEM OF MATERIAL STIMULATION OF SCIENTIFIC AND TECHNICAL PROGRESS

IN THE USSR

hoe* rts Us IAAlattalictlos of No (Omni

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Finally, there is one incentive program that mer-its special mention because it aims at stimulatingthe interests of researchers, design engineers, andproducers alike in the entire research -to--productioncycle, in the economic aplication of R&D, and in thereliability and performance of new technology. Thesource of this program is the Fund for the Creationand Introduction of New Technology. At industrialplants, this fund is generated through deductionsfrom the cost of production amounting to 0.2 to 1percent of the wage funds of industrial productionpersonnel. At research institutes and design bureausthese funds are specially provided for in their bud-gets and range from 4 to 10 percent of the annualwage fund. Enterprises retain 25 to 5C percent endR&D facilities retain up to 50 percent of these fundsand divert the rest into centralized incentive fundsat their respective ministries which are used to re-ward 'work on especially massive and important pro-jects.29

The size of bonus awards depends on the annualeconomic savings due to technological innovation andis determined on the basis of the scale presented inTable 11-1. Staff members of research institutes anddesign bureaus can claim 30 to 50 percent of the bo-nus, technology developers 20 to 35 percent, and pro-duction workers 25 to 40 percent. Ninety percent ofthe incentive funds should be used to reward thosewho directly participate in the work and 10 percentshould go to those who assist in innovation and util-ization. For completion of projects ahead of timqAthe size of the bonus is increased by 25 percent.

Interesting features of this system are (1) theassociation of rewards with results regardless of theorganizational affiliation of the participants, (2)

the flexibility intended by the centralization of alarge share of the fund, (3) the rigid and somewhatarbitrary character of the shares of bonuses as afunction of the stage of R&D, and (4) the reliance onthe ubiquitous measure of "economic return." The un-reliability of this measure, the decline in the bonusshare with rising benefits, and misapplication of

195

TABLE 10-1

THE STRUCTURE OF BONUS AWARDS FOR TECHOLOGICAL INNOVATION IN THE USSR

Annual Economic

Return

of the Innovation

iot114...ndrubles)tt

Up to 10

10 to 20

20 to 50

50 to 100

100 to 500

500 to 2000

2000 to 5000

above 5000

Amount of Bonus as Percentage

of the Annual Economic Return

6 to 25%,

5 to 20X,

4 to 17%,

3 to 12%,

2 to 10%,

1 to 7%,

0.7 to 4%,

0.5 to 3%,

but not over 2000 rubles

but not over 3400 rubles

but nct over 6000 rubles

but not over 10,000 rubles

but not over 35,000 rubles

but not over 80,000 rubles

but not over 150,000 rubles

but not over 200,000 rubles

Source: I. D. Ivanov, "Overcoming Obstacles and Stimululation During the Introductionof New Technology and New Management Methods (Russian text)," p. 11.

funds have diminished the effectiveness cf this pro-gram. Yet there is potential in this a.d other pro-grams to redirect the attention of scientists andengineers to economic application, which is perhapsthe major theme of all current developments in Sovietprogram management and control mechanisms regulatingthe conduct of R&D.

UTILIZATION OF R&D RESULTS

The growing Soviet concern, reflected throughoutthis study, for effective application of R&D resultsin production and use is a consequence of two trends:(1) the rising dependence of continuing Soviet eco-nomic growth on technological innovation; and (2) re-latively poor Soviet performance in translating sci-entific ideas into new products and processes. Thefirst necessitates improved performance in the entireR&D sector. The second focuses on the greatest prob-lem within that sector. As General Secretary Brezh-nev phrased the Issue in 1971, "If one examines allthe links of the complex chain uniting science withproduction, it is not too difficult to see that thelinks connected with the practical realization ofscientific achievements and their adoption in massproduction are the weakest."31

The overriding reason for this deficiency is theabsence, under traditional Soviet operating practices,of individuals and organizations that are both capa-ble of and interested in effecting the transition toapplication. In principle, the independent research,design, and development organizations are obligatedto supply the production establishment with technicaldoctr- -station, working blueprints, and/or prototypesof n, products and p-.;zocesses ostensibly ready forutilization. But the effective judge of the "readi-ness" of an innovation is the designer or developerhimself, and he has little incentive to undertakegratuitously activities which will only help the pro-ducer. The latter, in turn, receives little or no

197

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aping network models and grid schedules to includesteps related to application, but even this extensioncan force consideration of the entire research-to-production cycle as an integral unit. With clear de-lineation of responsibility, culpability for failureis easier to fix. Network approaches also requirecareful scheduling and provide a framework for ac-commodating unanticipated developments. All of theseelements reduce project uncertainty and risk and ben-efit considerably the production establishment, whichmust function in an environment hostile to 'slack"and uncertainty.

An interesting policy development is the creaticmof standard "systams" for regulating activities. TheState Committee for Standards is responsible for de-veloping methodologies for technical norms, standards,and quality certification programs, and for oversee-ing application of such methodologies. Such functionsare of course essential in any industrial economy, butparticularly so in the Soviet Union where the absenceof an effective market mechanism means that the statemust ensure that common design, development, and pro-duction practices are utilized where such commonalityis advantageous. This is particularly useful inavoiding unnecessary duplication of effort in design.

In recent years, Gosstandart has developed certainfamilies of procedures to ensure that standards for-mulated in a decentralized manner will be comparableand transferable throughout the economy. The firstsuch system was the Unified System of Design Documen-tation (TESKO), intended to unify design approaches.Other unified systems since developed include thosefor standardizing data processing techniques (TESSTEM),classification and coding (-TESKE), computer languages(YESPD), and procedures for evaluating product qual-ity (TESKAP). The most ambitious system is the Uni-fied System for Technological Preparation for Produc-tion (YESTPP), directly aimed at the problem of in-troducing R&D -results. It incorporates elements ofthe other special systems and in total contains 3500state standards on all phases of the preparation ofnew products and processes, including design, devel-

199

2_,I

FIGURE 104 DIEM PLANNING CHART FOR TECEOLOGICAL PREPARATION FOR PRODUCTIONIN THE USSR MINISTRY OF THE AUTOMOBILE INDUSTRY

by

Order

Detignation of

Duration According to Plan Actual ExecutionFundamental StepsPerforming

, 1 a15 x 2 19 x 3and Operations Organization 7171=T-Trin xV 111 ra IVeftlialmomilmommildOmmullwomsimo'

A. Design Preparation

Project-design vork

(Development of docu-

menttion)

Preparation of experi-

mental models

Testing of experimen-

tal models

Mining of designs

in experimental pro-

duction

Department of the

Chief Engineer (OCK)

Experimental Shop (ITS)

Design Bureau (13);

ITS; OM

ETS; Laboratories of

the OGK

ETS; Laboratories of

the OGK

1. TechnologicalChief Technologist;

PreparationChief Metallurgist

FIGURE 10-2(continued)

No.

byOrder

Designation ofkluadamental Stagesand Operations

PerformingOrganization

Duration According to Plan, Actual Execution

19 x 1 19 x 2 1 19 x 3

lin 'III] IV I II III Iv I II III IV

1.

2.

3.

4.

Technological analysisof drawings, develop-ment of paths lor pro-duction of parts inshops

Allocation of asaign-ments to shops, depart-meets

Development of technol-ogical processes; for-mulation of tasks fordesiga of machinery,tools, equipment andother means of produc-

tion

Designing means oftooiing productionprocesses

Preparation of machin-ery, equipment, tools

TechnologicalServices

OPP of the TechnicalDepartment

Technical Unit ofTechnological De-partment; Technolog-ical Bureau of ShopProduction

Design Bureau of thedepartments of de-signing productionequipment

Tool Production

15

Designation of

Fuodusatal Stages

and Operations

FIGURE 10 -2(continued)

Duration Accordin to Plan ActualExecut (in

Department of

equipleat, secbanic

Project-installa-

tion service

Source: B. Ye. Yusufovich and P. V.Fedortsov, "Improving the Organization of

Planning of Technological Preparation for Production in the AutomobileIndustry,"

......2119222ELAvtomshlennost, 4 (1973) : 3.

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into closer association with, if not formally incor-porated into, establishments for which production isa primary mission.

In this context, we discuss production associa-tions (POs) and science-production associationsMOO. These new complexes represent an attempt tobuild unified organizational systems rather than un-related or disjointed arrays of tasks, functions, andindividual efforts. Such integrated structures aredesigned to give institutional expression and coher-ence to the innovation process. Some science policyexperts in Moscow argue, in fact, that only throughresearch and development complexes can the "researchto production" cycle be effectively carried out frombeginning to end.34 The move to create special or-ganizations concerned with applications engineeringand diffusion is less well advanced, and only briefattention is given to chem.

As noted previously, the Soviet enterprise typi-cally corresponds to a single-plant Western companywit4 extremely limited design, development, and ex-per!--ental capabilities. The production association,combining formerly independent R&D and productionunits, is fast becoming the basic economic organiza-tion er Soviet industry. A major aim of establish-ing POs is to insure that series or mass productionof the most advanced items is set up for the internalmarket and for export. The POs are comprised of tech-nologically integrated production enterprises with re-search institutes and design bureaus attached to them.For example, the Leningrad instrument manufacturingproduction association Svetlana has experimental re-search and design divisions that work closely withits production facilities in developing new hardwaremodels, a special design bureau for creating technol-ogical equipment for their industrial testing, andshops for manufacturing this equipment. The organi-zational structure of this association is depicted inFigure 11-3. Note the experimental design bureaus(OKBs) which are subordinate to two of the associa-tion's plants. The presence of a comprehensive ex-perimental research facility is characteristic of POsespecially in machine building, and the metallurgical,

204

FIGURE 10-3 ORGANIZATIONAL STRUCTURE OF THE SVETLANA PRODUCTION ASSOCIATION

,...----.. ,;..., f4M1....

Coss I I

loprip GNI i[opTIGI:i.Wool bilsot

114.1.11101

y

kw 1 I

Olrftlog fer

CrsoirlelMIAs

held*Coital

6110:141 /la

Iwo plop

L1,14

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lus

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Int limreIds

a-.

Ilsputri

.

Plot

11Iay ?left lord

Plot J P. turfs

r r

Source: A. Domachev and D. Shuzhentsov, "Leningrad Production Associations," Ekonomi -

cheskaya gazeta, 5 (1970): 11-14.

2.1j

chemical, and oil refining industries. A number oflarge POs even have research centers of all-union im-portance, such as the R&D service cf the KAMAZ, andthe scientific research and experimental design cen-ter of E'ektrosila, which occupies a leading positionin the world in turbine construction.35

A distinguishing characteristic of the PO is theclear emphasis on production at large-scale, effi-cient rates of output. A production facility, infact, is the lead unit. Thus, while improved innova-tive performance is an important objective, otherstandard economic benefits of such larger units alsoare expected. These include economies of large s.: -Ileproduction, specialization of subordinate units, andwider application of advanced managerial practices.The use of integrated planning techniques, computer-ized data processing systems, and organizational de-signs based on principles of purely project or matrixmanagement has allegedly been instrumental in accel-erating innovation In these new structures. Accord-ing to Ivanov, the research-to- production cycle hasbeen reduced for certain products by 50 to 75 percentin the Uralelektrotyazhmash Production Association.In the L'vov Instrument Manufacturing PO imeni V. I.Lenin this cycle was cut on an'average by 50 percent,and the degree of interchangeability of assemblieswas boosted to 80 percent while their weight was re-duced by half and their reliability was raised by afactor of 3 or 4. In the Svetlana and Elektrosilaproduction assoclations almost all development pro-jects reach the production stage.3'

The most significant organizational development,from "the long range view of scientific and technicalprogress," is the creation of science-production as-sociations.37 Set up in the late 1960s explicitlyto organize innovation as a distinct and major task,NPOs function as special nurseries for the rapid gen-eration and application of new technology. Thoughthey exist in nearly all branches of industry, theyare concentrated mainly in machine building, espe-cially in the electrotechnical, electronics, instru-ment manufacture, and aviation sectors, as well as inthe chemical and petrochemical industries.

2062 ;2

Within industry, three basic types of NPO may bedifferentiated according to their final product: (1)those that specialize in developing primarily newproducts and technological equipment for their manu-facture; (2) those that concentrate on creating newmeans of mechanization and automation of production,including management information systems; and (3)those that engage in the development of new materi-als and technological processes. The third type isless prevalent than the other two associations. A fewNPOs, like Mikrobioprom (microbiological industry),Soiuznauchplitprom (wood processing), and Plastpoll-mer (chemical industry), engage simultaneously in de-veloping new products, new processes A and new kindsof equipment and automated devices.3'

NPOs differ also in terms of the scope of theirspecialization and product use. The majority are ofbranch importance. However, some NPOs like Plastpol-imer are primarily subbranch while still others areessentially interbranch. The latter include Soimma-uchplitpram and Soluzsteklamash (glass machine build-ing), which develop articles used in construction,electronics, and defense as well as in the automobile,electrical engineering, instrument manufacture, light,food, chemical, and medical industries. Similarly,the All-Union NPO Soiurtransprogress was formed in1974 to design, develop, and install transport con-tainer systems throughout the country.39

Numerous benefits are ascribed to these new inte-grated and integrating structures. The process ofcreating and applying new technology has been reducedin many. NPOs by two and even three times.40 The qual-ity of research, development, and innovation is alsohigher. in the electrical -Angineering industry theshare of output stamped with the seal of highest qual-ity is 1.5 to 2.5 times greater in the NPOs than inthe branch as a whole.41 In the associations from 40

to 50 percent (and climbing to 80 and 90 percent) of

completed R&D is actually introduced while in autono-mous scientific and technological organizations only15 percent is successfully utilized. Labor and ma-terial costs are also reduced because of less dupli-

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associations and enterprises. If these two tasks are=it delimited organizationally between science-pro-duation and production associations but are done with-in the NPO, then confusion and a distortion of func-tions takes place. The inclusion of enterprises en-gaged in series production leads to an expansion ofmanufacturing operations to the detriment of scientif-ic READ activity. The main function of the NPO--proto-type development-becomes subordinate to the task offulfilling current production programs.

Indeed the claims and fears of those adopting thisview are confirmed Ly experience. In several NPOsthe share of scientific research and experimental de-sign comprises only 5 to 15 percent of the volume ofindustrial production activity. Some of these NPOshave, in fact, been subsequently renamed POs. In oth-ers, R&D results are accumulating and cannot find anoutlet either at the association or at other enter-prises of the branch. The share of new products orig-inating in the NPO and assimilated into series produc-tion has also declined in recent years at Elektroap-parat and Kondensator. More than half of the work ofseries production facilities at some NPOs deals withassignments that have nothing to do with the activi-ties of their own R&D units and sometimes even falloutside the specialized profiles of the associations.NPOs having major enterprises of series and mass pro-duction have shown a strong tendency to become inter-ested mainly in improving production indicators andnot in accelerating innovation. To weaken the desireto maintain production runs of the same items and toencourage greater product mix and renewal, a new rulehas recently been introduced. If an NPO issues a par-ticular product more than three years, deductions toits incentive funds are then reduced by 50 percent.44

On the other hand, many specialists insist equal-ly strongly that series or batch production is an in-tegral part of the NPO. The role of series produc-tion facilities is not to increase industrial outputbut to serve as an arena within which the NPO cantest and perfect its innovations under actual produc-tion conditions. If NPOs lack series production ca-pability, this forces them to transfer the assimila-

209

tion of .ew products and processes to other organi-zations. That prolongs the process and reduces thequality of innovation. In effect, the NPO is exclud-ed from the most important stage connected with theintroduction of R&D results into the economy and can-nct perform its role of connecting link between sci-ence and industry. When the NPO concentrates mainlyon "preproduction" work, it cannot really qualify asa "science-production" association-45

Views also differ concerning the place of the NPOat the research end of the innovation process. Forthat matter, there Is no agreement in the Soviet Unionabout the place and role of basic research more gen-erally in the research-to-production cycle-46 Untilrecently, major NPOs like Pozitron themselves per-formed fundamental research equal to nearly 10 per-cent of their total scientific research effort. Itbecame necessary to abandon this practice by the mid1970s, however. While a few NPOs still engage insome exploratory research, the majority contract withinstitutes of the Academy of Sciences to conduct fun-damental research for them. 47 Befitting their roleand development as "branch" institutions, NPOs focuspredominantly on applied R&D.

At the same time, the scope and volume of scien-tific research and development vary widely among NPOs.In some associations the share of R&D may be less than10 percent of the total cost of production activitywhile in others it may account for as much as 50 per-cent.48 Some Soviet specialists believe that a fixedpercentage should be established for the ratio of"science" and "production" activity as a mandatorycondition for the functioning of an NPO. Though hedisagrees with this view, Taksir notes that whet acomplex is headed by a small research institute whichconducts an insignificant volume of R&D (less than10-12 percent), then the NPO is generally unable todirect effectively the research-to-production cycle.Arkhangelskiy also demonstrates that the capacity ofthe R&D center must be nearly 20 percent of the pro-duction capacity for an NPO to perform successfullyits various functions.49

210

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is the leading center for plastics and has overallresponsibility for high pressure polyethelenes, poly-styrenes, fluoro-plastics, and polyvinylacetates. Be-tween 1969 and 1973 the NPO introduced 117 innovationsinto Soviet industry. In the cryogenic engineeringindustry nearly 90 percent of all machinery and equip-ment produced is based on designs developed at the in-dustry's NPO Kriogenmash. In radio electronics Pozi-tron is the S&T center.51

At the same time, it is also clear that not allNPOs serve as S&T centers for their branches. Someassociations serve only a few enterprises and containvery small R&D units. Others that do exercise branch-wide functions do not provide all the special servicesmentioned above. Some NPOs are unable to performbroad S&T tasks either because they lack a researchinstitute or the one they have is not the leading linkin the association.52

These basic differences in perception and practicedetermine the structure of science-production asso-ciations. Table 11-2 shows the structural makeup of15 leading NPOs. All these associations contain botha scientific research institute and a series produc-tion unit. Thirteen have an experimental productioncapability. Other evidence suggests, however, a lessuniform picture for the NPOs as a whole. In a studyof 40 NPOs, Kushlin notes that 10 percent had no se-ries production unit while 8 percent lacked a scien-tific research subdivision. Eighteen or 45 percent ofthe NPOs had no experimental production or testing fa-cility.53

Particular .y absent, it seems, are facilities suchas start-up and adaptation organizations and trainingcenters which can promote more rapidly and effective-ly the utilization of R&D results. A few NPOs, likePishchepromavtomatika (food processing), Soiuznauch-plitprom, and Impuls (computers), have establishedspecial services that help introduce new products andprocesses directly at client _mterprises and traintheir personnel in the use and repair of equipment.At series plants of their branches other associations

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have created special departments (affiliate servicesof the NPO) which include design engineers and tech-nologists who assist the plants in retooling and man-ufacturing new products.5 In general, though, thisset of important functions is not yet being performedby the majority of NPOs.

Underlying these issues of rh^ optimal structure,composition, and functions of the science-productionassociation is the problem of what in American busi-ness terminology is called "k)roduct differentiation."Given the array of new structural designs and asso-ciational forms that have evolved since the late 1960s,the NPO has had difficulty in gaining and maintaininga distinct identity. Lacking a precise definition ofthe NPO, some ministries have arbitrarily classifiedthe new complexes. What are labeled NPOs are, in fact,production associations or complex scientific insti-tutions. Some NPOs have experienced problems in pre-serving their fundamental dual character. Overdevel-opment of their scientific functions turns the NPOinto a traditional research institute, only larger.Hypertrophy of production operations, on the otherhand, transforms the complex into a production asso-ciation. The difficulties of maintaining a "dialec-tical unity" of functions have led some experts topress for a fixed ratio or at least minimum levelsregulating these activities.55

The problem of product differentiation is made allthe more difficult because in some instances it ispractically impossible to distinguish between an NPOand a PO which contains its own large R&D complex.For example, the Uralmash Production Association in-cludes a scientific research and engineering designinstitute of heavy machine-building which has morethan 6000 workers and does business by contract withmore than 60 R&D establishments in the country. Dur-ing the Ninth Plan the PO developed more than 100prototypes of new machines and equipment.56 The dis-tinction becomes especially fine when a productionassociation creates new products in small series orsingle lots and is one of the major producers of thistype of product, as with Elektrosila.

