USSR: ORGANIZATIONAL MEASURES FAIL TO SPUR TECHNOLOGICAL PROGRESS (SOV 88-10062

Created: 8/1/1988

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Directorate of IntdUfWtco

USSR: Organizational Measures Fail To Spur Technological Progress

A Reaearch Paper

Tha paper wai prepared by

Office of Soviet Anaiyaia. "ith eonlribuiioiu from

.SOV A. artel Office ofSaenlific and Weapons Research

Comments and queries are welcome and may be

directedChief

SOVA

USSR: OrRHnizalioiial Measures Fail To Spur Technological Progress

This paper assesses tho performance of intcrbrancli scknlific and technical complexes (MNTKs) in spurring and expediting the development and introduarOQ of critical lechnoloties in the Soviet Union. Ii describes briefly their organizational framework, how they operate, and what they are to achieve. Tbe paper does not discuss the actual status of targeted technol-osics or ipecific prospects for iheirn the'fcJh^irig Dl*

j; InteJli

gence Assessment2 (SecretSovfrt Microelectronics: Impact of Western Technology Acquisitions,'

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USSR:easure* Fail To

rirhiliilitl

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a tpcaihead ihedevelopment of crilkal technoJocjies forroaram. Each complex was io link, under the ovciarcliing authorityead scientific iflstittitc, families (hat ipan the entire product devclopmenl speclmm. The MNTKs were damned lo bridge the tap between science and production to ensure lhat no new scientific ducovery would fall through the bureaucraticphenom-enon thai traditionally hai impeded innovation within tbe Soviet Union Similarly, (he regimethat iheexeroiing coniidcr able authority over the productionboth >Pecd Ok development of new technologies aod foster broader diffusion of new Production processes

Tbe retimes liraorprodoct devcVcc-ncnt U't conserva-live, top-down approach based on time-boned methods used to advance weaponTbeas threeeveJ party wpoort; wrong, ccotraliied pUnninc and prkxiiy access to reaourca

ftuppotnliag Rrswffi

The complexes, now numberingre performing dismally. In general, ihey have noi been luccessful cilher in increasing the volume nnd quality of new products or in shortening the research and development) proceai. In particular, the complexes have not met iheir time schedule, fo. the devclopmenl of new prcducu and proccsaea. .nd the regime has reproached them for spending too much lime just getting organized. In fact, many of the MNTKs have notany new pratolypea. and the leadership has complained that tome of the complexeson paper only" or arc only in -embryonicitnUariy. the resulu thai ihey hive been able to produce have not met (he retime', quality tundardi

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Placing Ihcrong?

The MNTKs have eneountcied signlfic-inl obstacles and resistance. Their efforts have been hampered mosi by iheir inability to obtain preferential sialus for resources. The MNTKs* inabilliy io daim priority sutus points toflaw in the maiecy itself. The breadth and scope of the MNTK activities, especially when coupled with efforts outside the complexes i0 develop new technologies, are probably stretching resources too thin and generaling competing claims for resources.

Much of ihe rtngerpointint has been directed at the industrial ministries thai were to participate in the complexes The party and ihe MNTK beads have repeatedly complained that the ministries have cilher dragged their feel or refusedoopers ic ihoielher "

Although ihe regime has patientcd tbe MNTK after the model used by the defense industries for development and production, il did not duplicate the role of ihe defense custoener-thc Ministry of Defense. Tbe military's precisely defined needs and demands for advanced technology to counter Western Ibieais. coupled with its rigid duality control measures, has fostered technological advance within the defense industries. The MNTKi are also attempting lo develop sophisticated lechnoloeies, but they have only limited ties to potential consumers.esult, even when able to de-velop new prototypes. MNTKs usually are not able to find customers for their products and. therefore, are unableonvince series production plants to produce Ihe flew product*

The dismal results of the MNTKi arc largely due lo the regime's focus on attacking ihe bureaucratic rather lhanlo Innovation. Although the MNTK head, have pointed to syslemic barriers-the lack of incentives for enterprises io produce new technology and the aversion of producers to tbc risk associated with newprimary obstacles, the leadership, thus far. has done little to overcome these Isarriers. The regime probably ihought that, by adopting the methods used by ihe defense industries to develop lcchttoiog.es. it could duplicate the biter's success vrithoul drastically disrupting the system

4

for Help

The regime is tapping lhc dcfenic industries lo support ihe MNTKs. Mosi of the technologies largeted by the MNTKs lisvc civil and military applications, and many of Ihe complexes include organizations thai are cither directly subordinate to the defense industrial ministries oror ihem under contract. Further, many of the technologies targeted for attention by the complexes have been mosi fully developed within the defense industries. Moscow probably intended the MNTKs to serve as conduits for technology transfer between the two sectors, and the inclusion Of dcfenic industrial organizations within the MNTKs was prob-tbly designed to encourage broad diffusion of the MNTKs' achievements

Reactions lo the regime's sclkataiions for increased support have beenecent callefense industrial deputy minister to form an MNTK on composites Indicates Ihat at least some in the defense sector support the MNTK conceptay to accelerate developments of special interest io defense. On the other hand, the head of the Personal Computers MNTK complained that ministries responsible for producing thewhich three arc" defenseresisting because they viewed the MNTKstemporary campaign."

Sincehe regime has also turned increasingly toward the Wesl to gain assistance for the MNTKs through cooperation agreements with foreign governments and bus'meases, joint ventures, and instrumentWe believe that the original MNTK blueprint hadery narrow role for the West, wilh the primary emphasis on the USSR'sapabilities and an avoidance of dependence on Western assistance. Nonetheless, the Sovieu have shown an eagerness to broaden Wcsiern contacts, especiallyay to overcome the barrierseficient experimental test base We believe their efforts to enlist Western assistance will intensify over the next year as the complexe* become more desperate toh Five-Ycaroals

Prospects

In the near term, the performance of the MNTKs Is likely to fall far short of the objectives sei for ihcm. The itnpedimenis to progress are major and will not be easily or quickly overcome. Shortages of trained personnel.

deficient, experimental test bases, bureaucratic resistance, and systemic deficiencies will weaken the impact of the MNTKs throughout lhc remainder of the present plan period.

Over the long haul, the MNTKs' ability to serveechanism lo advance key technologies rapidly will hinge on the regime's ability to resolve bureaucratic resistance, command priority status for the MNTKs. and refine the strategy to address the problems caused by tbc "absenthile Gorbachev has demonstrated his determination to address bureaucratic resistance, he has not succeeded in overcoming it. His prospects for success in other areas are similarly limited. MNTKs. however, may provide important benefits to the defense sector, which is likely to continue toigh priorityesources and whichowerful and knowledgeable customer in the military. The MNTKs may be particularly useful in transferring Western technology to the defense sector

Even In the unlikely event that these barriers arc overcome and the MNTKs are ultimately able io operate as designed, wc do not believe that ihey will be competitive withn spurring broad-based technological advancement throughout tlte economy. The MNTKs' lop-down, command approach to innovation relics on targeting specific areas for forced development, thus limiting spontaneity and flexibility. This approach orients the Soviet Unionfollower" or "catchup" role.

Beyond the MNTK

The Soviet leadership is becoming increasingly aware of the flaws in tbe MNTK strategy and is rethinking tbe role and siructuie of ihesell has begun to question whether the MNTK mechanism is approprialcatalyst for tcchrtctfogkal progress and whether it should be continued. Reforms now being considered could eventually lesulihift away from the MNTKs.aking its first faltering steps to address the systemic features of Soviet RAD Recent legislation aims ai creating conditions and incentives for greater "technology pull" from beto-and expanding the autonomy of research and ptoduciion collectives

Over ihc next few years the regime is likely to pursue bothto integrate centralized wiih decentralized methods. However,bc new. decentralizing measures now beingas self-(ininc.ihi and increased competitionr janiiococnpalibk with the centrelirod strategy embodied in tbe MNTKs. Thus,hiftreater reliance oa decentralized decisions on pew producu and processes is probably correct over the long term, in the short and medium lerm it creates the potential for conflict and disruptioo in Soviet technological developmenl and could ultimately cause tbe leadership to abandon the MNTKi.

Saw**

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Contents

Scope Note Summary

iDllUCiUClicXi

the Retime Eipecta To Achieve Taraaih the MM Ki

Accelerate *md Imprtwe Remra FromjmScacncc FadUiate Interaction Wuh therlwtriaJ

The MNTKSliatciy

Borrowing From Iktctue Industry

Party Support

Strortj Cenlraliiednd Oeriiihi

Priority a

What and He- Are the MNTKi

Some Stacmiei

Maa,

Plae.B( the Blame: What! Wrong.?

Rrti-erpoirttina;

Need forCreaicr Autonomy

Priority Status Only llluiory

Syn-mic Faciora

Unking Reaearch to Produetiori: The Gap Remains

EmaUtincDefense lndu.mil Sector TVMU

Keaime Pesroese

Tightening iheThroaich Reorganisations

looking Outwird

Scaling Back pjprctatlotu

Having Second Thoughts: Moving Beyond the MNTK

Organiraiional Fixes

Sysicmic Adwslraienls

Fallmg Short lor the Near Terra

New T<

Sho-teningroceu

Strangheninc Eichsnge Between Civilian and Dr fetiae Sectois

9rerw

USSR: Orgam tattoos! Measures Fail To Spurcal Progress

oldinj lhc tcieoti/ic comma nity re-ipoeisibk Tor (he rapid introduction of new produclion tecboolocks Into induiiry.ecember the Pctiiburo and Council of Minicters unveiled tbe organizational rrxehariiim thailended lo play the pivotal role in thb trscnnology devclopmenl effort: the Inter branch tcieatific and technicalne compkxes are detijned towhat has traditionallyajor weakness within tbe Soviet SAT and industrial sectors: the disconnect between science and production. Eacho link, urider Ihe overarching authorityead imtilute, utilities that span the entire product development spectrum: from basic research to ai Icait prototype productionsome

Prmmj

Table I

Coals for Increased Use of Advanced Technology In tbe ITtb Five-Year Plan

ti.cn

JO-HQ

mesaltuirr

lira

ccanpatcn

miltwn'

11th Five-rear flan ealti for lac me of ihese iecbaotoi'ic> io <by ibe mall tneUeiiccl

* The roau (or rolirj sstornatcd lino sad rsrnooiln. refa

io increaica in produnlon nine? thin Increased me.

