THE TECHNOLOGICAL GAP: THE USSR VS THE US AND WESTERN EUROPE (ER IR 69-13)

Created: 6/1/1969

OCR scan of the original document, errors are possible

DIRECTORATE OF INTELLIGENCE

Intelligence Report

The Technological Gap:

The USSR vs the US and Western Europe

EBune9

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WARNING

(his document contains information aScctlnc the national rictciKO oi the United Stales, within tho meaning o( Title IS.. of the US Code, as amended.

ItS listmiiitfinii or revelation ol its tOntems to Orn unauthorizedson is prohibited bv law.

i:'ii{ -tihe'-Tedhildlo^i'cal' '^

'rtri'"fnaust'irV JV*7

III. Trends in Technological Advance,

. . . . . .

IV. Some Factors Bearing on the Gap r.

of Relevant

-vr'T*:

and Development .

of Diffusion of New

Effects of Different

V. The Likely Effects of Current

of Planning and Incentives

in Industry .

of Industrial Prices

of Organization and

Incentives in the ResearchEstablishment

- in -

Comparison of Major Branches of Soviet *ah,aosrTfldustry" r.v'v Z'.^'l

f Technological.he United States, Western Eur.ope, and the" USSH'in thes

2. Comparison of Avorago AnnualGrowth of Factorthe United States,and the .

3. USSR: Imports of Machinery and

Equipment from tho Developed West

. Comparison of Levels ofthe Labor Force of theWestern Europe, andin thes

The technological gap between the Soviet Union and the'developed west is'largo and is probably widening. -The -gap apparently -narroweds but evidently has been widening durings. Thus, except in the military field, the Soviet Union has not shared in the post-World War II technological revolution to the same extent as have the United states and'Western Europe. The Soviet lag will probably become even greater, as long as the USSR continues to preserve all of the essentials of the present system of planningand eoonomic'admini strati on that-have retarded'ovation in the past.

The Soviet technological lag is reflected in the large productivity gap that exists between the USSR and tho West. The productivity (output per unit of capital and labor) of the Soviet economy is only about one-third that of the United Statesittle over three-fifths that of Western Europe. Because full allowance cannot be made for in produce quality, this measure tends to overstate the relative capabilities of the USSR. Although the measure of productivity differencesumber of factorsnotably differences in the quality of the labor force, in the allocation of resources, in management, and in naturalthe level of technology actually employed

report wae produced solely by CIA. It uas prepared by the Office of Economic Research and

uas coordinated with the Office of Scientific Intelligence. The judgments on the technology in use in military induetriea have been coordinated uith the Office of Strategic Research.

y importantoxingsproductivity v

more rapidly ao.the USSJUthan in..the. Unitedut; considerably leeshann

t'h'e'falling 'farther behind-the'West

hich,anages.,itsveconomic resources, including,.technology.

i-

in the postwar period the USSR has borrowedechnology extensively from-the -West, particularly from Western Europe. Total imports of machinery and equipment from the developed West increasederemillion0 to0 million Ins the USSR imported plant and equipment for the chemical industry amounting to more than SI billion and plant and equipment for the consumer goods industries totaling0 million. Contracts totaling more thanhavo been-let- or are -under negotiation with Western firmsassive Soviet effort to modernize and expand the small and obsolescent motor vehicle industry.

In the market economics of the West newarc spread rapidly, and the pace evidently has quickened in recent years. Private business firms, spurred by competition and profit incentives, have been the innovators in this process andhave provided tax incentives and financial support. In addition, the multinational firms, which have burgeoned in the West in the postwar period, have greatly facilitated the international transfer of technology.

In the USSR the development and diffusion of new technology tends to be much more balky than in the West. The USSR's centrally administered economy has no automatic mechanism for bringing aboutchange; the incentives that are intended to do so ars ineffective. instead, new production methods and products are "introduced" bybodies through plans for new technology

v-..

n

tatrce 'of plaht.'nianagers to change technology, because

ii':!! lcii pl-ar. Jy COSUlt*-?

Jdemanding plan - . -assignments- Because^ofhere.are.

few reserve supplies and plant capacities to handlebottlenecks- and provide; flexibildty. Finally,

i ties of Soviet prices, there,

is no accurate means for determining the payoff on 'hew technology. Even when new plants and equipment ' are imported, licenses-acquired, or foreign-merely copied, the modus operandi of the Soviet system delays their introduction and reduces their effectiveness in comparison with results that would bo obtained in the West.

iiajce. tne .syete^

essential featuresThe prospects; for-UP- the.QceSs in the sovietot promisinq. ' -

.

industrial- sector -the1 level, ofL Soviet technology relative to -the. West-differs-monq the various branches,irect reflection of Soviet priorities over the years. These priorities have favored the military sector above all. This favored status, coupled with rigid seciecy policies, has, in effect, resultedual economicmilitary and civilianwith the former having been protected from the frustrations in resource supply that plague the latter. Consequently, -the.usSKearrpari,cy withnited-States in technology for producing many types of weapons and space equipment, and even superiorityew areas.

Second priority has been accorded to the basic industries whose output: directly suppoits bothproduction and the investment programs essential to rapid growthsteel, fuels, electric power, producers' equipment, and more recently, chemicals. Although these basic industries have equaled or even occasionally surpassed the West in some technologies in a few plants, the bulk of their output is produced with technology obsolescentumber of years relative to that predominantly in use in the west.

Last in the scale of priorities have been the industries catering to the populationextile and clothing, food processing, consumer durables, and household products. Their low status has resulted in an average level of productiontl-iat is woefully backward by western standards --

by several decades in many issor. .

by and large, also turn out productsuality

tronic components is behind that of the West by at least five years, and the gap is widening; Soviet comsat technology lags three to five years behind the West and is likely to remain so for the foreseeable future.

he.Sovaet stoekc-of machine tools- isiderably younger than in the United States, but its technological composition is inferior, because of its poor quality and the preponderance of standardized, general-purpose tools.

Both the production technology and the product mix in the Soviet automotive and tractor industry sre obsolescent compared with the West; many products are merely copies of old US designs.

in almost all aspects of petroleumthe USSR lags well behind the United States, by as much asears in seismic exploration and offshore drilling.

Soviet blast furnace technologyar with the West, but onlyercent Of Soviet steel is made by the modern oxygen converter process, compared with over one-fourth in western Europe

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is behindtthat..of. the United. Kingdom and :.

tWest-Germanyj-where naturalnd the USSR lags behind both

the United States and Western Europeecade or more in mechanical loading, mechanization of surface work, and coal preparation techniques.

The Soviet chemical industry is at'least five years behind the West in the used to produce most important chemicals, and its product mix with its elatively-small"production--of -synthetics is obsolescent; no Soviet plant yetammonia using the new technology that is revolutionizing fertilizerin the West.

By and large, the technological level of the Soviet food processing and textile industries eneration behind the West; Soviet appliances and housewares, often produced as sidelines in heavy machinery and aircraft plants, are mainly copies of obsolete Western models.

