olicies and Strategies Under Gorbachev [
National Intelligence Estimate
sn
this estimate is issued by the director of central intelligence.
the national foreign intelligence board concurs.
The following intelligence organizations participated in ihe preparation of Ihe Estimate:
The Conical Intelligence Agency, the Dcleroe Intelligence Agency, the National Security Agency, the Federal Bureau of Irrveiligonon, ond (ho intelligence otganirotions of the OeportmerHi of Stote, the Treasury, ond Energy.
Alto Participating:
Ihe Deputy Chief of Staff for InloBigeoce, Department of the Army Ihe Director of Novol Inreligence, Deportment of the Navy The Asiislant Chief of Staff, Inleftgence. Deporlmenl ol the Air Force The Director of Intelligence, Headquarters, Morine- Corpi
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olicies and strategies under gorbachev|_
InJocmilUwn the preparation of Ihii Estimate, -nlch was approved by ihe National Forcien InlcHeence Board
hjmmt"
contents
Page
scope
key
policy
revitalizing the rdt&e
increased
higher wages and
belter training and information
continued acquisition of foreign
improving technology
changing the roles
restructuring the rdt&e
renewing the
improving lcmg-range
revising the incentives to
using defense as a
prospects for
the rdt&e
technology
a change in
systemic
increased centralization and discipline
appendixes
a targeted technologies forh five-year
omplexes
comprehensive programthe year
aw*
SCOPE NOTE
This Estimate assesses the formulation, implementation, andof Soviet science and technology) policy throughhat will impact on Soviet performance in. The key issues are fa) Soviet policies, or goals,, (b) Soviet strategies forthese policies, (c) the effects of these policies and strategies on Soviet domestic and foreign policy, and (d) the likelihood of the success ofolicy program. The Estimateolicy and strategies affecting both the military and civilian sectors, bul does not address explicitly technologies or programs unique to the military. The Estimate also addresses policy affecting research, development, testing, and evaluation (RDT&E) and the assimilation ofesults into production.
In, The Future ol Soviet Science, we assessed theof the massive Soviet research establishment, which appearsthose of other nations. The Estimate provided anthe environment within which Soviet science is conducted,to an assessment of the relative strength of scientific researchfields of science in the USSR as compared with that in.
Inanagement and Development of SovielTechnology, wc assessed the status of the Soviets' key militaty technologies, possible future systems they could choose to develop, and how they manage military research.
In this NIE we are assessingolicies and strategies thatleader Corbachev intends to use to harness the potential ofector and whether he will succeed. The NIE forms the thirdriad of complementary Estimates, one on science, one on technology, and now this oneolicies and strategies.
The foregoing information is StfortlW
key judgments
both international and domestic pressures have forced mikhail gorbachev to launch his ambitious program to revitalize and modernize the soviet economy with scientific and technological) progress as an avowed key. the soviets fearermanent technology gap with the west in many key areas will have grave implications for their status in the world community and particularly for their defense posture, which requires new technologies of unprecedented scope andmany of these technologies must also be developed rapidly to keep pace with the west. also, gorbachev needs to shed the economic lethargy of the brezhnev years and tap the energies and skillsew generation of soviel leaders at the national and local levels to develop new strategies that ensure adequate future growth.
we expect that the gains made from gorbachev's efforts torogress will not be enough lo yield the growth in productivity, efficiency, or innovation called for in his civilianprogram, without success in broader economic reform:
the initiatives to revitalize the soviet base for research,testing, and evaluation (rdt&e) should meet with moderate success.
but the major sticking point is the lackoherent and incentive-driven system to diffuse these new technologies throughout the economy.
the initiatives to revitalize the RDTirE base are targeted at selected technologycomputers, automated manufacturing systems, advanced and new materials, biotechnology, and nuclearinclude larger investment resources, wage and bonus reforms, increased informalion flow, and continued acquisition of foreign technology. of these initiatives, we believe that soviel plans to strengthen the resource base forave the best chance for success, if sustained over at least the next decade and backed by successful implementation of gorbachev's commitment to modernize the machine-building sector. major constraints reduce the potential of the others:
new pay hikes for scientific workers depend on the ability ofrganizations and enterprises to finance them out of their ownequirement that is sure to create inequilies.
Moreover, Ihe value of monelary incentives is queslionable. given continued shortages of consumer goods.
to improve the information flow so as to increase domestic tics between researchers and producers and to gain access to international data pools run up against the regime's desire toonopoly over this vital instrument of political control.
technology will continue lo Gil selected gaps, but broad acquisition will be inhibited by factors such as hard currency limitations and Western export controls.
Soviet strategies to improve technology diffusion aim atdepartmental barriers,ew cadre of workers, improvinglanning, and revising the incentives to innovate. In many cases the defense sector will be usedodel for change. Upow, these strategies represent conventional Sovietby decree and change "fromhave noi worked in the past and are unlikely to work in ihe future unless accompanied by broad economic reforms;
Many of the organizational changes simply realign the old structure, but sectoral and bureaucralic interests remain. The attempt to redefine the roles of theolicymakers so far has produced only confusion.
A substantial turnover in the scientific cadre has provided new energy, butevision in incentives it will fall quickly into the old ways. Some defense managers reassigned to the civilianector have been unable to produce the expected miracles because they lack proper equipment, political priority,killed work force.
Long-term planningontinues to be hampered by the same problems that plague Soviet economic planning inlack of rational indicators such as prices and aenvironment to provide guides to decisionmaking.
The bias toward gross productioneasure of success will conlinue toisincentive for enterprise managers lo innovatei sanctions for not fulfilling production plans remain greater than the gains to be achieved from innovating.
The defense-industrial sector probably isiable model for the entire economy because of its priority claim on resources, specific requirements, and often inefficienl and wastefulThe problems currently encountered in theof the new industrial quality control system borrowed from defensease in point.
The inability of the Sovieis to develop and implemeni antrategy will limit their technological development. Innovative research and state-of-the-art technologies will most likely occur only in special-emphasis areas where the leadership, as in the past, focuses its attention, hard currency, and resources. Moreover, certainof the new technologies will clash with the Soviets' failure to change the modus operandi: they become outdated quickly, requiringin planning and management; they demand higher levels of quality and testing; and they depend on developments that went before, thus limiting tlie benefits of Western technology acquisition. Moreover, the existing Soviet system has not produced the regenerative dynamic characteristic evident in the West that would allow the USSR to catch up and keep up with "world standards" as planned.
A broad range of the Soviets' other policy objectives will also beby the limited fulfillment ofoals:
They will continue to view the Westechnology source and will thereforeontacts, trade, and information exchange. Reliance on Western technology may in fact increase in areas critical to the modernization of civilian and defense industries. They are likely to expand their interest in joint ventures and licensing agreements, increase borrowing from the West, and pursue illegal methods of technology acquisition. They will also increase their use of Eastapabilities.
The pressure torogress and compete militarily probably will encourage the regime to improve East-West relations. An arms-control agreement, in the Soviet view, would slow US military growth and provide more timend economic strategies to succeed. Reduced tensions could also make it easier for the Sovieis to acquire the types and quantities of Western technologies they have identified as critical, possibly on favorable credit terms
In any case, we believe that the continued priority for defense will enable this sector, at least in the short term, to compensate for the failingstrategies. Even if civilian programs areigher priority, the dual-use nature of the target technologies will allow the defense secloreap continued benefits.
We expect lhal. as the limited success from these strategies converges over the next few years with other economic pressures, societal tensions, and the defense burden. Corbachev willhoice
s
of settling fot half measures that fall well short of his needs or making harder and potentially divisive decisions that could bring moreresults:
has decided to initiate more radical economic reforms that are aimed at tapping the strengths of market forces such as decentralized decisionmaking, increased competition, and liberalized price formation. Theector should benefit from these changes, if effected, through increased opportunities to contract directly with production enterprises and greater flexibility over research plans and projects.managers, judged less on volume of output, would be more likely to innovate. There are major political obstacles to the successful implementation ofrogram, however. The military, for one, might be strongly opposed to reforms that threaten their priorities. If successfully implemented, such changes would probably be disruptive in the near term. Over time,certainly well beyond the time frame of thisbelieve that they couldignificant impact on the performance ofector.
the proposed radical reforms falter, the leaderships approach might be reduced to the more traditional characteristics ofcentral control and disciplineay torogress. There is some support for this approach in the Soviet elite, and it might placaje the military, at least in the short term. The administrative approach ofbyowever, has already proved ineffective. Its inadequacies inrogress are likely to set backnd eventually military RDT&E. To avoid such consequences, the defense sector would need to increase its resources and broaden its coverage to assure development of many dual-use technologies now covered by. Moreover,etreat on Gorbachev's "openness" andefforts would have negative domestic andeffects.
Gorbachev's approach will contain both decentralizing and central-izing elements His successful balance of the two will be key touture.
The foregoing informationf**'untiaL
discussion
General Secretary Gorbachev cameIn5 he outlined an ambitiousrevitalize and modernize ihe economy,and technological) progress to bestaled:
The party views the acceleration ofand technical progress as the main direction of ib economic strategy, as the main lever for the Intensification of the national economy and for raising itsand hence for the solution of all other economic and social issues. These tasks are so pressing that action has to be taken without losing any time.