' The tool (or roury aaaonawd noes and penoaal com pin era

(IBOfW ll* plaarod pi-cduaka ia

the Regime ExpeeU To Achieve Through the MNTKs

It hasatter af urgency to createforms af Integrating science, technology, and production, which will'make It possible to ensure that scientific Ideas are followed up precisely andfrom Iheir beginning right through lo iheirpractical application. We are convinced lhai Inierbranch scientific and technical complexes must become one of these forms.

Lev mkolayevich Zaykov, Pony Secretary and Politburo Member

UaroVtHI

The Soviei leadership ursderstands clearly lhat the key loimprovement of ihe country't economic situation it ihe continuous, rapid introduction of advanced produclion processesroducefoods using successive generations of increasingly productive machinery and equipment. The Gorbachev regime opects MNTKs to develop specificcritical foi modernisation and to shorten ihe

lime required lo move from the laboratory to the shop Boor. The regime alsoTKs to improve the efficiency of Ihe research and development <RAD)is. to ensure greater return from RADFrnally, the MNTKs are intended to tap (be defense-industrial sector for tecnnologj needed for civilian modernization and io create aogy Row back inio the defense lector

Tbe regime has targeted for priority development the same advanced, high'technology areas that areto Westernnewbtoeogirteering. and energy.1 the use of keyo eapand0" percent over thaihe complete* arc to ensure thai ihe new technologic* are developed and meet the regime's specifications for numbers of ne* product* and standards of Quality (teec cordinrj to Soviet public statements, there are nowNTKs focused on the targeted technologies lilted in table 2

ardTiT

Accelerate and Improtc Return* From ImesUnetUs Is Science

Theate, although rrutnimoth in size, it grossly inrfiicicjtlliee

Jilhe rale of return on RAD ha* actually diminished since Ihe. One of tbe principal causes driving down ihe return on thexpenditures is that very few scientific achievern'ois are translated into actual applications or introduced into production. Many of thedeveloped by an institute are not picked up by design bureaus forew prototypes and are left to laogulsh within an Institute unill obsolete and forgotten, or until discovered in the West and later reimport ed into the Soviet Union. Accord ing tostatistics, only one-third of Soviei inventions and discoveries are Introduced into production, and onlyercent of inventions are introduced into more than two enterprises. An even more dismal appraisal was given7 Itveitlya article- According to an official from the State Committee for Inventions and Discoveries, onlyercent of inventions ever find practical use, andercent of all inventions are introduced at more than ooe enterprise

Similarly, Sovieu writing In the open press complain lhal the country cannot expect to be cooxpetillve with the West as long as it takes seven to IS years to transform an ideasable and marketable product. The regime has celleddrastic"io the duration of tbeooe Instance,o five yearsoal. (Competition to trim the product development cycle is currentlyin tbe West. For example, the automotive industry is seeking to pare the processears, whiltC. 3is seeking to slash lu four-year cycle for ^equipment by SO percent.;

The regime expect* that the MNTKs will bcabtfl to overcome Ihc bureaucratic obsucles as well asImprove communications within the RADThe MNTKs are to speed and improvedevelopment and problem resolution by bringing scientists and designers under one roof. Closer and Improved communications should result because each

Bureaucratic Beundarlrianovaliea

Yevgenlyhot. Academy of Sciences Viet PreM-drrc and scientific adviser lo General Secretaryhat pettmed cart ihat: The branch saemlfie (mt it uiearrier to tht tpread af certain scientific Ideal ihat appeared In th. Academy and the .hither and tpetiaUied educational

In tht Soviet Union, iht dlfftrtni major naget baste and applied rtitarch. prototype design, andlo be performed by different orga-nlunions with widely varying subordination. Soviet Ret li faefttilts come umdar three broad etrgardsatlcm-al categories: the Industrial ministries (referred to as sectorial or branchinistry of Higher and Secondary Special lied Education (Vusyf. and the academies of sciences. Communications runalong vertical lines, with the Individual actors rrponing directly so central, superior adoriristratrt ethers within the parent ml edit let In Moscow, The bureaucratic boundaries have acted as barriers that limit Ihe devricnyment of new lechnoloties and

While Ihe bureaucratic boundaries have created gaps within the scientific sector, ihey are also responsible far the gulf Ihat Stparatts tMl lector fromThe two sectors report to different superiorwit kin tht same ministry. They also operate under dlfftrtni regulations and procedures for planning, financing, and Incenltvet. What Is an Incentive to one sector cmttlnemstre to the other. For txamplr. plem fubVlmentesearch Institute has been based on project comiMttlon. not whether the results are rail able for Introduction ml the production enterprise Crmsequently, newleaving the institute are frequently Inadequately tested or have design Raws thai prevent their series production

mntk will Iks able to link ihe varioai actors, permit at lean aome limultarseous research activiiy. and reduce ihe lime required in develop ihe eiteniive ocumental ion

The MNTKa are eipecied io sharply increase tbe return oa iareatoaeol ia science Although to oar knoattedee no specific goal baa been act for the MNTKi. ihe retime hai cited Iheeiurna achieved by ihe Paten Electro-Welding Institute and the Problem! of Malerial Science Inililuie. Decauie each complox Li to link the numeroui partlclpinii withinrocess, tbe MNTK ii intended to ensure thai no new scientific discovery ii allowed to fall through the bureaucratic cracks. Similarly, ihe regime capects lhat the complexes, exercising Iheir linkages and authority with tbe relevant minisuiea. will achieve broader aad nar thorowgh cVTun-sr ofdwetx aad processes

K reaction Wltb the fhrfettM Industrial Sector

Mi of Ibe irjchnriictpes tarcetcd by the MNTKsn both the defente and civilian Induitrial lectors, and we believe that the MNTKs are to terve aa conduits for technology transferthe two sectcri. Although the regime has not explicitly citedole, the organirational network of many of Ihe oompteict shows sabtiantial ties to lhc defease sector, further, marry of the technologies targeted Cor mention by theat pertoaal eomrnitert.aber east ics. and leatiacbeen most fully developed within the deft me ind amies. For eiample:

- The lead organization Of Ihe Rotor MNTK Ii subordinate lo Ihe Ministry of Defense Induiiry.

MNTKi for Personal Computers. Robots.taseit. Fiber Or*ics, and Machineirvorjrportte research or production faeiUties thai arc subordinate to the defente indattrial

mi ni ii riea.

lean half of lhc MNTKssubordlniic

to chili* nor Ihe Academy of

include research institutes ini fablef research it conducted under mililary contract!.

Moreover, although the Soviets have announced thatiganiraiiortt are wotking within ihehey have identified fewer0 faeili. lies. We assume that many ofnHenlined organizations ire tied to ifee defense sector

The MNTK Strategy

Tbe MNTK meetisejsmypical Sonet top-dsowa suaiesjy. Ia fact, it aac* the approach prevailing La tbe defease sector, which feat ores three eleoaenis:

High-level partyto owoeomc bureaucratic resonance.

Strong, ceatrali(ed planning and oversight toand meet goali on time.

Preferential aiaiui and priority access to reaoorcet to avoid disruption*

Borrowing Front Ihe IVftttie Indrtttty

Thiipushes technology fromheavily from the approach usedthe defense sector to develop critical technologies for weapon programs. It emphasiiea reliance on tbe USSR's indigeavout RAD capabilitiea aad anof dependence on Western assiitiner or inputs. Indeed, acxrorotng lo italemeais made by thethe taient is to hive tne MNTKs apply, witlaa tbe civilian RAD sector, thoae lactka thai have bees reuinvsly successful rot the military la hit5 speech dedicatedAT lateen. Gorbachev outlined his plan for the formation of new orlhat eventually became ibewould be reiponiible for developing critical technologies by emulating thc-methodi used in RAD and carried out under the auipicei of the defense Indusiriei. Gorba-ejhev recmplitilrcd, while viiitlng the Biytoour Space Center in? and praiting Soviet riciiievementi in space and rocket development, hit eipeciations that the country'i RAD community coJd duplicate these lame iiiccessen without goingandimilarly. Academy Vice President Kcatstantia Frokw cmpbasirodoviet puUrcaiaoa thai the idea of Ihe erxiapleaei and iheir formation was based on Ibe experiences of iht nuTiury-erasruoued inace andprogrants. The regime probably believes that tbe saiecestes achieved in ihese pcugramt can be daptical-cd by tbe MNTKs by tranaptaaiiag (he fnan*gew-ni processes ind Incites uted ia mdilary RAD

Tt-

lue la lo irantfer defense-lector practice* to lhc civilian aide have not proved lo be tueeeaaful. however. Duringnd, scientific prod actassociations (NPOs) were formed aad employed many of ibe tame roeaaaiea. The NPOi, lute lhc MNTKs, were aa otginiajtamil meel.iniim designed to link ihe key acton ia the RAD and production process. The NPOa dad not provide ihe anticipatedacceleratedof newhoot*i them were itill in existenceeneially, ihe NPOa were defeated by many of the obstactei now confronting; Iheproblemi,experimental hue, and fragmented authority. Moreover, the NPOa (offered from an ideality crisis. While on tbe one hand they were lashed with rapidly developing new techocaoeka. on the other hand the parent ministries and eauerprisea looked to the NPOa for tapped in rr.eetiricurrent production quotas. Many of the NPOs eventually becaanc prisonct lo narrower, parochial Interests at the enterprises, to Ihc neglect of scientific research and technology

aorbachev'i science plannen most certainly analyzed tbe experience of tbc NPOa to find ways of avoMInc the problemi they encountered. From Mcoco-'t per-trxcth-c, the strategy of an overarching authoritytself sound, but the organizational impteapcotaiicm wasrial boundaries Tbe Kept that the leadership took to refine the itraiegy focused primarily oa otganlia-ikutal ad is tt menu. The scope was broadened tocf ministerialta the capabilities necessary for ibc developmentpecific, inlerdiseiplLnary technology. In contrast to tbe NPOs, Ihc MNTKa Include basic research institutes under the Academy of Science* anddrawn from numerous rnlansiriea. Similarly, tbc MNTK* hive been delegated greater dodiionrnakina authority

Party Scatffwrt

The party has frequently demonstrated Ms satpport for the MNTK concept. The leadership has coupled visible support with public criticism in aa attempt lo overwhelm bureaucratic reshtaace from ministriesovercome lhc inertia and Hagnaiioa within lhc

RAD sector. Gorbachev, in his speech to ihe7 Central Committee plenum, expressed "grcai hopes" for the MNTKi and called upon the ministries lo provide the complexes with ill ihc assistance they needed and to facilitate iheir wtVk* in every way. "Second Secretary" Yegor Liiacher and partyLev Zaykov tunc both praised the MNTK concept. Zaykov. when responsible for both the crril-iaa and military industrial sectors, attended orgmeetings at aotne of ibc complexes to relay party support, but alao euaptcnacttc at the ocaudes the MNTKs hare encountered Iigichcv. who we believe has had general oversight reaponaibilily for science and education, warned: The directors of the MNTKs and the leaders of ministries, agencies, and lhcofro personally responsible for effective utilitalion of this new-in-principle form of Integrating science with production."