-ftECfttrt

nd the: us: recent trends incountries.,'Whenever possib

mentaiii the size

Tf&ctfc'ri productivity?

indicators ;in industry,eries of'brief summaries f ^'trmerehce's'h^lboicaf levels 'ahcrrends,in the two countries -in individual'industries. The relative cooimitments. ota- technoT-^icalt. are.alsoummary and comparative description is given of the innovative processesinvention, diffusion, and adaptation of new technologies in the two radically different economic systems, followed by anof the USSR's near-term prospects" fornarrowing the gap.

Following more or less along the linesecent, somewhat similar study .of tho gap between'States 'andthis' report" defines technology simply as the methods of convert-ting raw materials into semifabricants and final products and the design of final products. advance (innovation) means the introduction of new methods and designs that, compared with existing ones, either reduce costs or improve the quality and services of existing products or yield new products and services. Technological advance in the narrower sense thus takes the form of new products, such as video-tape recorders, and new processes, such as the oxygen converter process for steelmaking. roader sense, technological progress also involves the application of advanced management techniquesfor example, statistical quality controlnd the use of efficient forms of economic organization for example, thelines.

In comparing one country's technological level with another's, it is important to distinguish

epartment oj Commerce, The Nature andhe Technological Gap Between the United States nd Western Europe, FOR OFFICIAL USc ONLY. tTo be ublished. I

SECRET-

;ucn-Sofie.may..hawe bet.

ataonal

v. -another-. at SdViefc: and Western technology actually.,ino attempt is made to measure the gap in technological In the modern world, new technologicalspreads very rapidly. Hence, the disparities in the level of technological knowledge amongare likely to be much smaller than thein the levels of technology in use.

4. Judgments about relative levels and trends .in. technology-in. use, thereafter, referred COweimpiy -as technology) necessarily must be largelybecause of the many qualifications that must be attached to the various quantitativebearing on overall technological levels and trends, with respect to specific industries, large elements of subjectivity are involved in estimates of how many years one country is behind or ahead of another countryarticular area. Speculations about the future are especially hazardous when they concernomplex matter as technological change. The conclusions presented in this report are tentative and provisional.

The Current Size of the Gap A- Development of Soviet Technology

5. From the outset of its industrialization drive the USSR has used every device available to keep abreast of worldwide developments inwhile simultaneouslyolicy of cultural and political isolation. In the earlys the USSR borrowed technology from abroad cn

Ai ET

argo=-scaleteaching and disseminating.such .literature;

foreign periodicalsooks were abstracted. Over the past decade the USSR also has actively participatedrogram of scientific andexchanges with the United State_s, from which it must have benefited in terms of technologicalin civilian fields.

7. Finally, the USSR, particularlyas builtomes tic capability, to develop, technologyassive research andestablishment, which has worked out its own innovations and adapted foreign technologies to Soviet use- esult, Soviet technology may be ahead of the westew military-related areas, such as large helicopters. Nevertheless, although the USSR now sells patents and licenses on its own technologies to the West, the innovations emanating from its research and development establishment have been few.

Measurement of the Technological Gap

8. The average level of technology throughout the Soviet economy can be compared with that in the United States and Western Europe by using several different quantitative measures that reflect the general levels and trends in technological The measurements and their limitations are discussed in the following section.

1. Overall Levels

o precise measure of internationalin levels of technology has yet beer, devised,

even assuming that-the term itselfrecisely, enough;Such. mckV assofe .seme.-quantitatlye. impressiori obtained; by^all" .Wester* the; ussrvIspar with the *es 1 j

the West in ovc

The,measures we, grossdu^

an^yalue;.pf,.sapii^

he estimate .of factor productivityon. an;oadejby7 by means .of estimates

growth of inputs and output.

Table 1

Approximations of Relative Levels of Technological Advancement of the United States, Western Europe,'and the USSR in thes a/

. - ,

- ,. *.

per Unit

Capital

per

Stock

Labor

Worker

States

b

and expenditures for various purposes given in this report are the geometric means of two comparisonsne carried out in US pricks and one carried out in the domestic prices of the countries being compaved.

ach of these measures has seriousas an indicator of relative levels of

' Bergs on. Planning and Productivity Under Soviet Socialism, Columbia University Press, p.

easure ^capical, stpcfc'pajr.mplies; that "all-

the. capital: stock, .an* assumption',

echno -

two

measures P per .worker'arid, gnp; per. .

'. Obviously^

tivity differences are attributable ttf manyother thoin--technology in the'if airly harrow way" *

defined.

in natural resource endowments, levels ofmanagerial methods in the broad sense. for the effect of differences inof the labor force (level cf .educationof female employment) reduces thegap" significantly, but the patternthe same. The USSR and Italy aretwo-fifths and Northwestern Europe is -r-

11. With all appropriate reservations,in the technology actually being employed unquestionablyajor element in these international differences in productivity. They indicate clearly that the average level 3fin the Soviet economy is far beicw that of the United States and also well below that estern Europe. Moreover, these measures make inadequate allowance for the quality of what the technology produces. Were full allowance to be made for product quality, the average level of Soviet technology would be, comparatively, even lower than the level indicated above.

2- In industry

12. Although no attempt to quantify hasbecause of lack of data, the average levelin use in the industrial sector alonesomewhat higher in the USSR relative to I fo: w::c . iott-

are, however, enormous variations among the branches of industry, and within individual branches, in the level of technology is the West. Moreover,

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at- ut.'ii in: in. coai mining/ foresttextiles andnd food. Processing*' Chemicals, petroleum', electric power generation, and construction materials seem toiddle position. The following sections ore capsule assessments of Soviet technology relative to the West in important branches of industry.

Aircraft

heindustry,,produces -high-performance fighters and interceptors, comparable with those in the West, but Soviet civil transports now entering production are inferior to similar Western transports in range, payload, fuel and engine life. Moreover, the development of Soviet transport aircraft typically has required an extremely long period between initial flight and series production. The USSR leads the world in development of rotor systems for very largeand has also been first in many other features of helicopter design. Tho Unitad States, however, hasubstantial lead in design and production of high-speed tactical helicopters and associated weapons systems.

Eltctroniot

14. Soviet production technology is behind that of the West in computers by at least five years and in solid-state electronic components by at least three years. Soviet computers now in production are second generation machines using transistors and capable of performing, atillion operations per second. Some current model US and

..Even though the^Soviet .inventory ofools is considerably younger than in the United States, its technological composition is inferior. In theuch larger percentage of the machine tools produced are of the general purpose type than in the United States, where the production ofdesigned tools tailored directly to customer requirements is the usual practice. For priority customers, however, the USSR produces machineaqual inequality, andp. those produced,O ^ the United States. The Soviet industry leads in some nonconventional machining processes such as electrodischarge machining, ultrasonic machining, and in hot rolling or gears and shafts, but. is far behind in the use of numerically controlled machine tools. The proportion of metalforming machine tools relative to inetalcutting tools is low in the USSR compared with the United States,onsequently larger waste of metal.