214

On another level, the relations of science-produc-tion associations with higher ministerial authoritiesare not uniform and regularized. In some branchesthere is no permanent body to lead NPOs. Where suchorgans exist they sometimes fail to take into accountthe distinct features of individual associations andregard them all as alike. Some ministries and agen-cies approach NPOs as ordinary research institutes orindustrial enterprises.5 The lines of subordinationalso vary. A few NPOs, such as Soiuznauchplitpromand Mikroblopramreport directly to the ministry (fre-quently to a deputy minister). The majority, however,operate on a three-link system (NPO- -glavk /industrialassociation--ministry). They report either to one ofthe glavki or main administrations in their respec-tive ministry or to an all-union industrial associa-tion. Plastpolimer provides an example of the latterpattern, which will probably become more common asthe ministries reorganize and the glavki are liquida-ted or transformed into industrial associations. Themajority of NPOs function as the first link of manage-ment. Yet a number of them conduct from 30 to 100percent of all R&D done in the branch. In additionsome NPOs are essentially all-union associations.These differences are not reflected in their legalstatus, however. This causes some specialists to ar-gue that certain NPOs should have additional powersand prerogatives compared to other NPOs.58

Internal organizational development has also beenmarked by problems and diversity. The key issue hasbeen the degree of legal authority to be exercised bythe central management or head organization as againstthat retained by the constituent units. "The criter-ia for establishing a happy median between loose orformal merger and overcentralization of decision ma-king are apparently difficult to arrive at observesNolting.59 The aim of creating these new complexes,it will be recalled, is to break down structural frag-mentation, to bring the multiple participants in inno-vation into closer association and even under commonadministration.

Meanwhile, the evolution of NPOs up to 1976 showstwo negative tendencies. On the one hand, Integra-

215

22j

tion stopped far short of the goal of a unified andorganic system. Amounting to little more than a me-chanical conglomerate of autonomous units, the NPOwas transformed into "an administrative superstruc-ture, a superficial link on the path from the minis-try and glavk to science and production."60 Evenamong the earliest and most tauted NPOs institutionalconsolidation was slow and incomplete. An investiga-tion of nine major NPOs of this kind by the Academy'sInstitute of Economics in 1974 found that a councilof directors had not yet been formed in three of thecomplexes. One still lacked a scientific-technicalcouncil for the association.61

On the other hand, centralization was sometimescarried to an extreme. Constituent units of an NPOwere denied any autonomy, even in operational manage-ment and control. This situation proved especiallydebilitating when the association contained subdivi-sions that were highly diverse and geographicallydispersed. As a result the NPO became unmanageable.The decision process became frozen as each unit wasforced to go to the highest levels and much time waslost in getting agreements and approvals. In short,association members became caught in the familiar bu-reaucratic chain from which they were supposedly tobe liberated.

Of these two tendencies, the first was the mostdominant. The retention of autonomy by componentsalmost everywhere impeded, if not prevented, the de-velopment of an integrated planning and managementstructure for the association as a whole. Pressuresubsequently mounted on Moscow authorities to imposegreater centralization. Significantly, the officialstatute on the NPO, which was finally approved by theCouncil of Ministers on December 30, 1975, stipulatesthat al: nits joining an NPO are denied any legalautonomy. At the same time, the ministries and re-public officials have been given some discretion inapplying this ruling and making exceptions.62 Intra-associational relations are likely to continue to re-flect substantial diversity in practice, if not inform. How successful the 1975 statute will be inovercoming formal merger without leading at the same

216

time to excessl.ve centralization still remains to beseen. Writing in the Academy's main economic Jour-n 1 a year after passage of the statute, two Sovictscience experts admit, "While some services are cen-tralized, a system has still not been found of organ-izing the mutual relations of structural units andthe machinery of management for the complex as awhole. "63 Indeed until 1976 NPOs were not even reg-istered as an independent institutional category atthe USSR Central Statistical Administration. All ac-counting was done strictly in terms of their individ-ual structural components. 64

Underlying these prob..ems of the continuing frag-mentation of planning, financing, and management ofNPOs are serious and unresolved methodological issues.New integrated performance criteria have not yet beendevised. This explains partly, in fact, why minis-tries and higher planning and financial agencies per-sist in issuing plans and finds to separate NPO sub-divisions. Many performance indicators still relateto the activities of R&D and production units intheir previously independent status. Existing indi-cators do not differentiate between R&D subdivisionsthat belong to NPOs and those that do not. Accordingto current methods of accounting and reporting, it isnot possible to aggregate the activity of organiza-tions that relate to material production and to theworld of nonproduction.65

To be sure, some efforts are being made in this di-rection. Some norms have been devised for determiningthe average length of the research-to-production cycleand are used in measuring the performance of some NPOs.According to Tabachnikas and Skliar, however, thesenorms are established rather arbitrarily, largely "byeye." No fixed and uniform methodology exists yetfor this purpose. In other associations indicatorsare used to determine the degree to which the research-to-production process has been reduced over time. Tak-sir points out, however, this kind of norm is of dubi-ous value because reduction of the innovation cycleobviously has a limit." What methodological progresshas been made in developing integrated evaluative in-

217

dicators and norms for NPOs is still largely experi-mental. Not everyone realizes yet that the NPO isnot simply the sum of its parts but represents aqualitatively new type of organization.

Looking back on the first decade of its life, then,we can say that this new institutional form has stillnot found its proper place in the Soviet scheme. Veryfew NPOs have approached--much less achieved--thegoal of creating an organizationally, technological-ly, and economically integrcted system for promotinginnovation. In most, "science" and "production" con-tinue to lead separate lives. The administrativebarriers between them have not been effectively bro-ken down. Organization-building has been marked bymuch confusion and diversity, not to mention bureau-cratic opposition and lethargy. In the absence ofclear guidelines from the center, branch ministriescreated NPOs as they saw fit, often obliterating theboundaries between different kinds of research andproduction complexes. Sometimes NPOs were put to-gether without any systematic research and analysisof design and development problems. Little consid-eration was given to their place in the context offuture directions and needs of the branch as a whole.67Initially, the lack of a formal statute permittedneeded flexibility and experimentation. It also re-duced the danger of putting these new structures in-to an organizational straitjacket and monolithic mold.More and more, however, the absence of a document es-tablishing the legal status of the NPO and definingits basic functions and principles of organizationhad prevented the solution of a number of complexproblems. The associations were recognized as beingfrozen in their units, forms, and relations. A newstage of development came in 1976. After confirma-tion of the NPO statute, Kremlin authorities steppedup efforts to impose greater clarity, order, and di-rection in the affairs of the associations. The ef-fect of these measures remains to be seen. Taken to-gether they form :art of a broader drive to make theTenth Plan a period of "development not only inbreadth but also in depth" for research and produc-tion complexes of all kinds, and not just NPOs. Asfor the latter specifically, they are expected to growto 200 to 250 by 1980.68

218

At the same time, expectations for the NPOs seemto have cooled. Much of the initial optimism thatsurrounded them has dissipated. As one Soviet observ-er noted in the summer of 1976, "One can hardly findnow defenders for the view that every branch inst:.-tute should be turned into an NPO. The opinion .1..sgrowing slowly but steadily that the number of NPOsin industry cannot be big, perhaps three or four inone ministry." "And if this is so," he continued,"then it is necessary to recognize directly that theNPO is a partial solution to the problem of strength-ening the ties between science and production."69 V.G. Shteingauz also concludes, "The NPO must be re-garded as a successful but far from the only form ofintegrating research with production."70 The NPO isstill expected to play an importantand even Increas-ingrole in accelerating innovation and technicalprogress, but other integrating structures will haveto be developed.

In this light, the growing Soviet interest in es-tablishing specialized introduction organizationswhose task is explicitly the implementation and dif-fusion of new technology and production techniquesmerits brief discussion. Since this function is notthe main job of either scientific or production or-ganizations, a new type of institution is needed forthis purpose that is neither a research institute noran industrial enterprise, some specialists argue.They see innovation--the exploitation and applicationof new ideas and designs--as a distinct activity thatis fundamentally different from both research andproduction. Hence, they maintain that new technologytransfer vehicles are required to perform vital butneglected innovation functions. Such specialized or-ganizations are depicted as the new connecting linksbetween science and industry which serve as important"middlemen" facilitating and mediating the research-to-production process.71

Attention to these new structural forms has grownin part because the science-production associationshave proven to be more successful at creating newtechnology than at applying it. While a few NPOsconduct extensive innovation activities, they are the

219

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From a Western perspective, the fifth category ofinnovation organization identified by Taksir is per-haps the most interesting. This group is comprisedof what can best be described as profit maximizingengineering or management consultant firms. They arecreated and sustained through the private initiativeof technological entrepreneurs seeking to exploit S&Tadvances. Offering a broad profile of services, theseorganizations exist essentially outside the formaleconomic system and beyond official planning and con-trol. Paradoxically, this is both their greateststrength and their greatest weakness. In accord withthe initial decentralizing spirit of the 1965 econom-ic reform, more than a dozen of these new technicalfirms sprung up across the USSR. They included, forexample, Fakel (The Torch) in Novosibirsk, Novator(Innovator) in Baku, Iskra (The Spark) in Tomsk, Po-isk (Search) in Severodonetsk, and Telm (Tempo) inMoscow. By the early 1970s, however, most of themwere forced to close their doors. Others continue tolead a semi-legal life. In general, these institu-tions have not been stable and surviving additionsto the Soviet S&T establishment. This is not becausethey have been inefficient but, on the contrary, be-cause their success and viability have not been ac-ceptable in ideological and political terms.

Tndicative of the nature and fate of these ent re-preneurial vent- res is the "tale of the Torch."7'Fakel was set up by a few young scientists-entrepre-neurs in 1966. It had no budget, no material sup-plies, no paid staff, and no office space. Aftercompiling a list of prospective consultants and theirspecialties, the founders simply set up headquartersin a dormitory of the University of Novosibirsk andbegan soliciting contracts. Consultants would be se-lected to work on problems in their spare time. Var-ious organizations were paid for the use of theirequipment and facilities during non-working hours.The Torch received 3.5 million rubles from 263 con-tracts for the period up to June 1970. Allegedly,the innovations introduced by it resulted in a sav-ings of 35 million rubles. These included the devel-opment of an optimal plan for forest exploitation in

222

Novosibirsk Province, a system of computer analysisof seiRmi_c materials for a local geographical expedi-tion, and an experimental model of a Torch-builtswamp vehicle for oil exploration in Western Siberia.Other projects were in '1,a^ fields as gold extraction,the use of manure, and -be ,levelopment of control de-vices for the Novosibirsk tower Station. Despitesupport from the Presidium of the Siberian Divisionof the Academy of Sciences, not to mention the localKomsomol authorities under whose wing Fakel formallyoperated, however, this efficient but unconventionalorganization came under strong attack and eventuallyclosed down in May 1971.75

One of the few firms of this kind to have survived(in modified form) is Novator. Formed in 1967 and re-organized by leaders of the Azerbaidzhan Republic in1971, it has since been put under dual subordinationto the Azerbaidzhan Ministry of Local Economy and theState Committee on Inventions and Discoveries. Basi-cally, the firms seeks and screens relatively simple'orphaned inventions" from institutes throughout theUSSR that cannot exploit them. By 1976 Novator wasdoing an annual business of over a million rubles.Since its creation the firm has developed and dissem-inated more than 120 innovations. Some of these havebeen awarded state medals, and others have been dis-played at the Leipzig international trade fair.76

Scientists in particular attempt recurrently torevitalize and legitimize these entrepreneurial firms.Recently in the Academy's main economic journal Tak-sir and M. T7Zrasnokutskly argued that these institu-tions were viable and desirable. They urged thatthese products of private initiative be turned intostate organizations with a firm legal basis.77 Thecentral issue is the institutionalization, if not bu-reaucratization, of entrepreneurship. The problem ishow to preserve these efficient innovating forms with-out destroying their spontaneity, independence, andelan vitalthe very foundation of their success.Some Soviet specialists recognize that entrepreneur-ship is frequently associated with specific and spe-cial personality traits. Like R. M. Shteinbok, they

223

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must reflect "socially necessary expenditures of pro-duction." With new product innovation, the problemwith the traditf.onal system is as simple as it is se-vere. As cumulative output increases, cost declinesfor a host of reasons which collectively may be la-belled "learning curve effects." While market compe-tition acts to force corresponding declines in prices,fixed prices will yield larger profits as the productbecomes increasingly dated.

Formulating price-setting methodology and monitor-ing its application are the responsibility of theState Committee for Prices. Fairly recently, the Com-mittee has begun to implement measures for introducingat least step-wise or staged price flexibility. Theessence of the new techniques is described by Ivanov:

One of the rules of price formation is that thesavings obtained by an innovating enterpriseshould not exceed 50 percent of the total eco-nomic gains. Prices on new articles may changewith time, assuring the producer fast write-offof initial start-up costs as well as reasonableprofitability of production at all stages of themarket cycle' of the innovation.

Specifically, prices for items which make onlyminor improvements or changes in existing prod-ducts are established in conformity with theprice level of their prototypes with adjustmentsmade for the savings effected by the product im-provements. Prices for radically new items areestablished in stages. First, temporary pricesare fixed which include planned cost of produc-tion of the new article plus a profit marginthat is based on the norm of profitability ofthe enterprise for a given year for its basicoutput. However, it should not exceed 20 percentor be less than 10 percent of the planned costof production. After the expiration date of tem-porary prices (When the initial costs for newproduction have been written off), permanentwholesale prices are established for new prod-ucts. In case of high quality products which

229

2 1

have been awarded the State 'Seal of Quality,"prices may include a special incentive markupamounting to 0.5 to 1.0 percent of the prof-itability norm, but under the condition thatthis does not increase the producer's shareof economic returns by more than 50 percent.This markup is established for a period of 3years and can be lifted if the article doesnot meet high quality standards during thenext certification.

In turn, permanent wholesale prices on newproducts may be fixed for a limited periodof time and in stages. Such differentiationhas the goal of imparting to price formationadditional effectiveness as a weapon for re-moving from the market obsolete products, aswell as preserving the fair distribution ofeconomic gains produced by the applicationof new technology between the producer andthe consumer as the cost of production de-creases. Step-like, sequentially lowered_,-4,zes are therefore established for prod-

whose costs are particularly elastic inrelation to the volume of the series whichsaturates the internal market to a high de-gree and also for products with high ratesof obsolescence.89

Important elements of this description are the at-tempt to tie product prices to a measure of qualityand the intent to divide the "benefits" or economicreturns an a new product between the producer and the

consumer, thereby rendering the product advantageousto both. This benefit is transmitted through the ef-fect of higher prices on establishment success indi-cators and, hence, on the primary bonus fund. And,

finally, the step-wise character of pricing is in-

tended to promote product turnover. Imparting priceflexibility by administrative means is costly andcumbersome, but promises benefits.

Other recent efforts relate the size of primarybonus funds to technological advance and the evalua-

230

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bonus fund is to be used for lump sum payments to in-dividuals or collectives as a reward for particularlynoteworthy achievements. Innovation is prominent onthe list of such achievements. We do not know theextent to which such payments are actually made toreward innovation activity, but they do offer the po-tential of a flexible and effective stimulus, at leastfrom the perspective of the recipient. However, thecaveat applicable to the Fund for the Creation andIntroduction of New Technology is also pertinent here.A lump suo payment may make the participant betteroff, but if the innovation should cause the entirebonus fund to shrink, the labor force as a whole willsuffer. Indeed, the motivating effect of all thesespecial incentives for innovation is limited. Thestatutory ceilings on individual bonus earnings aresuch that no person may receive an excess of 90 to110 percent of his base salary in bonuses of allkinds. The relative balance of risk and reward as-sociated with innovation, Berliner concludes, stilltends to motivate Soviet decision makers and managersto discriminate against innovation in favor of alter-natives that involve no change in products or proces-ses.

In sum, throughout this section we have describedbriefly (and incompletely) elements of Soviet plan-ning, managerial, and finAncial policy which influ-ence the degree and rate of new technology utiliza-tion. While noting that the system must in fact beformulated and set in operation as an integral unit,we have been forced to analyze each unit separately.Yet, for traditional practice, this approach does notseverely distort reality, since the stages of R&D,the participants, and the various policy makers alltend to be disjointed. However, we note in passingthat experiments are underway in certain ministriesto "unify" not only the stages of R&D but also theentire policy-making process. The system, depictedschematically in Figure 11-4, originated in the elec-trical engineering industry. Planning is to be "con-tinuous," accounting for all stages of the innovationprocess. Similarly, financing originates in a Uni-fied Fund for the Development of Science and Technol-

232

FIGURE 40-4 BASIC SCHEME OF THE SYSTEM OF PLANNING, FINANCING, AND ECONOMIC STIMULATIONOF S&T DEVELOPMENT IN THE SOVIET ELECTRICAL ENGINEERING INDUSTRY

Ministry(Functional Administrations

R&D Plan Plan for Assimilation of New Productsand Removal of Old Items

Assignment on Share ofProducts in Highest andLowest Quality Categories

Scientific Research,Design, and Technol -

(.4

ogical Organizations

I Forms ofEconomic

Stimulation

NewDevelopment

Projects

IndustrialEnterprises

Assignment on EconomicEffect (Return)

IFinancing R&D

Financing the Preparationfor Production of New

Technology

Certification ofProduct Quality

UnifiedFund for

DeveloPmentof

Deductions tothe Unified

Fund

Markups on Priceof Highest Quality

Products

IDeductions to theIncentive Funds

u cW

4.10

00

1:4

To theNationalEconomy

Source: G. A. Dzhavadov, Upravleniye nauchno-tekhnicheskim progressom (Moscow, 1975),p. 32.

2 7

ogy, again accounting for all stages. Wit.iin thissystem planning, finance, management, incentives, .71/1.1other elements are to be closely integrated. This sys-tem does represent a radical departure from tradition-al practice and has been successful, though it hasbeen slow to diffuse. The pattern and impact of itsbroadening application in Soviet industry should befollowed carefully.

EVALUATION OF Raj RESULTS AND PERFORMERS

The basic notion of comprehensive planning of R&Dand economic activities implies the ability to prede-termine results in some detail. Thus, in the plan-ning process, a set of evaluative criteria, the tar-gets themselves, are generated and in fact are usedin assessment at designated plaa cLAIines. Becausethe resulting performance rewards, suds as the sizeof bonus funds, sometimes are planned it may evenbe said that evaluation telf sot- extent is pre-

determined.

Of course, the accuracy of this characterizationincreases as the precision and cf planning in-crease, which occurs as R&D approaches the productionassimilation stage. Thus, for design, development,and production establishments formal evaluative cri-teria are utilized which, whenever possible, incorpo-rate quantitative measures. Indicators employed inpia' formulation (volume of work, number of projectscompleted) and project selection (economic return,technical measures, social criteria) are also used inevaluating the establishment. Though calculations ofactual or realized economic return are, in principle,to be made following the application of R&D resultsin production or use, they are in practice rarelycomputed or recorded. Decisions regarding evaluationand incentives are taken predominantly on the basisof planned or projected estimates of return, not onreal results ane savings.

2 .4234

The fact that individual compensation to some ex-tent is tied to plan and project measures impliesthat evaluation of employees and participants pro-ceeds in similar fashion. Of course, subjectivejudgment always enters into personnel evaluation,but attempts are made to maximize reliance on ob-jective criteria. Performance in meeting quantita-tive plan targets affects not only income but alsocareers of production managers, for example, andthus is held to be an indicator of general managerialcapability.