Strong Ccaatreuicd Ptanalng aad Ovrttcai

Each complex has theoretically been given reaponsi-biliiy for alasost all aspects of developing iu target technology, iadoding forecasting fat are areas ofand do*loping com per hensirc SATprincipal loot ased to plan Soviet RAD activity in keyhe planning authority of the MNTK goes beyond ihe complex itself and ind odes all RAD facilities woeking on the technology. MNTK* are responsible fot developing annual and live-year plant coveringirri tie* of all theseions. The complex ca. working In conjunction with tbe Council of Mlaislers, are authorized to draw In additionalcompulsion. Iffulfill their mlaatoa. The MNTKs arc lo draw on ihe Stale Commillce for Science andfor administrative support as wdl as leverage when coordinating aetata cnioitterial lines. They akto arc icsporasibk for adming the Stale Planning(GotpUn) on how aad where theirire to enter scries production. Gasptaa, rat tarn, is lo incorporate these result* Into the plana ofcmerpriscs

Priority Access

The MNTKsbeen givensiatus when requisitioning resources. This right, rarely bestowed outside lhc defense industry sector. Is

iniended to avoid lh< bottleneeki (hat could retard tbc MNTKa* tciivina arrd progress. Baidra male rid. the complci es ma to have priority acccaa loand fundi The Sme Cornrnittee (or Science aad Technology (GKNT) fa lopecial ruble reserve for drt bursalhe MNTKa when necessary. Similarly. MNTK centime! ion rccjuirccnenti are to be fulfilled espeditiously

Koshkia bothcewUlion for iotvovaiioo and dedieaiioainding araatcationi fot their producu. All ihree have high level party contacts. (Federor ta Getrbachcv't personal eyeovietMinbicc of Defense Ustinovtrong personal interest in Kcnhkin aod his rotary icchnolocy aad ami instrumental in its djlTu-lion throughout lhc economy.'

and Ho- Are ihe MNTK* DolngT

Greet hopti for the acceleration of the elaboration of new tdrnllfic Ideal and especially /or the larrr-scale Introduction of newly efficient generations of rqutp menl were connected with the tttabltlhment of Inter-branch sctentlfic technicalittleare passed /timet their formation] It has to be admitted that the hopei for new complexes' did mot entirely Justify themselves.

EVooom icheska ya gaieufMJ

The MNTKs are not meeting Moscow's expecutlons. There have been some successes, bui iheae have been limited. Generally. Ibe completes have not succeeded In Improving the volume and quality of new peodocli. or in shorteningrocess. They haveproblems in getting themselves, organized and operational Indeed, the regime, accord tag to recent open-source articles, is rethinking whether ihc MNTK mechanism can fulfill the leadership'i cofee-Itvea. '

The fewthat have been identified lend to bo tingle products and nol new technological processes. For example, MNTK Riogen is supposed to have developed "moteifferent items,unique preparations and chemicalut MNTK Membraneaini recovery method, and MNTK Machine RdUbtutyest benchobot (reduction facility

Ma-,

Witheytion ef ihc examples rsoted above and in Ihe appendix, however, few of ihe complexes can point io sny achievements. Raiher, the MNTKs have been rebuked tirongly because they are -cooductlng their worknd many of Ihcm had failed lo embark on tbe creation and introductionew generation of equipmeni and technology-of ihe Academy of Sciences Curiy Marcbuk complained inl. for example, that ibe conspkics -Rill hare not become the struaural uniu that ire capable cf nbstaattaUy acceleratingft

Over Ihe nan year the Soviet press has reported that tome of Ihe MNTKs are operating successfully. These claims, however, have been made by Ihose complexes Ihat were already successful organizations before they became MNTKs. Indeed, the regime.eneral appraisal of the MNTKs, acknowledged that the few aweceaae* could not be attributed tn ihc MNTK ttisiegy. but rather retseeud iheir prior effectiveness. These -isrperxurs- include only Pa too Welding. Ro tor. snd Eye Microsurgery (secuch cf iheir aueccueflection of ihe capabilities of ihe MNTK generalYe. Kothkin, and S. N. Federov, respectively. For example, Paton md

Although our ability to asacaa ibe performance of the individual MNTKs it limited because we do not knowof their goals, nor the peformanoe of each, regime criticism indicates thif Ihe MNTKs have falkn short in several areas:

Timeliness. According io theCotnnsillee of Stattttica' oflkaal report7 plan fulfillment,MNTKs have not met their lime schedules for the eVvelopoteat of new rt^iptneni andTbe regime hat cnoared ihe tvtnplcxcs for spending loo much time just gelling organized For

Superstars: Thnmbaail Sketches

Welding MNTK

Tht Paton Welding cample* wai formed on ihe basis of the Ukrainian Academy of Sciences' Ye. O. Paton Electric Welding Institute, reportedly Iheomplex tn the USSR. Paion't Institute, which has Ils own massive experimental lesi base, six engineering centers, and pilot production facilities. Is unique within tht Atademy syttem fot having very successfully linked basic to applied research and for having developed titinstve ties to IndustrialThe Inslllute has long been praisedodel for others io emulate. In kit5 speech laying oui histrategy. Gortiaehev pointtd la ihe Paton Institute as the prototype for new organiiation-alnamed inlrrbrarock teltnt'Jlc and technicalwere lo spearheaddevelopment. The Paton Institute, now tkt MNTK.orld leader In ihe dtvrlcnmenl of welding end electrometallurgy techniques According to one source, at leastercent af Its work Is done under contract for the military.

MNTK Rotor

MNTK Rotor It led by the Podolsk Design Bureaucalled the Kiuhiln llcsltn fvwtj after Its generalIs subordinate lo ihe Ministry of Defense Industry. Rotary technology hoi been ihe creation af. and under the total domination of. Lev Kothkln. who originally developed theduring World War II for the production and handling of ammunition and who has pushed hard for

Its wider use In the ttonomyTett Us present slate af development within the Soviet Union. It Is generally low letrh'tn nature. In Iu simplest forms, rotary technology consistsariety af machine loots arrangedarge cylinder (hence thr nameor wheel) thateries cf operations oa urfinlshed goods transported by conveyer belts. 1st use suss been ruggrssed In many Instances In place of robot technology: Indeed, there appears to haveong, competitive bailie between the twoIn the USSR. While rotary technology can be upgraded to "high lech" through the Incorporation of sophisticated automated numerically controlled units. Ihis has occurred only slowly--tf atthe USSR- Koshkln It currtnilyery active role In adapting the technology for widespread use within Ihe food-processing Industry as part af ihe regime's overall effort to tap Ihe defense Induslriesfor support In the agricultural sector

a

MNTK Eye Miorasargrrj

This complex foe eye microsurgery Is unique In iket Itervice ratherroduct. Its director. S. N. Fedoror. has essentially "ausomasetT eye surgery. The surgical process Incorporalrs practices commonssembly line work. An operation Is conductederies af special learns, eachIts own function Inedorov claims lhat the process has ledigher cure rate. Increasednd lowrr patient costs

I,

MNTK Catalyiii. even though it hid new l "on the (heir1 when flril created,full ilow to ihow .nf results. Similarly. MNTK Membrane was rtccuied of luck of progress, sod "living off the scientific reserves" that Ii inherited.

Number ofhe com pie set have noi met theexpectations for Humbert of neworn the batit of criticism* in the Soviet press, we believe that, it oft a

minimum the Membrane. Personal Computers. Powder Metallurgy. Robot. Industrial Lasers, and Fiber Optics MNTKs were not meetinglives assigned to ihem within the one- and five-yearWe have no information on several MNTKi, although we anemc lhat some of them also are fallingany of the MNTKi have notany new prototypes. The leadership baithai many of the completes 'exist on paper only" or are in "embryonic form."

Quality of itsulit ThetToits. as well as (heir results, have noi mei die regime's qitalitx standards.7 MNTKsCont-pulers and Robot hid to rewrite their plans because many of the projected activities would not have met world standards. Metal powders produced by tbe Powder Melallurx;-MNTK were "unliable"The new laser developed by MNTK Industrial Laseroord inj; to the Soviet press, considerably inferior to fordgn models. Aod even the "superstar" MNTKs have bad problems: as ofotor was "not peformiDg to its fullnd Paton himself complained that internal problems kept results of the Welding MNTK from going beyond "average*

The leadership appears impatient for the MNTKs to become fully operational and is intolerant of their shortcomings. The MNTKs have been in existence only about two years, yet the regime's criticism of their performance is particularly harsh.osttbe critical role that the MTNKs and the technologies they are td produce are supposed to play ia the industrial modernisation effort. The regime is therefore hoping the MNTKs will produce quick results. Its attitude parallels the criticism levied against the machine tool ministry In the machine-building sector, which was also supposed to lead the way In producing new advanced equipment. The regime Is banking on the MNTKs to bare the new technologies in place for ihe start oflh Five-Year

Placing the Blame: What's Wrong?