Automotive 2nd Tracto" Iidusiries

16. The production technology used in the Soviet automotive and tractor industries is, on the whole, obsolete by Western standards. The same is true of the product mix. In accord with Soviet priorities the automotive industry emphasizes the production of trucks, especially medium-size trucks with Cargo carrying capacitiesons, rather thancars and light delivery and service vehicles as does the West. Trucks now in production in the USSR are still basically copies of old US designs-New Soviet truck engines incorporate modern features and have good performance characteristics, although

- un-ishm^t. bv pobr.rdad. condition]! SoWt factors "

inferior oy Western-Standards"iri'horsepowerv:;ratip^fMnd^^

tur.es such -as fourr-whoel drtvo':and- power^-'steering for wheeled tractors and .automatic transmissions for wheeled 'and- tracked -tractors "ar* now being copied - -from Free .World designs, few such tractors-are

industry technology in thebehind that of the United States by perhapsasears in seismic exploration methodsoffshore operations. The USSR also lagsdeep drilling, in the design and engineeringand gas producing equipment, and inincluding the use of

"appears" to lead tnV world "only

in water flooding to maintain the pressure of oil reservoirs and in use of large-diamoter pipelines for both oil and gas. Future increases inof oil and gas will have to come largely from deposits located at depths that will require the use of improved drilling techniques androwing demand for higher octane gasoline andider assortment of high-quality low-sulfurproducts also will require more and better secondary refining facilities.

Metallurgu

metallurgy, Soviet miningto the West, use inferior mining,grinding equipment, slower and lesstrucks, and poor-quality chemicalblast furnace technology is more or less on

a par with the West. The USSR has built some of the largest blast furnaces and open-hearth furnaces in the world but has been slow in expanding the use of new techniques, such as pelletizing of fine ore In stoclmaking, however, Sovietlags considerably; (or exaxplu, only about

Although; the Soviet

orld'loader in drfVelormw-nt'of

more).,

.th'the' exceptionew large-new -

-

*ce. by- Westernproduction of titanium alloys

andproducts,appears to bepar with

" K reads the world in cbhstru'e'tion of hydroelectric powerplants and in high-voltageof large amounts of power over long distances. Soviet thermal power engineering, however, lags at least five years behind the United States, both in size of units and in other technology. Supercritical thermal power units are not operating at design level or realizing anticipated economies in fuel consumption. Boiler and turbine units have not been able'to stand the' high tempera tubes'"and" pressure's1 because of shortcomings in metallurgy and welding.

Coal Mining

20. Soviet longwall coal mining equipment is not as dependable as that employed in the united Kingdom and West Germany. The Soviet Union lags behind the United States and Western Europe byears in mechanical loading of coal underground andears in mechanization of surface work at underground mines. Soviet power shovels and draglines used in strip mining of coal arc not as large as those in use in the United States, and disposal of overburden is more costly in the USSR because of the techniques employed. Soviet coal preparation techniques are believed to be aboutears behind those used in the L'nitcd States and Western Europe.

Chemiaa I 1'idus try

21. The Soviet chemical industry is the second largest in the world, but the technology it employs

particularlyn almost .all.,

reduceds:The-'Uriited "

States built its first-suchnd-by

the endB, approximately half of its total capacity to produce ammonia consisted of plants using the new technologies.

Consumer Goods

22. Tim technology of production in Sovietgoods industries varies widelyrom highly modern bread 'factories, to-ext lieIn other than bread products, the food industry of tho USSRears behind the United States. Soviet textile mill equipmentears behind that of the United States. Although efforts are being made to modernize the mills with domestically produced machinery, most of it differs little from that producedears ago. Technology in the USSR for production of consumer durables lags far behind that of the United States. Appliances and other housewares are frequently producedideline by heavy machinery and aircraft plants, whietl Imw Little incentive to update their technology for producing consumer goods. Household appliances are smaller, less attractive, and less durable than their US counterparts, and in most cases are merely copies of obsolete Western models.

Ill- Trends in Technological

23. Within the conceptual and other limitations already specified, the aggregative measures of productivity can also be used to provide some notion of relative rates of technological progress. Thus

- Comparison of Wrage Annual ;Ratcsrowth-

f Factor^Productivityof the-" oaterii* -

'far'**

United States USSR

United States Northwest Europetaly USSR

3.0

data show that the rate of in the USSR exceeded that of thes, but was well below that for The Soviet rates were far below thoseEurope, and especially below those forWestern Germany, throughout the period. Soviet rate of growth in productivity isthat for all major countries of westernthe United Kingdom for thes

a whole. 6 4 the Soviet rate was less than half the rates achieved in all countries of Western Europe, including the United Kingdom.

assuming that trends intrends in technological development, between the Soviet and US levelss but has been widening during thewith Western Europe, the relative the USSR has been worsening steadily

nature and extent-of their 'trade- with'he-machinery indue-

tries arc probably the most "technologically of the manufacturing industries. Thecountries of the West and Japan carryarge trade in machinery with one another; each country isubstantial importer and aexporter in this trade. Also, asproceeds, the large surplus of machinery imports over exports, characteristiceveloping

ends to. decrease -as- the--country:develops

its own capability to produce and sell machinery

abroad- pattern of trade for the USSR shows no such characteristics. In Soviet trade with the Developed West therearge gap between tne share of machinery in total imports and its share in total exports; machinery makes up one-third or more of total imports from the Developed Westercent of total exports to these countries. This large imbalance has remained essentially unchanged for the past decade. Its persistence suggests no significant improvement in the level of Soviet manufacturing technology relative to that of the West, including the ability toand specialize production, as well as toservice for the machinery. This imbalance also persists, although esser extent, in Soviet trade in machinery with the industrialized countries of Eastern Europe East Germany, Poland, and Czechoslovakia.

27. In industry and among its various branches the relative trends in productivity andadvance undoubtedly varied widely among

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^untrl^du^ng.#ia period.. The comparative data required to me as (ire thesenot available,*bearing- on them can be culled from iOC.^SvCflpin the various branches of-indOstry included in the-Appendix,-

SSO.'s the USSRbcort maVihq

by substantlal'ly boosting expenditures oh'owsUo .reseajrch>;afld^yelopmentas directed.very largely toward.thomilitary-spacam nector. 7 the OSSl. imported "

tne consumer g<

nde-rcehtr Represented imports of chemical equipment. The USSR, however, experienced considerable delay and difficulty in getting the imported plant and equipment installed and operating at capacity. The machinery anduch more rapid growth inthan did industryhole. The rate of growth of capital stock in that sector was more than twice the average for industry. Honce, the average-age of capital'stock was declining rapidly, and presumably the average technology embodied in it was becoming more modern. The same abovo-avorage growth of capital stock in the petroleum and chemical industries, however, was not reflected in above-average growth in productivity.

in summary, the evidence above, together with the descriptive evidence presented in tho Appendix, suggests that the USSR may have improved its technological position relative to the West duringut may not have dono so durinq The productivity trends showattorn. As pointed out earlier, however, technologyy ono factOE accounting for the international differences in productivity trends, as muasurod in this report.