As planning becomes less precise and detailed inapplied and fundamental research, there is a commen-surate increase in reliance on subjective evaluation.In practice, a mix of objective and subjective crite-ria is employed to take into account the originalityand long-range promise of R&D, its economic and so-cial usefulness, etc. 91 At the same time, the pro-cedure for performance evaluation tends naturally tobe internalized 3r1 research facilities, as the re-searcher's professional colleagues may be the onlygroup qualified to judge performance. Still, though,the formality and hierarchical procedures character-istic of most Soviet bureaucracies are also press Litin the research evaluation process. The results ofthe evaluation, in turn, are an important input inthe decision to contil:iu, modify, or terminate pro-jects which extend beyond standard plan periods. Rec-ommendations of consultative organs and expert groupsare transmitted up the hierarchy to respective GKNT,Academy, r-Id Ministry authorities for official deter-mination of future establishment and project direc-tions.92

Relatively little information is available concern-ing performance evaluation criteria and procedures forindividual scientists. Presumably, they differ acrossfacilities. We briefly describe below the example ofthe evaluation system developed and used at the Sci-entific Research Institute of Physical Chemistry imeniL. Ya. Karpov.93 The Karpov system, as it has come tobe known, is gradually being adopted in other Sovietresearch facilities.

235

Salary at the Karpov Institute depends on academicdegree attained, length of service, and results ofwork. To evaluate the last element, a "certifica-tion" commission convenes which includes leading sci-entists and representatives of management and socialorganizations. The commission evaluates employeesnot less than once every three years. A 10 point ra-ting system is used, and the following criteria areemployed to evaluate the individual:

1. Professional qualifications

2. Diligence at work

3. Prospects for further activity

4. Originality of research

5. Theoretical level of research

6. Experimental level of research

7. Value of research for theory

8. Value of work for practice

9. Ability to work independently

10. A-Ility to org...nize work for subordinates

11. Participation in work of technology utilization

12. Participation in social activities

13. Direct participation in experiment work94

The commission makes two kinds of recommendations as aresult of its assessment: (1) maintain or modify jobtasks; and (2) increase or decrease salary or keep itat the present level. The results of the evaluationare approved by the learned council of the institute.The decision of the council is final."

236

In general, Soviet procedures for evaluating R&Dresults and performers tend to be formal and highlystructured. The work of both individuals and insti-tutions is evaluated primarily in terms of their for-mal fulfillment of thematic and financial plans, noton the basis of the real value of their S&T achieve-ments. There is a strong tendency therefore to pro-pose "safe" and relatively minor themes, whose param-eters are fairly well known and results more certain.As Academician Ya. Kolotyrkin comments, "An institutecan fulfill its subject and financial plans year af-ter year without contributing anything to technicalprogress."96

Recently efforts to tie R&D planning and resourceallocation, management and incentive programs to endresults--the ultimate application of technology innew products and processes--have mounted. Throughoutthis study we have mentioned the increasingly ubiqui-tous tho=igh still ambiguous measure of "economic re-turn or effectiveness." If the utilization of R&Dwas almost ignored in science policy in the past, thensince the /ate 1960s it has come to have almost exag-gerated emphasis. There are important limitations,however, on the utfaity of practical application as acriterion for evaluating R&D results and performers.Some science specialists contend that RSD organiza-tions should not be evaluated in terms of the finalstages of the innovation process in which they stillhave little direct participation, much less control.Furthermore, the evaluation of results and real re-turns must be long range because of the necessarilyprot acted process of moving results from the lab in-to use. Hence, the operational character of evalua-tion is lost, and its motivating role is diminished.97As 0. I. Volkov notes, scientific R&D organizationscannot be evaluated by the same criteria as productionestablishments. They require an independent system ofindicators, instruments, and special organization ofmanagement which, though closely linked with the eco-nomy, possesses at the same time necessary autonomy."Science has its own internal development needs whichmust be attended to, besides its external relationsand linkages with productiorl.

237

DIFFUSION OF R&D RESULTS

In the Soviet economy, under traditional organiza-tional and operating principles, diffusion of newtechnology should not differ markedly from innovation.That is, the first introduction and subsequent intro-duction are not so sharply distinguished in the USSRas in the West. Part of the reason for this is organ-izational. When branch institutes or design bureausare independent, they are meant to serve impartiallyall production facilities in the branch, and proprie-tary rights over innovations are not associated withthe first introduction or use. Innovation may be in-troduced simultaneously or sequentially in facilities,with little advantage accruing to the first user.

The absence of competitive pressures in the Sovieteconomy also means that the economic viability of thenoninnovator is not automatically threatened by itsfailure to act. The production facility in the USSRis responsible to its administrative superiors. Forthe most part the facility is competing not againstother facilities but instead against its own perfor-mance in previous periods. Because targets tend tobe set in relation to earlier own-facility results,and because of conditions of general excess demand,facilities of widely differing productivity levelsand innovative postures can coexist in the Soviet eco-nomy for indefinite periods.

Today these situations are changing somewhat, inpart because of a conscious desire of the Soviet lead-ship to encourage more rapid technology diffusion. Or-ganizationally, the affiliation of R&D and productionestablishments, as in the science-production associa-tion, tends to distinguish an innovation from a dif-fusion process. Innovation may be thought of as oc-curring when the NPO plant successfully introducesthe technology, while the NPO leaves the problem ofdiffusion to other branch plants. Similarly, to gen-erate pressure for more rapid process innovation, So-viet authorities are attempting to rely as much aspossible on branch-wide performance criteria for tar-get formulation. Of course, branch standards have al-

238

ways been the ideal, and the process is slowed by thefact that inefficient plants are not placed in a se-verely disadvantageous position. Yet the greater ac-cent now placed on branch-wide performance compari-sons may ultimately have a favorable Li pact on tech-nology diffusion.

In large part, however, the factors outlined pre-viously which influence technology delivery and uti-lization by the first producer similarly influencesucceeding adopters. Plans may stipulate introduc-tion and in general are the basic coordinating andmotivating mechanism for diffusion. Organizationaland financial mechanisms may be employed to createa favorable disposition toward innovation in all po-tential adopters. The impact of clearly superioreconomic performance is exemplified by the experi-ence of developing new ceramic tile manufacturingtechnology:

In this case it is also vital to note that thesocio-economic consequences of replacinc theold technology of producing ceramic tiles intunnel kilns with a new technology using auto-mated conveyer assembly lines with slit kilnswere so obvious that adoption of the new meth-od in industry ... rot only encountered no re-sistance, but, on the contrary, a whole numberof enterprises and agencies sought additionalways to move up the fixed schedule for puttingthis system into operation.99

In certain Instances, however, the age of a productdetermines the applicability of a special innovation-related program. For example, compensation fcr highstart-up costs from the Fund for Assimilation of NewTechnology is only permitted for new products, where"newness" is defined bureaucratically to apply "if(a) it is the first instance of the product's pro-duction in the USSR, or (b) no more than two yearshave elapsed since it was first introduced in theUSSR. 100

Special Soviet programs to facilitate diffusionresemble those in any advanced industrial country.

239

Technical information services, managed by the All-Union Institute for Scientific and Technical Infor-mation (VINITI), are among the best in the world.VINITI disseminates Soviet journals, translationjournals, and comprehensive abstracts of foreign anddomestic publications, and assists in publicizingpatents. Most industrial ministries have similaragencies. Academy, university, ministries, and S&Tsocieties host frequent technical conferences whichfacilitate personal interaction, a potent means oftechnology transfer. Actual transfer of personnelwith the direct or indirect intent of transferringtechnology tends to occur less frequently, and isparticularly rare across ministerial boundaries.Standardization programs, such as those concerningdesign documentation, facilitate transfer but are arelatively recent development. Finally, a commonSoviet technique of technology diffusion which avoidsmany of the administrative problems described previ-ously is the construction of entirely new facilitieswhich "embody" the new technology. However, the per-formance of the Soviet construction industry is it-self quite poor, especially concerning lead times,and the shift of investment funds away from new con-struction to reconstruction of facilities reduces thescope for this approach.

In sum, the Soviet innovation and diffusion pro-cesses are rendered similar, if not indistinguishable,by the nature of Soviet economic organization and ad-ministration. The general absence of competitivepressures in particular is a severe deterrent to rap-id diffusion. Special programs designed to encourageinternal technology transfer, particularly relatingto information and (potentially) standardization, canalleviate some of the problems but are not, in ourview, sufficiently effective to overcome barriers toinnovation created by fundamental attributes of theSoviet economic mechanism.

240

FOOTNOTES

1. See L. S. Blyakhman, ed., Voprosy ekonomiki iplanirovaniya nauchnykh issledovaniy (Leningrad, 1968),p. 93; N. I. Dryakhlov, S. I. Nikishov, Yu. K. Plet-nikov, and S. V. Shakhardin, eds., Nauchno-tekhni-cheskaya revolyutsiya i obshchestvo (Moscow, 1973),p. 446; V. P. Aleksandrova, ed., Problemy p1anirovan-iya i effektivnosti razvitiya nauki i tekhniki vukrainskoy SSR (Kiev, 1976), p. 50; V. Sominskiy andL. Blyakhman, eds., Ekonomichesklye problemy yovyshen-iya effektivnosti nauchnykh razrabotok (Leningrad:Lenizdat, 1972), p. 177; V. N. Arkhangel'skiy, Organ-izatsionno-ekonomicheskiye problemy upravleniya nauch-nymi issledovaniyami (Moscow, 1977), p. 33; V. I.Kushlin, Uskoreniye vnedreniya nauchnykh dostizhenlyvproizvodstvo (Moscow: Ekonomika, 1977), p. 3; Nolt-ing, Sources of Financing the States of the Research,Development, and Innovation Cycle in the USSR, p. 3.

2. Kanygin, Nauchno-tekhnicheskiy potentsial, p.225.

3. L. S. Blyakhman, "Nauka kak otrasl prolzvodst-vennoy deyatel'nosti," in Blyakhman, ed., Voprosy eko-nomiki i planirovanlya nauchnykh issledovaniy, p. 15.

4. Berliner, The Innovation Decision in Soviet In-dustry, pp. 103-104.

5. K. I. Taksir, 7ategratsiya nauki i proizvodstvapri sotsializme (Moscow: Znaniye, 1975), p. 14; Kush-lin, op cit., p. 122.

6. V. G. Shteingauz, Ekanomichesklye problemy re-alizatsil nauchno-tekhnicheskikh razrabotok (Moscow.1976), p. 118.

7. A. Zalkind, "Akademiya dlia 'neakademicheskikh'nauk," Literaturnaya gazeta, 12 (March 24, 1976), p.11.

241

8. A. N. Bortnyakh, ed., KPSS i sovremennaya nauch-no-tekhnicheskaya revolyutsiya (Kiev, 1974), pp. 379380.

9. Zalkind, op. cit.

10. See Tom Burns, "Models, Images, and Myths," inWilliam H. Gruber and Donald G. Marques, eds., Factorsin the Transfer of Technology (Cambridge, Massachu-setts: MIT Press, 1969), pp. 11-23. Ore of the bestdiscussions of Soviet views of innovation is by Kany-gin. See his Nauchno-tekhnicheskiy potentsial, pp.151-213.

11. V. I. Berlozertsev, "Soedineniye nauchno-tekh-nicheskoy revolyutsii s preimushchestvami sotsializ-ma," in Problemy soyedineniya dostizheniy nauchno-tekhnicheskoy revolyutsii s preimushchestvami sots-ializma (Voronezh, 1974), pp. 11-12.

12.222.

13.

Kanygin, Nauchno-tekhnicheskiy potentsial, p.

Berliner, op. cit., p. 140.

14. Zavlin et al, Trud v sfere nauki (Moscow,1973, 2nd edition), pp. 123-125, 129, 206-207.

15. Ibid. (First edition), p.

16. Berliner, op. cit., p. 116.

17. Zaleski et al, Science Policy in the USSR,p. 93.

18. D. Bobryshev and Ye. Nisevich, Setevyye metodyv upravlenii (Moscow, 1973) , p. 14.

19. See Robert W. Campbell, "Management Spilloversfrom Soviet Space and Military Programs," SovietStudies, XXIII, 4 (1972), pp. 586-607.

20. See Yu. I. Maksimov, "5-!cond Wind for NetworkMethods," Ekonomika i organizatsiya promyshlennogo

242

proizvodstva, 4 (July-August 1976), pp. 205-211; V.G. Afanasyev anu V. S. Chesnokov, "Sistemy tselevogoplanirovaniya -- instrument effektivnot=o upravleniyanauchnymi issledovaniyami," in Nau#-Iinoye upravlenlyeobshchestvom (Moscow: Mysl', 1972), VI, pp. 268-331;D. M. Gvishiani, ed., Vorosteorlipctikiurav-leniya I organizatsil nauki (Moscow: Nauka, 1975),pp. 17-22, 82-95; G. M. Dobrov et al, Programmno-tselevoy metod upravleniya v nauke, pp. 24-27.

21. V. I. Dobuzhinskiy, D. D. Katanov, and E. L.Rokhvarger, "Razrabotka novoy tekhnologii keramiches-kikh plitok" (Development of A New Technology of Cer-amic Tiles), p. 7. Soviet Side of the Joint Soviet-American Working Subgroup on Planning and Managementof Scientific Research and Development. Unpublished(draft) paper, 1976.

22. Yefimov et al, "Developme-.it and Realization ofA Program of Comprehensive Mechanization of Funda-mental and Auxiliary Processes of Production at theMoscow Production Association ZIL," pp. 7-8.

23. Zaleski et al, Science Policy in the USSR, p.280.

24. Gvishiani, "Centralized Management of Science:Advantages and Problems," p. 103.

25. Ivanov, "Preodoleniye prepyatstviy i stimuli-rovaniye pri vnedrenii novoy tekhniki I novykh metod-ov upravleniya," p. 10.

26. Ibid.

27. Ibid., p. 12.

28. A. G. Orlc.i, Oplata truda rabotnikov nauki(Moscow: Nauka, 1973), p. 52.

29. Ivanov, op. cit., p. 11.

30. Ibid.

243

31. XXIV Syezd KPSS: Stenograficheskii otchet (Mos-cow: Politizdat, 1971), I, pp. 80-81.

32. L. M. Bashin, "Ekonomicheskiye problemy vnedren-iya novoy tekhniki," Voprosy izobretatel'stva, 7 (1975)P. 12.

33. See G. D. Anisimov, L. S. Glyazer, A. M. Omarov,V. G. Pankratyev, and M. P. Ring, Nauchno-tekhnicheskiyprogress i khozyaystvennaya reforms (Moscow: Nauka,1969), pp. 119-127; "The Quality of Designs," Pravdaeditorial, May 13, 1977.

34. L. S. Blyakhman, "The Association: Experienceand Prospects," Pravda, December 1, 1971.

35. Ivanov, op. cit., p. 21.

36. Ibid.

37. Ibid., p. 22.

38. K. I. Taksir, Nauchno-proizvodstvennyye ob"yedi-neniya (Moscow: Nauka, 1977), pp. 42-53, 57-58; Yu.Subotskiy, Novyi etap razvitiya ob"yedinenly v pro-myshlennosti (Moscow: Znaniye, 1973), p. 26; E. I.Gavrilov, Ekonomika i effektivnost' nauchno-tekhni-cheskogo progressa (Minsk: Vyshaya shkola, 1975), p.290; L. N. Andrukhovich, Upravleniye kachestvom (Mos-cow: Znaniye, 1976), p. 47.

39. Taksir, Nauchno-proizvodstvennyye ob"yedineniya,p. 57; G. A. Dzhavadov, Upravleniye nauchno- tekhni--

cheskim progressom (Moscow: Znaniye, 1976), p. 23.

40. Taksir, op. cit., p. 132.

41. V. Pokrovskiy, "Perestraivayas' na warshe,"Sotsialisticheskaya industriya, July 13, 1977, p. 2.

42. Taksir, op. cit., pp. 125-154; Louvan E. Nolt-ing, The 1968 Reform of Scientific Research, Develop-ment, and Innovation in the USSR, U.S. Department ofCommerce, Foreign Economic Report No. 11 (WashingtonD.C., 1976), p. 16; Shteingauz, op. cit., pp. 120-

244

122, 127 and her "Novye organizatsionnyye formy svya-zi nauki s proizvodstvom," in Ekonomlka i or$anizatsi-ya 3 (1973), pp. 46-47;M. A. Yudelevich and M. A. Gusakov, "Puti sokrashcheniitslkla 'issledovanlye-proizvodstvo,'" in Blyakhman,ed.. Voprosy ekonomiki i planirovaniya nauchnykh is-sledkovanix (Leningrad: Lenizdat, 1968), pp. 93-95; G.A. Dzhavadov, "Nauchno-proizvodstvennyye ob"yedineni-ya--forma integratsi1 nauki, tekhniki, proizvodstva,"Sovetskoye gosudarstvo 1 pravo, 1 (1975), p. 37, 43-44; Andrukhovich, op. cit., pp. 48-50; Sominskiy andBlyakhman, Ekonomicheskiye problemy povysheniya ef-fektivnosti nauchnykh razrabotok, pp. 179-180.

43. Berliner, op. cit., p. 135.

44. See Dzhavadov, "NPO--forma integratsil nauki,tekhniki, proizvodstva," p. 37; Yu. V. Subotskiy, Raz-vitiye ob"yedineniy v promyshlennosti: Voprosy teoril1 metodologll (Moscow, 1977), pp. 66-67; V. Kochikyanand V. Kushkin, "Osnovy khozyaystvennogo rascheta vnauchno-prolzvodstvennykh ob"yedinenlyakh," Planovoyekhozyaystvo, 7 (1977), pp. 25-26; K. I. Taksir, "Nau-chno-proizvodstvennyye ob"yedineniya," Voprosy ekono-mlki, 11 (1972), pp. 46-49 and his Nauchno-proizvodst-vennyye ob "yedineniya, p. 39; Pokrovskiy, "Perestrai-vayast na marshe," p. 2.

45. Taksir, Nauchno-proizvodstvennyye ob"yedineniya,pp. 35, 39-40; Shteingauz, Ekonomicheskiye problemyreallzatsil nauchno-tekhnichesklkh razrabotok, p. 124;V. N. Arkhangel'skiy, Planirovanlye i finansirovaniyenauchnykh isnledovanly (Moscow: 'nsy, 1976), pp.158-160; Kochikyan and Kushkin_ cit., p. 26.

46. Yu. Kanygin and S. Kostanyan, "Nauchno-proiz-vodstvennyi tsikl," Voprosy ekonomiki, 12 (1976), p.61.

47. Yu. M. Mikhnevich, Ekonomicheskiye problemyupravleniya nauchno-tekhnicheskim progressom (Lenin-grad, 1974), p. 57.

48. Taksir, Nauchno-proizvodstvennyye ob"yedinenlya,p. 110.

245

49. Ibid., p. 111 and Arkhangelvskiy, Planirovaniyei finansirovaniye nauchnykh issledovaniy, p. 162.

50. These tasks are listed in the statute on theNPO. See "Polozheniye o nauchno-proizvodstvennom ob"-yedinenii," Sobraniye postanovleniy pravitel'stvaSSSR, 2 (1976), pp. 24-25. See also Subotskiy, Raz-vitiye ob "yedineniy v promyshlennosti, p. 67 andDzhavadov, "NPO--forma integratsii nauki, tekhniki,proizvodstva," pp. 38-39.

51. Taksir, Aauchno-prolzvodstvennyye ob"yedineni-ys, pp. 43-79.

52. Ibid., pp. 38-39, 74-79; Kushlin, Uskoreniyevnedreniya nauchnykh dostizheniy v proizvodstvo, p.111.

53. Ibid. See also Pokrovskiy, "Peretraivayas' namarshe," p. 2.

54. Taksir, Nauchno-proizvodstvennyye ob"yedineni-ya, pp. 48-49, 139-140.

55. Ibid., pp. 32, 37 and L. A. Bulochnikova et al,eds., Problemy sovershenstvovaniya upravleniya sots-ialisticheskoy ekonomikoy (Moscow: Mysl', 1976), pp.135-136.