The Initial reaction of those responsible for MNTKs* lackluster performance has been to place the blame elsewhere. It appears, however, that the mechanism's failure stems more from systemic factors and, despite leadership promises, low priority in obtaining supplies.

Tbe legimc has complained lhal MNTK directors,ibeciences in general, have not been sufficiently diligent in cliininaiing obstacles. For example, MNTK Oil Extraction's slow progress'waslo its weak and ineffective director. In another case. InT ihe director of ooe of MNTK Machine Reliability'! principalA. Ksybrsbev of tbe Supcrplaniciiycensured for allowing the performance of his organization to worsen The resignation ia6 of Academy President A. P. AtetuaaoVo* any have been pushed, la part, by the regime because of his lack of whotchearud support for the MNTKs (wehen announcing hii icsigBatioe at UseAcademy meeting. Aleksandrov admitted that be had not been able lo give lhc complexes hb fullt was it (hit mooting Ihat Ligachev Issued his strong warning that Academy aod ministrywould be held responsible for their support of tbe MNTKs.)

Mosi of Ihe hngerpolnllng. however, has beenal the ministries, which were to partlcipaie in the complete* through the Ind as ion of Iheir scientific institutes, design bureaus, and eiperimcntal teatThe party and the MNTK heads havepublicized their gricrvarsccs with the ministries, complaioing thai ihey have either dragged their-hence slowing Ihe formation of theor have refused to cooperate altoarthet and have reacted on their conuniimcais For example:

The director of MNTK Robot emphasized thai be could "only loflecncr with words" his manyministry partners.

G. A. Abirtiiov. bend of MNTK Industrial Lasers, declared that the ministeriil organizations that belonged to his MNTK did so in name only, not In action. The complex'* activities were "more and more taking on ihe character of bureaucratic warfare,"

Koshkin. director of the top-perform-

MNTK Rotor, griped that many ministries were

The principal participants in thecooperating or paying attention lo hisministries, and MNTKx--are taking idvantaceregime's policy of glasnon (openness) to placethe blame for tbe MNTKs* dismal results

A Hesitant Academy

Both themembers ond leadership ofthe'Academy of Sttrntti have not beenoutof iht new tompltxtt. Academicians warn thai applied reteareh and product dntlopenexi are not In themertit because they attract front Hi primary focus on basicame of ike Academy's top stien-tistt heme complained openly that the UNTKs wouldellout strain on tne Academy's already limited resources. World famous theoretical physicisttniburi argued In the Academys official Journal that It was "inadmissible lo carry oui theof the contacts of science with produclion al the essxrue'tsflhe Academy's responsibility for pursuing

budget was already too smallerceni aftht state's expenditures onarntd then, for "thelobe responsible foreans not be responsible for anything.-Similarly. V. A. Trapesni-kovSoviet asmputer specialiit, head of an institute participating In the MNTKs.trong advocate of the reform and riAiallsallon of Sovietomplainedanuary 1M7 I' -Ja artl-elr that the once lop-prrjormlng Institutes were"overtaxed, bogged down In administrative wort, and turvdng into bureaucratic apparatuses-tauli of their role in leading ike large

ComplalniSlevded by Borit Naumov. director of the

" Computers MNTK until hit death in. indicatekail In falldefense Indus"it* hat also been orKoaperative. Naunsov coniended that, although be had attempted io assert control over the orgsniiatiMBi involved in theand prodtsctioa of personal computers, the four miniiiriea responsible fop prodocint iheof whichare defenseresisting because (hey viewed tbe MNTKstemporary campaign."

Need for Greater AMonoru? The record so far suggests thai ihe completes do need greater autonomy from the overbearing control of the mianiries and greater aathotity to enforce the righis grimed to ihem by the regime. Miaulcrial comerva-tiam mskcB it difficult lo eaercise the powers ibe MNTKa posies* on paper. The MNTKa' iitabiiiiy to awer! control over lhc ministries audio assume true leadcnhip over the development of the targeted tech-oralrsgiei isresultoopbole in the reflations governing iheir activitiea. Althcatgfa ibe lead iniiiiaic for each MNTK is to have authority over all (be

statu as aa independent legal cattily and itslo iu pa rem rjiiasstry. Eachlo be responsible to iu parent rnioastryfulfillment of its previous taika andThe MNTK tubunlu have. Innd are requiredwiih Use tajking of two mastcrt whocompeting, oficn easnilieiing. demands on

Priority Status Oafy fjjosory Almostof the MNTK dirtctort have protested that ihey have not been given enough support. Although the MNTKi. by decree, were ensured priority access lo resources, this lias not materlaltied. MNTK headi often have itreased ihat no real ptogiesa can be made until "priority italus"eality and not merelyllusion or rhetoric They point to severe shortages thai are hinder!ag the faD spectrum of MNTK activity:

Scientific Instruments and experimental test base. The lack or adequate eaperirtienul test facilities equipped with state-of-the-art precision scientific 'instruments is, by far. the rtiosi critical shortage confronting Ihe MNTKs. Al leastomnleics have made ktsown their need for design, cajwimen-laland prototype prodacsaon fadttita. Dircc-lora have chaiged that deSkaraM or rsonejisteos test facilnie* are severely retardiag-or blocking elio-gethcr-progress by the MNTKi The bead of MN TK Bcoaen slated lhat the lack of testing capability wis impeding his ability to move new producti into series produclion until lhc5he head of MNTK Industrial Users protested lhat his organisation wai "in desperate need for priority placement em cnnsiruction lists.-but hu pleai for preferential consideration ignored

Financial Support. Abel Aganbegyan. one olecoiKxnicrisers, hat pointed lo thrpractice of haanciag science separately from productionajor handicap MNTKsaUlysts, Machine Reliabiliiy. and Oil Extraction hive itiied ihai financial problems aie hurting llMlr activities. Tbe Oil lis tract ion coin pie* licked any landing for iu firs! fall year. The eoenplcae* hive called for funding methods to be reformed and for inmaaed financial luionomy.

Specialists. Mot! of Ibc cnrrtpleacs have complainederious aborUge of technically qualified ipectalitu. <sp-Xitll(or example. MNTK Rotor alone00 dearer. era over the next fire years, lnairuclion in some of ilic ipecialtiea within the higher educationalis, according to the ccMrrplea heads, cither eficient or nonexistent. MNTK Robot's director contended lhal these wasemand for robot ipecUlisu he could not hold on to them; erg antra-lions able to pay higher salaries were drawing themBeyond Ihe need for SAT woe ken, therehortage of trained personnel to install, operate,service ihe new technologic* produced by Ibe MNTKs.

Suppllet*Tna complexes, which have not been granted priority acceis to general luppUes, ilw materials, or ipcctalirrd subconsponeots. have called for reforming Ibc MNTK supply system Rather than benefiting from preferential status, Ihe com plexei have encountered coniinued red tape and bo. reaucratic inertia The MNTK for Scientificreported ihat il wai having lo wait two years to have iu orders filled. The Membrane MNTK could not get accaa lo vans or gaiolinc in order to mark el and service rU new prod acts. Theiers complciritical need for sophiitkaied svbeomponenu such as orxtcal units, electroniccontrol equipment, and power syiiemi One of the participating orgaaiutioM iaTK refused lo produce custom designedand minted thai Ihe complexodel already in series produclion

At long at the Soviei supply lituatioo continues lo be characterized by pervasive shortages, it at essential for

the success of the MNTKs thai Ihey receive ptefcren-tlsl treatment. Priority Is critical, not only to supply

MNTKs to operate, but also lo maintain Ihcm as viable otgsniutiom for the long term. Sovietof new products cannot operate |tke there ha Ihe Wesl. who can turn lo alternative sourcesnun power, Taw materials, and supplies. Without preferential treatment, live MNTKs will find llnolmeet iheir coals within the established deadlines. Further, the complciet will increasingly limit ibe number ofand tailor Ihc design of producu tochanges thai would roquire ihc use of different inputs.

Tbe MNTKs' inability to dalm priority nitu*.poiauaw in the strategy itself Priority Malts becomes meaningless if it is granted tooThe breadth ind scope of the MNTKespecially when coupled with effects outside the corn-plexca to develop new icchnologlea, arc probably Itrclching resources loo thin and generatingaad competing claims for resources

In the near fuiuie, the supply situation for tbe NTKs could gu worse. Because of the political lir.icl.ght focused on ihc MNTK concept, there have been calls ewer ibc past year lo form yet more complexes. Some of those proposed are limited in their potential impact and do not leprcseni key, intcrdisdplinaty technologies. Rather, they arc cfforU io join the politically popular MNTK bandwagon. For cuin;4c.' therecalls in the Soviet press for ibe formation ol MNTKs lo develop vidcoeassetie recorders, mining simulators for nuclear power complexes, and Infiaenia vaccines, lite unique nature of the completes and their priority aula* risk ovcrdilution as iheyconomicallyf the complexes arc allowed lo proliferate, there will be even greater compelilion for tearce SAT

Systemic Factors

For the most pan. MNTKs have been unable to move their developments beyond the prototype stage and into series produciion. Although Soviet press reports credit MNTKs wiih successful developmentew items of machinery aod technologies ihat were ready for .stimilstionnlyf the

products HN included in tUIC orders fot actual production undo8 plan. The regime and MNTK directors haresujes for the slsortlell:

Responsibilityvcrtee series peivluetior. does not dearly come under the purview of ibc MNTKi.

Minimica and thdr subordinate produclion enter-pnica ate leluciant to tackle scries pcoduction of new producu

. Linking Rtitareh la Prod atei IonTheThe MNTKa, in rnoal insuriccs. arc responiiblc for producing only prototypes, allbouch. by decree, they arc tasked urilh overieetng Ibc development of the Icchnolofyeries production.etail of.O tncchanitm to ensure (hai the prototypes will ever be scries ptoduccd) aad Ibe recime't goal of era ting the MNTKs lo bodge the gap bci-een tejenee aad pcoducxtoo it falling; short. The Utc R. A. Belyaiov. (he head of one of Ihc first and moat tascccssful NPOs. Kriogcnmaih. complained lhal the MNTKs provided only "halfBclyakov pointed out ihat "lhc economy needs new tula-produced equipment, not prototypes."