The worsening of the Soviet position durings relative to the West couldelatively greater lagging behind in technology.

It could, however, also indicate the following:

The Soviet: Union has been considerably

.

es tern 'Europe- iinv^hifti^V. labor v - .

.from agriculture, to-honagri cultural sectors, but the timing of the shift did not differ greatly among "'the

tries.

(3) Economies of scale. All o$ the countries compared evidently benefited from this factor, the USSR perhaps less so than Western Europe; but again there is no evidence that this factor was much more important ins than in the

nodgepodge of variables with divergent trends and effects are mixed up in the measure of productivity trends.* Management and

* During both Italy and the USSII reduced the share of agriculture in total employment by ercentage points (from 43 to or Italy and fromoor the USSR}. Edward F. ercentage point in the growth of Italy's GHP over this period to this "improved" allocation of resources- If a similar gain can be inferred for the USSR from the reallocation of labor, very little of the productivity residual remains to be explained by other factors. Indeed, it isthai, if accurate allowance could be made for quality changes in the labor foroe, economies of scale, and minallocation of resources in the USSR, their total would significantly exceed theresidual. If eot this would imply, not the absence of technological progress, rossof the technical progress (investment programs> andorsening of the degree of mismanagement.

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m

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r

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c c

IB

J

1

-

Bearing-

A. Allocationelevant Resources '

-ducation *

32. Some part of the disparities indevelopment reflects differences inattainment of the laborin the supply of college-trained Comparisons as of thos are given in Table 4.

Table 4

Comparison of Levels of Education of the Labor Force of the United States, Western Europe, and the USSR in thes

Medianof Labor Force

College Education

United 6

Northwest

-

-eseftirr

34. In the postwar period the USSR, unlike the West, has oriented its educational effort at the college level toward scientific and ^technical fields. This pool of technically trained manpowerarge part of the administrative-managerial jobs, as well as purely scientific and engineering jobs throughout the economy. 5 the.annualf col togen -the OSSR *aseachingH. Close to half of these graduates received degrees in scientific and technical fields. The United States graduatedne-fourth with majors in scientific and technical fields. Although such an orientation might seem favorable to technological progress in the Soviet Union, much of the training is narrowly specialized and makes for inflexibilities in the pool of college-trained manpower.

2. Research and Development

35- Relative expenditures on research anddiffer considerably among the countries. Although the data are not strictly comparable, the United States devotedercent of its GNP to research and development in thes, compared with an averageittle under 2for Western Europe andercent in the USSR. Also, the proportion of the total devoted to applied research, compared with basic research, would have some connecrion sooner or later with disparities in technology.

V* -viirrthehe USSR-devote

considerably larger

The.,Uhlted St

raftnt woHld.^ac^

findings into.new products--and- improved productionprocesses.

37. The sizectivities in various countries is approximately indicated by theof scientific and engineering manpower to that purpose. In thes the United States had more than twice as many scientists and engineers employed. as did all of Western Europe, and perhaps-about-'the. same-humber-^as did. the-USSR- According to estimates of the Organization tor Economic Cooperation and Developmentcientists and engineers were engagedctivities in the USSRour-sixfold increase over0 and double the number According to National Science Foundationcientists andwere engagedn the United Stateshree times the number0 andhird more than

of Diffusion of New Technology

in market economies new technologies arc developed and diffused throughout the economyast-acting, seemingly almost biological process. Private enterprises, spurred by profit incentives and by competition to the degree that it exists, are the innovators in this process. Profitsowerful stimulus for cost-saving innovations, and competition encourages the speedy diffusion or such innovations. These same stimuli

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SECRET

p^bv&'W -incentives

llBos-t.rocess-.vf

nt

ly in most cases and that old,

... :. prod.uote and" for the qui or. citing products. - ; ensures that

t^^mx^faxy^ieW

*-oompo:

- the.

sector; Aided-by the deliberate-policy east -in the -United; States!ensureshere. .will; bes

-

that-such -spin-offs will come sooner rather than

later. Finally, multinational firms, which have burgeoned in the West in the postwar period, greatly facilitate the diffusion of technology and managerial know-how through theiroreign This is not to say that there are no obstacles to innovation and its spread in the West. There are difficulties in obtaining the required capital, and there are monopolistic practices,nd corporate secrecy;-'to name"a1 fewv -As-deterrentso technological progress, however, their adverse effects tend to be short-lived.

the USSR's centrally administered economy there is no such automatic mechanism for fostering technological progress; the.incentives that are supposed to help to perform this function are New production technologies and new products, therefore, have to be "introduced" by deliberate actions of administrative bodies; likewise, obsolete technology and old products must be taken out of use or production in the same way.

This complex process is carried out,by enterprise, through annual and long-range plans for the introduction of new technology and for the output of new products, in turn, the materials and equipment required to carry out these two key parts of enterprise plans must be provided for, and this, in turn, must be done by incorporating specific requirements into the production plans of other enterprises. Moreover, the innovations that, are

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Sf.CR 1VT

iSt^esth.GrnVti,e; whole,has to-be coordinated "at-the. top by the. State. Committed- for ScienceVand' technology and-' Planning-.Conunission/.iand atinterniediate 'levels -.

.

ssorted, other, administrative, bodies also get-intotheira word; the development and

entralized manner. a'nnovations

much less frequently and are spread much more slowly

it; plague

the civilian sector;"

The bureaucratization of the innovativeis only one reason for the balkiness ofin the USSR's civilian economy. _An even greater obstacle to rapid technological'advance is the fact that the key actorsthe producing tend to resist" the new and cling to the ld, because of the incentives that are set for them. Indeed, they are tacitly aided and abetted inootdraggihg-tiyare similar.

Until the recent reform the main success criterion for enterprises was their performance with respect to fulfillment of production plans, and bonuses for managerial personnel were keyed to this criterion. In practice, if not on paper, all other performance criteria (including the "mandatory" fulfillment of plans for new technology)ubordinate role. Hence, managers were reluctant to innovate, bocause of the likelihoodinterruptions to production and the consequent threat to plan fulfillment and bonuses. Moreover, plan assignments were increased after an innovation had been adopted. Plant managers tended not only to resist putting such measures in their plans but also to delay putting the new measures into effect after theyart of the plan. They could always lay the blame on failure or delays in receiving the needed materials and The supervisory agencies tended to condone this attitude because fulfillment of the production plan

in the aggregate was the primary determinant of their own success.

^ been at.ozen. -

such -decree*"dealing-directly wttKrio'thSr-

Evidently, their net effect has been small! if. not

0therdrags on the rateSwarp and "

IS2 By and large, innovations

and developedefty and burgeoning

(supplies or plant capacities) to handle bottlenecks.