56. Taksir, Nauchno-proizvodstvennyye ob "yedineni-,pp. 17-22.

57. K. I. Taksir, "Nauchno-protzvodstvennyye ob "ye-dineniya," Voprosy ekonomiki, 11 (1972), p. 50.

58. Taksir, Nauchno-proizvodstvennyye ob"yedineni-ya, pp. 36, 55-56, 78, 157-158 and Shteingauz, Eko-nomicheskiye problemy realizatsii nauchno-tekhniches-kikh razrabotok, p. 124.

59. Nolting, The 1968 Reform, p. 16.

60. Sominskiy and Blyakhman, Ekonomicheskiye prob-

246

lemy povysheniya effektivnosti nauchnykh razrabotok,pp. 188-189 and Dzhavadov, "NPO--forma integratsiinauki, tekhniki, protzvodstva," p a 40.

61. Taksir, Nauchno- proizvodstvennyye ob"yedinen1-2A, pp. 54-55.

62. "Polozheniye o NPO," p. 23.

63. B. Tabachnikas and M. Sklyar, "Khozyaystvennyyraschet nauchno-prolzvodstvennykh ob"yedinenly," Vo-prosy ekonomiki, 12 (1976), p. 73.

64. Kushlin, Uskoreni7e vnedreniya, p. 112. In itsdecision approving the NPO statute the USSR Councilof Ministers stipulated that the USSR Ministry of Fi-nance and the Central Statistical Administration hadto draw up within six months appropriate bookkeepingand statistical reporting forms for the NPOs.

65. See Nolting, The 1968 Reform, p. 16; Gavrilov,Ekonomika i effektivnost' nauchno-tekhnicheskogo,pp. 297-305; B. Tabachnikas _Ind M. Sklyar, "Otsenk.4raboty I printsipy obrazov_iniya fonda material'nogopooshchreniya nauchno- proizvodstvennykh ob"yedinenly,"Planovoye khozyaystvo, 2 (1974), pp. 123-124.

66. Tabachnikas and Sklyar, "Khozyaystvennyy ras-chet NPO," p. 77 and Taksiz, Nauchno-proizvodstven-sun2ttlyaianixI, pp. 101-112.

67. Gavrilov, op. cit., pp. 294-295; Mikhnevich,op. cit., pp. 71, 85.

68. Subotskiy, Razvitiye ob "yedinaniy v promysh-lennosti, p. 5 and Taksir, Nauchno-proizvodstvennyyeob "yedineniya, p. 158.

69. R. M. Shteinbok, "Komu vnedryat' novuyu tekh-niku?" Ekonomika i organizats±ya promyshlennogo pro-lzvodrtva, 6 (1976), pp. 78-79.

70. Shteingauz, Ekonomichesklye problemy realiza-

247

tsii nauchno-tekhnicheskikh razrabotok, p. 125.

71. See Taksir, Sushchnost' i formy soyedineniyanazi s proizvodstvom pri sotsializme (Moscow: Vys-shaya Shkola, 1974), pp. 92-104; V. Pavlyuchenko, "otstola konstruktura do zavodskogo konveiera," Pravez,June 13, 1971 and his Ekonomicheskiye problemy uprav-lealya nauchno-tekhnicheskimproc,ressom (Moscow: Nau-ka, 1973), pp. 202-213; Shteinbok, op. cit., pp. 76-85; Kanygin, Nauchno-tekhnicheskly potentsial, pp.237-241.

72. See Shteinbok, op. cit., pp. 79-80 and L. Davy-and R. Shteinbok, "Formy organizatsii vnedreniya

novoy tekhniki," Voprosy ekonomik, 9 (1977), 134.

73. See Taksir, Sushchnz.,a,-T i formy soyedineniyanauki s proizvodstvom pri sotsializme, pp. 92-104 andhis Nauchno-proizvodstvennyye ob"yedinnlya, pp. 24-25.

74. See the excellent article by John Lowenhardt,"The Tale of the Torch: Scientists-Entrepreneurs inthe Soviet Union," Survey, XX,4 (43) (Autumn 1974),pp. 113-121.

75. Ibid., pp. 117-118.

76. K. Taksir and M. KrasnokutsIriy, "Formy organi-zatsii vnedreniya novoy tekhniki,' Voprosy ekonomiki,1 (1977), p. 50; V. Pokrovskiy, "Novaya tekhnika:Dorogi i porogi," Ekonomicheskaya gazeta_z_ 10 (March10, 1976), p. 10.

77. Taksir and Kr:_snokutskiy, op. cit., p. 50.

78. Shteinbok, "Komu vnedryat'P- 80.

79. K. I. Taksir, Integratsiy.pri sotsializme (Moscow: Zflanlye

novuyu tekhniku,'

ski 1 proizvodstva1975), pp. 47-48.

80. Ekonomika i organizatsiya

248

promyshlennogo pro-

izvodst.a, 5 (1977), p. 160. These difference ofview were expressed in the debate in this issue eLEKQ (pp. 143-146) under the subject, "Komu vnedryat'novuyu tekhniku?" (To Whom Should the Introductionof New Technology Be Entrusted?) This was the titleof Shteinbok's essay that appeared in the journal theyear before. The discussion in the May 1977 issuecontains reactions to Shteinbok's article and callfor specialized introduction organizations for newtechnology.

81. Ivanov, op. cit., p. 7.

82. L. M. Gatovskiy, Nauchno-tekhnicheskiy progressi ekonomika razvitogo sotsializma (Moscow: Nauka,1974), p. 202.

83. "USSR Short Answers," p. 57.

84. Berliner, The Innovation Decision in Soviet In-dustry, p. 271.

85. Zaleski et al, Science Policy in the USSR, p.119.

86. Ivanov, op. cit., p. 8.

87. Berliner, op. cit., p. 493 and Ivanov, op. cit.,pp. 8-9.

88. Berliner, op. cit., p. 488.

89 Ivanov, op. cit., p. 7.

90. Ibid.

91. "USSR Short Answers," p. 25.

9 . Ibid p. 29.

93. P. A. Sedloy, Material'noye stimulirovaniye ra-botnikov za sozdaniye i osvoyeniye novoy tekhniki(Moscow: Ekonomika, 1975), p. 55.

249

2

94. Ibid., p. 56.

95. Orlov, Oplata truda rabotnikov nauki, p. 118.

96. Ya. Kolotyrkin, "0 rezervakh uvelicheniya ot-dachi of nauchnogo potentsiala," Kommunist, 8 (1974),p. 53.

97. A. Kansan, "Pokazateli nauchno-tekhnicheskoydeyatel'nosti VIII, KB, i NPO i proizvoditel'nostitruda nauchnykh rabotnikov," Planovoye khozyaystvo,3 (1976), pp. 133-140.

98. O. I. Volkov, Planovoye upravlenive nauchno-tekhnicheskim proressom (Moscow: Nauka, 1975), p. 157.

99. Dobuzhint.eiy et al, op. cit., p. 12.

100. Berliner, op. cit., p. 200.

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comes not only the key force driving modern societyforward but also a major arena of competition betweenthe world's two opposing social systems. Underlyingthe notion of the STR is also implicit- -and sometimesexplicitrecognition of Russia's relative backward-ness and growing technology gap with the West, espe-cially the United States. As a letter of appeal fromdissident but concerned Soviet scientists to Partyand government leaders in March 1970 noted frankly,with respect to the computer age: "We are simply liv-ing in a different era. The second inch trill revo-lution came along and now, at the onset of the seven-ties, we see that far from having overtaken America,we are dropping further and further behind."1- Thus,a "historic" task facing the USSR today, as definedby General Secretary Brezhnev at the 1971 Party con-gress and reaffirmed by the 1976 congress, is "tocombine organically the achievements of the STR withthe advantages of the socialist economic system, tounfold more broadly our own, intrinsically socialistforRis of fusing science with production. "2

Second, there has also been growing realizationthat the Soviet economy is approaching the limits of"extensive" growth and entering a new era that callsfor more "intensive" methods of development. Declin-ing supplies of manpower and material resources re-quire a basic shift in development strategy and great-er emphasis on qualitative improvements rather thanquantitative increases of inputs as the main sourceof future growth. Already at the end of the 1960s,Brezhnev declared firmly that intensification "be-comes not only the main way but the only way of de-veloping our economy." Moreover, in this approach hetold the 1971 Party congress, "the acceleration ofS&T progress forges into first place both from thepoint of view of current tasks and of the long-termfuture." Premier Kosygin similarly insisted at the1976 congress that without faster translation of S&Tinto production "the economy can no longer success-fully advance along the path of intensification andquality improvement."3

252c

International and domestic pressures have combined,therefore, to make the accleration of S&T progress amajor issue of the 1970s and beyond. Just as he haddefined this to:be the "key task" of economic policyin 1971, Brezhnev also listed it first among the "keyproblems" of the period of the Tenth Five Year Plan(1976-1980). Indeed, the General Secretary affirmed,"In our entire economic development perhaps no taskstoday are more urgent and more important."4

There is also enhanced awareness in Moscow of theneed to raise the quality of R&D planning and manage-ment. No longer can science policy afford to be builton the basis of "subjective evaluations and wishes,"contends V. A. Trapeznikov, a first deputy chairmanof the GKNT. Gvishiani describes as a major task ofthe day, "To put the development of science itself ona strictly scientific basis." Dr. Semyon Mikulinsky,a leading science policy expert, similarly stresses,"The whole point is that science must be brought tobear on the management of science itself."5

Accordingly, there has been a proliferation ofscience policy studies and "research on research" inthe USSR during the lasz decade. Virtually the en-tire social science research sector has been put towork on the problems of acclerating S&T progress. Themain purpose of such studies, Gvishiani notes, is toprovide a strong "theoretical basis on which the fun-damentals of science policy are worked out." Under-lying the growth of the "science of science" movementis an intrinsic belief in and professed need "to studyscience as a controllable system and to attempt a morethorough exploration of the interrelationship of dif-ferent aspects of this system with a view to increas-ing the efficiency with which it functions."

In line with the basic Soviet approach to scienceand technology generally, the dominant emphasis inboth theoretical study and practical policy has beenon the need for a "systems approach." As Gennady Do-brov explains, "More than half a century of experi-ence in the formulation and implementation of SovietState science policy shows that one cannot expect to

253

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have become the key terms of the debate. They pointclearly to the major interface difficulties and de-ficiencies that underlie such an approach in generaland the Soviet R&D system in particular. Behind So-viet thought and action is the hope that "the holesin the whole" can be filled and more effective cou-pling can be achieved in the creation and applicationof new te-1,nology.

INTEGRATING SCIENCE POLICY AND ECONOMIC POLICY

An implicit feature of Soviet thought in the 1970swas the movement towards a broader concept of sciencepolicy and the closer integration of R&D with the to-tality of domestic and foreign policy. Traditional-ly, scientific R&D has been conceived apart from thewider political and economic context rather than asan organic part of it. In fact, science has oftenbeen viewed more as an appendage of social and cul-tural policy than as an aspect of economic policy.Increasingly, however, attention is being given toits status as a direct force of production and keysource of economic growth in the era of the STR. Thefocus is on relating S&T to a much broader range ofnational aims and activities, on the role of R&D insolving contemporary economic and social problems.

In line with this more strategic approach isemphasis on external rather than internal criteriain science policy. By the end of the 1960s Gvishianihad sounded the new line. He noted that R&D planningand management was no longer simply a question of therational planning of science expenditures, of thetraining of scientific manpower, of the allocation c.2resources, or of the supply of scientific instruments."The issue is broader and deeper," the deputy chair-man of the GKNT affirmed,

It is about the future, about the long-termdevelopment of socialist countries, aboutthe very fate of the world and of socialism,

25c

For now only that system can win which isable to assure itself a vanguard positionin scientific and technical progress-8

To phrase the isst.e somewhat differently, the ob-ject of planning has gradually shifted from primarily"new technology" to "scientific and technical prog-ress" more broadly. Prior to the Eighth Five YearPlan (1966-1970), planning agencies operated with on-ly the conc- = of new technology. The notion of tech-nical progress was confined to theoretical social andeconomic literature. Brezhnev himself observed in1971, however, that the demands of the times requireda change of focus: "In an age when the role of sci-ence as a direct force of k:roduction keeps growing,separate scientific achievements, no matter how bril-liant, are no longer the central issue. What is cen-tral," the General Secretary asserted, "is a high S&Tlevel of production as a whole."9

However, there is no consensus in the Soviet Unionregarding the definition of "new technology," "thetechnical development of production," or "scientificand technical progress."1U To a large extent, disa-greements about the meaning of "managing S&T progress"replicates the ongoing disputes about the general con-cept of "management." A semantic jungle exists inboth spheres.11 In essence, the issue is how to makethe concept operational, how to designate the bound-aries of S&T progress--its structure, content, andcomponent elements--as an object of planning. Withouta precise definition it is extremely hard to estab-lish the place and role of the concept in the generalsystem of economic planning and management.12 Acade-mician Fedorenko admits, in regard to the prolem ofmodeling technical progress and its economic, social,and ecological cc%1_;equences, "we are only at the verybeginning cf complex and arduous rese-rch." Signif i-cantly, with the Tenth Five Year Plan a new subdivi-sion on basic indicators of S&T progress was added tothe plan for the development of science and technolo-gy. It represents the first attempt to define somebasic technical and economic parameters characteriz-ing the level of production and the manufacture of

2564. -

output. However, in the words of one high Gosplanofficial, the choice of appropriate indicators re-mains problematic, because "there is essentially noexperience in this area."13

As Kremlin policy makers have focused less andless on R&D as a relatively isolated entity and moreand more on the interplay of R&D with industry, of-ficial Insistence grows that R&D and its applicationsbe closely linked. The aim of policy cannot be sole-ly the expansion of S&T per se or "science for sci-ence's sake" but must include its use as an instru-ment for economic growth and industrialization. "Rel-evance" has become a big issue, if not the fad of theday, as the Soviet leadership seeks greater and fast-

er payoffs from the nation's substantial investmentin scientific R&D. Indeed, a major challenge con-sists in formulating a science policy to promote in-novation, to build an effective strategy of research

utilization. In the early 1970s Brezhnev, in fact,singled out the application of R&D results as themost important but also the most deficient aspect of

S&T policy. "If we examine all the links of the in-

tricate chain that binds science to production, weshall easily see the weakest links are those relating

to the practical realization of scientific achieve-ments, to their adoptioi in mass production." It wasnecessary, the General Secretary stressed, "to createconditions compelling enterprises to manufacture the

Latest types of products, literally to chase afterS&T novelties, and not to shy away from them, figura-tively speaking, as the devil shies away from holy

water."14

Despite the espoused need for more effective cou-pling, however, the integration of science policy andeconomic policy has been slow and difficult to achieve

in practice. In May 1974 the Chairman of Gosplanstill noted, "It is urgently necessary to shift fromthe planning of S&T potential, which is what the S&T

plan is at present, tc planning the mass productionand diffusion of new technology."15 Planning R&D re-

mains geared to the creation of new technology and

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ciency- -and this must be said again and again--is themost importat component of our entire economic strat-egy. In the 1980s accomplishment of this task willbecome especially urgent. "23

Under these conditions, problems of choice, prior-ity, and policy have become increasingly important.In turn, they have fed the quest for relevance andthe driv to weed out unpromising and unimportantlines of research. That much still remains to bedone in this regard, however, is evident from Brezh-nev's remarks to the presidents of the academies ofsciences of several socialist states in February 1977,"But why not admit it," he said frankly. "The live andhealthy tree of science sometimes has dry and evenbarren branches. It still happens sometimes that re-search is conducted in completely peripheral or evenin simply fruitless directions."24

Unfortunately, there are no reliable statisticsthat show the impact of the government pressure fortechnology development and delivery on the actualstructure of R&D expenditures. It apr._77s, hawever,that the commitment to fundamental researc- remainsfirm and that there has been no significant shift offunds away from basic science. Indeed, the budget ofthe USSR Academy, the citadel of basic science, hasreportedly grown faster in recent years than the na-tional budget for R&D as a whole.25

These pressures for economy in R&D and for improv-ing research utilization, in turn, have generated ris-ing interest in cost effectiveness studies. m in-tense search is underway for criteria and ways bywhich to measure the return on investment in new tech-nology. Opinions differ greatly and obstacles abound,however. A number of specialists caution against ad-hering too stringently to economic cost alone in as-sessing new technology. Some stress the need to takeinto account "social effectiveness," as expressed inimproved sccial relations or better working conditions.Similarly, a few champion what is sometimes called"ecological" or "wasteless" technology, such as pol-lution control devices. Adopting yet a different

260. 4

view, others argue that "science is not a lotterywith guaranteed prizes. Many lines of research pro-duce no profit, or at least none measurable in termsof money." There are also some who emphasize thatthe magnitude of the socio-economic return dependsnot only on the result itself, but also on the speedand scale of its application. Many a good scientif-ic idea or engineering solution quickly becomes ob-solete.26

In addition to this diversity of opinion about theefficiency of technology, various procedures havebeen developed for calculating its effectiveness. Un-til recently, each ministry and state committee usedits own method and set of indicators. Without uni-form methodology, however, ar comparative evalua-tion and choice among alternative S&T designs is im-possible. Significantly in February 1977, a unifiedmethodology for the calculation of the economic re-turn of new technology, inventions, and efficiencyproposals was made compulsory for all branches of theeconomy. The procedures contained in the methodologyhad been tested since 1971 in the unified fund minis-tries. However, in spite of the comprehensiveness ofthe methodology and the extensive preparation and ex-perimentation behind it, the individual ministriesare still required to devise instructions for adap-ting it to their own accounting practices and cate-gories of output.27

In general, past procedures for measuring economicreturn have had major deficiencies. The anticipatedeffect has been systematically exaggerated, and theactual return is not properly considered or monitored.In fact, no statistics are kept in -zhis regard. The-Iystem of 'ncentives is also pegg,d to the calcula-ted return: Not surprisingly, therefore, Lev Gatov-sky, a prominent authority on the subject, confirmsfrankly, "Up to now the economic effectiveness of newtechnolog has not been a leading principle in econom-ic managemon.t or an object of planning."Z8 V. S. Ta-

rasovich and Yu. B. Kliuka add,

261

Calculations of effectiveness, as a rule,are made only after basic work is completed,that is, when expenditures have already beenmade and time and resources are spent. Con-sequently, these calculations essentiallyare directed not to substantiating the ex-pediency of conducting work but to the 'just-ification' of costs already incurred."29

At a national round table on S&T progress, held inMoscow in the fall of 1975, it was noted that thedominant engineering thought of the country remains:"I create technology and leave the effectiveness ofproduction to others."30 Thus, much remains to bedone before substantial progress can be made in ziov-

ing towards an intensive mode of growth and beforean effective strategy for using S&T can be worked out.

ACHIEVING ORGANIZATIONAL FLEXIBILITYAND INSTITUTIONAL RESTRUCTURING

In seeking ways to improve effectiveness of R&D,Soviet analysts and policy makers have begun to thinkseriously, really for the first time, about Organiza-tion. Basic concepts related to organization and thestructural requirements of technical progress are be-ing reexamined and revised. A relatively stati7 viewof organizational structure as an immutable given !.sbeing replaced by more dynamic conception of orgaization as a set of complex variables about whizh c

siderable choice can be exercised.