Many of theexample. Blogen,Metallurgy Machinery, Personal Computers and Industrialindicated that ihey have encountered resistance from ministries and"hen altcmptintange for tertei prod tie-tion based on new prototypes The bead of MNTK Industrial Lasers, ooe ot" the few compleies tpccthcal-ly responsible for series peed set ion, complained thai Ihc Mlnuiry of Electrical Equipmeni had reneged on Its commitmentroduce components and perform assembly work. As ofhe complci had latisned only fourequests for new industrial liters (hit It had received from unspecifieda-lions Even the successful Rotor MNTK hni run intoi- oopei"one of itscustomers, Ihe Ministry of Machine Tool ind Tool Buildingdragged their feet and tried io avoid thr production and introduction of rotary technology

The inability of the complexes to estsute tenetof newclose ihe gap betweenresearchduciiontuggcsli lhal the

MNTKs have not addressed the systemic obstacles thai hive consiiienily blocked lhc introduction of innovation! throughout lhc economy (tecNTK-hesds have pointed to the iTCVof incentives for enterprises to produce new icckrology and tbc aversion of producers tertbc risk astociiled with introducing truly new products. Indeed, lhc regime's objective for the MNTKs was to atuck ibc bureau-erathai have hindered the development and introductioa of new technologies. The regime probably thought ihat. by adopting lite methods uied by Ihe defense industries to develop technologies, It could duplicate ihe liller'a success wiihoui diitticatly disrupting the system

Emulating IDefrost IndustrialhtLink. Although lhc regime sought to (raesfcr the strategy used for developing tectnevogy wuhia tbe e> defense lector, one critical dement waa act replicated: the miliiary eastomer. The precisely denned needs and demands of Ihc miliiary for advanced technology to counterm threats, coupled with rigid quality control meiiuies, fostered lechnolocieal advances within lite defense industries. The MNTK mechanism is held back not so much by bureaucratic boundaries and ministerial inertia bul by tbc absence ofcustomer who knows what is availablehas specific demands in terms of Ihc product aad quality,ccountable for producing state-of-the-art gOOdl

To compensate for the Uck of strong demandustomer. It It up io the MNTKs to act aggrcaalvdy to firsi identify lhc needs of thdr customers ind (hen to convince ihcm lo buy the new producu. Moat of ihe lechnoloties targeted by (he MNTKs arc embodied in products thai do not "aland alone" and cannot be easily introduced onto the production hoor. Rather, the new products mast be integrated into newprocesses and require extensive uttering lo the individual needs of ibc consumer la lhc West,lly trained marketing teams go out and findand tailor their product to the customer's needs. On their own. the MNTKs may be able to meet goals for designing and developing prototypes, but

Sytiemlc Obstacles to Innovation al Industrial Enterprises

specialists on Soviei industrial managerial practices hove documented over the years iheobstacles discouraging the Introduction of newproduct andenterprises. (One outstanding example Is Joseph S. Berliner's The Innovation Dccuioo In SovietMIT) Although the Sovieihas sought over the pasi three decades to address Ihe obstacles, numerous disincentives have discouraged Industrial managers from activelyand encouraging the Introduction of new. more technologically advanced products and processes, ne primary objective for the rnanagcr Is to fulfill his production largcis assigned under ihe annual and five-year plans. Only through plan fulfillment can enterprise employees oualifyfor salaryprincipal Incentive that ensures enterprise compliance wilh central planning directives

To meet production quotas, managers seek to avoid decisions or actions thai Introduce risk or Jeopardise plan fulfillment:

New telhnoiogtes Invariably reduce productivity Inn/oily and may even close down produclion lines altogether, losses may noi be recouped within the designated plan period, especially If the plan Is even moderately lout. New products and processes lhat appearlan cycle are especially vulnerable to rejection.

The snore Innovative the new technology, ihe more likely ll Is that enterprise will have to alter Its supply requisitions or develop new supply channels.

Increased costs Incurred through ihe purchase or Introduction of new technologies decrease onrincipal Indicator of plan fulfillmem.

the prospect /or significant productivity Increases and substantial pldhoverfulfttlmeni are avoided If they carry with iheir introduction sliable Jumps In plan quotas.

The Introduction of new technology requiresshifts, wage and price adjustments, and, often, new facilities, necessitating extensive lime and effort lo provide documentation and gelfrom numerous central organs. Enterpriselack the authority to act on their own; for rxample. centralised control af capital financing does not permit ihem io nurture promising RA D.

Thr prices for new technology, or the rubles saved from Its Introduction, rarely reflect the degree of actual Innovation. Only plan targets, not prices, are used by Ihe enterprise manager to make decisions regarding ihe use of resources under his control. '

Material rewards for introducing new technologies at ihe enterprise are moderate at best and do not compensate for the risk, whereas penalties for failures-loss of bonus and possibly one'sare stiff and immediate.

Slatedirectives regardingtechnical characteristics andfrequently servetraight Jacket, stifling the rapid Introduction of new technology or products thai may not conform lo increasingly obsolete Standards. Enterprise managers will eschewor production of new products or processes that violate standards, regardless of whether It represents an improvement.

technology may lead to loss of Jobs, an unpopular phenomenon in Soviet society

Managers havtr sought to keep produclion targets relativelyonly for Incremental Increases. Innovations shot hold out

*

wrket for ihem. The retime risks storing expensive, bui unwanted, desifins and ptototypes. The heads of MNTKs Membrane and Thcrmosynthesb have ctnphasited that, while they may be successful in meeting some of their production goals, they lack customers for the new technologies. Membrane's chief nervously pointed out that7 production plan urgets foe membrane nitrationand ntaterials were three limes higher than the confirmed demand for tbese products. Tbe excess would have to be stored in tbe warehouse, where it

would sit as "frozen

Although the Soviei Unionplanned" economy, chronic shortages have also madeeller's market. Individual factories thai produce accordinglan rxovidediruitry do not have lo worry aboui Belling their product. But because of the lautness In the plans, there bas almost riwayx been more demand for products than available supplies. Within this environment, the premium has always been placed on "production" rather thannd on staying with the proven product rather than riskingwith the new

Regime Response

Moscow has responded to poor performance by MNTKsariety of measures, most of which are Band-Aid remedies and none of which address the key, systemic problems noted above. Recent title-ments In the Soviet press, however, suggest lhat the situation has deteriorated to the point where tbe regime Is rethinking tbe appropriateness of ihe MNTK mechanismatalyst for technological progress

Tightening tiw Screws Through Reorganliatlons

The regime has sought to improve Ihe viability of the MNTKs through reorganizations and rcsubordini-tions. Such measures aim primarily at overcoming bureaucratic resistance to the MNTK mechanism and Strengthening centralized control over their Operalion.

Academy would be able lo first develop newand then to have lhc foreilghi to determine and guide jheir introduction into" prodan Theassumed lhat Ihe "logic" of advanced technology and the predidea benetju would be sufticientverwhelm conaervaiiim within the industrial'

As early as the spriaghe leadershipthat the Academy did not have lufSciem experience or prnuge to deal with ihe ministries. Of ibe right MNTKs originally beadedSSR Academy facility, throe (Personal Cotrtpuiert. Fiber Optics, aod Machine Reliability) were totally rcsabor-dins leduatstry. ihreegen. Catalysis, and Tbermosrnlhcsis) cctnpkies winclose affiliation" with ministries, aad one (Industrial La-ets) *ill continue lo be dually subordinateinistry and the Academy (we believe thai this will also be lhc case with SeaeutitV:hile making the changes in lubordination, Ibe regimeusing the opportunity to increase (he participation of the defenseor example. Machine Reliability MNTK will be more closelyperhapsthe Aviation IndustryThis closer alignment it Indicative of Ihe party's increasing effort lo draw on ibe expertise of the defense industrial ministries. The regime probably capecu that, by mating tbe ministries, defense or civilian, directly responsible for Ibe success or failure tsf ibe oompleics. the ministries will more actively and willingly support the caertptetei

Tbe leadership has also sought lo men ft Sea centra) control over the eon pities and to increase Ibe party's oversight of Iheir activities The GKNT.esultecent rerxgaairation and regime decree setting out its duties, it lo assume greater resporulblily for the development and activities of the MNTKs and their targeted tech oologies. At Ihe tame time, ihe GKNT is io divest itself of involvement in RAD activiiy thai is limited lo ihe confinesingle ministry. Oo the basis of7 decree. It appears lhat OKNTs performance will be evaluated in lhc future by how effectively It hat supported the complexes and assisted ihem in meeting their objectives. The regime has also

original inclination was toeading rolehe Academy of Sciences and its institutes. Tbe regime probably believed lhat the highly respected

rtiXei.-.