45. These features coupled with the inhibiting system of incentives account for the deficiencies perennially cited in the Soviet press. For example, new plants usually take five to seven years to build compared with one to three years in the West. plants usually take several more years thant!aA2 CaPacitv output. some new products ZhlW that either they are obsolete when finally produced or there is no demand for them.

in scientific institutes

is not wanted by the intended user. An innovation generated at the enterprise level frequently takes so long to receive higher level sanction that it becomes obsolete before it can be implemented. New designs or products often turn out to have serious technical flaws. Even when new plants and equipment are imported from abroad or licenses are acauired or foreign technologies merely arc copied, the modur. operandi ot the Soviet system delays their introduction and reduces their effectiveness in

being centrally/trtf lexib^

times that of investment in industrial plant and-equip-

merit'. This assertion was primarily politicalsince there is no known way of separating'. ; yieldrom plant and equipment. Moreover, ideology, besides eschewing marginal, has long regarded the concept' ofpeculiar to capitalism. Uence, retirementresulted in plants being kept in operationthan in tho West and also inproduction runs, for givenUntil . f;

recently, capital costs were largely ignored and amortization charges have been purely arbitrary.

c. The effects of Different Priorities

47. The wide disparities among branches ofin average level of technologyis the West directly reflect the longstanding priorities of the Soviet regime. These priorities above all have favored the military sector. This favored status, coupled with rigid secrecy policies with regard to military programs, has in effectual economic system the military sector and thesector. The two sectors are administered by separate bureaucracies that seemingly have as little to do with each other as possible. The military sector has had first claim on the best resources the brightest scientists and engineers, the most skilled workers, the best quality materials and equipment, and the best construction talent. Its overriding priority has enabled it to breakquickly and to escape most of the frustrations in supply that plague the civilian sector. The scientists and engineers engaged in military and

ce;ts* equipment, and/more .recently,esearch .andesources have been allocated to these industries, and some world technical innovations haveew Soviet innovations, such as continuous casting of steel, have been quickly" picked up and further developed in the West but have spreadnail's pace in the USSR itself. Although these basichave equaled or even occasionally surpassed theome aspects of technologyheir-,output. is'produced.

plants having technology obsolescentumber of years relative to that predominantly in use in the United States and Western Europe.

49. Lowest of all in the scale of priorities have been the industries catering to the population -textile and clothing, food processing, consumer durables, and household products of all kinds. Their low status over the years has resulted in an average level of production technology that is woefullyby Western standardsy several decades in many cases. By and large, these industries also turn out productsuality and assortment far inferior to those produced anywhere in the industrial West. The low level of production technology is only one factor in explaining this disparity. Most of the blame belongs to the low priority that the consumer has had in the Soviet scheme of things, the disregard for customers' wishes, and the planners' penchant for concentrating resource allocationsarrow range of standardized mass-produced products.

States and Western Europe. Although stepping up the irate of techno logical advance in the economy has been recognized as the key need, how to achieve this has been far from clear. The voluminous pressofs on the problems rn developing and introducing new technologies echoes thereporting ofs on the same theme.

51. The current Soviet leadership is hoping to

rpb-leweries of major economic reforms, some of

which have been introduced piecemeal during the past three years and others of which are still in the process of implementation. One explicit objective of these reforms is to raise efficiency, primarily by speeding up the introduction of new technologies. One of themthe restoration,of the industrial ministriesas effected inith the declared intent of restoring unity and direction to policy on new technology; the diffusion of responsibilities in this field was alleged to have been the majorof the system of regional economic councils Isovnarkhozyi introduced by Khrushchevccording to Soviet testimony, the benefits of tho reorganization in this area have yet to be realized. Other reforms concern revision of planning and incentives, reform of the industrial price system, changes in organization and the system of incentives in the research and development complex. Infinitely complicated in detail, these three reforms are fairly simple in intent and concept, and tentative conclusions can be drawn about their likely impact on the rate of technical advance in

adopting new technologies and scrapping obsolescent equipment. The emphasis on sales and profits, in place of gross output, is supposed to spur thout of new and improved products:-'By ailhe new measures have had no such effect thus far, nor are they likely to have in the future. The reason is that the reform retains all of the features long characteristic of the Soviet system that have

plans for output, investment, and new technology; central physical allocation of key materials and machinery; and establishment of success criteria for enterprises that are based on fulfillment of plans. Moreover, great emphasis continues to be put on "tight" plans, and enterprise plan assignments are boosted after technological improvements are adopted. Finally, the greater independence of action granted to enterprise managers on paper is already being curtailed by the ministries, both through direct interference and through issuanceost of detailed rules and regulations on how the new freedom is to be exercised.

53. With bonuses linked to plan fulfillment and with supply uncertainties undiminished, enterprise managers are unlikely to be any more eager to adopt new methods than before. Because of the perversities of Soviet prices, the charge on capital may lead Lhem oven to avoid the purchase of new machinery, whose payoff remains as hard to determine as before. Indeed, decisionmaking at the enterprise level is made much more difficult under the raform, because

-

J, Reform of industrial Prices

arid.has>-ad'opted'; a- jrew-'o--

,h

industrial pricesewpricencludean allowance'- for"interest on' -for the first time. The new price system .

.of -tho.-esn enlarged and -bureaucracy with broad price-fixing powers and the declared intent to use'pricesnterprise behavior. The new Price Committees are explicitly charged with "raising the role of prices.

in promoting, technological progress-in-all its many-sided aspects."

discussion thus far indicatesthat the committees have every intentout this mandate literally. They are

--attempting to-set-prices-'ingreatrices "'

fixed for individual machines and equipment are to be those that will encourage enterprises to buy new machines and get rid of old ones. Similarly, prices on consumer goods and industrial materials are to be juggled to accomplish the same objective. The prices on new products are to be set high enough to encourage their production, but not so high as to discourage their purchase.

this is to be done product by productnew government price fixers, and changes aremade as frequently as necessary. Already itannounced that "to stimulate technicalwill be informed that successiveon their products will be made on To set prices that will reallyintended objectives means, in effect, toprices without markets. The magnitude ofdefies description, but an army ofseems determined to take it on. The be further complication of theand further bureaucratization of the system.

-

t 3

r. econom^.reior^ ect tists and the profits of research' institutes are. toeconomic effectiveness of their.work. Organizationali tasto reduce the cost of the program and to 'link its work'more closely with the needs ofenterprises.

58. Although-it is too early to> evaluate the full significance of the new program, its possible favorable long-term results may be limited by bureaucraticnd resistance to some of the proposed new techniques. Delays, temporaryand much dissatisfaction are likely, to. result from "the numerous reorganizations and other changes to be brought about by the implementation of the resolution. It subjects academy and university research institutes to periodic review ;sing the same criteria of effectiveness applied to industrial research establishments. The research programs in these institutions therefore can be expected to give more emphasis to applied research.

59. The high status traditionally enjoyed by scientists and engineers in the USSR and the absence of economic success indicators and accountability have ledegree of independence of action for theommunity. The new program will tend to decrease this independence, which may or may not be beneficial.