Relyingrogress and on other approaches to economicimportant, changes in investment policy and reforms In the economichopes to ensure the necessaryin the quantity and quality of Industrial output and better use of limited resources. Without such revitalization, the Soviet leadership realizes that it will be Increasingly difficult to meet the full range of nationalliving standards, betterperformance, and stronger defense duringnd beyond. (See
Gorbachev must bring aboutresurgence of economic growth andwhile sustaining the formidable militarythe pastears Ccncrally. Soviet militaryleaders acknowledge the role of ain supporting military power.also recognize that their powerful militarywas built up during the past twomassive commitment of the nationsand with growth in military spendingtlut of the overall economy.esult,seriously concerned that Gorbachevsmassive investmentandincrease thefor many of the resources used tn theand production of weapons. Giventhe Soviets know that the economyrevitalized by making the work of both thedefense sectors more efficient and productive.
ZZI
he rapid rate of technological change in theorcing the Soviet Union to concentratemprovement. Soviethave been blunt in depicting the threat posedrogress in the West. They have criticized ihe lethargy of, implicitly charging that the Brezhnev leadership failed to act on its promises and to appreciate the pace and consequences of Western advances. The Soviets express concern over theof being condemnedermanent lag and to technological dependence on the West. They argue that such dependence, often tied to thepractice of imitating foreign technology and design, not only makes the USSR and the Soviet Blochole susceptible to Western political pressures and economic sanctions bul also retards the develop-
rmtmfl-'- V. L I
mem of Indigenous capabilities in science and
Serious military concerns over Sovietevelopment and technological dependence on the West have surfaced. The possibilityS technological breakthrough that upsets the strategic military balanceontinuous Soviet fear. USprograms, like the Strategic Defense initiative and "smart" conventional weapons, require theintegration of computing and communications activities of unprrscedented scope and complexity. Soviet weapons to be introduced in the future will use more sophisticated guidance, sensor, computer, and communications subsystems, which will in turnadvanced microelectronics and advanced design, fabrication, and testing capabilities. | |
Domestic considerations also played anrole inecision to concentrate on the acceleration of technological progress. (Sees the inheritorechnologically backward economy that hadecade of slowing growth, he knew that hb political success would be determined largely by his ability to revitalize that economy and that to do so wouldodernized industrial base. Hb strategy abo was influencedhanging political climate, inew generation ofand adminbtrators seem increasingly unwilling to tolerate the technological Inferiority spawned by years of leadership inertia and managerial inefficiency.
POLICY GOALS
hile the Soviet leadership often definesrogress" vaguely, its aim is to harness theand the momentum of the "new industrial revolution" based on advanced technologies such as computers, robotics, and new materials, and to put them to work in key economic sectors such as machine building, construction, fuels and power, andAccording to Corbachev and others, the Soviet Union by the0 is to reach world standards in the following areas biotechnology, nudcar energy, advanced and new materials, automatedsystems, microelectronics, computers, and telecom-mumeations. Consensus among the leadership is that these dual-use technologies are critical for Soviel advancement in bolh the military and civilian sectors (see appendix
< NoW.ilMand.nc ihctr tt.ietncnuol concern,ortett cc-ntin oc loencwcencene-Jprigmilico acquire Wftttni lechnolooii. overcome ihfiiSftTna " pcMllxV SeetKl
Underlying Themes of Gorbachev's Program
Tbe Gorbachev leadenhip has mack it dear lhal the dnlleugerogress requires major policy and institutional change.elevised speech in6 the General Secretary stressed, "To continue nuking mistakes In technoloay policy means driving thefurther into ann June he told the Central Commtttee plenum.must counter all attempts at multiplying the former approaches andall in the sphere of SfiTSinceh Concress officially endorsed hb modernization Botus. Corbachev has shifted Ihe etnphans from strategy design to problems of implementation. As he puts it, "The main task now it to transform the energy of Intentions into the energy of actions"ressing his SeVT program with lour central themes:
The USSR isrucial turning point in its lustory-the rdndustrteligation ol the country ranks in historical significance with and should be given the "same polilical ring" as ihecampaign of
The envisaged Iransformalioni arc sweeping and unprecedented in theirequated restructuring with the word "revolution '*
There is no alternativeny Othet pathelinquishment of posi-tMxts, an orientation toward lag
There is an urgency to lakerecognize problems and to carry out fundamental"If not us, who? If not now. when?"| |
here is also consensus (see inset onhat two overall goals exist:
A revitalized base for Soviet research,testing, and evaluationhough, by world standards, the Soviet Union maintains the largestillion people and includingull-time scientists andin the quantity of resources (human and financial)to the Sovietector has been on the dedine since theseehe historical lack of incentivesorkers has resulted in poor worker morale, low productivity, and difficulty in attracting bright youth toand engineering. Furthermore, the InaoV quacy of the amount and quality of equipment and testing facilities forasontinuous and erowing problem for SccTas well as for ihe instrument-making and
ESgafil
Sovielverage
Growth in Resource Inputs *
ol workers in
and science
vim
ol leientoii
enaineex
toe cinita)
In icienee
lor tcirnce
prkei)
for tniro-
new teehnologiei into industry
Theiralculated dlrcclr from official published Soviel Kalinin, are subtect to cceaSdciablc uncertainty became thein* ot the coverage ol Soviet itatbtici are vajue and often undefined
heacbu-fted
machine-building ministries, which ere unable to sal nit present demand
Improved technology dilfusion. Sovici leaders and SAT specialists are calling (or ihe removal of administrative and organizational barriers that impede the diffusion ol new discoveries and tecbnolof ies throughout the economy (Innovation and assimilation in Soviet parlance) As Politburo. Shcfaestutshy complainedEvery year only one-third of completed developments are Introduced and far Irom all completed work Isoreover, as etnphaitced by Corbachov in tlie7 Central Committee plenum, the Sovietsthat enierprise incentives must beto reward innovations These problems affect both ihe civilian and defense sectors to varying degrees, but in the defense area they are mitigated somewhat by its priotitv access to resources, better supervision and quality control, and the need to compete with the Wesl.|
umber of ambitious but perhaps unrealistic production goal) involving key targeted technologies highlight the strong Soviet interest in seeing these technologies applied in the Soviet research andprocess
Thr production oi computer equipment is to grow byercent annuallyn
addition, by that time the Soviets plan toillion personal computers, after producing virtually no PCs unlil the
Dining tlie, the target for tbe average annual growth in output by Ihe main producer ol instrumentation equipment isercent, as compared withercent
The retirement rate for obsolete machinery in the machine-building sectoi is lo grow fromercent4ercent0
. automation in the engineering industries is to Increase labor productivity lo twice or twoalf times the present level, while automalion of continuouso free? up to half the workers
Installation of computer-aided design (CAD) is to increase dramatically and shorten producttimes by SO toercent.
STRATEGIES
orliachev is actingroud Ironl to achieve these goats, building upon measure* begun by his predecessors while adding some new Initiatives of his own. In the past. Soviet leaden did not view these measuresoherent program or strategy, nor didLabel them as such Moreover, the leaderships SAT pohctes and strategics are aimed at all pans of theproduction and science) sectors, ihe Academy of Sciences, and higher educational institutions. They are oftenwith other domestic programs, such as economic reform and the campaigns for work discipline and agaimt
Revitalizing thease
Soviet strategies aimed at revitalizingbate Include increased investment formanufacture, higher worker pay andbetter training and information flow,efforts lo acquire Western equipmentThere seems toeneralthai such measures have been needed. | |
Increased Resources
part of his broader economicGorbachev (see figureas pledgedto ihe ei peri mental-production base and IO instrumentmaking capabilities of the USSK
The Soviets plan to increase national level capiul investment! io support research andtryercentan average
Ksnn
Soviet Assessmentroblems
olicy goals lo revitalize the cs 1stl'6f. Law and lo improve technology diffusion. Soviet leaden recogniie the longitanding problems tlat mutt be addressed:
Problem* Inhibitine Itew'laliiatioa of the BDTtrE Bote:
- Lack of Inc-tntlvti fot SOT Workers. The Soviets acknowledge the comparative decline insalaries since the, the increasing difficulty of attracting bright youth to science, falling enrollment rates In engineering schools,hortage of designers. Poor morale, low productivity, low-quality goods, and inertia in favor of the status quo are common. Asrecently stated, for "too long engioeerinc and technical cadres and other workers inhave become Inured to the mediocre and have set their sights oo lowered criteria. All this has to be putecline in the desirabilityork is especially striking in Soviet society, where scientists have typically enjoved prestige and high status.
-Inadequate Eqttfpmenl for Experimentation and reilltuj. Soviet scientists and engineers often complain about irmirocient Quantities and the poor quality of tbe equipment available to them These inadequacies, along with the lack ofare especially significant intargeted technology areas such asand mlaoelectreeucs. The Soviet resource problem isesearchers and scientists lack materials and technical equipment, such as precision measuring Instruments and computers, used to carry outDT&Elack adequate facilities to developand to test new products, materials, and processes;be Instrument-making and machine-buildingsuppliers of much neededhave inadequate equipment and test facilities and are unable to develop and to produce the equipment necessaryatisfy present demand.