I-

-ftrarm

ihe talc lhc party Ii In play directly in Ihe MNTK operilioni. The,located in Leningrad. Novosibirsk, and Vied mm have been-placed undo lite day-to-day coniiol of lhc local partyto Ihey can eierelte theirla obtain needed resouroes. homing, and onnstruc-tion. but alto to monitor the complexes' RIDthrough the Institutes' SAT councils and party organs

LooVI.fi Oui-.rd

Wc believe that lhc original MNTKbough itimited rate for Fast Earopcan pankipaUcsn,ery nirrow rote for the West. (Many of the MNTKs aerve as lhc "head organita-lion" responsible (or coord in it ma PAD aeiiviiy under the Comprehensive Program for SAT Progress hxe-tgh the0 fory the Council for Mutual Foonomicorbachev does not want io depend on Western sources for technology and has emphasised that tbe countryitsa strong indigcnaui base capable of operating independently.am8 meeting wilh lhc Soviet iik.In. Gorbachev complained lhat, during, the foreign currency earned through oil exports had been used lo "thoughtlessly buyolve production tasks (and to) purchase spare parts, without developing our own engineering and science properly. This import plague actually stifled lhc process of scientific ande fount ourselves literallyhe regime is attempting to boUnce the national security imperative of technological independence from the West with ns traditional reliance oo iouoo on Wesiern SAT aetrritiei so advance Soviet (ecnneadgy

While the regime remains committed to indigenous technological dcvcloptneni, it it not above teeking Western help in improving the RAD process. Sinceigh-level detentions representing Sovtet induitrial ministries and the heads of MNTKi have approached Western govern menu and businesses to press for increased contact and exchanges between ihe West and the MNTKi. Although the Sovieu have always dcmoniiraied an interest In pun:lutinghigh-technology goods, iheir mote recent el feien ied lo ibr MNTKi and their targeted technologies- have lended to focus more on deriving

twos

al tbe RAD stage. The Soviet leadershipeeking to use such cootacu io help support aod advance ihe complexes untilvet-comc curreni obstacles or until mher measuresimplemented to spuriophnoloiical development can; have an impact (seen7 lhc head of MNTK Personal Computers, Boris Narirnov, told Ibe Soviet press lhat he wai seeking tonterpriseoreign firmay to bypass the bureaucratic resistance and inertia tbalj blocking the progress of his MNTK

The regime wants lo expand foreign contacts with the MNTKaariety of meant:

- Cxo-ernntnl-to pO'trn/nr" fuhontei. During Ibe

7 US-USSR peeiiininary negotiationsew intcigcvernmrnul scientific cooperation agreentctst, the Soviets proposed the indasaoa af several MNTKs as the lead orga aiiaiioos. Sirnilar-ly. in7 tbe Soviets proposed to expand the USSR-Greek agreement to include eiaoperation witb^ the Industrial Lasers MNTK. at well as exchanges in new materials and

* Cooperation apritmrnti with private buiintiitj. Many of the MNTKs hare approached foreignin the United Slates. West Germany, and Japan. Proposed cooperative efforts would trtdodc the celling* nf specialists and joint testing of new ideas and product design.

Joint ventures. Severalexample. Welding, Membrane, and Personalseeking io establish joint ventures ia which Scries and Wesson enteipruci will combine forces within Ihe Soviet Union to research, develop, and market new producti In eicbaage for their managerial ei penise and invest men is. Wesiern companies arc tohire of the protiu. Tbe lead ecganjo-tioo of MNTK Personal Conspwtcri recor-edly has beenoint ventareS software firm

Uormint at Soviet trehnoloty- MNTK Paton Welding has liken an aggressive approach toits technology to Western countric

Srrril

The defense industries probably support -and may haveshaftreater rote for the Weal la ihe MNTKa. la aay eveai. ihey arc well poatarcd to capitalize oo increased contacts with ihc West's RAD community and to use the MNTK mechanismay to channel bencfita back iaio their own organization! (see inset)

Wc believe Ibe regime expect* numeroui bene lilt for the MNTKi through Increased contact* with the Wert:

Attesttate-eff-the-art experimental Itil bests. Cooper* boo with theeenay ho overcome limited domestic testing and eaperimcntal capabilities. Contact of this type weettd enable ihe completes to test ia tbe West theories developed within the MNTKs but blocked from fartherevelopment because of the weak test base.

Acauliltton of sctenlific instruments. MNTKs are seeling to purchase scientific instrument* helpful inomestic experimental tat base and for

-"developing new

iarench firm and an Italian firm were ccanpeting toiable contractead facility under MNTK Btogen for software, equip-meat, snd engineering assistance. Earlier7 ihc complex was reported to be placing contract* in excess0 million.

Asnt* In idrntifring and developingeatd processes. The Soviets havethai they expect lo uie ei pandedwith Western companies to help Identifyindications for stew scientificlo aid Ihem ia overcoating Iheirof moving ideas mat nt (he lab ontoi

some areas lhc Paton Welding MNTK hat luecess-fully developed new technologies and dedicated cuatomett -including ihe military- but iheha* been lets successful in developing an efficient process to apply the sew productilling to license teeeac!og, to Ihc Weal thai has been uacd in the USSR for ihe construction of submarine hull rings, rocket motor eaiiruts. snd armor plaie. la exchange,ec king Western

MNTKiport-Ceatrol Con rem r

7Jre MNTK toncrpt will complicate efforti byStairs and the Coordinating Comma/tietorras /COCOM) to preventof militarily significant Westernthe Scrrlet Bloc. US and COCOMprovide for the approval of certainof otherwise restricted technology toIf the end use Is purely civilian. SuchIt difficult io make when iheuser Is an MNTK many of the numerousarpaatsattons conduct varying drrrrrs ofwork OS well as civilian research.of the MNTK subuntts are directlythe defense-Industrial ministries, and approvalssales to MNTKs raise the riskdiversion; that Is. the dlvertlon of the tech- the approved, drlllan end use toone. As discussed In the text, theis intended. In part, to promoteback and forth between the defenseIndustrial

COCOM concern! for technology transfer are not limited lo dlreei equipment purchates end extend to all mechanisms currently pursued by the MNTKs io broaden exchanges with the West. Cooperationincluding MNTKs will risk the Involvement of Sovietngaged ia miliiary research, and It will be difficult to fashion joint projects that exclude iheir participation. The licensing af technology under Joint ventures with MNTKi. although subject to the lame export controls, would also contribute to Soviet defense programs and Industries repeetrnted within the Individual complexes

To make ant Informed decision on expanding eoeuacts wiik the MNTKs. COCOM-member licensing au-thorliirt will reautrr hard-to-get Information em the complex members and Ihe extent to which equipment, faciiitiei. or knowledge art shared among complex lubunits.

IS

assistance la Improve the production process fo*Ihe technologythereby overcoming the problem lhc complci has had in developing reliable produclion equipment.

accessm/ormoltom- An MNTK ehreclorlosplan official complained al an earl/ stage thai, because of the lack ol information concerning advances in Ihe Weal, the Sovieu had fallen behind. The director stressed thai information onctivities was essential todiawlng uputeeaili and effectively directingffort. Both argued thai increased contacts between MNTKs and the Wesiern scientific organizations mould facilitate access to the information

Scalingtaectai oca

Although the leadership has continued to electon the MNTKi to fulfil! their objectives, Moscow may be scaling back tame goad. The evidence is fragmentary, however, and based on veryand sometimes

Although the Personal Computers MNTK was to oversee the productionulfion personal corrt-paiicrs duringh FVve-Year Plan. 1st Zaykov.peech lo ihe major producereferred to the goalniu for tbe entire economy (not just for educational purposes ai had previously been the can).

MNTK Membrane wai to oversee the production and use of membranes thai were tobiillcn-rubJe impact within the rconomynoviet newspaper reported that the target for economic Impact now stoodillion rubles.

MNTK Rotor initially was slated lootary liness of8 lhc target had been trimmedines.

Tbese Leadership actioni stemrowinglhai iu tipcctalions for cjnick aad significant returns from the MNTKs were not grounded in reality. During Ihe last year, the leadership has complained on many occasions thai ih* projected economic effect claimed by scientist! and planners for new lechrsuloglea has noi materialized. Moscow's high eipcciaiioni were probably based on lhc limited eiumples in which new technology prototypes were introduced under ideal conditions and benefiteduv status and leadership attention. Rotary tecb-nolcajy. for enrapic. had been reported lo lead to as muchea fold Increase in labor productivity, release hundreds of thousands of workers, and reduce by iirc or four times the space required forTho director of one enterprise that installed rotary lines reported, however, lhat he had such difficulty In assimilating the lints that, without Ihe conitani. prolonged, close lupervjiion of lhc developer (Kcahtin'i Designis enterprise would not have been able to start up operations

The development of robot technology in the Soviet Unionlassic exampleechnology's failure to mcci eipecl anions once introduced. As has happened in the West, Ibe ptoblcrtu encountered inew process irci-aacgy often lead initially to ditillu-siocsmeni and laterautious rcsgmausn. Soviet publications indicate thaitevaleaiioa now it taking place with rebut ic technology and iu broad introduction throughout ibe Soviet Union. Soviei ita-liiilct ihow that the economy cannot even absorb the robou that are produced. OfX) were introduced Ivan Silayev. head of the Machine Building Bureau, stressed ia7 thai it was "not enough to just emphasize the number of robots produced, the coun-try wai already producing more transport robots than ihe economy could accept" Accordingoviet journil ankle, too many robots were being produced, and the technology iricorporaied into them bad not ydonsequently, ihe introduction of robotic technology had not resulted la the anticipated reaease of suable numbers of workers. Robot production needed to be cut back by on*-third lo one-half to permit significant improvement jn spend and accuracy and lo Incorporate individual robou Into integrated production lines

Havingrring Beyond

(ht MNTK

By7 the leadership appeared to be reihinking the MNTK strategy and reevaluating the

commitment to its continued use. especially after the

new State Entcrpriic Law came into cfTectAtGKNT-iponiored conference, scientists,worker t. .ind puny ind government officials sought to dcieiminc what wu hindering tbe complcirom teaching tbeir objectives and what measures were needed to imptove per forma ooe. Accordinf to lhc Soviet pre*t. however, participant! debatedthe MNTK mechanism itself was appropiiatc and whether it iliould be continued. Although thethought the MNTK mechanism to bea vocal element "denied tbe usefulness of Ihe MNTKpecial organizationalhe meet-ing ended without drawing firm conclusions.oviet reporter slated. "Il bai not yet been possible to find unequivocal aniwert to all iheseod be acknowledged that "diametrically opposed*'were nITeied oo what act rocs, were required. Conference attendees were apparently unanimous in Iheir view that Uie MNTK mechanism inuil be changed If It is to be more effective: "Neither ihe traditional mechanism of iiria planning nor purely market relations are suitable for the assurance of ihe successful IraiuJlMa to qualitatively new levels of equipment aod technology."