_ . ntxeprajieursUnbureaucracies arc notoriously.tortiif-rmore, Soviet

education continues to emphasize narrowly specialized engineering, and scientificsuited to producing graduates'with entrepreneurial ability, even should the environment be conducive' to exercising it.

62. In the technological race,-countries whose economic institucions permit fast action and rapid adaptation to new things are likely to Come off best. In periods of particularly rapid technological change like the present, therefore, the USSR seems likely to be at an increasing disadvantage relativeto the West in the average leveltechnologyse. This may be so even in the field of advanced weapons and space.

qialdr -

-uni-tad'States'Wherever'

also made wi th.

.arisons ate 'festernTheummary in nature. Comparisons of technological ' levels-e eic: tremely difficultmake, and to do so in detail is beyond the scope of this report. By way ofthe industry summaries include information about the general size of the industry relative to that of tho United States. - *

64. In these brief descriptions the attempt has been made to restrict them as much as possible to technological aspects per se. Nevertheless, more than technologies arehe comparisons,rid precise distinctions cannot easily be made. Thus, the low quality of Soviet products in general relative to the West reflects not only technological lags, but also unfavorable incentives, relative priorities, and the results of pervasive shortages and centralized control of supplies. Some of the differences in production methodsfor example, in the degree of mechanization of materials handlingprimarily reflect differences in relative costs of labor and capital. In the USSR, labor costs have been low compared with capital costs over the years, whereas the opposite has been the case in the United States; Western Europe resembles the USSR in this regard. Therefore, production processes tend to be much more labor-intensive in the USSR than in the United States, but they are also more so than in Western Europe.

tochnolt

computer-controlbot^i'for '

power generation and for transmission. Control and data logging systems in use' rn-lHi'Jor -Sovietlants, both Conventional ana nuclear, are of aquality and type that has not been' installed in the United States for at leastears. No powerplant in the USSR is under direct automatic controlomputer system; whereas in-the Unitedumber of plants built3 are controlled by computers.

66. In the United States, thermal generating unitsapacityegawatts ri'g" a'tr supercritical parameters" of temperature and steamave been in operation sincend units of upW are now going into operation. In the USSR, units ofW arc the basis for the development of thermal powerplants. ive years after tho first such units were installed, they wero not operating at design level, achieving sustained operation, or realizing anticipated economies in fuel consumption. Poor performance is due primarily to failures of boiler units caused by metallurgical shortcomings in boiler drums and tubes and by improper welding procedures. Frequent turbine failures stem from poor casting, heat treatment, and welding. Defects

* Pressure above.ounds per square inch and temperaturehe point at uhich water flashes intoeam without boiling.

structionarger number of demonstration and commercial-size nuclear powerplants, even though such plants wore not yet economically competitive. At the endhe-USSRotal of moreW of electric generating capacity installed in nuclear powerplants, comparedW in the United KingdomW in the United States. The costs of the more recently constructedPVerplanW have, been, coming.down, .and theirperating record compares very favorably with the record of the best and most modern nuclear power-plants operating in the United Statesoviet plants are now being built accordingtandard design consisting of two blocksWe (megawattsach block comprised of one pressurized water reactorWe In contrast, the reactors in most nuclear powerplants now under construction in the United States will serve single turbogenerators with capacitiesWe.

68. The USSR is moving ahead of the United States in construction of more advanced fast-breeder reactors that are expected to produce morematerial than they consume as fuel. The United States pioneered in this field with the world's first breeder, the small EBR-1 that began operation in and also built tho largest breeder to go

-SkCRJvF

_ u.alei per aay. The USSR also plans to construct at Beloyarsk an even larger breeder, thehat is toapacityWeWt. The only fast reactor now planned for construction in tho near future in tho United Statos isWt Fast Flux Test Facility to be built during.

USSR leads the world inhydroelectric-he Bratskpowerplant, on tho Angara RiverapacityW, morethe capacity of Grand Coulee, thepowerplant in the Unitud Statos. hydroelectric powerplant, underin Siberia, willapacity ofwhen completed. The generating units, fivewere in operation by the endave

a capacityW each and are the largest hydro-generators in the world.

USSR also leads the world intransmission of electricand higher. Rapid advance in this fieldstressed because of the need to transmitof power over long distances. Theput thev line in the worldin and by the end ofilometers fkmtvm

FCKITF

itruction'in the Pacific Northwest. "This line, which is"to apacityW, will be completed

Coal Mining -

71. The USSR leads the world in production of coal, with an output ofillion tons The coal mining industries of the Soviet Union and the United Statos are not comparable in mosttheir major aspects -'because of* the' differentnd geological characteristics of the coal deposits exploited. Where Soviet mining technology andcan be appropriately compared with that of the United States or of West European countries, the USSR lags considerably. The thin, faulted, andseams frequently encountered in Sovietcoal mines inhibit use of the highly mechanized room-and-pillar method of mining prevalent in the United States. Instead, aboutercent of the coal mined underground in the USSR is obtained by the long-wall method. The level of mechanization of longwall operations in the USSR is relatively high, but the equipment is not as advanced or as dependable as that employed in longwall mining in the Unitedor in West Germany. Heading or tunneling machines, used in longwall mining to bore entries or haulage-ways, have only recently been serially produced in the USSR and are probably inferior to their US

-

SECRET-

.ogy ilKmL

.nun ^ feicniR -

thobor force employed inr.<ja'jod primarily tn> hand-labo^ above ground indicates that the -USSR mayears behind thein.themechanization-.and- efficiencyurface work. Only aboutercont of the coal minedunderground in- the USSR-is'evel equal to that in tlie United Statest present more thanercent of all such US coal is loaded..mechanicaliy. In Western Europe the. mechanization of surface work is close,to the US level, even though labor is cheap relative to capital there, as it is in the USSR.

73. The USSR lags behind the.United States, and also Bast Germanyv byO years lo'develop-ment and application of modern equipment andfor strip mining. The largest element of cost in strip reining is the removal of overburden. The cheapest method of ovorburden removal, used in nearly all US strip mines, is the "direct dumping" method whereby an excavatorower shovel or draglineremoves andoad of overburden in one continuous cycle. In the USSR, only aboutercent of the overburden is stripped by the direct dumping method, primarily because of the extreme thickness of the overburden at many coal deposits. This method requires giant-size power shovels and draglines. The largest US power shovels and draglines have bucket capacities of upubic yards, whereas the largest Soviet dragline, still in the design stage,ucket capacity of only ubic yards. The USSR also0 years behind the United States in theand use of giant-size trucks for hauling

percentamechahlca. owwtin the Onl'-ted'Stated'ihvsubstantial part pf tho Soviet.be cOri^Sdered* obsolete' ih'Vh'ecountries of the Free World. of great lag is In the applicationmanagement and engineering problems. In.

field the* Soviet'coal industry is0 years behind its US and West European counterparts.