Impediments to recAnological Diffusion
and Or&onUollOnal Barriers Departmental barriers, permeating the entire Soviet economic system, impede cooperationdifferent ministries and isolate scientific activity from manufacturing, Soviethave also long recognised that the physical separation of organizations performing dlOerenltages (for example, researchesign bureaus, and test facilities)and ofnd production facilities has severe negativeon Ihe speed and flow of innovation Soviet leaders have relied onnd economic planning to compensate for the lack of information Cow. However, the large andnetwork of special government agencies involved In the formulation and conduct ofolicy is often unable to develop andolicy because of the special interests and often overlapping responsibilities Though these barriers exist in both tho civilian and defense sectors, the problem is intensified for civiliannd produe-Hon, which lack the defined requirements and supervision more prominent In the Soviet weap-
CjliSt^
of Incentives Jot Enterprise Management To lanoiMle. The lack of incentives for industrial managers to Innovate has kept the economy from quickly absorbing new products and processes and putting them into widespread use. Soviet industrial managers, often with inappropriate machinery and limited authority, are givenproductioD targets to meet. The Soviet system continues to fudge, reward, and sanction these managers by standards that place more Importance on plan fulfillment than onnew technologies or innovations andhat actuallyisincentive lo innovate!
rate2 percent, as comparedercent during. These increases are slated both lor capital improvements at tcsearch and designand betterandfor the development of new and belter equipment (scientific instrument manufacture and industrial autotnalion).
Budgeted expenditures in the science sectotcapital investment) are to rise toillion rubless compared withillionhis would bring the average annual growthercent, as comparedercentsee table on
Industry is being encouraged to allocate anshare of its budget torogress The Supreme Soviet's Commission for Machine Building recently recommended that
. Gorbachev ot Sv*liana Electronicin Uningrod. The USSB'i ihotoge ol-ii-wmenionon (orat been aand ii the basis for General Secretarypooh to inaeerse the outpot ond Cfvairy olmachine' ond initrvmeot-making inoWriei.j
each machine-building ministry should spend up loercent of Its capiul investment on science[ |
Higher Wogos ond Bonuses
oviet legislation passed5fi per-mlti Iricrcuses In wages and bonuses for scientific workers, designers, engineers, and technologists in Industry as well as in the USSR and republicof Sciences beginning7 Wages and salary rales could rise by an average ofoercentesult of replacirer Bied salary ratesore Bealble sliding scale of pay rates designed to reward hard work and Innovative results. Following cautious bonus reforms introduced by Yuriy Andropov3 and based on cspcrixnents that have been taking placeumber of cities, ihese new reforms will
- Increase the number of iob categories for workers.
Provide greater pay differentials betweenof qualification.
Increase wages in key sectors for SotT progress such as machine building.
Provi.le managerial authority to increase orwages on the basis of productlvily and lo fire unproductive workers
The source of funds for the resulting wage increasesbe largely individual enterprise* andmonies savedo eased productivity and wotker layoffs
Belter Trcaruhg ond Information How
he Soviets are abo attempting lo raise the teeluiological level ofstablishment through increased training and access to more and betler information;
They areomputer literacy program Intended to provide up loillion PCs lo secondary and vocational sclvool* over the next decade.
Educational reforms are aimed at easing Ihc shortage of skilled lechnicnl labor by increasing both vocational Iraioing and early entry into the workecently adopted reform promises closer cooperation between Industry and higher education, toughererformance ttendards. and Special training for lop students
Domestic and international computer networks and Information systemsre being developed, includingomputer network thai reportedly links several Academy of Sciences organizations in Moscow, Leningrad, Kiev, Riga, and Novosibirsk lo each other and toaU bases.
Organizations are being createdasten the development of information sciences and data processing. The Academy's new computerdepartment, for example, willeading role in this area | |
Continued Acquisition of Fceeegn Tee+incJogy
its policy to develop irsdlgemouiIhe Soviet leadershiptrong interest in Westernis Likely lo continue attempts to acquireIllegally. Such activities will includeooperation andIrade diversion, and covert collection activities
H
Technologu Aca*ttilion WeIhe Sovieis will continue to carefully selectWestern machinery and equipment lotechnologies and to help build theneeded experimental productionubstantial part of theof total Soviel machineryone-third, mostly from Easternoviet hard currencybeen primarily for the cnemicaL. energy,to Gorbachev'iprogram We believe that machinerypurchases for Gorbachevs modrrniralion
Figure 3
Share of Imports In (he USSR's Total Machinery and EquipmentS*
TotalUloo rabid Imports tioro other Communiii countries, l%
biioaii uiumlmwtffraitiotmM&mi,feat,
necimk nrMi.
Fiqurnorbachev6 Visit of Soviet Party Delegation toerman Tool MM. Weil Germany Is Ihe largeit Western exporter of mochinery ond equipment
Io the USSR.Q
program will have priority, even though hardconstraints might force the Soviets to cut back on total imports from the West (see figure |
eanwhile, the Soviets are attempting to find ways to enhance their access to foreign technology and to use imports more effectively, while al Ihe same lime limiting hard currency expenditures Their goals are to raise the quality and efficiency of industry enough to meel more of their own needs and to expand their exports of manufactured goods. These initiatives include:
Increasing imports of machinery and equipment from Eastern Europe East European Roods now make up aboutercent of Soviet equipment Imports. The Soviet leadership Is continuing to pressure the East European countries to boost technological modernization throughxchanges bilaterally or among the countries of the Council for Mutual Economic Assistance (CEMAXsee inset onlthoughix of Western-level technologies and lower quality goods, the Soviets areotential long-term source of additional resources and at the same time saving bard currency.
Allowing selected Soviet organizations to trade directly with foreign partners through their own foreign tradeof through theof Foreign Trade apparatus. This isto encourage Soviet exports and toa more efficient and productive system of selecting imports. Reorganizations In several trade and financialinpurportedly causing confusion, high-level Infighting, and morale problems at lower levels Nevertheless, the trade reforms provide the enterprise withcan keep part of the hard currencyproduce goods for export.
Promoting joinl ventures and other commercial relations with Western firms. In7 the Soviet leadershipew law that allowed minority foreign ownership of Sovietfirst time since the. The foreign partner contributes capital in the form of equipment, technology, or financing, and takes part of its return in finished orgoods Among the countries where Moscow is actively promoting joint ventures are theStates, Japan, and West European states. Soviet proposals have been weighted heavily on the chemical, light, and food industries. Proposals for Soviet-US ventures that have reached the negotiation stage include some Involving oil and gas, nuclear, and agro-industrial technologies The Soviets have also expanded their use of internaltOnal financial instruments and applied to participate in the General Agreement on Tariffs and Tradehis reflects their interest in expanding their presence inorganizations and markets!
I .ui European Contribution to
Pertly in lesporuc lo Western sanction* end lo chances in Soviet percepttoni of the COM* end benefit! of Wewetn technology. Moecow is tryinc tomorebetter technology Ircen iu East Etuopraii allies The Soviet leadership ii putting pressure on thr tail Euiui*-an couninci to boost technological mode minparticularly wants Inlra-Bloe structures that will increase the level of collaboration end hasten technological dcvetoprneal in priorityout In Ihe CEMA Conipccheikuve ProaTarriicgreas Throurh the0 and aho identical to Soviet riocneslic targetelectronics, automation, nu elcai eneigy. new malerlali and trchnoloiiiei, and Imttrcbtioloev (see| The Sovieis have abo calledrgan!rational changes among CEMA rnernbers, lucfa as the creation of "internationaland technological coropleaet" In CEMA couMno and participation by other CEMA countriei In the USSR's newly formedompleiea (MNTKi) Two new CEMA Standing Commlstlviit have beenfirst new organs at that level ilnceihe materiab and biotechnology areas, | |
The0 program, hist beginning to get unoVt way.otential beat-term source of additional resource* and lerhraology to aid the Soviets in thcii questrngroa Thr prograrn providca an riirmive list ol general intentions andaeks concrete lugaestioeu for action In tlie near dilute to Initiate, guide, and control ihr itated tasks The plan doer serve a> an important guide lo inspire the directions ol regional ceeevomicenefcclal to Soviet long-term eoab. While pant Hint proieeti have tended to be of limited suoteea. the inteacalion of the CEMA computerovei thesed massive tramlen ofechnology la accelerate progreu in ihe area While stillehind Western achievements, the Soviets end Other CEMA countriei haw embarkedong teen eoMpcefcerattve program, butane; to build on the lucceB of tbeir faint computer effort Novel he leu. loncitanding and major political, economic, and technological impediments will constrain the pacef Iheic Bloc-wide eflotlil acquitWestern knowledge and techno logyoviet Bloc ciltiens come lo the United Stales each year in nontourist status. Despitein the number of requests for US visas during the. Soviet major interest areas continued to be fairly steady (see figuren addition.ontacts with the rest of the West are citcnslve For eiample, the French estimate that more0 Soviet SAT personnel visited France |
e believe lhat Moscow would like to reverse the declineisits caused by strained diplomatic relations in tbe. Gorbachev bas agreed to severalichangrthe general (umbrella) agreement renewed In5 by him and President Reagan at the Geneva summitcooperationon oceanographic studies, standards, atomic energy, and space research Otheras those on environmental protection, medical science and public health, artificial heart research, agriculture.
Gorbachev has placed importance onand increasing international scientific contacts These contacts, in the form ofonferences, formalxchanges, academic study, and private business relations with US firms, are an Important means by which the Soviets
l.