Currently, two very different ipproaches to the dirS-culties with lite MNTKs are being considered(tin and systemic idjutimeniJ

d found objectionable, especially the right of MNTKa. in conjunction with Goaplan, to dictate new production regard lei* of prohibitively highcosts. Vcfskhov implied ihai ihe decision tonew technologies ai ihe production enterprise In order to be rational and lo reflect economic concerns bade made by producen. though with advice from Ihe tckaiific community. To vest scientists and cngincen with Ibe decisionmaking authority risked inational conclusions Inoviet laser specialist and director of an Academy institute recommended the formation of small, regional laserutside lhc MNTK mechanism thai could draw on newly formed produclion associations lo supply tbcm with needed components. The ipecisliat Ihoughi that such action was necessary because the Industrial Lasers MNTK was encountering iueh stiiT resistance from the unrencracy (hat it had been rendered ineffective

At the same time, ihc regime hat announced lhc formatkoo of State Productionew organizational mechanism Ihat will dwarf even Ibc huge MNTKs. The GPOs-to appearpaa research through series production as well as through the instaon and servicing of new technologies.t not yet clear what role Ihe MNTKs will have within the CPOs

Fixet. Some of Ibe contemplated measures aim it creating yet more organisations -either larger or smaller thaa the MNTKa. Proponents of ihese solutions continue to operate under lhc ssanmptson that bureaucratic boundaries arc thebarriers to innovation, and it isailer of finding ihc right organizations! mechanism tothem

Doth Academy President Ouriy Marchuk andVice Presideni Yevgcniy Vellkhov have pointed to (be use of small, (cmporary groupings of tcleotltii and producers-hat would be flexible in their membership and comprised ideally of no moreembers la1 Vclikhov evaluated small. tVaibtc groups favorably when comparing them to MNTKs. He contended thai Ibc small groups allowed fot greater contact between science and production and were able lo avoid some of the MNTK prut licet that

m*ati. The Gorbachev regime also Is rethinking its science policy in general and may be stepping back from its heavy relianceop-down approach to developing key technologies Tbcappeari to be taking lit first, though 'altering. steps io address lystcmic barriers lo (he development and introduction of new tcchooaogics. Portions of Ihe new State Fnterprisc law, along wiih otherpubis bedndicate (hai Moscow may be taking stem to createmore innovative scientific bate -one not to dependent on the top-down approach to developing new technologies. In tome eases, however, lhc regime's new measures arcwith its earlier itrttegy it incorporated within lhc MNTKi.oviei journal in lanuary repotted ihai ihe changeover lo the new methods had

Secret

taken the complain "by turpihere is tht potential (or IncicaseJ disruption If both approaches arc enacted simultaneously,

We believe that the retime may now recognize that overcenlraliration of clecUionmahirui authority within tbc complexes may actually retard or limit theof new icchnolofere appears torowing apprncution for the role that competition plays in advancing technologies. Encouraging eoropc-liiion among RAD orginiuiaoas. however, relaaes the cen trained control aad nans contrary to the

MNTKs' task of elirninaling parallel and duplkaiire

research

Although most, if not all MNTK wort will be financed by tbc state budget, over half of the scientific cotntnoaityill switch tohich requiresrganizations to cover their operating coats out of profits earned through research conducted under contract. Under the newmany of the Individual MNTK tubuniif will iwitch to ac If-financing and will be granted increased autonomy entitling them to more independence to their decision making. These organisations may find ii more advsnugcoua to perform work for customers outside the MNTK structure, circumventing tbeof tbc MNTK director to dictate who Is to participate within the MNTK. The regime has not made it dear bow it intends to resolve this potential conflict of interest. Meanwhile, the country's stientif-ic leadership appears to be particularly apprehensive over what effect tdf-finandng will have on tbe dead-cxprnent ot interdisciplinary -hencetec-inoiogtca:

hink (bat. If the nuclear power iadastry had developedelf-financing basts, it would not existA. P.arcctorey institute and design bureau within

"As our practice ihows, under the conditions of economic accountability, an enterprise is oriented toward the demands of the moment. For this reason the fate of developments designed for the long term becomes more complex No one orders them from us. Today it It almost Impossible to persuade some

enterpriseinance the creation of future(A- A- Deri baa. headpecial design bureau. Academy of

While the leadership attemptsarn itstoward the need* of production, it isstep* designed to (Simulate keener interestpart of industrial managers to acquire andnew technologies For example, measuresintroduced addressing quality control,depredation and recsacnmcnl of machinery,profit margins on technologicallyIn hit7 speech to theSoviet, Premier Nikolay Ryzhkovthe new* conditions, an enterprise wilt notto function successfully unless it relic* onfact, making every collective asas possible to innovations and giving it ain utilising the achievements of SAT wasas virtually the main task of restructuring."

Over the neat few years the regime i* likely to limultaeeonsl) pursue bothto integrate centralized with decentralizedwithout committing itself. To do so, we expect it will use the newly created "state orders" so directto priority projects aad producu. Soviet econ-omitu discussing the obtudes encountered by the MNTKs have proposed thai state orders be issued by Gosplan and the OKNT for each MNTK, specifying tbe basic assignments for the research, devdomncnt, and int rod net too of new producu and processes.each MNTK would be authorired to issue state orders to ensure an adequate and timely supply of needed resources and to levy mandatory asrignmcnis oo panidpanu. At the tame lime, however. MNTK directors arc to seek to ocgotiaic with tbrir sabuoil* mutually bcnecicsal contracts for anpphcs aad for research and dctign work

While we expect (he regime lo use slate orders to protect ibe MNTK* during the disruptive period when reforms are introduced, iheir use will not serveanacea and. in fact. Is likdy to encounter stiff

-Seem

ministerial ruaUnce On the bun of limited Soviet press reporting. tl appears ihai Male orders rnnsl be it least eooid.nr.ted and probably approved by ihe par-ikipaiing ministries, notjust Go.plan and ihe GKNT. Il il precisely ihese ratnistrJes lhai arc already rcsiii ing the erosion of iheir auihorliy lo the complexes. There will also continuee conflicting demands piaeed on ihe MNTK subuaits. because the ministries will Mill levyers

ari of iu effort to delegate authority and responsibility to Ihe enterprises, the regime istrong lUnd against the abase of the newly created state orders. The leadership Is already complaining that, rather than beinghe most important products, ilatc orderi have been distorted to serveubstitute for the annual plans in orderetter the entire production capacity of the enterprise and to weaken ne* measures intended to decentralise dees sionmaking

Should the Gorbachev regime increasingly rely on state orden to address the problems ofTKs, it will Indicaic thai thelean on the issue of the .levebpmf nt of critical tech ncdogies-con tiirues to resist decentraliiation of decision making.

Prospreti fur Success

Falling Short for ih* Near Tana

The MNTKa have not fulfilled the regime's objectives to dale, and we do not expect the situation to turn around in the shonremaining iwoalf years ofh Five,Year Plan. Indeed, many of Ihe MNTKs win fail miserably under the curreni conditioni

Although such an evaluation mad* on the basis of only twoalf yean- performance by the MNTKs may appear particularly harsh, the obstacles Mocking progress are major and will not be easily or quickly overcome. Personnel shortages, delleienl ex-perimenlil lest bases, bureaucratic Inertia and resii-tance. and lyatemiewill mlmmlie the impact of the MNTKs throughout this five-year plan.

Newe do not expect the MNTKs per sc to enable the SAT sector to meet regime objectives. In those rare instances in which we know (he ipecifics. MNTK plan, appro, unrealisiic In terms of ihe number of new prcducu or the impact Ihey are expected to achieve. In sliuallons in which compleaea doumber of new prototypes, wc espect that the MNTKs will be lest successful inthe prototypes otucaiy aato sariea production In many instances the new product, -iO fan sbtxt of -orW-clau qualily. And the absence of an effective marketing strategy will result in rjeoducu lhat will be difficultntroduce onto the factory floor, require extensive and Ume-consumiug modification or adjust-menl when Aral reaching lhc enterprise, and perform ai appreciably ksa-than-planncd levels

I ike SADThe MNTK rnccfaa-

aitm will not apesreenbiy shorten thecycle during the current live-yearew prodocta may be developedomewhat shorter period of time, especially as MNTKa urocele to show some success, but ihese successes will be attained onlyotal focus of effort and resources to the potential detriment of broader, yet slower, progress acrosswhole tectmcaogy.

Sfrr.grWag fnrshawje hVr-vea ike Ciriliem ami Drfeait Secitn. It isharas evenlhat the MNTKs will be successful la upping tbe defente indusiries for support. Defense indastry insri-lutes and design bureaus are probably willing to give guidance and some resources to assist theespecially In areas la which the Industry stands to gain appeelably with only minimal eripendilure of Iu ownecent callefense industrial deputy ndnisterorm an MNTK oa coenrvasiies indicates that at least some of the defense lector support the MNTK conceptay to derive benefits rot their Interests Oo Ibe Other hand, the re.inar-.ee thai ihe Personal Computers MNTK has encountered from the defense Industry itUahtttes Indicates that ihe completes aie not reeeivlna wholehtarird auppon.

i- tail year, we have teen Ihe oasoiiaiion between the defense industry and the MNTKispeciallycaali af reaubordination ol some of the MNTKs from the Academy lo ministries, and the defease Industry sector may be lipped yet harder to Morton the MNTKs. EspeciaDy as the completes fall iricreasingly ihort of the regime's goab, the leadership will be tempted to turn to the defense induitriet for increasedIn My in the case of those tcchrsolotiei in which they have acquired the meat eiperieacc. rotors, ccenpaiers, robotics, new materials, and machine reliability and test ing The defense sector probably will be looked tooarce of designers, experimental test facilities, andproduclion capabilities

rm Prospects

Tbe MNTKs' success in producing significant results and servingechanism to rapidly advance key technologies over the long haul hinges on how the regime resolves bureaucratic resistance, whether il attaint priority status fot the MNTKs. and how it refines the model

Orureoai/ag ttstTMacrariV Writ trance. The regimeong and uphill struggle to overcome bureau-ctatic resistance andwithin the mmistries. but also within the relatively irsderssndent Academy of Sciences. Overcoming obstacles toposed by bureaucratic boundaries is but one element of Gorbachev's efforts to redefine the role the mmistries are to playore rtecentralized decisionmaking environment. The regime muat move quickly lo establish the MNTKa as the primary authority over tbe varioustlx expense of the ind aat rialthan continuing to let tha subunits serve two competing and oftenmailers. As evident by tbe complaints now being registered by the MNTK directors, continued divided authority could result in paralysis