Petroleum -

75. Tho petroleum industry of the USSR isonly by that of the United States inof crude oil and natural gas and in refining capacity. Exploitation of theccessible nd highly productive reserves that have been the Soviet Union's major sources of petroleum since World War IT has not required the advanced technology and equipment employed by Western oil companies. Moreover, the requirement of the Soviet economy for high-octane gasolines and other high-qualityproducts has not been sufficient to command extonsive investment in secondary refining facilities. Consequently, the USSR has generally lagged behind the United Statos in seismology, in doop drilling and offshore operations, and in the design and engineering of oil and gas producing equipment and of secondary refining installations. Only in two aspects does tho Soviet petroleum industry appear to lead the world: in tho use of water flooding for maintaining the pressure of reservoirs, and in transmission of oil and natural gas throughof very large diameter.

- <t! l.-j-

he, SovietUnionears- behind the United States in,exploration .methods, -applied seismograph techniques ah3-ab^iity to nap deep' drluringod* Mghotic,ngs are used 'to delineate areas for seisiaographCcuiracy/of-fioviotis less than that of OS' instruments becauseoviet engineers have been unable to make'varts eleflienfcsy ;Thta lewrgualtty'of Soviet- geophoncs. and "seismic cable prevents-reception and. transmis^ sion ol- lov-frequency signals .'refomying'andlackomputer hardwaresoftware'-procludee automatic:'processing oE-soiemic -records, display of variable density oross sections,;'vOr i'n'cegntati'bn;he .application of computers! to: seismograph .p'roQodurus in the United States3 has revolutionized. deep exploration for petroleum.

ercont of all tho oil and gastho USSR are now drilled by the turbodrillis exceptionally well suited for drilling in .hard rock formations such as thosedevelopment of the Urals-Volga region. Thois inefficient, however, in the deep softfound elsewhere in the country,most future increases in production mustthe Unitedotary drilling is used "about percent of the time because it is muchthan turbodrilling at depths of moremetors and in soft rock formations. Soviet

use of rotary drillingotcr depths has boon limited by shortages of related oilfield In recent years the USSR hasetof rotary tools, tricone and diamond drill bits, high-pressure mud pumps, blowout preventers, high-quality drill pipe, and cementing equipment.

methods in the USSR orothosu used in the West except that Sovietbegin water flooding inside new fieldsreservoir pressures from the outsetproduction. In the United States,is regardedecondary recoveryand is restricted to the outer edges ofwhere the primary reservoir drive has The Soviet practice increases the share

-alf-dozen mobile. ffshore .platforms Will' be"required to exploreffshore deposits which Soviet geologists believe are hus/ fix'/ the USSR has built'one such ?; latfom, has another, under construction, andmported one from the Netherlands. The Soviet-built platform is capable of drillingeters deep ineters-of water, only about one-third of the depths for which the Netherlands platform was designed. The United states has several hundred offshore platforms, some of which are capable of drilling wells to depths of moreeeteters of water.

80. The USSR'uses' the'largest pipe 'inor transporting crude oil and natural gas, butof pipeline systems is less advanced than in the United States. Oil and gas pipelinesnches in diameter currently are being laid in the Soviet Union, whereas the largest line pipe in use in the United States is aboutnches in diameter. Soviet plans call for use of lino pipe with diametersnches. Some equipment installed on sections of Soviet pipeline systems, however, is not adequate for the size of the line pipe employed. For example, undersize valves used oninch central Asia-Urals gas pipeline reduced its capacity byercent. In general, Soviet natural gasoperate at lower pressures and throughput capacities than US pipelines of the same diameter, because of weaker pipe and tho lower number and capacities of Soviet compressor stations.

82 In.recent years the USSJ< has begun totaiytic reforming process using is process hasse xn the United States and ther. Western.countries since the-s.>Soviet - .roduction of silica-alumina catalysts for fluid catalytic cracking units is believed to be adequate to satisfy domestic needs.and-to.permit expprts to Eastern Europe. Moreover, the USSR is conducting research on zeolite-type catalysts, now inuse in the United States for increasing yields of gasoline. Whether these catalysts are in actual use is not known.

Chemical Industry

The Soviet chemical industry is the second largest in the world, but the technology it employs for production of many chemicals is five or more years behind that in the United States or in Western Europe. The lag in Soviet technology is reflected in continued use of inferior and outmoded processes, in tho low quality of products, in the smallof many newer chemicals, and in the low level of mechanization and automation. This situation reflects the inadequate attention given toof chemical technology durings ands and the failure to make effective use of available domestic and foreign technology.

The USSR is far behind the United States in almost all phases of fertilizer technology, including basic process engineering, design and fabrication of equipment, and final treatment of fertilizer todesirable properties. The lag is particularly evident in development of concentrated and complex

.-

slants employing similar technology' were'The-United-si^tWs also'has '

. be^ter. ^et=nni^UGS. for granulation tQ^make fertilizer less susceptible to'loss of nutrient duringand storage and easier to apply with seed.

In the field of petrochemicals, the United Statesubstantial lead over the USSR. espiteears of development work,glycerine was not yet produced in the USSRommercial scale, whereas, in the United States, -f synthetic: glycerine .accounted.

ercent of all glycerine capacity. lmostercent of the total output of benzol in the United States came from petrochemical sources, compared with less thanercent in the USSR. 8 the largest known units for production of ethylene in the USSR had annual capacities0 tons, and at least some of these units had been purchased from Free World firms. In the United States, many ethylene units have annual capacities of moreons. Soviet efforts to develop petrochemical processes comparable in efficiency to those used in tho United States for producing acetylene, acrylonitrile, ammonia,ethylene, synthetic glycerine, propylene, and many other chemicals have been hampered by the lack of effective catalysts for unit operations such as dehydrogenation, and by inability to produce, in the required quantity and assortment, some types of highly productive pumps, compressors, and other equipment.

synthe

in levels of production of major tic materials in tho USSR and United States

- Ar> -

_ Continued.-use of'.oUtmod'od technoloqv is.--

Continued.-use of.otttmbried technology is. responsible for the substandard quality of some Soviet- synthetic materials-. The-fact that-the service life of many Soviet rubber goods is only one-half that of similar products made in the United states probably reflects .not.,only poor. Soviet process technology for synthetic rubber but also inferior fabrication equipmentack of rfigh-qualitv additives and stabilizers. .

eficiencies in Soviet

- technology-led to -imports of plant and' technical ata from the Free World valued at1 Most of the imported equipment was for the manufacture of synthetic materials and agricultural chemicals and associated intermediates. Many of the imported installations were more highly instrumented than models developed in the USSR. Frequently, however, the purchased technology failed to provide the anticipated benefits, because of Sovietin building and operating the imported installations.

Metallurgy

the mining of metal ores, the leveltechnology lags well behind the West,specialized techniques such as miningand in coastal placers have been developedparticular Soviet conditions. The Sovietuses inefficient and obsolete truckston capacity, while in the West, truckston capacity are in use. The technical

level of Soviet ore crushing and processing equipment

, backward relative to. tho Wostrtheercentlof the, copper in,

ore, comparedercent or nore. in the Unitedand-the USSR recovers"ercent, ofgold,ercent in the .