10 JS
'
and housingup (ot renewal over the next two year* The USSR alsoooperation agreement* with France, the United Kingdom, Italy. Sweden, Germany, Finland, Canada, Japan,
llegal Technology Acquisition. We believe that Soviet illegal and covert technology transfers will continue toignificant role In supplementing Soviet military research and manufacturing capabilities and in narrowing the technology gap with the West. Two such efforts have significantly improved Soviet capabilities in both defense and civilian technologies:
A program run by the Military Industrial(VPK) seeks the blest technology to improve the technical levels and performance of Soviet weapons, military equipment, and defense manufacturing equipment. This effort usesintelligence services, their surrogates among the East European services, and Soviet trade andrganizations to collect targetedand documents from Western defensemanufacturers, foreign trading firms, academic institutions, and electronic data bases. Collection has focused most significantly oncommunications, aviation, radar and computers, and chemicals.
A trade diversion program run by the State Committee for Science and Technology (GKNT) targets equipmentexample, computers and machinedirect use In production lines, for reverse engineering and copying, and in support of research programs to enhanceboost product quality, and meet planned targets. We believe that this program bfor most diversions of COCOM-controlled. dual-use equipment to the USSR. Decisions are made on the use of technology and equipment, acquired by the VPK and GKNT for the design of weapon systems and associated productionearly on In the Sovietrocess, most often at the design bureau level.!
Improving Technology Diffusion
ne Sovietaried approach to eliminate the obstacles that have in the pastthe successful diffusion of technology throughout the research-to-produciion cycle. First,structure and methods of operation are being reworked and the cadre renewed.eginning to tackle the problem ol supplying the proper incentives topart of hb larger program to "restructure" the economic systemaddresshe7 plenum outlines more extensive measures for radically restructuring the management of the economy, including pricereforms, enhanced incentives, increasedand decentralization. The defense-industrialb being used to some extentodel for change.
ome of these measures have encountered foot-dragging in the bureaucracies, I-
n-
countering stiff resistance In the party andbureaucracies and perhaps in the Politburo itself despite the Incremental nature of the process thus far.
Changing the Rolesolkymokers
Calling for an improved, comprehensive, andolicy. Gorbachev, like Brezhnev, is attempting to make important personnel andchanges in the three national agencies that coordinate science and technology: the State Planning Committeehe GKNT, and the USSRof Sciences. Thettempting to redefine the roles and functions of these organizations, to eliminate overlapping functions, and to withdraw them from day-to-day operational planning so they are able to carry out more strategic planning These changes also aim atnteractionthe military and civilian sectors to the mutual benefit of both. On the one hand, the defenseb being called upon to assist civilianin the application of technology. On the other hand, the scientific community (especially theof Sciences) is being driven to enhance military-related RDT&E, while key civilian ministries are under pressure to help modernize the defenseas well as their own plant and equipment to better support weapons productian-| ]
Gosptan. We are uncertain about the eventual role of Cosplan inolicy sinceuch confusion surrounding the organization's role in economic change Cosplan. now responsible for overall
economic planning and introducing newinto the production process, is to become "tbe country's economic-scientific headquarters,"to Central Committee secretary and Politburo member L. N. Zaykov, Despite recent criticisms of Cosptan, the leadership has expressed commitment to strengthening its control over the main directions of the economy and innto economic policy and plans. I
KNT. The GKNT, charged withnifiedolicy and promotinguse of innovations and the ministerial science it supervises, has continued to come under criticism from Corbachev and others for the past several years. It is criticized for taking "only very timid steps toward uniting science and production and amalgamating scientific research institutes and designtill adheringait-and-see position on these matters"
__ln7 the leadership appointedobtykh as chairman of the GKNT after leaving the position vacant for fourthat at least part of the heated debate has been resolved.
SSR and Republic Academies ol Sciences. The Corbachev leadership, continuing efforts begun under Leonid Brezhnev, is placing increased attention on the potential economic and military applications of the huge research effort of the USSR and republic Academies of Sciences, historically known for their work In fundamental research The leaders (see figureow running the USSR Academy, including: newly elected President. Curiy Marchuk, are supporting more enthusiastically the party's demands, are closely tied to Ihe military-industrial complex, and have thetoore applications-oriented policy. Marchuk has called for strengthening the role of the Academy's substantive departments in directing and planning Academy research, imposing age limits on Institute directors, concentrating the Academy's work on basic and long-term scientific reseaich, andtemporary intersector scientific laboratories to work on short-term targeted programs. The leadership is likely to continue to increase the Academy's role in applied research, while striving torastic shift away from fundamental work, and to expand the Academy's role in developing and promulgating the use of computers (see inset on1
Figure-eeting of Soviet ond JapaneseKodii Hushiml, president of the NationalCouncil ot Japan, meets with Yuriy OvchioniovVevgenr, Vetthovice rvei.oer.ti of theo( Sciences. VelAho* heads the Academy1iDepartment ol Me* mot ion Science,ond Automation.pecialisrheads the new mntk
Restructuring Ihoetwork
t the working levels, Gorbachev is continuing to emphasize increased managerial authority and new organizational forms, such as science and engineering centers andompleteshich are being created to break institutional and administrative barriers between science and industry Speaking Inlained:
Our country is great onejust isn't possiblethe whole of
this huge economy from only the center;
a significant part of responsibility for the solution of many questions must beto local organs And that means that they must be given corresponding rights too.
These changes include
Expanding tbe numbci of science andassociations, centers, and complexes, within tbe economic branch ministries, that linkperformers in the research-to-production process
Creatingorganizations that havend manufaciuting facilities tasked, to develop and produce target technologies that require the cuopeiation of social ministries and the academies All ihe MNTKs arc oriented toward practical applieal ioni, uhllr many target
:
tor the Aeodomy of Science*
In the pan year, ihe Soviet leadership hai liven ueitiBcanl attentionhe irJe of the Academy tn directing ictence to serve economic reform end mod erniution We have teen several direction* deveiootne. IhUv
Inceoted Empheti, cm Applied Research The Academy's chanainit rmpheWi from banc to applied retcaich hat intensified in the IWOa and may resulleduction or leveling oil ol tome Iiindarnental science,meller core ol scientists ran be eipeeled tn continue to produce world-dm trientinc result* Thevidenced In several way*
Increased Academy partinpetaai innonty ptogiami ind in coord iroring key larger program! aodompieus (MNTKi]
Ei^Uohmeol of ne- Academy institute* and Uboralories dedicated to applied research inareas loch ai energy, metallurgy, and biology, and In crucial industrial and defense technologies
- Oigaotational reforms (hat bring industryinto reseaich leami of various Academy institutes to help speed up the trim fer ofnto production j
CoacenlrerhM of Feaeteaerwte' Rriearci cmProtect, Marchui hunly theole in applied research, butto be more rxaamatic In Iu choice offocin on (he llieoreticalof new lypes of equipment, advancednew material* The leadeiuStp Isvory tower" attitude pieterrl in manyacademicians who are Heeped In anlhat focuses on the banc natural sciencesor no practicalhe near term.tbat these areak clotrl. coupled toaa condensed matter phytic* andlikely to receive ere*let em pliast*
Aclioe Pole oi PenScience CeMeri. The Academy is aho pressing in regional tcientibc centers toore active role In solving regional economic problems and cooidinatlng ihe research of industrlel and educational establishments with that of Academy militate* For example, the Academy, backed by re gionel party leaden, has sought to Nrenglhen to role in spearheading the advanceax* center of defense industry and high-technology devel opmern Apparently, party leaders are trying, nationally aid lorally. to use the Academy lo bteaL down oi circumvent ministerial banters lo terhiwlofircal chance Tlie iccenl conversion of the USSR Academy's Far tail and Utah scientific centers lo depart menis indlcalei Maichuk'* flrsi move toihc Academy and to deeeislialue to day-to-day decisionmaking I development o( advanced equipmenl and male-rials for Industrialmachine tools, robots, lieu Me manufacturing systems, microeleetroiiicj, computers, andmaterials (tee eppendii Hi
Increasing access to and joint use of facililies and services across sectors on Ihe basis of negotiated settlements and shared interests Academyfor example, are making greater use of the experimental and pilot pioduction bases olIhe defense industries (see Inset on pagethe latter are tapping the basic and applied research capabilities of the Academy.