Organizational design itself is becoming recog-nized as a distinct and important area of expert anal-ysis and management specialization. To be sure, therehas long been a penchant for organizational engineer-ing. Almost by reflex the remedy for any prcr)lem hasbeen "to reorganize " - -of ten without organization stud-ies. Until recently, the political commaad simplydid not see any need to do anything abut organiza-tion, to think about organization, much less to thinx

262

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Sheinin also notes that many R&D institutions "izon-tinue to exist largely by inertia, become preoccupiedwith far fetched of secondary problems, and avoid newdirections and new questions, becoming ends in them-selves. "37

Two major organizational deficiencies in scienceand technology come in for particular criticism. Thefirst is the relative rigidity and bureaucratic char-acter of R&D institutions. E. I. Gavrilov faultsthese organizations for "their slow response to chang-ing goals, tasks, and projects, their incapacity forextensive integration and cooperation, and their in-effectiveness in resolving scientific and productiontasks." V. N. Arkhangelsky sees the main weaknessesof R&D structures as their "static quality" and "or-ganizational exclusiveness." In the same vein, Mi-kulinsky writes, "New lines of research find it everharder to find their place within the fram-=work ofestablished collectives and crystallized organiza-tional forms." Gvishiani, too, speaks about sciencehaving "a surplus of stability and in some instanceseven of conservatism.' One of the main demands be-ing made on science, he stresses, "is that it shouldbecome much more flexible and laobile and capable ofmuch easier and faster reorganization and even of to-tal restructuring, when the need arises."38

At the same time, organizational change is recog-nized as being a formidable task. Gvishiani himselfadmits, "It is extremely hard to recast the structureof a scientific establishment that has taken decadesto shape." In practice, it is easier to create a newR&D facility than to transform an old one. This op-tion, however, which has been frequently used, isless viable today given the constraint.; on resourcesand need for intensive de relopment of both scienceand industry. Moreover, restructuring involves build-ing organizations that are not only more fluid but al-so both flexible and stable. Yet finding the -ighr_blend of adaptability and stability is the "ma_ dif-ficulty" in the organization of Soviet S&T today,Gvishiani emphasizes." The deputy chairman of theGKNT and others also acknowledge that the major prob-

2663

lams in restructuring frequently revolve around theinability and unwillingness of scientists and engi-neers to switch from one field or project to another.The creation of large integrated research and pro-duction complexes requires a corresponding psycho-logical remolding of collectives which are used toworking in isolated groups. 40 In short, institution-al restructuring involves considerable behavioral en-gineering and attitudinal change. The organizationalissues, therefore, go beyond strictly structural andtechnical factors, a point that some--but not all- -organizational reformers and "enthusiasts" realize.

The second major deficiency concerns the organiza-tio--1 dissociation of R&D participants and the se-vere coupling problems that this creates in movingideas from the lab into use. The traditional ap-proach to innovation, based upon extreme functionalspecialization by institutional performers, has leftthe process structurally fragmented and shapeless.Structural barriers have been created all along theinnovation chain. In essence, the process has beenunorganized and unmanaged.

To overcome this fragmentation, special emphasisis now being put on the need to apply a systems mod-el of organization to innovation. Virtually everymajor writer on science policy in the 1970s, in fact,joined--if not led--the burgeoning systems movementin the USSR today. Because it focuses attention oninterrelationships, interdependencies, and integra-tion, the systems approach is regarded by many to bea viable conceptual framework for analyzing and solv-ing structural design problems. Its emphasis onstudy of organization of the research-to-productioncycle as a total system is new and underscores theemerging broader view ,.-:-.f organizational structure asa means of facilitating decision making, motivation,and control. The application of a systems modeltransforms the innovation process allegedly into "aunified and self-regulating dynamic system." The re-search cycle becomes "a continuous and goal-dixectedprocess."41 Recent organizational policy alms, then,at making the process both managed and manageable.

267

Practical manifestations of the systems approachto organization are seen in the variety of integra-ted structures and new associational forms linkingresearch, development, and production activities thathave arisen in recent years. Research and productioncomplexes have indeed become a pLenomenon of thetimes. Regional R&D centers, modeled somewhat afterAmerican research and industrial parks, have sprungup in a number of areas and joia industry and educa-tional institutions or academy institutes and exper-imental production facilities.

Wrestling with the problems of innovation, Kremlinauthorities have become increasingly aware of the im-portance of linkage and of the need to structure moreexplicitly and effectively the vital interfaces inthe transfer process. Accordingly, linkage is a prom-inent feature in the designing of new structures ormodification of established arrangements. The searchfor more effective and flexible designs has also ledto rising interest in project and matrix forms of or-ganization and management. Indeed, the matrix modelis seen by some analysts to be the ideal structurefor R&D in the future. It is regarded as an effec-tive way of institutionalizing flexibility and sta-bility. 42 At present, however, matrix organizationis still used on a limited and experimental basis incivilian R&D. Nonetheless, current organizationalthe .ght, at least in some prominent Soviet circles,poir.ts to an expansion of the matrix and of othershapes for R&D management in the 1980s.

In sum, a new and more sophisticated style ofthinking about organization and the structural re-quirements of technical progress has recently devel-oped in the USSR. New attitudes and approaches areemerging as the leadership begins to address some ofthe fundamental structural problems impeding S&T per-formance and capacity. Both foreign and domestic ex-perience have cunvinced some sr-ments of the rulingelite that "the management structure of economic or-ganizations should be designed no less carefully thannew technology," according to Georgy Arbatov, Direc-tor of the Institute for the Study of the USA and Can-

268

ada.43 Monolithic organizational perspectives aregradually giving way to multi-institutional viewsas the Kremlin seeks to cope more effectively withadvancing techn:Aogy and complexity.

To be sure, practice lags behind conceptual ad-vances. V. A. Trapeznikov of the GKNT admits thatin structuring and managing large complexes and or-ganizational SST systems "we are essentially only be-ginning wrrk."44 Organizational experimentation andstructural change have been limited. Nonetheless,the leadership appears increasingly serious abouthelping make organization itself a positive force for,rather than impediment to, innovation. Given theheavy emphasis on organizational issues and approach-es, in fact, the kf.; to innovation seems, at times,to be simply "management by structure." In any case,it is important to note that the basic buildingblocks are beginning to assume new shapes. Integrat-ed research and production complexes are coming intobeing. Organizational arrangements are being repat-terned and authority lines recycled. The Soviet S&Testablishment is in motion and in transition.

IMPROVING PLANNING AND RESOURCE ALLOCATION

There is also enhanced awareness of the complexityof planning and stimulating S&T progress. Some ofthe shortcomings and disincentives of the planningsystem with respect to innovation have become steadi-ly apparent, as has also the need for greater initia-tive and use-,--stimulated innovation in R&D. "We can-not divide the 'plan-stimulation' formula into twoparts and subordinate one to the other," some spe-cialists argue. "We all realize," they add, "that itis impossible to solve the whole problem by movingjust one lever alane."45 Thus considerable attentionwas given in the last decade to strengthening therole of "economic mechanisms" (e.g., prices, credit,profitability) and of various incentive schemes inpromoting scientific research, development, and de-livery.

269 s._

The dominant approach to S&T policy, however, re-mains fundamental] -- management-centered rather thanentrepreneur- Gr market-centered. V. M. Ivanchenko,an official of the USSR Gosplan, expresses the pre-vailing view: "If_ is impossible to transfer problemspertaining to she acceleration of S&T progresseconomic levers and stimuli alone." The predilet, Drtfor central planning persists. The commitment tocentral planning remains firm. Indeed, it is said,"The management of technical progress needs to becentralized more than any other area of economic man-agement." The national economic plan proper, conclud-ed the recent round table of experts, "must be themain link that we must grip in order to pull the en-tire research-to-production chain . "46

In the sphere of SST planning, attenton has fo-cused largely on two needs: long-range forecastingand planning geared to the ultimate utilization ofresearch results; and :ore integrated program-typeplanning and effective project control. To meet thefirst need, Soviet authorities have pressed the cam-paign to extend the horizons of Planning beyond theprevailing short-term incremental mold in order toaccommodate the kind of decision making and long leadtimes inherent in the development of science and tech-nology. For all prac:.:ical purposes, Soviet economicplanning is an annual matter. The dominant tendencyis to plan "from the achieved level." The expansionof existing production patterns prevails over thedevelopment and introduction of new products and pro-cesses based upon S&T. As a result the plan for S&Thas remained largely "an appendage of the generaleconomic plan, an independent chapter insufficientlyintegrated with the whole."47

Significantly, in 1971 Brezhnev st_essed ':_hat anew approach was needed to make the macroeconomicplan a powe-.rful lever of S&T progress, to ensue therational managelLant of both economic -owth and -ewtechnology. He called for t..e formulation of a com-prehensive program for the development of science andtechnology that could th,,I be used as the basis uponwhich to build a 15 year general economic development

I4 270

plan. Such a program, he told the Party congressfive years later, "provides points of reference andorientation without knowledge of which it is impos-sible to manage the economy successfully .48

Since 1973, in fact, work on such a general devel-opment plan that would extend to 1990 has been under-uay. Given the tremendous and recurring difficultiesthe leaders have in trying to devise even t%;risiblefive year plans, however, it is no wonder that suchlong-range planning has e4countered stiff resistanceand serious methodological obstacles. The Academyand the GK TT completed a partial draft of a "Compre-hensive Program of S&T Progress and Its Social andEconomic Consequences for 1976-1990" by the fall of1975. Indicalp that this effort did not yet meetwith full approval, the Part: Congress in February1976 instructed the Academy and the State Committee"to continue" work on this subject and "to see

tr it" th. the forecasts "are better grounded."49Prepa ation of a general 15 year development planfor the country continues to encounter delays anddifficulties.

Though we still know very little about the detailsof the Comprehensive Program for S&T, it is possibleto glimpse from available information at least a fewof the central concerns surrounding this endeavor. Ingene:al, the more than 150 forecasts prepared for var-ious fields of science and technology before drawingup the Comprehensive Program were only partial fore-casts. They focused on the development and productionof only a few select products and processes. In ad-

dition, eacu forecast was developed predominantly ona branch basis, separate from the rest in materialand labor resources. The lack of a "systems approach"to planning and resource allocation admittedly dimin-ishes the value of the forecasts.50

Particularly significant, the major projects in-cluded in tZle Comprehensive Program are based onlyupon SETT achievments that have already found prac-tical application. "This reduces, of course, the

271

possibilities for technical progress posed in theComprehensive Program but, at the same time, makesthe general targets and indicators realistic and re-liable," cia.;_ms a study produced by the Higher PartySchool under the CPSU Central Committee.51 Nonethe-less, there are P.ome, like A. S. Gusarov of the Acad-emy's Institute of Economics, who disagrees with thisapproach to planning, uncertainty, and risk. He em-phasized at the 1975 round table, "After all, we mustbe concernd.d not only with mastering the experiencethat has been amassed in the course of SST progress,but also with mastering the ongoing revolution inscience and technology." Gusarov and others apparent-ly fear that this conservative approach to buildingthe future entirely on the accomplishments of today,no matter how high, will only lead to "planned obso-lescence." As a recent major Soviet work on sciencepolicy put it, such planning amounts essentially to

backwardness, not progress."52 It alsodoes not constitute a viable strategy for closing thetechnology gap with the West. On the contrary, itcarries the possible danger that the USSR will falleven further behind. As Gusarov observes, "After all,it is possible to lag even while moving forward."53

To meet the second need, continuing emphasis hasbeen placed on broadening the application of a "pro-grammed-goals approach" to planning and management.A kind cf "programmitis" has gripped the Kremlin asmany have fastened on this management-integrativetool with high hopes of solving the mounting problemsof complexity and change. Its use is being urged formajor construction projects, like the territorial-production complexes being built in Siberia, CentralAsia, and the Far East, as well as for large-scaleR&D programs. Calling for comprehensive programscentering on key scientific, engleering, economic,and social problems, Premier Kosygin at the 1976 Par-ty congress singled out as priority tasks the devel-opment of the nuclear power industry and the mechan-ization of manual and heavy physical labor. A. P.Aleksandrov, President of the Academy of Sciences,suggested that the modernization of agriculture and

272

development of computer technology be raised to thisspecial national program status. Brezhnev, on theother hand, stressed to the congress the importance

formulating comprehensive programs for the devel-opment of the fuel and power complex, metallurgy, andthe leading branches of machine building.

As regards science policy specifically, movementtowards -rogrammed-goals planning is most evident inthe switch from "coordination plans" to "integratedprograms" for high priority S&T problems. The numberof basic problems has also been reduced to around 200.Much more than before, the accent is on the actual in-troduction of R&D results into the economy, on inte-grating science, technology, and production. Thisfollows Brezhnev's own stress at the 1976 congresson the nc d to focus planning and management more on"end results." "This approach becomes especially ur-gent," he explained, "as the economy grows and be-comes more complex, when these end results come todepend more and more on a multitude of intermediateunits, on an intricate system of intrabranch and in-terbranch ties." "In these conditions," Brezhnev in-sisted, "It is easy to overlook the most importantthing--the end results."54 Scientific R&D has inparticular fregt ntly been caught in "the activitytrap," when activities become an end in themselvesaad their end results are lost to sight. As we havenoted, even the coordination plans for priority S&Tproblems have tended to end with the experimental de-sign and testing stage and, in exceptional cases,with the production of prototypes. For all practicalpurposes, the planning process has stopped short ofseries production. Scientific R&D thus has failedto produce substantial practical results, to followthrough to industrial assimilation. Suffice it tonote that another important aim of the new integratedS&T programs is to facilitate more effective coordi-nation of R&D plans with investment plans and withthe allocation of material and technical resources.Thus, the change in planning involves more detailedcontrol and managerial surveilla'ce, not just the in-troduction of R &D results.

273

Underlying this heavy accent on the systems ap-proach to planning is the need to deal more effec-tively with major interbranch problems that cutacross ministerial lines. Brezhnev particularlycomplained to the 1976 congress about too many"nursemaids," about the fragmentation of decisionmaking and administration, leading to unwarrantedcost overruns and protracted delays. "What r:quired here," he told the congress, "are integratedand centralized programs embracing all stages ofwork, from project design to practical implementa-tion." Lending his support to the systems movement,the General Secretary charged that "the question of

improving the methods of solvinc major interbranchand territorigl problems of state importance cannotbe put off."5' M. P. Ring, a prominent science pol-icy expert, also emphasizes that the Soviet govern-ment cannot continue to solve major complex S&T prob-lems incrementally "by pieces," and by means of ter-

ritorial and branch planning alone. Such a policy

leads to "slow, incomplete, and insufficient solu-tions."56

It is important to mention again that, despite the

long tradition of central e-onomic planning, Soviet

authorities have lacked unt relatively recently the

necessary organization, techniques, authority, and

exp4rience to plan and manage R&D on a comprehensive

level. This is particularly true for the civilian

sector with the exception of a few crash development

and high priority programs, like chemical technology

or atomic energy. Planning of R&D has been--andstill predominantly is--conducted on an institutional

basis. Given the extreme functional specializationof institutional performers and the structural frag-

mentation of the innovation process, it has not been

possible to plan and manage projects within theframework of one or two organizations. A major aim

of the drive to create large research and production

complexes is to build an organizational basis for

broader program planning. Such structures permit the

development and use of more sophisticated techniques

of systems management and project control.

274.)

Thus, systems planning and programming is seer bymany to offer a remedy--if not a panacea by which toovercome existing deficiencies. But experience re-mains limited in this area. As Academician T. S. Kha-chaturov, editor-in-chief of the main Soviet economicjournal, cautioned the 1975 round table or S&T

"This is indeed an enticing prospect, but towhat degree has the ground been laid for program-in-tegrated planning?" Indeed he reminded them, "It isappropriate to remember that work is only now begin-ning on questions pertaining to planning based on com-plexes and programs."57 There are still many unre-solved issues not only about programming per se butalso about how to fit programming techniques into thegeneral system ,:)f Soviet planning. The issues hereare far from purely methodological.

RAISING MANAGEMENT EFFECTIVENESS

Problems of choice, priority, and policy are,above all, management problems. Indeed it is possi-ble to say that managezent has emerged as the "cen-tral issue" in Soviet science policy and developmentstrategy today. A. V. Sobrovin of Moscow Universityexpresses the prevailing official view: "The problemof technical progress is first and foremost a ques-tion of management."58 In June 1970 Brezhnev ob-served, "The solution to many of our economic prob-lems should now be sought at the junctures betweenprogress in science and technology and progress inmanagement."59 Gvishi-lai writes similarly:

It is no exaggeration to say that the paceof our advance hinges on organization andcapabilities in the system of management.Fusion of the latest achievements in scienceand technology with the most up-to-dateachievements in organization and managementis an imperative of the contemporary STR.60

275

2

Growing appreciation of the critical role of man-agement, in curn, has brought enhanced awareness ofthe need for more effective R&D administration. So-brovin says frankly, "Let us build a modern system ofmanagement of technical progress. If we do not dothis, we will accomplish nothing. '161 Stating whathas since become a slogan of the times, Brezhnev de-clared in June 1970 that "the science of victory inbuilding nmmunism is in essence the science of man-agement."° The linchpins of his grand strategy havebecome the "management of science" and the "scienceof management."

A critical "management gap" therefore is an inte-gral part cf the perceived "technology gap" in theUSSR. Soviet authorities have come to recognize moreand more that the existing technology of managementis increasingly inadequate in coping with modern R &Dproblems. Innovations in planning, organizing, andcontrolling activities have lagged along with advanc-es in technological hardware. There exists a newlevel of awareness of the need to develop and to ap-ply modern decision-making techniques and managementattitudes toward S&T policy. Indeed underlying theseconcerns, it seems, is the idea that perhaps the fast-est and most effective means of overcoming Russia'stechnological backwardness in modern hardware isthrough a great leap forward in "software" and man-agement know-haw.

Again, as in organization and planning, the majorproblems in management lie in the fragmentation ofR&D decision making and administration. This resultsin poor direction and integration of effort--theheart of management functions. Integrative capabil-ities are, moreover, becoming increasingly importantin S&T policy. "The problem of ensuring continuityof the process at every stage of R&D, including theintroduction of results into mass proe'action," writesGvishiani, "is now being brought to the fore as themost complex organizational task. It is absolutely ob-vious that this process requires integrated manage-ment." Professor G. Kh. Popov, Dean of the Economics

276

Faculty at Moscow University, also notes, "Today vir-tually all questions of any importance--and above allthe key problems of S&T progress--have become inter-branch in nature." "This is why," he explains, "im-provement of the mechanism of interbranch coordina-tion is one of the core problems of management." Asregards this problem, Politburo member M. S. Solomen-tsev, who is also Premier of the Russian Republic,acknowledges flatly, "There is nothing of greater ur-gency."63 Indeed, the administrative machinery en-counters its greatest challenges in dealing with com-plex S&T problems. At a time when the importance ofthis class of management problems is rising, the de-ficiencies of the existing system of coordination arebecoming all the more apparent.

Official concern with surmounting these shortcom-ings provides, in fact, the impetus behind the grow-ing systems movement in the Soviet Union today. Sys-tems technology is fast becoming the final word inprganization, planning, and management as the leader-ship seeks more effective methods of integration and:ontrol.

Taken together, developments in the areas of or-omization, planning, and management indicate, to aLarge extent, the efforts being made to bring space-age management perspective and technique to the Krem-lin. The current emphasis on setting objectives, de-'eloping action plans, determining the means to ac-:omplish them, and appraising performance on the ha-;is of results is the essence of modern management.Mille "programmed-goals approach- is basically Soviet-;tyle "management by objectives," "results management,"and "systems planning, programming, and budgeting," toIse equivalent Western terms. Much like leaders of:amplex organizations the world over today, in gov-rnment and business, Brezhnev and company are at-:empting to use these tools to improve managerial)erformance and effectiveness as well as to ensure'arty control.