Gorbachevetter chance of succeeding here Ihaather areas. While wc believe Ihe General Secretary hai demcmtrated the determination and dedication to break through the logjam ofmanagers, he hai yet to demonstrate tucceti. Assuming lhat he continues hii pressure on the

bureaucracy and policy of cadreore lupponive and capable bureaucracy could be ia place by Ihe

ClaimFor the MNTK

me. iMinsm lo be even marginally effective, il muil have priority accesscarcc resources such asinstruments, ne* cons!ruction, experimental lest facilities, specieespecially designers) aad srsccul-ized subcomponents, as well as financial assistance. The MNTKs will face competition from allincluding the defenseIhese items, and wc think the compleict are not likely lo receive preferential treatment, especially at compel: tiori itened during tbe rwitehore decent*red supply system.

ht Ut4tL The MNTK nrategy contains weaknesses that, if not addressed, will severely limit lhc potential of the complexes Io spur long-term technological development at the pace and quality dictated by the regime. These missing links will act to limit the viabilily of the MNTKs and will sharply curtail their effectiveness. As the MNTK charter nowat prototypedoes not connect research to production. Thus, even when ihe MNTKs have developed prototypes, there it no asiurance that enterprises will assume lessenWe bdieve. there Fore, thai the effect iveo eat of Ihe MNTKs will be severely limited as lang as the Soviet economic mechanism odea nottrong, -ell informed customer whoirect interest In eaercliing bis right io shape product design or qualily. In the absence of auch customen. ihe MNTKs would have to market their producti aggressively to bridge the research to-prod action gap. We believe that, if this Issue ii not addreased, the technological advances coming out of ihe MNTKs will not be disseminated widely throughout ihe economy, To dale, Moscow bas barely recognized thti deficiency

Failure on the pan of tbe MNTKi to meet tbe regime's objectives does not mean thai the Soviets win not be successful In developing tlx targeted neat. The

20

leadership tony be able to achieve significantbut Ihey will be reachetl primarily in spite of (or outside) the MNTK mochanlim, through stepseconomic decliion making. Much willon how theseself-financing,implemented. The new deceatralbiitg measures, however, -ben am pled with the highly eenirdited strategy uied by the MNTKs.reater potential to disrupt both efforts thaa to be mutually supporting

If Gorbachevs deceairatiling nseaiures are more successful in spurring innovation, Ibe regime may play down orliminate ibe MNTKs, In the interim, during which the measures sre Implemented, the MNTKs will continue to limp along, with the regime using state ordersrutch to provide funds, scarce resources, and ministerial assistance If'the neware not successful, Ihcn MNTKs can beto be reemphtsired wilh increased pressure put on ministries

i

If current obsiscles arc cwcrcomc, and the regimenicgrites and balances the effects of its numerous sod. at times, uncoordinated reformthe MNTKs may make an impact by ihe. By thai lime, ihe MNTKs thai enjoy strong directorship and moderate ministerial support should be able to show at least tome limited technical advariccs and new products. The targeted technologies are not "blue-sky ideas" Ihat wouldong and risky basic research effort toechnological brcaktbough The MNTKi thould be able to modestly improve ihe rate of return on investment Infforts: product quality will be enhanced through priori lira lion of effort and improvedfrom producers aad end users, and diffusion of results will be broader because of Ibc numerous ministries drawn into lhc MNTK effort Similarly. Ihc MNTKs, benefiting Irom unproved and shortened communication lines, should be ibte lo shortentheroeeit

iMpllcatlons for (be West

As one way to overcome bureaucratic and orgaaita-liooal obstacles, ihe regime will probablyoncerted effori to gain whiicvcr benefits andpossible by increasing contacli and scientific

eachanges between the MNTKs and lhc West. At comnciiiinn for scarce resources become fiercer, we crpeci ihat the MNTKs will (urn increasinglyhe West for sesendhc Instruments Io develop an infra-alruciure for lutingesults. We alio rjpect ihat the MNTKs will pursue such contacts with the motive of gaining access toe-art test base* and capoditing the devdec-nent of proto-lypen Such joint van toreso allow Wcatera market forcca to be usedroxy for consuovcrs and competition aad tbe role they play in directing and encouraging technological advance. The MNTKs will particularly look to joini ventures to help ihemand develop applications for iheir new scientific ditcoverlcs.

ll it ironkhe defense teeter probably will reap greater benefits lhan iu civilian counterparts through the use of Ihe MNTK mechanism. Defense interests are wdl represented in Ihe long-range plans and SAT program* that ihc MNTK* have drawn up, especially in those compicies known to have direct tics to defease isdasirid erg aoua titers. Becauseo--erful ind knewriedgeabk casstccoer. the military wifl be abk to capital .re on any achievements ibcmay deveioc. The defense industries have ibcrastructure to identify, acquire, and rapidly assimilate technological advances, and tbc military will hive the resources and the aulhorlly to ensure thai products of interest to Ihem are prlorlliud and nunuied until compleiion. Similarly, the defense secior Hindi to gain through technology transfer a* MNTKs expand (hdr contact* with Westernthrough cooperation agreements and joini

Even if theble to resolve ibe numerous obstacles Itmiiiag Ibe MNTKs, they will not be able to con-pei- with RAD conxplexc* in tbc West in spurring broad-based technological advancement. The MNTKs" lop-elown, command approach to inaovaison probably condemns lhc Soviet Union lo perpetual follower or caich-up status. The practice of largeilng and priorltiiang apeciftc areas for forced developmenl. and placing control within ooe organization under one

App<mdix

MNTK Goftlt tad Result* [Reported onet iProwJ

metise-ii (or fentile and collator

(fijlnwf int toi lie UtCftl generation Of 0C*

- j"or il: j kullUfe* isctoding

Iftntfn. iwUrphiTOfi,rowinIeom^ndf, aod

horsiWH fo* cattle flrOviL koo ii Inurfcron Alphantended1 for trwlnc

Brf-gen hod mud ikfli he bid mm rccd*od ibe

retoorcca iraaaury for tctttaf aad produciinn;no prodi*tLonraviitfitdWS-JQOG

order io meet tlior%twJcd (rater irdmtaiiifiim: Mthor*

Uy, eomamtcand better

ihc, toerrjie HO

perceot of ill new eoutytu for tbe Minmry of

clfoktfBi Michlnc Bcftdtitf; ind

MMary of Mineral Ferrtltra Prodixtk-a,

utienttif-MJ,

Creditedfee repUcemeru of lhc catalyii Mod withinfitric add rmjcjtry.

TV^ih the MNTKshelf" to

eVrekp whm fni emied, il atlll huo

new

left aVme and not disturbed byhcii cly art to meel ii*

ih rirr Ynr Ptin. to prtarirril

geoe'iiUooi of mtohlocry for the orocmiac

Ktd dcfcVotxdf iprxul

r^utptnoBl, bat^nUtiita.ndHTrYentf*rverkr

eorornic impect

0oobuinmionfublfj.

in:

t re

To mcreoMeerfcMMounecd thit It vttbiiin in

econornkUT-On ruble*n

l9tTa anoounecd tbti to obtttn

jmf^ctof

A* ofht mki won tbe

iclenuAc Hvm* Ihot oitMad bofort tbe Tormoijfea ef tbe MNTK md bod ool ton* beyondl

T.aooovaepaiate oifKrfTh an iA>aomk booehlubla oe* lowre meter of mrmVpM. Tba dfrotiar odmltied taoi <ue0 rriolitfav artd far batvaen*

Thb MNTKounl on any iiinifteioe

vMnie inMala af alTatn.ihcre wai fa Oebtin| able looulrblyV.^

iicbwataty wa> toil.k

IWrfK Coals(contlpucd)

lhc entire countryt juii IIk MNTKi. lo prcdtioe IJ mJiHoft emptticrt by the endlt*M

NTKictxnl

b.L

h rntYaf PU- iwtod

ftodtttttntnactivecrtcfcl ivvci [tutor IM;.

The MNTK dirow huo fiBine ihort ofiiCf<lkobtt*de.w

ose ll* prcvWwel

RADftt ml il fc-ufld lc*tHi_

lawt from thtich iq.Cmj icfu of mrthifle*bulttiAt Ucm* to povtlorHitn|

ftJ ^rvb^

oftciL-iptc* Kid rot Khtt-d

pCanf>M

<OVtp^Kfti maIoI for iwilcrpfc-dut.looateieJt. the ttu*lUy of

u:it'i efforteeJW

rolMtudlexible*yv

tw thatk-vdj If to rrefeU

itraox In

For the enure country.ooots ire co be

nOQQie^lnilM *sae

uced dutiitih Ftc-Yeif fUi tin

fccrt

coudtryV

A* of IMI live MNTKme-tl iu toot* inrs 11

One of Iuor htrjjtjjI ihree robe* modeU to terie* productionliiw year* of

I*roduced tor ItSo, IJJMO

O) fiutirflah forwiitlee,.

iWwd^VvM^rotair^ willc ^fotrfeUm' of tbe entire lyucm of

riil

mhWidiore^etot^^

of U< printedfor rcKireh were oot it

orwlop.otpi

btce/rafiW wiihotii fiiturr

ilno'-rvibi* -rotr-nn owrmf the

HacYcur Pin for ifce ile^povMof rou>

rr IfchfK-cty

tarioc

m lines Introdra-J

I^WnHjry0 (ThitW Uierine* i

ef reboafy

CMtMiit.

a pc 'CrtiL

MNlKMllilnJllI

[MtporiM im IW SdwiH Pro.)

Uam

Jlind law anlu ittf

Hn (Omptrt wxti wohinht yearly.

heMiNtM

ht aa-iari b* bad iatU

oar of iaoaifnd ttmnti IH dtmirak.

i*ct catr tcvice life fro* 1to >AW fcev

iter talkdo" ll* factory( produce kaof

torn bin* aciMtia* of MNTKi Pr wrlobori. and Machine RcJiiV-iiy forJmlopavtni of aew iweoWfioa pnra+c*

To*dcHlor* laaer* far radical *w.oichiftinf rarrttrt. aad

AiofMiMOaa

mora uMaf oo it* chirarur of btraaacraiic

Ody aoftLM many typea ofad b>

Original document.

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