Increasing the rebance on CEMA organizations The CEMA Comprehensive Programrogress Thiough Ihe0 provides for ioinl work ontVTnulling several thousands nf tubprojects and programs (seelthough it is unclear whether allre dearly defined as vet, Soviet official* claim that the first concreteof new high-technologybe at early7 Much of the lead work will be done by Soviet organizations, such as theand Individual MrvTKs | |
Re-ne-wing the Cod-e
he positioning ol competent andparty technocrats, successfulmanagers, and defense industryparty and government job* is crucial toof Gorbachev'solicy. In theandrganization heads havefor empire building and creating barriersand informalion tramfer. GorbachevCentral Committee department chiefsmachine building, construclion. trade, andsector, has appointed new heads to allpolicymaking organizations, and hashalf the country's ministers and stateThe Soviets also are pushing toscientists and to provide themcademy of Sciencesfor example, recently announced theor cement of mandatory retiretnerrt feedirectors and other Academymay accept iobs as advisers to newand lo the Academy's
Improving long Range Planning
he Sovieti believe thai they must produce longer term and lans, given the
MA lory Involvement In GyOkxi RDt&E
Although none of ibe publicly .dent if led Si, Iere weapons de>efae*nrnt txog'airu. manyihe target rxcsratris) foctn oo ihe elevalotmsetit of newaterials, end manulactur.ng pro cesses thai can be used to help design and produce tcvroiiicauedora. Mo-covci. Soviet militaryndeguiiansoos ere no*ating in teveralrogram, as bothopen and end users of new technology These proerami appear lo be an importaal mechanum for technology liaiufei between miliury and civilian leeloei; they aie lieiiui used both lo modernize Ibe civil machine build ins base and lo retool defeme industry with critical high technologies
Several organisations involved in the Industrial Itoboti Program are majorenlcra of delensc-Industrial ministries. They Include Ihr science and produciion associationstitmvetlana (electronics iodustryX and Leningrade-chantcal Association (LOMO) (defease Indiastryt As pan of this program. Industrial robots and manipulators are being introduced Into production lines at several defense plants for -elding, pa.nl ing. and forge pressan
The Ministries of the Defeme Industry. Aviation Industry, and Radio Industry arc Involved in the Powder Metallurgy Ptogiam
The Ministr.es of the Radio Industry.ations Eouiptnent lridustiy.ed ionic*are raaxe participants inorm programs in computer technology, micrrguncet-tors. and mlcroelectrcaiics. Computer-aided design (CAD) systems are being Introduced in several defense industry establishments, possibly iirtder Ihe target program on automation of rmeaich and design engineering.
Various elements of the Ministry of Ihe Defense Industry are taking part in the Industrial Lasers Piogram. In addition. Userring introduced at the Baltic Shipyard under this pro gramQ
increased magnitude and complexity of their goals Toward thn end tbey have formulate.)
Aear Comprehensive Programrogicss, which aims to integrate and drive annual and five-year plansots national ttriorities to solve key economic and socialdirects resources and funds, and identifies large-scale economic target programs Fot the
12th FYP. the leadership is emphasi/m* pro grams in heavy industry, machine building, and the chemical sector, and continuing those in food, energy, and consumer goods
Long-term and short-termModeled after weapons developmentthese are meant to support majorprograms, cut across departmental lines, and promote technology transfer between the defense and dvilian sectors The tnajority of theserograms approved forh FYP are probably similar to those ofh FYP. during which almostercent of the long-term and almostercent of thefocused on Gorbachev's prioritycomputers, nuclear energy, biotechnology, and automation. We believe that the Soviets ate alto placing special emphasis on machine building (including robotics, lasers, and cryogenicand metalworking
The CEMA Comprehensive Programrogress TWath the0 Ack**cd after much public Soviet prodding inhis program aims to promote "mutual reoperation, specuuiztiaort, and the integration of production. ceaasrabdaCion of the material and technical base of the CEMA member countries, growth of pt estsge and attractiveness of socialism in the world "the target areas of interest to Gorbachev, the0 plan delineates cooperation in btoen-gineering. nudcar power, advancedomputers and microelectronics, and machine automation (see appendix CV| ]
Revising the Incentives To Innovoie
he Soviets are reforming the economic system In an effort to make it more efficient. This is an ongoing proems that, according to some Soviet officials, will not be e. impletcd until theart of ihis elforl is to change the system of plan targets and incentives fot both enterprises and workers in ceder tot- |he innovation and diffusion of the appropriate tech noi capes into machine building and the rest of the econo my Reform measures already in piece that could support technological change include the following
Labor productivity and improvement in product quality are emphasized as success indicaton for enterprises
Thr shilt in measuring perfotnianceiosset concepton theol new equipment and paoeestes that <jvc on inateiials
enterprise autonomy to use production development funds gives factory managersauthority to procure new machinery and equipment.
Wages and bonuses are tied more closely to cutting coats, reducing manpower, andproduct quality
Prices are being made more Bealble lo reflect product quality. Wholesale prices on top-quality goods may be increased up toercent while output not meeting such standards Is subject to price discountsoercent charged partly to Irscentive funds
Material and criminal liability can be levied onrganizations, and officials who allowegularities lo occur ot substandard goods to be
the spirit of Gorbachev's campaign fotnnd olAriftost (publicity and oprnncss),aisd ministries have been publiclylack of innovation. According to I'raoda.oscow City Party CommitteeYel'tsin, tint secretary of the committee,unproductive Moscow researchdesign bureaus and threatened to closenstitute*
Using Defenseodel
of these changes useodelsector, which emphasizes traditionalcentralized planning, organization, andrTireh.nisms that In the Soviel rlgejfor Inadequate information flow (see inset).is the ambitious new system for qualityState Acceptance. Introducedeginningtinspectors and coven anll industrial products andhird offrom the machinery sector. Thisa program of incentives lo industrylo Corbachev. ensures that those who"garbage" do not get rewarded. Statea reflection of the quality control system insector, requires the State Committee onto enforce quality standardsystemoffices and inspectors at major industrialThese local quality control offices areol ministries and enterprises, unbke theunits that have existed in Soviet factoriesyears, and therefore are envisioned toami effective monitoring similar to that thine
Tachnotogy Oifluviom Emulating and TappingDefease Sector
Moscow'< focus is an rnt inertigh technology revolulion ind industrial rev ital list Ion fromusing lis own mitiliiy ccoitomrils model The leadenhip ii looking lo the defensetheir traditional me* hods of centralised planning, orend management, as well as strong partyadvance iW Soviet rechnica) induonil base acron the bond Meuurea the leadership Is taking to apply this rnodeJ to lb* civilian aretce include
Improving ihc eflcotivervrai of bureaucratic le-vers- ibr party's sponsorship and oversight of new technology development, and strong cent ralliedhit hive been geneially weak in the civilian spheie bul are crucial to military technology and delmieat (on
ie role of long-range scientific forecasting and technology assessment inmanagement tools used in defense loi drrndei
Creating big. goal orient ol protects to accelerate the development of key technologies (lasers,robotics, biotechnology) modeled along the linn of the USSflJ nuclear and missile program*
upcr agencies under thr Council of Ministers, ltd by deputy premiers andon thedustiul ComrrsbHon. to oversee and cuordiiule the wort of related ministries.
Introducing military rt.le quality controlat the man important industrial enterprises outside the defense sector
Moving top delrrne creeiilivrset tenor in managing high technology into critical civilian
in the defense-industrial sector by military representa-tives assigned to defense-related
PROSPECTS FOR SUCCESS
orbachev already has put hrs personal stamp ontrategy, predominantly by hisand vigor in pursuing change In hb short time in power. Gorbachev has gone far in raising the leadership's consciousness of the importanceolicy and its integration into economic policy To marshal public support for bit policies. Onibachev is actively encouraging increased candor and publicity In dealing with problems ofnd the possihili-
tics of their solution Gorbachev also is publicly ceii-suiins! those within the elite who are not implementing the new standarda and strategics he has set. Butmust move from plans and garnering support for his policies to implementingrogram Its success will depend as much on the creation of an adequate incentive system forspur theof more technologic-all) advancedand equipment and guarantee its use throughout theon the sustained allocation of the necessary personnel and Investment resources]
Thoase
lans to strengthen tbe Soviet SOT resourcebos* probably will meet withsuccess, backed by Gorbachev's programthe machine-building sector The lackpermeates multiple layers of theand directly affects the quality,morale ol the work force Some of thrtargets, however, willet.literacy program, for example, assumesof more0 computer labsa million PCs, but Soviet domestic capabilitiesto meet this productionestimate lhat onlyCs willIhisless service and supplyihe necessary perioberals and software.
he efforts to raise the quality and morale of the St'7 tabor force probably will rnoct with limited success Tlie new education measures may generate higher quality graduates, but are less likely to make the educational system more flexible and conducive to technological change. Benefits lhat do resull are not expected before. Plans to raise the payorkeis depend entirely on the successrganizations and enterprises In raising productivity, and ihey may not have enough fundi to financeage reform and new equipment. Moreover,incentives to workers in an economyearth of consumer goods and services are of limited value The Soviets are attempting lo tackle thisalto, but results are at best several years away.
he strategy to increase the flow ofruns the risk of spreading politically undesirable ideas and threatening the regime's traditional monopo ly over informationmajor instrument of political control Therefore, the regime is likely to counterrend by controlling access loas it has done for copying machines, and by strucluring inheienl limits on items such as disk storage, modems, and prliileri This type ofinformation Co* would work against effortsS&T
e believe lhal the Soviets will continue to have success in acquiring Western technology to pjpplcrnenl. and lhat such acquisitions willhort-term fix while ihe Sovieti alletnpt to build theirapabilities The reliance on Western technology may In fact increase in areas critical to the modernization of civilian and defense Industries. However, there aic constraints on tlie legal and illegal acquisition of foreign trvhnology;
Hard currency limitations continue, exacerbated by current world oil prices, and the Soviets are likely lo place increasing emphasis onlo hard currency imports, includingventures with Western 6rms andreliance onapabilities of Eastern Europe.
The Western business community, however, has received the vast majority of the Soviet joint venture ptoposab with little or at best mild interest, complaining that they are one-sided and still too vague to represent serious bids.