In the organization of management, two problems in>articular are being singled out. The first is the

277

need to separate strategic and coordinating functionsfrom operating management and control. The failure ofexisting management structures to incorporate andmaintain this division of tasks has caused them "tofreeze the development of technology and the effi-ciency of production," writes Milner. In practice,both strategic and operational functions are concen-trated at the highest levels of management. Conse-

quently, the command channels become overloaded asproblems are constantly referred upward. Top execu-tives become absorbed in current operations and di-verted from strategic concerns.6'

Second, there is need to formalize and expand hor-izontal patterns of management as well as to combinevertical and horizontal channels of administration.Integration can take place only at the apex of theorganizational pyramid. Thus, top management becomesheavily involved in securing horizontal joint actionsand coordinating goal achievement by various func-tional units at lower levels. Again the result isthe overload described above and the failure of or-ganizational leaders to conduct strategic planningand decision making for the future. At the same time,the nur.ber of complex problems demanding team workand joint effort is growing daily. Numerous attemptshave been made at plants and associations to createspecial bodies responsible for coordinating and har-monizing lateral ties at all levels of management.However, they have proven to be ineffective, Milnerpoints out, "because they try basically to adapt theline and staff structure to solve tasks for which itis not suitable." Such problems can be solved mosteffectively, he adds, "within the framework of a spe-cial structure, one that cooperates with a line andstaff structure, supplements it but is not identicalto it."65

Basically, the Scviet structural response to theseneeds has followed closely the pattern of organiza-tional and managerial adaptation in the United States.During the 1960s many American business firms foundthat well-known and well-tested structural designs

2784')

and management shapes were inadequate in coping withcomplex problems of advancing technology. They facedmany of the same pressures and design problems thatpreoccupy the Kremlin today. Similarly, interest inthe design of strategic planning systems mushroomedas ways were sought to free top executives from oper-ational worries. Differentiation and integration:oncepts were applied to structural design to achievegreater organizational flexibility and management ef-fectiveness. Additional managerial roles were creat-td to provide horizontal coordination across function-

lines and vertical flows of authority. Among themost important structural innovations to emerge out)f the 1960s were project management and matrix or-paniz,lion.

Significantly, these same two concepts lay at themasis of Soviet structural refinements and managerial:eforms in the 1970s. According to Milner, tr.,.;_,y pro-ride for "a flexible and dynamic system of interfunc-:ional coordination and subordination of diverse ef-!orts of individual links for accomplishing set ob-iectives."66 "Project teams overcome intraorganiza-:ional barriers and therefore avoid the basic contra-Lictions of a functional structure," writes Taksir.67E. E. Drogichinsky notes, "In the matrix structureare optimally combined vertical and horizontal flowsf leadership, the management of current productionnd scientific research, the development of new tech-nology and retooling for manufacturing new productsrithout violating the rhythm of production."68 Theain advantage of matrix organization, Gavrilov ex-lains, is that it makes possible the transfer ofperational management to lower levels and thus per-Its top management to step out of day-to-day deci-ion making and to concentrate on strategy develop-ent.69

Accordingly, the concepts of project and matrixanagement are beginning to find application in theevelopment and introduction of new technology in theivilian sector. Science-production associations inarticular have become crucibles for experimentation

279

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STRENGTHENING THE BONDS OF MOTIVATION

The motivational and collaborative issues left un-attended by previous approaches to innovation are al-so receiving greater attention today. On one level,efforts have been made to strengthen the role of eco-nomic stimuli. Some specialists feel, in fact, thattoo much emphasis is being placed on this direction.According to Gusarov, "Essentially the system of stim-ulation has been reduced to a system of material in-centives, and this is not correct." Others argue,"We must not fear the creation of large incentivefunds at enterprises producing high quality products:they pay for themselves entirely by eliminating los-ses due to low quality production."73 New incentivefunds have been established at R&D organizations, andsteps have been taken to tie the funding and awardingof bonuses more closely to the return that R&D re-sults yield the consumer and the economy. A numberof experiments are also underway that seek to relatesalary levels to productivity and to the results ofwork of research personnel.

In general, though, there remain a number of trou-blesome and unresolved issues surrounding this wholequestion. Yu. V. Borozdin notes, "The fact of thematter is that to date there is still a certain gapbetween the system of planning, the system of incen-tives, and the system of price formation." The award-ing of incentives is based upon faulty and obsolete(1968) methods of pricing new products and of equallyineffective and outdated (1961) methods of determin-ing economic return on new technology. Two systems ofincentives still exist at production enterprises: oneis geared to the fulfillment of basic economic activ-ity and the other to the application of new technol-ogy. Not only do the two frequently contradict eachother, but the latter system, according to M. I. Vol-kov, "is easily overshadowed" by the former. LevGatovsky similarly writes that the stimuli for newtechnology cannot serve as a real "counterweight" tothe rewards for basic production. "Methods of cost

283.

accounting, the evaluation of economic activity, andthe system of material incentives are too little ori-ented toward national economic effectiveness based onS&T progress," he affirms.74 Despite the strong ac-cent since the late 1960s on the importance of accel-erating innovation, in fact, the relative share of in-centive funds for applying new technology compared tothe bonuses for fulfilling basic production targetshas actually declined over the years.75 Writing inthe Academy's economic journal in May 1977, Gatovskyasserts that the innovating enterprise still findsthat it does not occupy an advantageous and privilegedposition. On the contrary, this is still held by en-terpri3es producing old and obsolete technology.76

In addition, the development of a unified incen-tive structure has been a special problem at all lev-els of the administrative hierarchy. Just as in R&D

planning and management generally, divided authorityand fragmented administration have been the rule in

this sphere as well. Only recently have a few min-istries switched to a system of unified funds forplanning and stimulating the research-to-productionprocess within the branch as a whole. Only in 1976

were guidelines laid down for the science-productionassociations on the formation and utilization of uni-

fied incentive funds. Previously, the central man-agement or head organization of the NPO lacked au-

thority to redistribute assets, investments, andfunds of the constituent units. Each subdivisionformed and spent its own fund for material incen-tives, and the NPO did not have any right to these

funds. As a result top management could not utilizethese resources or part of them as an economic in-strument. The absence of unified funds and uniformrates for bonuses has prevented NPO' from using mon-etary incentives to ercourage association mc_bers to

pull in the same direction. A similar problem existswith respect to the use of incentives across minis-terial lines to stimulate interbranLh R&D. ScientificR&D organizations receive deductions for their mater-ial incentives fund from profits of individual enter-prises only in their own branch. This dampens their

282

29r

interest in doing work of an interbranch character.At present there are no procedures that permit aneasy transfer of bonus and wage funds, capital in-vestments, and material resources from one branchto another to stimulate organizations, regardlessof their departmental affillation.77

On another level, strong emphasis has been placedon strengthening motivational bonds through the cre-ation of a unifying goals framework. This tendency:o view questions pertaining to incentives through:he prism of the plan is in keeping with the basic:e"i.tralized approach to S&T policy. Because the re-;earch-to-production process has basically lacked artLntegrating goals structure, the focus has not beenon final results and overall integration but onparate functions and individual work efforts per

in isolation from one another. Coupling hz.seen loose and disjointed. Individual and institu-tonal participants are not fully aware that they.re involved in a connected process. The whole ac-ivity chain moves through different links withouthe integrating force of common purpose and sense ofeamwork.

Through more explicit use of a goals-oriented sci-ace policy and purposive technological innovation,he leadership is trying to build a more effectiveramework for cooperation and interorganizationalcollaboration. The accant on objectives and end re-alts in programmed-goals planning and systems man-gement approaches currently in vo1ue is designed toalp build commitment and common purpose that canIse structure and people in joint action. Throughsearch and production complexes and associationsle authorities hope to reshape the attitudes of R&D?xsonnel and to create a coincidence of interesticing all participants in the smooth and rapid trans-:r of technology. Instead of being guided by itsin special interests and parochial views, each unitto be motivates by common objectives, by "only one

onAcept: ours." The new complexes are seen as meanswhich to transform 'awkward external cooperation

283 2(4 7

into harmonious intrafirm cooperation."78 Such inte-

grating structures are expected to build a more ap-

propriate climate for innovation and to help get

needed team play. Indeed, the Russian term most fre-

quently used 'o describe these complexes and associa-tions--obedineniye--cnmes from the verb "to unite" or

"to join." It captures the explicit design emphasis

on integration and cooperation.

To be sure, efforts are being made on a variety

of fronts to strengthen motivational bonds all along

the research-to-production cycle. Current approaches

focus almost entirely on the creation of positive in-

centives to promote and reward innovation. Little

attention, much less emphasis, is being given to the

creation and use of negative incentives or sanctions

that punish non-innovative tehavior, such as are pro-

vided by a competitive market economy. In general,

though, motivational bonds are difficult to assess

until these is greater knowledge and understanding

of the nature of anti-innovation attitudes and re-

sistance to new '_echnology in the Soviet Union. In-

deed, this point was made by Sobrovin at the 1975 na-

tional round table on S&T progress: "We still do not

know the reasons for the slow introduction of S&T ad-

vances by enterprises, and hence we do not know the

objective base for searching for new forms and meth-

ods of stimulation."79

SCIENCE POLICY REFORMS:A BALANCE SHEET

Following Soviet S&T policies over the last de.:ade,

one is struck by a number of features. First, the

growing sophistication of research and analysis in

this area is amply evident. Important steps are be-

ing taken to advance understanding as a first step

toward improving the practice of scientific R&D. The

proliferation of "research on research" has lee, to

greater awareness of the multiplicity of factors in-

284

volved in moving ideas from tae laboratory into use,along with greater appreciation of the importance ofeffective coupling throughout the process. Nonethe-less, understanding of the innovation cycle remainsincomplete. Many questions still lack adequate an-swers; some important issues have not yet even beenraised in the literature.

At the same time, practice Conti:::ues to lag appre-ciably behind perception. Just as in modern technol-ogical hardware, so also in made= software the im-plementation and diffusion of innovations in R&Dplanning and management remains a critical problem.Indeed, the ongoing science policy debate is rp.Letewith complaints that progress in introducing its

is slow. Brezhnev observed at the 1976 congress,"Theimprovement of planning, the restructuring of sheeconomic mechanism, and the policy of intensifyingproduction proceeded slower than planned." He par-ticularly lamented, "Despite the fact that this ques-tion was raised repeatedly and insistently, the ap-plication of SST achievements is still a bottleneckin many branches.,30 Even more outspoken is L. A.Vaag of the State Committee for Science and Technol-ogy, who told the national round table on S&T prog-ress in the fall'of 1975, "Five years have passed andthere have been no major changes."81

Though the Kremlin's new strategy for science andtechnology stresses the need for a total systems out-look and approach to remedy the problems of incom-plete planning and disjointed administration of R&D,reforms themselves have been adopted in a piecemeal,experimental, and incremental fashion. Despite somesteady gains made in the 1970s, a great gap persistsbetween the aspirations of Soviet authorities forcomprehensive and coherent S&T policies and theirabilities to implement these wishes. In short, theKremlin's reach still exceeds its grasp in this pol-icy sphere.

The two systems for guiding S &T progress stillprevail, and opinions continue to differ over how to

285

improve and how to integrate them. The basic system

of economic planning and management is oriented to-

ward the expansion of production and today's technol-

ogy, while the supplementary system is concerned with

the planning and management of R&D toward the tech-

nology of tomorrow. For the most part, the target of

attention and action has been the supplementary sys-

tem. This prompts Vaag to exclaim, "We must think of

improvements in the basic system and must not confine

ourselves to improving supplementary systems for the

stimulation of S&T progress."82

At issue is largely the role and future of the

supplementary system. On one side are those who ques-

tion the need to improve and to preserve this second-

ary line of influence. For them the central issue is

making the basic system work for science and technol-

ogy. If the economy as a whole is not altered to in-

spire and promote technological innovation, then im-

provements in the supplementary system, no matter

what, will be of no avail. If the fundamental work-

ings of the economy can be so modified, then a sup-

plementary set of S&T mechanisms will be unnecessary.

On the other side, there are some who focus almost

exclusively on improving the latter machinery. They

tend to inflate its role in and potential for accel-

erating S&T progress while downplaying the need for

general system reorientation and change.

A middle position on this issue is held by Profes-

sor Popov of Moscow University. His views also prob-

ably represent the majority opinion among the Soviet

ruling group at this time. Given the complexity of

science and technology under modern conditions, Popov

contends that it is necessary to retain, even in the

future, two channels of influence. In describing the

specific task of the supplementary system, he draws

an analogy with modern aviation. Just as some ad-

vanced aircraft require an initial booster engine in

order to accelerate to a certain level before the

main engines cut in and take over flight control, so

a modern economy needs a supplementary booster sup-

port system for the development and acceleration of

286

science and technology. This secondary system of spe-cial mechanisms for R&D planning and management canfulfill its role only when it is closely integratedwith and subordinated to the basi,; links of economicmanagement. "It is impossible for his supplementarysystem alone to solve all the problems of managingS&T progress," Popov emphasizes.83

While everyone generally agrees that both the ba-sic system and the supplementary system need to beimproved, there is considerable dispute about what toimprove and how. According to Popov, it Is possibleto identify three main schools of reform. One groupfocuses on improvements in planning, the search forbetter indicators, more sophisticated analytical tech-niques, etc. A second favors structural approachesand organizational solutions. A third school empha-sizes the importance of improved economic mechanisms,such as more effective material incentives, betterpricing policies, integrated financing, etc. The"best" policy, in Popov's opinion, is to pursue im-provements along all three avenues, to unite all linksof the supplementary system, and to integrate thissystem with the basic econ:,wic mechanism. Indeed,this multi-dlnuamsional approach has been generallythe path of reform in recent years.

On a broader level, developments in the 1970s con-firm that in the Soviet Union, as elsewhere, the for-mulation and implementation of science policies de-pend not only on their substantive effectiveness buton their political feasibility as well. Suffice itto say that substantial disagreement persists withinthe leadership about the intensity of the "technolog-ical imperative." Opinions differ over the urgencyof making the transition to more intensive growth ingeneral and more rapid technological advance in par-ticular. Political differences and conflict amongthe major elite groups constrain action in this pol-icy sphere. Indeed it is politics that accountslargely for the basic discrepancy between the es-poused strategy for S&T with its emphasis on the needfor a systems perspective and approach to problem-

287

solving and the tactics of implementation which rec-ognize the need for a cautious, experimental, and in-cremental mode of reform.

At the same time, it is inaccurate to attributethe slow pace of science policy reform simply or sole-ly to bureaucratic resistance and political conser-vatism, The responses of Soviet leaders to the man-ifold problems at hand appear to be based on a morecomplex calculus of decision. Not only do they rec-ognize some of the fundamental and not just politi-calconstraints at work in the Soviet system. Theyalso are more aware of the complexities of modernscience, technology, and development. To be sure,some still cling to the hope of simplistic solutions.But solutions to complex problems are themselves usu-ally complex. While this is not always understood,some Soviet specialists and political leaders arefully aware of the difficulties of effecting organi-zational and behavioral change. Milner himself ar-ticulates well the basic dilemma that confronts So-viet policy makers in science and technology as theUSSR moves into the 1980s. There is no doubt, hesays, that modern systems approaches and more sophis-ticated techniques make R&D planning and managementmore. difficult. They bring it "into a new class, in-to a new situation." "But it is not possible by anyother way," he emphasizes, "to solve the new and com-plex problems of development of the national economy,which have no precedent in our past experience."84Perhaps the greatest stride in contemporary SovietSST policy has been the discovery that there are nosimple or final answers to the problems of advancingtechnology and change.

FOOTNOTES

1. See Andrei Sakharov, Roy !fedvedev, and V. F.Turchin, "Letter of Appeal of Soviet Scientists toParty an:: Government Leaders of the USSR," March 19,1970, reprinted in Survey, No. 76 (Summer 1970), pp.161-170.

2. AXIV S"yezd KPSS: Stenograficheskii otchet(Moscow: Politizdat, 1971), I, p. 82 and XXV S"yezdKPSS: Stenograficheskii otchet (Moscow: Politizdat,1976), II, p. 237.

3. L. I. Brezhnev, Ob osnovnykh voprosakh ekonomi-cheskoy politiki KPSS na savremennom etape: Rechidoklady (Moscow: PolitiZdat, 1975), I, F. 41C; XXIVS"yezd KPSS, I, p. 80; XXV S"yezd KPSS, II, p. 24.

4. XXV S"-zzd KPSS, I, p. 73.

5. V. A. Trapeznikov, "Upravleniye naukoy kak or-ganizatsionnoy sistemoy," in Gvishiani et 21, eds.,Osnovnyye printsipy I cbshchiye problemy upravleniyanaukoy (Moscow: Nauka, 1973), p. 39; Gvishiani, "TheScientific and Technological Revolution and Scientif-ic Problems," Social Sciences, I (1972), p. 49; Vla-dislav Kelle and Semyon Mikulinsky, "Sociology ofScience," ibid., 3 (1977), p. 86.

6. Gvishiani, "The Scientific and TechnologicalRevolution and Scientific Problems," p. 48; Gennady

Dobrov, "Science Policy and Assessment in the So-viet Union," International Social Science Journal,XXV, 3 (1973), p. 322.

7. Ibid., p. 318.

8. Quoted in L. V. Golovanov, "Sistema upravleni-ya naukoy v SSSR I voprosy ee sovershenstvovaniya,"in Nauchnoye upravlenlye obshchestvom (Moscow: Mysl',1969); III, p. 35.

2893 i -)

9. XXIV S"yezd KPSS, I, p. 80.

10. See K. Yefimov, "Nauchno-tekhnicheskiy progress:organizatsiya i planirovaniye," Voprosy ekonomiki, 12(1974), pp. 22-23; A. A. Podoprigora, Pravovyye vopro-sy sozdaniya I vnedreniya novoy tekhniki (Kiev, 1975),pp. 14-32; 0. I. Volkov, Planovoye upravleniye nauchno-tekhniches.cim progressom (Moscow: Nauka, 1975), pp. 12-16; V. D. Volkova, Sovershenstvovaniye metodologiiplanirovaniya naudhno-tekhnicheskogo progressa v uslo-viyakh razvitogo sotsialisticheskogo obshchestva(Sverdlovsk, 1975), pp. 6-9; V. I. Pavlyuchenko, Eko-nomicheskiye problemy upravleniya nauchno-tekhniches-kim progressom (Moscow: Nauka, 1973), pp. 9-37.

11. Yu. M. Sheinin, "Osnovnyye ponyatiya organiza-tsii i upravleniya nauchnoy deyatel'nostyu," in Uprav-leniye, planirovaniye i organizatsiya nauchnykh Itekhnicheskikh issledovaniy (Moscow: VINITI, 1970),II, p. 178; M. I. Piskotin, V. A. Rassudayskiy, and M.P. Ring, eds., Organizatsionno-pravovyye voprosy ruko-vodstva naukoy v SSSR (Moscow: Nauka, 1973), p. 31.

12. See M. A. Vilenskiy, "Nauchno-tekhnicheskly pro-gress kak ob"yekt planirovaniya (voprosy metodologil),"Voprosy ekonomiki, 12 (1973), pp. 71-81; S. M. Yam-polskiy, "Ekonomicheskiye grartitsyprolzvodstva I pri-meniye novoy tekhniki pri sotsializme," in L. M. Ga-tovskiy, ed., Ekonomicheskiye problemy nauchno-tekhni-cheskoy revolyutsii pri sotsializme (Moscow: Ekonomi-ka, 1975), pp. 128-137.

13. N. P. Fedorenko, "Urgent Tasks of Economic Sci-ence," Ekonomicheskaya gazeta, 21 (May 1976), p. 10;Yefimov, "Nauchno-tekhnicheskiy progress: organizatsi-ya i planirovaniye," p. 26.

14 XXIV S"yezd KPSS, I, pp. 80-81.

15. Trud, May 23, 1974. See also Yefimov, "Nauchno-tekhnicheskly progress: organizatsiya i planirovani-ya," p. 24.

3L 290

16. Volkov, Planovoye upravleniye nauchno -tekhnicheskim progressom, pp. 17, 19. Emphasis added.

17. Dobrov, "Science Policy and Assessment in theSoviet Union," p. 308.

18. L. Blyakhman commented on the increasing numberof scientists in Neva, 1 (January 1973), pp. 173-181.See also K. L. Gorfan, N. I. Komkov, and L. E. Minde-n,

(Moscow: Nauka, 1971), p. 8. For the budgetaryprojections, see E. Kosov, "Ekonomicheskiye problemyupravleniya nauchno-tekhnicheskim progressom,".Ekono-michesklye Ilauki, 7 (1971), p. 51.

19. See S. Mikulinskiy, "Prdblema nauchnykh kadrovv usloviyakh nauchno-tekhnicheskoy revolyutsii," Kom-mimist, 5 (1973), pp. 76-88; Zavlin et al, Trud-v.sfere nauki (Moscow, 1973), pp. 123-124.

20. G. N. Volkov, Sotsiologiya nauki: Sotsiologi-cheskiye ocherki nauchno-tekhnicheskoy deyatel'nosti(Moscow: Politizdat, 1968), p. 216.

21.Dobrov, "Science Policy and Assessment in theSoviet Union," p. 309.

22. XXIV S'yezd KPSS, II, p. 19.

23. XXV S"yezd KPSS, I, p. 67.

24. Pravda, February 19, 1977.

25. Statement by E. I. Sklyarov of the State Com-mittee for Science and Technology as reported by LorenGraham in his "The Place of the Academy of SciencesSystem in the Overall Organization of Soviet Science,"in Thomas and Kruse-Vaucienne, op. cit., p. 55.

26. See M. A. Vilenskiy, "Sotsial'no-ekonomiches-kaya effektivnost' nauchno-tekhnicheskogo progresses,"in Gatovskiy, Ekonamicheskiye problemy nauchno-tiAh-nicheskoy revolyutsii pri sotsializme, pp. 138-146;

291

V. Yu. Budavey and M. I. Panova, Ekonomicheskiye prob-lemy tekhnicheskogo progressa (Moscow: Mysli, 1974),p. 26. Statement about the lack of profit in researchmade by Alexander Birman, cited in Science and PublicPolicy, III, 4 (August 1976), p. 367.

27. Louvan Nolting, The Planning of Research, De-velopment, and Innovation in the USSR, U.S. Depart-ment of Commerce, Foreign Economic Report No. 14 (Wash-ington, D.C., 1978), pp. 12-13.

28. Lev Gatovskiy, "Effektivnost' novoy tekhniki kakob"yekt upravleniya nauchno-tekhnicheskim progressom,"in Organizatsiya upravleniya (Moscow, 1975), pp. 63-71 and his article, "0 kompleksnom upravlenii effek-tivnost'yu tekhniki," Kommunist, 14 (September 1973),pp. 60-73. See also Gatovskly's remarks in "Planiro-vaniye i upravleniye nauchno-tekhnicheskim progressomv X pyatiletke," Voprosy ekonomiki, 8 (1975), p. 128.

29. V. S. Tarasovich and Yu. B. Kliuka, "Organiza-tsionnyye formy tekhniko-ekonomicheskogo obosnovaniyanauchnykh issledovaniy i razrabotok," in V. P. Alek-sandrova, ed., Problemy planirovaniya i effektivnostirazvitiya nauki i tekhniki v Ukrainskoy SSSR (Kiev,1976), p. 44.

30. "Planirovaniye I upravleniye nauchno-tekhni-cheskim progressom v X pyatiletke," p. 117.

31. Boriz Z. Milner, ed., Organizatsionnyye struk-tury upravleniya proizvodstvom (Moscow: Ekonomika,1975), pp. 4-5 and Brezhnev, Ob osnovnykh voprosakhekonomicheskoy politiki KPSS na sovremennom etape,II, p. 386.

32. B. Z. Milner, "Formirovaniye organizatsionnykhstruktur upravleniya," Ekonomika I organizatsiya pro-myshlennogo proizvodstva, 6 (1975), pp. 4-5.

33. Milner, Organizatsionnyye struktury, pp. 5, 6,16-17, 37.

34. N. S. Kalita and G. I. Mantsurov, Sotsialls=1-

292

cheskiye proizvodstvennyye ob "yedineniya (Moscow:Ekonomika, 1972), pp. 3-4 and Boris Milner, "Organi-ization of the Management of Production," Social Sci-ences, VII, 3 (1976), p. 48.

35. XXIV S"yezd KPSS, I, 90, 179-180; P. Danilav-tsev and Yu. Kanygin, Ot laboratorii do zavoda (Novo-sibirsk: Nauka, 1971), p. 40.

36. Kelle and Mikulinskiy, "Sociology of Science,"p. 87.

37. Yu. M. Sheinin, "Nauka 1 organizatsiya," inE. A. Belyayev, S. P. Mikulinskiy, and Yu. M. Shel-nin, eds., Organizatslya nauchnoy deyatel'nosti (Mos-cow, 1968), p. 114.

38. E. I. Gavrilov, Ekonomika i effektivnost' nau-chno-tekhnicheskogo progressa (Minsk, 1975), p. 277;Kelle and Mikulinskiy, op. cit., p. 87; D. M. Gvishi-ani, "Sotsial'naya roll nauki I politika gosudarstvav oblasti nauki," in V. Zh. Kelle and S. P. Mikulin-skiy, eds., Sotsiologichesklye problemy nauki (Mos-cow: Nauka, 1974), p. 215.

39. Gvishiani, "Sotsial'naya roll nauki i politikagosudarstva v oblasti nauki," pp. 213-215.

40. Ibid., p. 213; Kelle and Mikulinskiy, "Sociol-ogy of Science," pp. 88-89; I. A. Turchaninov, "Ten-dentsit i formy vzaimosvyazi nauki i proizvodstva nasovremennam etape," in Probiemy deyatellnosti uche-nogo i nauchnykh kollektivov (Leningrad and Moscow:Nauka, 1977) , P. 9:

41. L. S. Blyakhman and A. F. Ivanov, "Nauchno-prolzve-istvennoye ob"yedineniye kak forma sistemnoyorgai atsil tsikla is-ledovanlye-proizvodstvo,"

Akademii Nauk SSSR, seriya ekonamicheskaya,6 (1971), p. 39 arid K. I. Taksir, Nauchno-prolzvodst-vennyye ob"yedinenlya (Moscow: Nauka, 1977), p. 16.

42. See Milner, Organizatsionnyye struktury uprav-

293 3 if 7

leniya proizvodstvom, pp. 7, 9, 108-111; N. E. Drogi-chenskiy, ed., Sovershenstvovaniye mekhanizma khozya-ystvovanlya v usloviyakh razvitogo sotsializma (Moscow,1975), pp. 160-170; D. M. Gvishiani et al, eds., Vo-prosy teorii I praktiki upravleniya i organizatsiinauki (Moscow: Nauka, 1975), pp. 14-15.

43. G. Arbatov, "Proektirovaniye organizatsii krupnykh prolzvodstvenno-khozyaystvennykh kompleksov Iupravleniya imi," Planovoye khozyaystvo, 5 (1975), p.2 . This article was also republished as "Sistemy up-ravleniya krupnymi proizvodstvenno-khozyaystvennymikompleksami," in Vestnik Akademli Nauk SSSR, 10 (1975),pp. 46-53.

44. Trapeznikov, "upravleniye naukoy kak organiza-tsionnoy sistemoy," p. 24.

45. "Planirovaniye i upravleniye nauchno-tekhni-cheskim progressom v X pyatiletke," p. 120.

46. Ibid., pp. 119-122; G. Kh. Popov, Effektivnoyeupravleniye (Moscow: Ekonomika, 1976), p. 136.

47. A. V. Bachurin, Planovo-ekonomicheskiye met .'dy

upravleniya (Moscow: Ekonomika, 1973), pp. 385-386.

48. XXV S"yezd KPSS, I, p. 72.

49. Ibid., II, p. 239.

50. Nauchno tekhnicheskaya revolyutsiya: Ekonomikai upravleniye sotsialisticheskim proizvodstvom (Mos-cow: mys1.13 1976), p. 28.

51. Ibid., p. 29.

52. M. I. Piskotin et al, eds., Organizatsionno-pravovyye voprosy rukovodstva naukoy v SSSR, pp. 388-

53. "Planirovanlye I upravleniye nauchno-tekhni-cheskim progressom v X pyatiletke," p. 117.

54. XXV S"yezd KPSS, I, p. 83.

294

55. Ibid., p. 85.

56. M. P. Ring, "Problemnoye upravleniye v nauke,"Vestnik Akademii Nauk SSSR, 7 (1976), pp. 12-14.

57. "Planirovaniye i upravleniye nauchno-tekhni-cheskim progressom v X pyatiletke," p. 115.

58. Ibid., p. 121.

59. Pravda, June 13, 1970.

60. D. M. Gvishiani, Organization and Management: ASociological Analysis of Western Theories (Moscow:Progress Publishers, 1972), p. 172.

61. "Planirovaniye i upravleniye nauchno-tekhni--cheskim progressom v X pyatiletke," p. 121.

62. Pravda, June 13, 1960.

63. Gvishiani, "The Scientific and TechnologicalRevolution and Scientific Problems," p. 52; G. Popov,"How Reliable Are the Interfaces?" Pravda- July 27,1976; XXV S"yezd KPSS, I, p. 164.

64. Milner, "Formirovaniye organizatsionnykh struk-tur upravleniya," p. 8 and his Organizatsionnyyestruktury upravleniy4 proizvodstvom, p. 7.

65. Ibid., pp. 7, 8, 16, 108 and his "Formirovani-ye organizatsionnykh struktur upravleniya," pp. 8-9.

66. Milner, Organizatsionnyye struktury upravleniyaproizvodstvom, p. 108.

67. Taksir, Nauchno- proizvodstvennyye ob "yedineniya,p. 85.

68. Drogichenskiy, op. cit., p. 169.

69. Gavrilov, op. cit., p. 280.

295 3Lij

70. See Ekonomika i organizatsiya promyshlennogoproizvodstva, 6 (1975), pp. 36-37.

71. Popov, Effektivnoye upravleniye, pp. 12-13.

72. Ibid., p. 13; G. A. Dzhavadov, V. N. Varvarov,and A. V. Sobrovin, "Organizatsiya ratsionalizatsiiupravleniya nauchno-tekhnicheskim progressom v otras-li," in G. Kh. Popov, ed., Problemy organizatsii so-vershenstvavaniya upravleniya sotsialisticheskim pro-izvodstvom (Seminar g. Ka]mmin 1-10 fevralya 1974g/(Moscow: Izdatel'stvo Moskovskogo Universiteta, 1975),p. 253.

73. "Planirovaniye i upravleniye nauchno-tekhni-cheskim progressom v X pyatiletke," pp. 118, 121.

74. Ibid., pp. 120-122, 128.

75. V. Ya. Elmeyev, E. F. Denisov, and S. F. Zotov,"Ekonamicheskiye usloviya soyedineniya nauki s proiz-vodstvom," Izvestiya Akademli Nauk SSSR, seriya eko-nomicheskaya, 3 (1976), p. 56.

76. L. Gatovskiy, "Usileniye orientatsii planov istimulov na vysoko effektivnuyu tekhniku," Voprosyekonomiki, 5 (1977), p. 123.

77. See V. N. Arkhangel'skiy, Planirovaniye i finan-sirovaniye nauchnykh issledovaniy, p. 162; A. Vershin-ina, "Nauchno-proizvodstvennyye ob"yedineniya i sti-muliravanlye tekhnicheskogo progressa," Sotsialisti-cheskiy trud, 7 (1976), pp. 32-36; V. Pokrovskiy,"Upravleniye effektivnost'yu nauki i tekhniki," Eko-nomicheskaya gazeta, 32 (1977), p. 10.

78. A. Bachurin, "Promyshlennoye ob"vedineniye itekhnicheskiy progress," ibid., 43 (1970), pp. 5-6.

79. "Planirovaniye i upravleniye nauchno-tekhni-cheskim progressom v X pyatiletke," p. 121.

80. XXV S"yezd KPSS, I, pp. 62-63.

296

81. "Planirovaniye i upravleniye nauchno-tekhni-cheskim progressom v X pyatiletke," p. 122.

82. Ibid.

83. See Popov, Effektivnoye upravleniye, pp. 128-136.

84. B. Z. Milner, "Sovershenstvovaniye organiza-tsionnykh struktur upravleniya," in Sovremennyye me-tody upravleniya narodnym khozyaystvcm (Vilnius, 1974),p. 22.

297

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and authority for major segments of the R&D ef-fort, the republics act as a conduit and interpreterof S&T policy and directives of central bodies. Giventhe highly centralized Soviet system and its distinctset of R&D priorities, however, repub7Ic and localinvolvement in science planning and management remainssubstantially circumscribed. With the exception ofGeorgia there are no counterparts to the USSR StateCommittee for Science and Technology on the republiclevel. "All-union," rather than "union-republic,"much less "republic," ministries and agencies shapeS&T policy and direct the national R&D effort, justas they do in economic policy and development moregenerally.

On the whole, both countries have made inordinate-ly high investments in defense, aerospace, and nucle-ar R&D while underinvesting in technology for econom-ic growth. Though technological innovation has cer-tainly been a more prominent and widespread featureof the American economy than of the Soviet, still 80percent of all US R&D has been concentrated in justfive "intensively engineered" industries. Further-more, 80 percent of federally supported R&D goes tojust two of these sectcrs--aircraft and missiles, andelectrical equipment and communications.

In both nations, scientific R&D remains highlyconcentrated geographically in a few major urban cen-ters and is performed by a few large institutions.The Soviet penchant for large-scale organization andfunctional specialization is well known. Tradition-ally, head research institutes and design bureaushave been given primary responsibility for developingthe main thrusts in science and technology. They areorganized to serve whole branches of industry ratherthan individual production facilities. The smallbusiness firm and individual entrepreneur do play animportant role in American science and technology,especially in innovation, that is virtually absent inthe Soviet system. But even in the United States, in-dustrial R&D is dominated by a small number of largecorporations. Just 10 R&D performing firms account

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philosophy, purpose, and operation. For example,

the National Science Foundation, as a general funder

and caretaker of basic science, resembles the USSR

Academy of Sciences. There are strong parallels be-

tween the budgetary process, which is the main tool

for planning, review, and control--at least in the

public sector--in the United States, and the plan-ning process in the Soviet system; and between the

OMB and the GKNT in their executive management over-sight and mediating functions in S&T matters. As the

principal advisory arms in science policy at the apexof the two respective governmental structures, theOSTP and the GKNT play somewhat analogous roles. In

interagency R&D coordination, the FCCSET is a kindof American functional counterpart to the GKNT. On a

more general level, certain parallels may even be

drawn between Congress and the Supreme Soviet as in-

stitutional arenas where S&T policies are publicly

debated and legislated. But such national compari-sons do not really take us far. Though some proce-

dures or institutions look the same, their effects

and significance may be quite different because they

operate in different environments, each shaped by its

own national traditions, values, and circumstances.

The main characteristics that distinguish the

American and Soviet environments are rooted in the

fundamental differences between a competitive market

economy and political pluralism, on the one hand,

and a centrally planned economy and political cen-

tralism, on the other. It is these underlying sys-temic dissimilarities that account for and shape the

alternative approaches to science and technology in

the two nations.

In the United States the S&T policy process is

diffuse. The organizational structure of the federal

government is highly fragmented and diversified with

a multitude of crosscutting and competing agencies

in both the Executive and Legislative branches con-

cerned with S&T matters. In most of these bodies R&D

is only an activity in support of a broader set of

roles and missions. In the American framework no

301 315

real mechanism exists to guide polic: making and pri-ority-setting, much less to blueprint and administerthe whole enterprise. Science policy emerges not asa grand design but rather as the end product of a com-plex interaction of diverse and partial wills. Theoverall set of S&T policies lacks unity and coherence.

In the Soviet Union, on the contrary, there is amuch more formal process, structure, and policy forscience and technology. The set of institutions re-sponsible for R&D planning and management is more ex-plicit and functionally specialized; procedures aremore uniform and clearly defined; and authority ishierarchical and centralized at the top. The wholesystem is built, in principle and aspiration, to pro-duce comprehensive and unified S&T policies that arean integral part of overall macroeconomic plans anddevelopment strategies.

The roles and responsibilities of government, inparticular, are perceptibly different. In the Amer-ican setting government plays primarily an indirectand supporting role, serving as a catalyst to createa climate favorable to science and its applicaticms.The system is premised upon a basic division of laborbetween public and private institutions as well asthe belief that whenever possible private incentivesand the normal play of market mechanisms should berelied on to generate relevant R&D and technolog.,.calinnovation. Only in those areas where market forcesare deficient or where it has major responsibilities,such as defense and space, does government take a di-rect administrative role. The difference betweenfederal markets and competitive private markets mustbe recognized. In the former the government frequent-ly plans, funds, and manages directly the R&D and isalso the principal customer of the results. The wholeprocess is heavily authoritarian with strong emphasison roles and controls, resembling that of the USSRwith its one giant public sector and command economy.In the latter, the competitive private market, thegovernment's role is only indirect. This is the ma-jor American market.

302

By contrast, the Soviet government takes generallyan active and directing role in S&T policy and devel-opment. Just as industrial advance is the product ofstate initiative and administration, the spur to in-novation also comes from central political authori-ties. Through state ownership of R&D results and de-tailed plans the government intervenes directly frombeginning to end of the research-to-production cycle.Administrative bodies deliberately plan and introducenew products and processes. The mode of advance ispredominantly innovation by order from the top down;administrative levers and bureaucratic instrumentsare relied on to drive the whole process. Thus theSoviet government stresses organizational and proce-dural solutions to science and technology problems.

It is important not to overdraw the image of twosharply dichotomous models of science and technologyfor the US and USSR. The Soviet system is neither af.unique nor as monolithic as it is sometimes assumedto be. Though highly centralized, the S&T establish-ment is also heavily compartmentalized among numerousfunctional agencies and institutional subsystems. Al-though military R&D is systematically managed, Sovietcivilian S&T is less centralized. The GKNT has onlypartially succeeded as general overseer by concentra-ting on a limited number of priority areas ratherthan all R&D activities. Nor is the American systemas anarchic and freewheeling as it seems at firstglance. Government regulation of innovation dampensthe entrepreneurial spirit. Contradictory impulsesand policies coexist in both environments. Each sys-tem excels in certain respects and falls short inothers.

To underline the comparative dimensions of Ameri-can and Soviet approaches, the following discussionfocuses on three major areas of S&T policy: (1) rela-tionship of scientific R&D to industry; (2) the useof indicators and measurement techniques in policyplanning and management; and (3) incentives and ob-stacles to innovation. Finally, the new complexitybarriers that both countries face today in framing

303

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The creation and use of new technology is fenced offfrom general economic activity. Each sphere proceedsmore or less on its own. Organizational structureand the overall planning process continue to reflectthe fact that science and industry are still largelyseparate worlds, coexisting rather than interacting.

American R&D, on the contrary, is more closelycoupled to other subsystems of society. Science forscience's sake has not been an aim of public policy.Rather, like everything else, science should pay offif it is to merit public support. In governmentagencies, R&D is not considered in isolation but aspart of their broad mission. In industry, managementworks on the principle that R&D of itself is notenough; it must ultimately be exploited in the mar-ketplace. Thus, R&D is made a component of overallbusiness strategy and operations.

A major consequence of the greater insulation ofscience in Soviet society is that R&D enjoys far morestability and continuity in the USSR than in the US.Kremlin policy makers have much more of an investmentmentality toward S&T as growth enterprises than theirAmerican counterparts. The mode of incremental plan-ning "from the achieved level" provides the SovietS&T establishment an assured and rising level of fund-ing that contrasts sharply with the variability ofAmerican R&D funding patterns. Neither the federalgovernment nor industry in the US is officially com-mitred to a base level of funding nor to standardlevels of increase. On the contrary, R&D funding byindustry varies widely with current economic condi-tions as does federal spending. In both the publicand private sectors the vulnerability of R&D as dis-cretionary outlays makes difficult the formulation ofdurable science policies. In addition, the Sovietpractice of institutional bloc funding, as opposed tothe American system of project funding, makes formuch greater stability at the level of the R&D per-former.