Soviet susceptibility to Western trade sanctions and technology bans continues lo make theapprehensive over tlie cost and wisdom of technological dependence on the West, although the diSuslon of technologies throughout the world makes ll harder for Western governments to deny Soviet acres*
Tecfcnrjlogy diSuseon probterna have limited the contribution of Western technology to the growth of Industrial productivity, reducingenthusiasm for Western equipment and tech-nologyanacea for domestic short comities
Technology Diffusion
espite some improvement in iheirase, ihe Soviets will be limited inrogress under tbe current strategy package because of their inability lo improve technological diffusionstrategies inrea reflect convention -al Soviet remedies thai have not worked in the past. For the most part, Gorbachev is continuing the Breah-nev approach ol mandating change "from above" and irsing the delmsc mdustiyodel for change
oviel plans to break down departmentaland to redefine the roles of Gosplan, the GKNT. and the Academv of Sciences are likely to encounter serious problems. Many ol the new organizational changes simply realign the old structure, and sectoral and bureaucratic interests remain:
Uncertainty exists over whether Gosplan or the GKNT will have the responsibility to ensure the integration of science and economic planning since Gosplan is to become the country's "cco-nomic-scientiBc headquarters."
Despite calling for an increased role for Gosplanolicy, Gorbachev has singled it out as an example of opposition toto old habits, thinking, and styles of managerncnt- Wc believe thatain role will continue to focus more on the economic than on thesiderogress. We also doubt whether Gosplan will be able to shed its historical bias toward the production sector and maximizing industrial output.
The future establishment of firm roleslanning is tenuous in light of current economic reform proposals ihat could tesull In someof decisionmaking and planning.
New commissions and organizations, such as MNTKs, cloud policymaking responsibility.of the new Bureau of Machine Building, fot example, argue that the CKNT should gel out of technical policy at the engineering level.
Changes in the Soviet management of the foreign trade system that decentralize foreign equipment acquisition to some extent are likely to affect the GKNT's role as coordinator of foreign technology acquisition efforts
Though the leadership appears to be increasing its reliance on the Academy of Sciences, the issue remains how much these changes cannd the economyhole. Academyin innovation is localized, confined mostly to scientific centers in the Ukrainian Academy and the Siberian Department of the USSRFurthermore, the Academy systemelatively small part of the totalase, occupyingercent of the total reported expenditures for science, and il suffers from an aging cadre as well as an antiquated building and equipment base. The leadership risks straining Ihe Academy's resources and pushing it into areas, such as production engineering and testing.
which are further from it* expertise. Emphasis on applied research in the Academy may, indeed, decrease the quality and volume of basic work needed for long-termevelopment
Gorbachev's commitment to the creation of tbe MNTKs suggest tliat ihey could providedevelopment and assimilation ofObstacles are appearing already, however, as shown recently when tbe slow pace of creating MNTKs was criticized by Academy official! and party heads who admitted that so far they are "largely paper
MNTKs
ire declared from above to be instrumentsbut their material support so farbased on traditional, unhurried temposIt is likely that even when fullythey will encounter strongand technological conservatism inand industry similar to theby scientific
orbachev has been able to move quickly on the cadre front and has promoted officialstrong track record for innovation. This appears toositive step fornd is likely to provide some fresh blood and new energy to back Gorbachev's policy. Individual ministers andrganization heads have been blamed for empire building and helping to create the barriers to cooperation and information transfer. The lack of expertise by leaders and managers has often resulted in poor planning as welltagnant work environment. Nevertheless. Gorbachev's cadre changes have affectedmall portion ofommunity and have notomplete success. Some defense-industrial managers reassigned to the civilianector, for example, have not been able to perform the miracles that Corbachev seemed to expect. These managers, with their strong militaryxperience in thesector, are finding themselves in an entirely differentthat lacks the proper equipment, political priority, raw materials, and skilled work force. Moreover, if incentives lo Innovate are not revised, the new managerial cadre will quickly fall back into the stagnant ways of its predecessors.
g-term planning to date has not beeneven in the Soviel view. Desuite continuing
SECRtl
k-adeiship pressure on the bureaucracy to integrate economiclanning and to raise the priorityrograms, we believe bureaucratic resistance, continued departmental barriers, and technological conservatism will continue to hamper their effort. The transition tond economicputs enormous demands on Soviet planners who do not have established measures and methods fortogress or the "economicof new technology. The leadership, recognizing these problems, recently has created new organizations to improve "scientific" planningrogress. Whileorecasting and planning have been important management loob in the Sovietcom pic i. we believe that the civilian economy lacks analogous advantages suchell-defined customer/consumerramework ofcapabilities and reduirements In which to evalu-atc the merits of alternative linesevelopment.
hough loo early to predict its outcome wiih certainly, wc believe that the new system of Quality control will have lo overcome several constraints andurbulent period of industrial disruption before experiencing any significant achievement of the increasingly demanding technical standards of industrial production. The system of irispectors, who arc purportedly independent of tbe developing or producing enterprise, does show promise and has been successful In the defense-industrial sector.significant constraints exist:
The rejection of materials and equipment has significant potential to create economicsuch as bottlenecks and productionas wdl as morale problems. During the first quarterigh rejection ratescut worker bonuses and disruptedof goods such as computers, radios, and metal-cutting machine tools While themay have expected suchhe issue remains how long the program's initial disruption will be tolerated and whetherwill be pressured lo continue high refection rales.
The inspectors must be highly trained and well-qualiBcd specialists to do their job effectively. Filling0 posts may resultrain of talented engineers fromonly pool of qualifieda glut of lesspaper pushers. Corbachev has alreadydismay at some of the newly created bodies for sinking "in the mire of burcaucracv and red tape "
High-quality, sophisticated diagnosticoften needed to perform inspections forThe USSR at present lacks this typeand therefore is dependent onin ils instrument-buildingon foreign Irade. Moscow appears tolhat the long-term solution of therequires more than punitivemeasures like State Acceptance, bul thereevidenceonsensus on what kindlevers, if any, will be introducedwith the problem.
As in the case of the new State Acceptance system, tbe leadership appears to recognize that carrots as well as slicks must be offered to spur technological change However, the present incentive system, limited by taut planning requirements and tnJdequate supply ananpernents, continues to place Soviet managerso-win situation; tbey are penalized for failure to meet innovation targets, but they are penalized more if titey fall to meet output targets. For3 decreepercent reduction in managerial bonuses if new technology targets were nol met; yetof the deliveries target led to total loss of bonuses. This reliance on vcl. or volume of output, continues loajor disincentive to the application of new technologies and processes. Now, under Gorbachev, enterprise managers have new worries about qualitypotential barrier lo planand increased material and personal responsibility for tbe goods designed and produced. I
eforms in economic planning andthat could be critical to improving the incentive structure and efficiencyevelopment and Innovation have recently been outlined by Gorbachev. Tliese include changes in (lie supply system, the expansion of authority and independence at thelevel, increased reliance on contracting, reduced plan output targets and other economic indexes, and reforms to the pricing system. If these reforms could be fully implemented without any fragmentingside effects, Gorbachev should realize considerable success in relation to past Soviet performance.ihe recent plenum strengthened Gorbachev's hand lo pursue his economic reform agenda, resistance to such change is strong and successful implementation is still far from assured.!
he Soviets have several problems with Ihe general notion of extending leadership intervenlion and tlie defense Industry model lo the entire economy:
Though civilian goal-oriented programs are to have priority, priorities by definition must be
limited. Civilian proclaim will be second to. or at most competing wild, military proerams foi rna tcrials, competent and experienced managers, and attentive supervision of high-leveland party official* Sirnilarly. whiledefenseongk>rnerales al least on oapo. the newly formed MNTKs cannot be successful unless ihey have adequate control over financing, influence on policv direct tons, and access to material and personnel resources. To date, ihey do not
The planning and management approaches of the defense sector, moreover, cannot be tram-planted easily lo the civilian sector; tbey will notthere with equal success. The civilianector lacks ihe defense sector's defined, closely coupled customer who has specific re quirement* and specifications for future products and who lends constant supervision to maintain quality.
The Soviel defenseector may not be the best model for Improved productivity and efficiency. Military output has been high in numbers of new weapon systems, improvedand increased capabilities, but. on balance, productivity in both civilianas been notably poor. The defense sector's reputation for quantity and, morequality has sometimes been achievedubstantial resource cosl.l
IMPLICATIONS
he limited success thai we expectrogram (see inset ons unlikely lo produce ihe large gains tn productivity, efficiency, and innovation promised by Gorbachev's moderntia-tion program Even in the unlikely event that tlie Soviets radically improve theirase, the basic systemic flaws will limit state-of-the-art technological development to special emphasisfortlie leadership, as in the past, focuses its attention, hard currency, and resourcesroljtcrns will remain unresolved, therefore. iiKiuding contentious resource allocation issues, inadequate information Bow. back of coopera tion between thend production sectorsontinued bias loward production. Falling short of hUoah uiiaht open Gorbachev's ad-minntration to charges of immobillsm, but he could try to reduce political lepcicussions by softening his rhetoric, reducing ihe pressure on party and govern-menl cadres, and easing up on controversial issues
urthermore, the unique qualities of the new technologies targaled bycomputers, biotechnology, nuclcai power, and machinelikely tothe existing problems and create additional obstacles to implementing Gorbachev's tcr^rsology ttralcgjes:
The targeted technologies oftenery short "lifetime" due lo the rapid pace of development Improved long-term planning andrograms provide llmlled bene lit and may even inhibit progress by misdirecting limited funds and resources.
They depend on and are interrelated with older technology Reliance on Western technology could have negative repercussions on futuretechnology development and capabilities For example, while the Soviel acquisition of Western technology has radically advanced tbe quality and quantity of microelectronics production, the United States stillinimum technology lead of at least two to three years, and aproduction lead of eight to nine years'
They demand new levels of quality and testing lhat must be built into the design capabilities, clean-room technology, and production process For example, computer-aided design, quality controls, and nondestructive testing capabilities ate critical in the materials area for efficient production of resins and fibers and to avoid costly overdesigning of composite parts.quality testing of integrated circuits must be part of ihe production process to avoid discovery of defective parts only when tbey fail to (unction after being assembled onto printed circuit boards Such quality control not only requires Western technology. In.it presents ihe equally difficult problem of disciplining and reeducating workers to follow though with time-consuming and often annoying workfor example, to keep their clean rooms dean.
They require scientialajor rolekeep abreast of the raped changes taking place in their own and inlerrdatcd fieldi Although the Soviets have been developing their system of automated data linksnformation transfer for many
luilliri disnasmn ol tlie iinpMi ul irthnolocv transfer on
ndigenousoVhWwM srv NICan
aad Paaeaapew/ of SonnJuan, Teeaaoeaa*
Indicator! ol Ptoorets In
ol inelfacieot ot redundantrgan*-rations ind 'he transfer ai workers betwernand sectorsikely lo lecruil from party cmacloiimi IDsties "hor about BO percentt corxentrated
Legalraccir.paiuRf and outlining tnmr of the broad adrwniettarlte and organ (rational change* aimed at accelerating SaT ptogieu SpecibcaUy
Regulations governing the USSR SlateScience and Technology (CKNT) (planned for the fourth quarterS bul Hill not promulgated).
USSR law on product quality (planned for the brat quarter
USSR Law on discoveries, inventions and license* (planned foe the latter half
in Soviet economic eflrelivenrei and efficiency indicators Western spectalisU. such as Ronald Amaon and luhan Cooper, have used such indicator! to assess cfaaner as the Soviets themselves arc it llowever. as these scholars warn, observers must esererse caution because of differing detsni tums. roethockjIogSes in estimating, and ntermtial bta' of the Soviets to inSate these reported iitoVawan
labor ratios Increased capital investment wouldncreased ratios According lo Soviet sources, for every -otic in Soviet "science and science services" In thehere wai
Sftatngy Implsmccilo'ion
an avetagcubles'orth of capital stock (building aid equipment) aad. of tha totalubles' worth of capital cqutpeaeot
- Prototypes of oew machines and equtprnentannual statistics haveontlnuous absolute decline since then the creation of prototypes ol new machinery and equipment, especially in ueasof instrumentation, automation, and computer equipment Statistics publishedhat the number of total inventions decreased during1eriod by an average annual rate ofercent Observers should also be aware thai somein these growth rates is expected because of the tendency toward higher development costs per prototype at higher level* of technological advancement.
changes in economic and SaT planning and management toie autonomy of Sovielnd production enterprise* and to decrease tbe importance of output or oof indicators
to measure eii-'opris^ VKVen
economic reform consisting of adminittra.
'Ta ITCitCT aWTlf>rt it KKV AEV{ 1
UberaliiauCei of the price system and foreign trade
venture agxecrociKs COTplcted with Western comspecially in areas such asnergy. biotechnology, machine building, matcriah. and automancei-j
Corbachev has been conspicuously silent on tlie issueetworks and has not labeledriority aimolicy. | |
or military RDT&E. the effect of Gorbachev's continued technocratic approach is more positive than for the general economy. Like the civilian sector, defense could profit from even limited or patchy Improvements in the targeted technologies and in the research-to-production cycle. Though scientists and engineers working in militaryave proved to be innovative in using available teehnc4capes to design effective weapons, they have not shown themselves to be as innovative as their Western counterparts in making technoicgrscal break thr ought Theof Ihe currenttrategies are likely to be mitigated by past Soviet efforts sinceo modemiie ihr defense sector. Soviel militaryas experienced continuous expansion and investment
In ils facilities and equipment and Is likely to be Inposition to maximize the gains that arrSoviet strategies such as the acquisition
he Soviet militaryested interest intrategics chosen. Priority for civilian programi int-tcases the competition lorOggf nails squeezing militaryrograms andmodernization needs Wc do not know how far Corbsschev will go in emphasizing ihe civilians opposed to the defense sector Since the targeted lechisulcapes areual use nature, however, the military is not likely to be squeezed withoutery important benefit in return The technologies targeted bvh Five Year Plan are. in the wordl of Soviet Major General Yasyukov. "the leadingof scientific-technical progress andthr basic catalysts of military-technical progress"
i 1
iven tlx problems ihes am enooBBMl in attempting to transform their indigenousaac. the Soviets ue likely to id create theii purtuil of contact* and trade with the West. Reforms in the trade area arc also likely to sour Increased Soviet interest in trade a* individual enterprises have more autonomy to contract with foreign firms and lake advantage of foreign markets The need for Western technology might encourage the Sovieti to increase borrowing from tbe West, to raise Ihc cost of eaports lo Eastern Europe, and to sweeten the terms in foreignventures with theesample. bytbe allowable share of foreign ownership in joint ventures The Soviets are likely to continuexchanges and other typeswith thend West in all ureas relating looals These contacts, while often portrayedign of Soviet good will and progressvencsv. also seive the foreign policy goal of integrating the Soviel Union into the community of advanced Western industrial demccraoes Because of increasing hard cunency constraints, the Soviets will continue lo look to domestic or East European alternatives to Western technology and wdl clearly make greater use ofdoeaoped in the East European countries through trade, inint ventures,xchanges Though some of Ihe technology is more advanced than that available in theill still lag well behind the Western stale of the art in most key areas-|
hough they are difficult to quantify, weihat Moscow will continue and possibly increase its illegal met hods of technologyin the advanced technology areas, such asand computer* High-priority end users will want stateof-thevart Western equipment,for military protects and key modern) ration program* The Soviets are likely to continue to use the already well-proven meant, such as inlelligenceIrade diversion, and industrial espionage.hard currency constraints may force them to be more selective In ihe technology they acquire and more creative in theirexample, using legitimate joint ventures to help establish conduits for illegal technol'igv acquisition In the area of dual-use equipment, our experience has shown lhat, dospile efforts by Western enforcement agencies, the Soviets have been able lo acquire such technology^
orbachev's strategies lo achievend
, aim
economic modernization policies in any event will
require time. Whether he gels Ihe time he needs could dependarge ettent on the state of the East-West reUtiotuhip. and particularly on the militarywith the United Slates. The Soviets see themselves under considerable military pressure fromCorbachev, therefore, mustong-term industrial inoderni/ation program with an accelerating miiiUry-teehnological competition Improved East-West relations, if they produce constraints on US military programs evenodest scale, could buy Corbachev more time. He appears to be acting. In our view, with an appreciation lhat an arms control agreementin landem withUS budgetaryslow US military expansion Reduced leniions could also make it easier for the Sovieis to acquire the types and Quantities of Western techiiologir* they- have identi-Red as critical, possibly on favorable credit terms.
oviet attempts tobo have implications for increased information 8ow between East and West. In an effort to exploit world wientiBc and technical literature and Western trade journals, catalogues, and advertising. Soviet citizens would gain broader access to outside news, increasing theirlo foreign Influence Information access and more East-West cooperative ventures could also raise the potential for increased pa lent and copyrightinternational contract disputes, andby international arbitration and enforce-
A CHANGE IN STRATEGY?
S3 Futureolicies and strategies ore closely intertwined with the successes or failures of Gorbachev's broader economic and domestic policies We believe llial as problems of technologyeconomic revitali ration, societal pressures, and the defense burden convergeihe next few years, Grirhachcv will face an increasingly clear choice as lo whether to setllc for half measures that (all well short of his needs and expectations or to make harder and potentially divisive dccisaoro that could bring more diamatic |
Systemic Reform
pparently recognizing thai one of the major sticking points of thetrategy is the lack of incentives to innovate. Corbachev has begun to initiate more radical economic reforms aimed al tappingcompetition, liberalized priceand decentralized control over supply This
approach long thought necessary by many Westernproduce (he follow inn benefits
in plan nine and itianmrcmcnl could help remove barriers lo cooperation thai have pel mealedncreased contacts between the science and production sretors would improve and better define the consumer-supplier reiatsonship. increasing the likelihood of better suitability, quality, and oversight
Increased autonomy at the level ofrganizations would add much neededto theystem. Because of the rapid pace of technology development,require the ability to ledliecl funds and people quickly without walling for permission from above.