At the same time, this high degree of stabilitycharacteristic of Soviet science exacts its price.

305 3 1

Conservttive tendencies stifle creativity and change.The inert-1 of institutions and projects is hard tobreak. R&D facilities and programs can go for yearswithout producing any significant results. Above all,the isolation of research from production decreasestechnological innovation and causes problems in de-livery. The American S&T structure, though not asstable, is more flexible and dynamic. The greaterstress on results and ultimate use as well as thecloser industrial nonrection keeps research and de-velopment both resp'nsive and relevant to the chang-ing demands of the customer. Though it does not per-mit the same security for performers and continuityfor projects that institutional funding does in theUSSR, the American mode of project funding coupledwith external peer review provides a more independentand flexible instrument for terminating unproductiveR&D and initiating new programs. In general, themarket environment causes the research sector to makepainful adjustments from time to time to direct capa-bilities to where they are needed.

The two systems differ fundamentally in their ap-proaches to integrating research, development, andinnovation. In the USSR integration is a bureaucrat-ic function assigned to a hierarchy of special agen-cies. There is little direct collaboration among in-stitutional R&D performers. Most external transac-tions are managed through superior ministerial offi-ces and departments. Interorganizational linkages,therefore, are essentially administrative. The ac-2ent throughout is on hierarchical organization, ex-tensive use of rules, multiple clearam:es, and longapproval routes. Coordination across organizationalboundaries and functional subsystems is partict:larlycomplex and difficult.

In the US the conduct and coupling of R&D takeplace under different operating conditions. The ver-tical relationship between organizations and plansfor S&T activities is abbreviated because there arefew steps in the chain of command between the settingof goals and the performance of R&D. Further, there

306

Is little coordination by the government between thedetermination of goals and objectives for departmentsand agencies and production activities in the privatesector. Private firms compete for R&D contracts fromgovernment agencies and offer services that competewith those provided by the agencies themselves. Theactors in American R&D are separate institutions,mostly nonhierarchical and relatively autonomous.They act independently and competitively, and cometogether by agreement in mutual self-interest. Link-age does not occur through directives and approvalsbut on the basis of competition and pluralism. Suchcooperation of public and private institutions is oneof the most original characteristics of the Americanscience and technology enterprise.

These systemic differences underlying the archi-tecture of linkage, in turn, shape attitudes of R&Dpersonnel. In the USSR innovation by order and topdown planning and management causes R&D performers aswell as their supervisory ministries to look upward.They are oriented primarily to pleasing their own ad-ministrative superiors in the hierarchy. Since theyare not concerned with the distribution and use oftheir results, producers all along the innovationchain are not output-oriented. They are, on the con-trary, keenly concerned with inputs on the supply sidebecause this is where major uncertainties and problemsin innovation lie in the Soviet system. Furthermore,the emphasis on functional specialization and organi-zational separation tends to direct the vision of in-dividuals and management bodies toward separate ef-forts rather than the overall enterprise. As a re-sult the whole S&T establishment is inward-looking.Each performer takes a narrow view of his responsi-bilities, tasks, and interests.

In the American milieu of a highly consumer-orien-ted society generally and with market pull a majordriving force for successful innovation, R&D perform-ers are oriented outward, to satisfying their custom-ers. Competition for customers on the basis of priceand quality makes output and use important considera-

307

tions. Supply is generally not a problem. Abundantresources are usually available, given sufficientcapital. Rather, attention is directed to the demandside where in the American setting the basic uncer-tainties and risks are lodged. Individual and inst-tutional actors focus on environmental externalitiesthat may stimulate or constrain innovation, especial-ly SST activities beyond their own in-house effortsthat may pose new opportunities or competitive threats.

Given these divergent orientations, R&D personnelmaintain different patterns of communication and in-teraction. In the USSR functional performers tend tobe separate from each other organizationally and spa-tially. The predominantly vertical structure of de-cision making inhibits lateral interaction. Workingcontact between R&D specialists and user or clientgroups is weak. The later links of the innovationchain--the introduction and debugging of new technol-ogy--are in particular poorly developed. Throughoutthere is little real interplay, much less team play,to integrate individual efforts. Self-sufficiencyrather than cooperation is the goal.

The accent in American R&D is on direct interactionand interdependence among major performers. Continuingcommunication among the various participants promotesmutual understanding, trust, and acceptance. Thoughthe "not-invented-here" sentiment exists, it is notso pervasive an attitude as it seems to be in the So-viet system. In the US personnel also move more bothwithin and among the different sectors of academe,industry, and government. Close contact between gen-erators and use-s of research is another importantfeature. Indu.try particularly stresses linkage notjust in R&D but also between R&D and manufacturing,marketing, sales, and services. These connectionshelp assure the viability of new products and proces-ses. Some firms organize R&D to involve the userearly in the development of innovations and clientsalso participate at critical po-!.nts. Good will andgood customer relations, it is said, do more for tech-nological utilization than almost anything.

308

Taken together these features point to differentapproaches to technology transfer. In the USSR com-munication takes primarily the form of the transmis-sion of documents and routing of information throughformal administrative channels. The main interactionsare between functional performers and higher ministryauthorities who serve as administrative gatekeepersat critical transfer: points. The whole activity chainmoves through different links and stages by hierarchi-cal referral and bureaucratic relay. In general, theresearch-to-production cycle is not an integrated orintegrating process.

In the American framework emphasis is on person-to-person contact rather than reliance upon printedinformation and communication through a middleman.Informal and oral sources provide key communicationsabout both needs and technical opportunities. Bridg-ing roles are played by "technological gatekeepers,""market gatekeepers," and "manufacturing gatekeepers,"all of whom provide information about environmentalconditions that can influence the flow of action. Thisclose linkage allows scientists and engineers to co-operate in shaping technical programs and an informa-tion base. Feedback from the market plays a self-correcti,ig role and keeps R&D responsive to the user.

This brings us to the question of technology util-ization and delivery mechanisms. These mechanismsdiffer between the private and government sectors inthe US. The federal government, despite its largeinvestment in R&D, does not take an active role in R&Ddiffusion and has not, with a few notable exceptions,been effective in promoting it. Diffusion is largelythe province of the private sector. Most federalagencies do not have explicit policies or special pro-grams for promoting technology transfer. Those thatdo usually fall short of the utilization stage. Amongthe mechanisms used by federal agencies the most com-mon and expensive are the S&T information dissemina-tion services. They are also judged to have the low-est impact, reflecting the general ineffectiveness ofwritten communication as a means of technology trans-fer in the American setting. The most successful ap-

3093'''

aft" LP

proach, on the other hand, has been the highly activeAgricultural Extension Service where field agentsknow well the local users and serve, in effect, assalespeople for new technology.

All these governmental programs encourage researchutilization only after the R&D results have been gen-erated. Most effective industrA...1 approaches to tech-nology utilization, however, begin much earlier in theinnovation process. Industry itlso provides an inte-grated and coordinated system from conceptualizationto commercialization that does not exist in the gov-ernmental sector. Indeed such an approach is used inthe public sector only in areas like defense or spacewhen the federal government both creates and definesthe market and is the principal customer itself. Evenhere, however, systems planning and management is notalways efficient or economical.

The practical translation of R&D results is one ofthe most deficient areas of S&T policy in the USSR.Traditionally, Soviet economic policy has minimizedinvestment in an experimental base and scientific in-struments industry in favor of investment in on-lineproduction facilities. The development sector, thecrucial intermediary between research and production,tends to be neglected. The share of expenditures ondevelopment and engineering applications has been on-ly about two-thirds that in the United States. As aresult there continues to be a scarcity of experimen-tal facilities to develop and test prototypes.

In general, the vital interfaces in the transferprocess have not been explicitly and effectivelystructured or linked. The utilization of R&D has fal-len outside the bounds of both science planning andproduction planning. Innovation or the introductionstage has not been an organic part of the system ofplanning and administration. There is no special pur-pose organization charged with managing diffusion inthe Soviet Union. For the most part, extensive--butineffective--S&T information storage and retrievalsystems have been relied on. These services, which

31011 4

are managed and coordinated centrally, befit tne gen-eral pattern of Soviet communications.

Since the late 1960s Kremlin authorities haveshifted from passive mechanisms to more active strat-egies of technology transfer to enhance industrialresearch utilization. Adopting a process view of in-novation, they have established new institutional ar-rangements and organizational forms that seek to spanand integrate the multiple participants and stages inthe innovation cycle. The development of researchcomplexes along the lines of some American industrialresearch parks has been emphasized in the belief thatthe desired benefits of cross-fertilization, sharingof facilities and interdisciplinary cooperation arebetter achieved through such close association. Dif-ferent types of research complexes have evolved, in-cluding (1) formal incorporation of research, design,and production facilities in single organizations,such as the production and science-production asso-ciations, and (2) more recently, geographic colloca-tion of R&D facilities. The creation of special or-ganizations concerned wich the introduction of newtechnology is less well advanced. Forms of projectmanagement and matrix organization used in AmericanR&D are, however, being modified and tried in the So-viet context.

SELECTION OF S&T GOALSAND EVALUATION OF RESULTS

In the United States major goals (problems) need-ing S&T solutions are selected not as a formal plan-ning activity but through a complex political-economicprocess that is not well understood or economicallyefficient. No formal procedure or time scheduleexists for such selection, no one body to establishgoals and to measure results. Both the Executive andLegislative branches have identified such major goalsas space exploration, cancer research, improved envi-ronmental protection, and energy research and devel-

311

opment. In general, the mission agencies of govern-ment have assumed responsibility and authority forrecognizing scientific opportunities and for steward-ship. Given the decentralized nature of American R&Dneither the selection of topics nor the allocation offunds is a simple process in government. The fragmen-tation of structure and competence mediates againstcomprehensive policy planning and analysis.

In the US the budget process represents the clos-est thing in government to a systematic effort at re-source planning, program evaluation, and integration.But it is a highly imperfect tool. There is no spe-cial budget or special budget process to integrateR&D into a broad S&T policy or national goals. Rather,the budget is prepared and judged on a departmentalbasis; the total federal R&D budget is largely an af-ter-the-fact-summary of the R&D budgets requested byeach agency and justified in terms of their separatemissions. The multitude of agencies in she ExecutiveBranch concerned with S&T matters is matched by amultitude of committees in Congress that share re-sponsibility for budgetary analysis and appropriation.

This pluralistic method of budgeting for R&D makesdifficult the formulation of policies and coordina-tion of activities across traditional government sec-tors and independent agency lines. Although some ef-forts are made--largely by the OMB and, to a lesserextent, by the OSTP ---to ensure priorities and balancein S&T programs, no integrative mechanism draws sci-ence policy toward a rational approach to problems ofchoice, of costs and benefits, of needs and opportu-nities. To be sure, the need is generally recognizedfor some central focus and oversight to ensure great-er consistency and coordination among plans and agen-cies_ Rem, rdless of how compelling the case seemsfor more systematic S&T planning and evaluation, how-ever, the basic fact remains that such a planning andanalysis function does not fit easily into the plural-istic form and competitive ethos of American govern-ment with its fundamental emphasis on political advo-cacy, bargaining, and compromise in reaching public

) r 312

decisions. The capability for such policy analysisand integrated systems management exists only in ex-ceptional instances where the nation has been galv.i-nized towards a single goal or where a single nation-al project has the general consent of the populace.For the most part, decisions are made piecemeal.Throughout the process there is considerable confu-sion and disagreement, but the nation accepts theseinefficiencies and imbalances as the cost of diversi-ty and of decision making that values open markets,adversarial relations, and consensus building in pub-lic policy.

In the Soviet Union the planning of R&D is highlystructured in a top down manner. Most important S&Tgoals are formally identified and selected. Current-ly, this list consists of approximately 200 majorproblems. The solutions to these problems are sched-uled over periods of from c'ne to three five-year in-crements and are incorporated into the macroeconomicplans for the USSR as a whole. Not only do plansspecify general objectives, but they also detail allmeasures necessary for the attainment of goals, suchas requisite resources and their interrelationship,experimental design, assignments for output and tech-nology transfer, construction of new facilities. Inaddition, the mechanisms for plan expression and en-forcement, such as indicators, norms, standards, andincentives, are similar at all levels and in princi-ple are mutually reinforcing and internally consis-tent. In the USSR, then, the whole structure of hi-erarchical relationships is designed to integrate thevarious activities of different units around central-ly determined general goals. Thus, in principle atleast, the Soviet system offers great potential forcomprehensive planning, coherent analysis, and balanc-ing assessments in S&T policies.

In practice, however, Soviet R&D planning suffersfrom serious deficiencies. Some of these result fromthe inherent uncertaintiesinnovation itself. Othersin Soviet organization and

313

and unpredictability ofare deeply rooted, however,procedure. Though highly

centralized, policy planning and analysis is heavilycompartmentalized not only in vertical branch minis-tries but also in the numerous special functionalagencies. The innovation cycle is fractured in time,task, and territory. The basis of planning, financ-ing, and management is still primarily the functional-institutional performer rather than programs, pro-jects, and work stages. Furthermore, SST planning isalso separate from and insufficiently coordinatedwith the planning of production.

Much as in the US, therefore, it is difficult forcentral S&T policy makers in the USSR to exert inte-grating influence upon a basically pluralistic admin-istrative structure. The heavy chalk marks which de-lineate different bureaucratic subsystems and insti-tutional domains are not easily erased. To be sure,there are more deliberate attempts than in the US atoverall priority-setting, program assessment, and co-ordination. But the capabilities of the GKNT--themain balancing wheel of the Soviet S&T mechanism--andother functional agencies to analyze and evaluate al-ternative program goals, costs, and benefits arc con-strained at every turn. They frequently lack theauthority and means to perform their integrating func-tions. Given the nature of their overlapping andshared responsibilities for R&D planning and manage-ment, the state committees are often forced to seekthe approval of and accommodate themselves to variousministries, departments, and other state committees,not to mention Party agencies. As a result they per-form a continuous and difficult balancing act in whichnational goals and priorities are reconciled with thespecial interests of the numerous organizations thatconduct the national R&D effort.

The Soviet planning process, then, like the Ameri-can budget process is salted with bureaucratic rival-ries. Though calls are periodically heard to strength-en the integrative capabilities of the GKNT, there isstill little inclination to give the State Committeeor any other body the clout necessary to forge coher-ent, focused programs across ministerial and depart-

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to specify objectives, and to evaluate alternativeways of accomplishing these goals.

In the United States several specialized planning(e.g., PPBS) and project management (e.g., PERT andCPM) methods came into use during the 1960s. Theywere designed primarily for large development programsin aerospace and defense-related fields--that is, insectors which operate much like command economies. Themagnitude.and complexity of these programa demandedsophisticated and high-capacity management controlsystems. Although only the largest companies and themilitary use PERT techniques and only on the most com-plex projects, systems thinking is a prominent featureof the research management environment in general inthe United States. The inherent uncertainties in R&Dand the difficulties of trying to quantify social ben-efits, however, generally rule out the application ofhighly quantitative systems planning and managementtechniques.

In the USSR a similar systems movement burgeonedin the 1970s. The demand for techniques which viewprojects in a total systems perspective began to beclearly felt as the regime launched a number of crashdevelopment programs to speed technological innova-tion. Formal program-type planning methods appearedalong the lines of PERT and other sophisticated Amer-ican models. These techniques were developed, in par-ticular, for application in the complex interbranchS &T programs ,f national priority, which previouslysuffered from faulty systems planning and management,and to improve management effectiveness in general.

Such sophisticated planning and control techniquesare compatible with the Soviet predilection for high-ly structured activities. Used for some time in thedefense sector, such methods have not generally beenapplied in civilian R&D which is constrained by thestructural and administrative fragmentation of the re-search-to-production cycle. Formal procedures formultiagency planning, financing, and management arestill confined largely to the interbranch programsand complex projects, although a few ministries have

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This trend holds for both countries but for verydifferent reasons. In the US innovation is moreclosely woven into the whole economic fabric and cul-ture of the nation than it is in the Soviet Union.The industrial connection is a close one, and Ameri-can READ, therefore, is powerfully influenced by thegeneral condition of industry. In the USSR generaleconomic policies are of overriding importance pre-cisely because of the separation of R&D from produc-tion. Science and technology have not been drivingforces of the Soviet industrial machine. Indeed, theproduction sector strongly discriminates against in-novation. The supplementary guidance system of spe-cial agencies, plans, budgets, and incentives orien-ted to the advance of SST still stands largely apartfrom the primary guidance system for basic economicactivity. Science policy continues to have littleappreciable impact on the normal processes of econom-ic life in the USSR.

At issue in both systems is the problem of balanc-ing the risks and rewards associated with innovation.The balance rests on profits tied to the market inthe American setting and bonuses tied to plan fulfill-ment in the Soviet. Both company profits and enter-prise bonuses vary with general organizational perfor-mance, as do the rewards to management. Hence, Sovietindustrial managers tend to maximize bonuses as theirAmerican counterparts maximize profits. In neithercountry is the management reward structure attuned tothe pace of innovation. Both American and Soviet man-agement work with a short time horizon, and each tendsto fall into a profit,NOW and bonus-NOW syndrome. Ori-entation to product4on means that innovation consistslargely in the adoption of less risky, small sizecost-reducing processes rather than the creation ofbasically new products. Moreover, the problems of in-novation in both countries lie not so much in internalmanagement as in relations with outside organizations,principally with suppliers in the Soviet Union andwith customers in the United States.

On the whole, the balance of risk and reward inthe USSR still tends to work against innovation. Al-

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In neither system, however, are present mechanismswell suited to solve contemporary S&T problems. Eachnation has evolved over the years a relatively set-tled division of responsibility among an array of spe-cial administrative agencies and separate performinginstitutions. But the problems and the solutions inscience policy today cut across established bound-aries. Effective problem- solving requires a high lev-el of coordination and cooperation. The multiple par-ticipants in the innovation process need closer rela-tions that still recognize their distinct roles. Thecreation and administration of such linkages, it turn,demand of both systems a new level of management andof imagination.

Though both nations are beset by the mounting com-plexity of S&T problems, the nature and source of com-plexity differ in the two systems as do their evolvinginstitutional responses to overcome the new barriers.In the United States both the public and the privatesectors--and their interaction--are growing more com-plex. This complexity acquires added significance asscience policy focuses increasingly on solutions ofdomestic civil sector problems, requiring a more di-verse and less centralized approach than military andspace problems. The role of the federal governmentand of industry in public technology and methods forstimulating innovation to improve the quality and ef-ficiency of public services are unclear. In particu-lar, government regulation has grown as a nationalconcern. The proliferating dezands and standards im-posed by government and the costs of regulation arebeginning to inhibit seriously both university re-search and industrial innovation. Reform efforts areunderway to rationalize the whole regulatory processand to make regulation itself cost-effective by in-troducing and requiring economic analysis and atten-tion to costs in regulation. Underpinning regulatoryrevision is the need for new approaches to achievinga better balance between risk and benefit. Nonethe-less, basic knowledge about the factors involved isstill weak, and there is no agreement about how tomeasure the costs and benefits associated with thisnew set of S&T problems.

329 ) 4V

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losophy, property relations, and social values. Thesefactors tend to rule out certain practices altogetherand circumscribe the, possibilities of change. It isevident, however, that improved understanding in eachcountry of the other country's approaches is valuablein its own right and creates the opportunity for eachto benefit from the other's experience and collectiveknowledge of its citizenry. And with greater mutualunderstanding it may be possible for both giants tocooperate in solving some of their mutual transnation-al problems through science and technology.

331 e u_ s_ covERrumiErrr PRIMING OFFICE 1960 327-927/6532