The switch to other indexes of economicas profit, quality, or product dcenendtiona! price system could decrease the bias toward gross production and reduce the disincentive lo innovate that exists today. If industrial managers can profit ftom innovating, even with short-term decreases In production, their choices in technology and productionate more likely to iiKorporale moreprofitable advanced technologies
rganizations to Ii nance more ofitliout state aid and to compete with others for contracts while allowugj. some to fail would help eliminate the most
orbacJiev would have to overcome enormous polilical obstacles lo implementeform procram
litai>-industrial complex, whose resource priority depends on the maintenance of central planning, is Ukely to feel threatened by potential administrative decentralization and changes to the price and supply systems. Defense would be on it more competitive basis wilh the civilian economy and would require special dispensation lo assure its priority access to needed resources
Party and government bureaucrats, whose power and perks are tied to the present system, are likelr to resist major reforms
The needree and rapid flow ofincreases dramatically when the locus of decisionmaking is movedower level Tin-potentlal Impact of greater access to data on political power will not be losl on (he leadership.
Although competition provides importantfor innovation and creativity, the loss of Job security and stability of institutional standing could violently rockhe moraleatgr (Millionale not at the technological frontiers of theirdecline and labor unrest increase.
Such reforms would not obviate Ihe needell-definedolicy and itswith economicupport structure, for eiample. would be needed lo encourage essential fundamental research lhal otherwise would not be supported by contracts-Even if wc assume that the Soviets fully implement suchassumption of greatwe believe that the ultimate improvements well beyond the time frame of this Estimate.|
Increased Centralization and Discipline (Neo-Stalinism)
Though seemingly ihe least likely direction for the Soviet leadership to take at thb point, its approach, if radical economic reforms falter, might be reduced to the more traditional characteristics ofcentral control and oUscipUne. Some support exists In the Soviet eliteeturn to strong leadership and greater discipline This approach would place increased emphasis on central control, stronger rewards and punishments at the workplace, increased administrative measures, and greater ideo-Jucical orthodoxy. Gorbachev might be attracted to this approach price It contains tome aspects of his existing strategies and could be viewed as providing enough resources to mollify defense i
But administrative measures and "innovation byave already proved Ineffective means to solve the fundamental problems of. Furthermore, because of the unique qualities of ihe new technologies involved, this top-down style of management would be likely to setock even further in world standings. Moreover, this approach would significantly increase tension inafterpcoroises of "democratization" andand it would again increase the potential for abuse of political power by oflsciab The military might he untouched by these problems in the short term, but over the long term, because of the importance of many dual-use technologies, the military would probably need to increase their resources, continue Western leclusologxcal acquisition, and broaden the militaryase toecrease in the technological capabilities of future weapon systems | |
Gorbachev's approach will contain bothand eentralltllig elements. His successful balance ol the two will lie key to ihc Soviet
APPENDIX A
TARGETED TECHNOLOGIES FORH FIVE-YEAR PLAN
olicy foih Five-Veatargets five key areas for development: biotechnology, nuclear energy, advanced materials, microelectronics and computers, and machineThe Kremlin is calling for Soviet levels to reach world standards in these areas by the end of Ihe century and is insisting on increased assimilation of such developments into widespread use in industry.
Biotechnology. Biotechnology includes theof genetic engineering (recombinant DNA and cell fusion) and biochemical engineering (fermentation and large-scale plant and mamma ban celliotechrwlogv has enormous potential to increase in dustrial productivity and create new products and processes across such diverse Industries as pbormaceu-ticaus (for both diagnostic and therapeutic uses),and specialty cbemicab. agriculture, energy, and intelligent nioserisocs. There are also importantapplications of the technology in chemical and biological warfare and defense, battlefield detector technology, and medical protection of the soldier. In the longer term, ihcrc is potential for specialtysuch as lubricants and structural materials, and the use of blochlps tn large-scale computer technology.
Nuclear Energy. Nuclear energy technology,to both military and civilian applications, includes conventional reactors, fuel-cycle technology, and fusion power. Conventional reactors, used to generate nuclear electric power, are an Important pari of Soviet energy resources Nuclear-fuel-cycleis needed to enrich natural uranium to reactor-grade uranium, to reprocess spent-reactor-fuelto recover useful nuclear fuel, and to dispose of high-level radioactive waste materials from the spent-fuel elements Fusion technology includes tola mats, magnetic minors, lasers, and particle beams This technology contributes lo llv development of direct-ed-energy weapons with applications for air defense and for antisatellite and ballistic missile defense.uses include fusion research aimed at developing rcactois for use in electric power plant* and lasers for industrial materials proceulng, for medicaland for cointiiunicaiinm.|
Advanced Materials and Technologic* forAdvanced materials include metals,and composites (Including advancedlo produce these materials includemetal casting and forging, filamenttape Laying, weaving, and rapid(for producing alloys that haveSoviet use of advanced materials hasin militaryun strong suporalloys loalloys, are necessary foras high-performance aircraft and let engines.composite materials has improved missileaircraft range, paylood. and maneuverabilitymade practical such radical aircraft design asword swept wing. Light* eight reinforcedare replacing metals, providing benefits suchperformance, including fuel economystructural ceramics are being developedin wear- and corrosion-resistant industrialand fuel-efficient engines and for certain
and Computers. Semiconductors
(particularly integratedomputers, software, and peripherals, such as terminals, printers, andand optical storage units, are used in almost all Western industrial sectors to increase ihccapability, and reliabilityarge number ol products used for both manufacturing andhe development of these products, theirmaterials such as silicon andcon devices, software, and the fabrication equipment arein the West and Japanapid rate, with advunmt in computer hardware and software power, speed, efficiency, and applicationv Also related is the telecommunications system which, since tin? advent of digital trarumusion and switching systems, has served lo bnk rapidly proliferating computers and data bases in commerce, government, and Industry Military applications are numerous, but include command, control, communications, and intelligence systems, avionics, (ire control, and missile guidance j
Machine Automation. Advances inhave ledew generation ol highly automated.
general purpose mi thine tools wtlh dramaticallycapabilities for commercial and militaryproduction Machine tooli include lathes, drill presses, machinintt centers, grind inc. machines, and formic presses tbat are numerically controlled (NC) or directed by an operator.ewer innovation in machine tools, substitute for human labor, allowingn automating manu fact urine rarocesac* that, when combined with NC machine took, can sharply boost productivity Tlie Soviet military is interested In machine automation and robotics for both operational and manufacturing uses, including welding,painting and coating, and assemblyariety of -capon systems These technologies increasethrough increased production rates and reduced scrap losses, provide betlcr quality control by reducing the variations tn products caused by operator error, allow mine Beiibility in changing from production of one product to that of another, aod provide greater accuracy aod the ability to machine more complexualities particularly vital in the production of missile and aircraft systems. |
APPENDIX B
SOVIETOMPLEXES (MNTKs)
and other Soviet policymakers are potting much emphasis on the new MNTKs, through which, according to Academy of Sciences President Curiy Marchuk, "the greatest national economic benefit is to behese complexes are supposed lo Include research, development, and manufacturing facilities
and flexible manufacturing
systems.
Avtomatikadesign andsystems.
Nadezhnosl' Mashmeans andto improve machine reliability.
and rotary-conveyor lines.
Tekhnologicheskiyelasers.
Impul'snyycmachines and storage devices.
optics.
Mikrofotoelektronikadevices.
Institut Elektrosvarkind electrometallurgy.
Poroshkovaya Mel a
' Pinootcd lu* not yd confirmed The foregoing information is Unclassified.
from both the Academy of Sciences and the industrial ministries. Many of the technologies the MNTKs are to develop arefor cost-effectiveof more sophbticatcd weapon systems as well as for high-quality civilian goods The MNTKs are named below, with their areas of focus:
techniques and protective coverings.
eq'uipment.
crushing and pulverizing equipment
of new inorganic compounds.
applications of radiation
and membrane technology
and gas enhanced-recovery technology.
PersonaI'nyyecomputers.
Mikrokhirurgiyamicrosurgery.
prospecting.
NauchoyyeInstruments.
APPENDIX C
CEMA COMPREHENSIVE PROGRAMROGRESS THROUGH THE0
end Electronics
I. Supercomputers (speed overillion opera-liom per second].
Personal cornpueers and software
Integrated circuits.
tc communicatiotn '
Microelectronic instruments (production effi-ciencv. reliability and quality).
Inlrstrated digital information cuntmunications lystcnu
satellite curnmunications and television broadcast systems
Machine Automation
8 Automated production systems'ntegraied controlobot -equipped laser technology '
processes for producing
robots andPower
mprovement of nuclear power slulionsnd VVER-IOOQ water-couled reactors).
mprnvement of handling natural uranium and raacicar wastes.
evelopment of equipmenl for fastbrecder reactors
' Interluanch SIT iwnpWiei(MNTKs) have bnn created[ he foregoing tnforrnarlon ir Undawfied
New Materials and Technologies for Their Production
New high-strength corrosion and heal-resistant compound and ceramic material.
Creation of ceramic internal combustion and ceramic gas turbine engines
plastics capable of leplacing
Wear-resistant materials (using powdermethods)1
Amorphous and microcrvstalline materialsmechanical, electrotechnical. and anli-corroalon properties.
New semiconductor material
Continuous casting technology.
Industrial lasers'
pplication of plasma, vacuum, and detonation if bncilogv for applying reinforcing,and anlicorrosion coatings.'
echnologies using high pressure, vacuum,effect, and explosion energy (or theof new superhard materials.
Bioengincering*
New biologically active agents and medicinal compounds for medicine
Microbaoiogical agents to protectnd hybrids
Feed additives and biologically active agents; new bloengiriecring methods for ibe effective prevention of diseases among liveslock.
Technologies for processing agricultural,and urban waste.
Original document.
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