90, Although the USSR .has made notable' advances nechnology in some sectors-of the ' ' '< -metals industry, metallurgy technology in general Mthe' Most .'

and by extensive use of

last furnace charge by sintering irOn ororates. Howeverhe USSR lags far behind in the*' se of the newer and more effective tochnique, already employed extensively In "the West, forfine iron ore concentratos. oviet production of pellets amounted toillion tons, compared withillion tons in the United States.

the steelmaking sector, the USSRthe largest open-hearth furnaces inbut has been slow in adoptinq the capital-

' oxygen converted process which is "

rapidly into use in the West. oviet production of oxygen converter steel amounted to onlyercent of total steol production, compared withercent in Japan, aboutercent in Western Europe, andercent in tho United States. Although the USSR hasorld lcador inof continuous casting, lessercont of the steel is processed with this technology. Rocont indications are that tho United Statos will soon move rapidly ahead of the USSR in industrial use of the new process.

greatest technological lags insteel industry are in rolling andonly is much of the equipment inefficientby Western standards, but also theinoxplicably failed to balance its steelcapacity with suitable rolling and Particularly lacking are adequatecold rollinq mills, heat treatmentcontinuous electrolytic tinning and These deficiencies result in poorquality of steel products, causing large waste

OECRRT

SttJ>

ut the overall level ofplants producing consumer products, suchfoil and kitchen wares, lags farin. the, Free World, .reflecting the.use of old and inefficient rolling

94. In the other major nonferrousopper, lead, and zincthe USSR in recent yearsfew-large plants with-technical' standards equal to those in the Free World, eneral, however, the technological level of these industries is well behind the Free World because Soviet plants are older, less efficient, andobsolete. For example, tho USSR is only now introducing byproduct recovery of sulfuric acid at nonferrous metalsractice in use for many years in the United States, The USSR lags considerably behind the United States in developing techniques for the leaching with acid of material in copper waste dumps and the flotation processing of copper oxide ores, both of which account for significant shares of US production.

The USSRorld leader in the development and production of titanium. Soviet technology for the production of titanium alloys and products is aboutar with that of the United States and the United Kingdom. The USSR has produced some of the world's largest titanium forgings for aircraft.

The USSR has made notable progress in research it: metallurgy and has attained world leadership in the

* Mar-aging steel isickel steel of ultrahigh strength obtained by special heat-treating and aging processes.

Notwithstanding its general inferiority compared with the United States in advancedcapabilities, the USSR has been able to produce the special" metals and alloys required for military and strategic uses. For' these priority customers itide range of high-strength steels and stainless steels, including precipitation hardening types. Soviet work on mar-aging" steels -is largely, experimental, and not as. advancedn tho United States, although the USSR has announced that tonnage quantities of mar-aging steels have been produced.

Jn production technology for superalloys the USSR is aboutar with the United States. The USSR also has devoted considerable attention to the development of high-temperature corrosion-resistant metals, such as tantalum, niobium, tungsten,rhenium, and zirconium, but has not attained results fully comparable to those in the United States with respect to the assortment or quality of products.

The USSR is ahead of all other countries in development of the thermomechanical treatment of metalsa technique for simultaneous deformation and thermal processing which can improve mechanical properties of metals quite radically. As yet,

the.he: USSR has' ment of. special ;boay sty les lor

small assort- .V"-

specialized truck bodies as transit' cementrashmaintenance, furniture moving, andare produced in negligible amounts or not -, .

From the end of World War IIost of the investment in motor vehicle production facilities in the USSR was devoted to the production ofnd 4Js-ton trucks at the ZIL plant in Moscowo'Wtflfiift in Gor'kiy; essentially copies of US trucks built during World War II. Today, the ZIL trucks6 have finally been replaced by modernized vehicles, and new models have been introduced at GAZ. At GAZ, however,6 model of theon truck is also still being produced.

Soviet trucks now in productionumber of modern features such as pneumatic or vacuum boosted brakes, power steering, oil coolers, and radiator shutters for better engine temperature control. Engine designs are copied from US engines and incorporate modern features such as chromium plating of upper compression rings, sodium filling of exhaust valves, and replaceable cylinder liners. The new Soviet truck engines's with good performance characteristics. They typically deliver less horsepower per cubic inch of displacement than do US engines because the low octane rating of Soviet gasoline dictates low compression ratios. Octane ratings of fuel for motor vehicles are on the average aboutercent below US ratings. Compression

-

-siccRrr

:.'us-'

^^

roadSome progress' is

being

types of heavy dampons and higher)but: /

for roost-heavy trucks this ratio lags behind com- US moddls:':

very recently, passengerwas treatedegrettable necessity

and has "been the most backward area-of the Soviet . A

automotive industry. Now, however, an expansion program is under way that is supposed' to raise annual passenger car production from7 toillion Soviet passenger car.production has consisted principally of the.

roicrosi'zeTfour-pa'ssehger Zapor'ozhets'

thehe small four-passenger Moskvich

(analogous to the Opelnd the compact-size

Volga {analogous to the Chevy II or the Rambler

American). ew limousines of the GAZ 'Chaika" and

thoypes are made, practically by hand.

Except for the Chaika and theo Soviet

passenger car engine has more than four cyclinders,

and all these engines have less horsepower than

engines used in analogous Free world cars.

passenger cars are designed tothe severe winter climate and the roughthe USSR. Because of stiff springing, theyhard ride. Engine noise levels and vibrationby modern standards. Typical complaintsowners refer to the poor grades offor scaling doors and windows, short lifematerials and paint, and inadequatesound insulation. The poor quality ofrolled steel sheet results in auto bodiesexcessively heavy andoor surface finish.

- '. Sov*et wrcfliotave-nas ^

S.ap-:'

erected

' Mobiles^uppiyiag'4.

;. plantain.Moscow.- Negotiations ate-now under way

increase the production of ZIL :'trecks and to buy'"'

-fromomplete plant .to,produce iSOyObO '

"trucks a=

The USSR has held first place in the world in volume of tractor production It producednitsompared with nits in the United States. However, despite great improvements in the lastears, Soviet tractors are inferior to US tractors inweight-horsepower ratio, transmission efficiency,

reliability, service life, .and ease of operation. "-

h< excessive ^weight of'Sbvlet

parteed to compensate for low-strength metals and from neglect of quality control in foundry practice. The poor reliability and short service life results in part from the low quality of even such ordinary items as bolts and other fasteners, paint, and rubber parts. Short life, by us standards, is common for the track and suspension parts of Soviet tracked tractors because their design does not provide for adequate lubrication, the sealing of bearingagainst abrasive dirt, and the proper hardening of wearing surfaces.

The transmissions of Soviet farm tractors are much less efficient than those of us tractors. Drawbar horsepower of the typical Soviet wheeled tractorercent of the engine horsepower, compared withercent for US tractors. the fuel consumption of Soviet tractors is high by Western standards. Although modern features copied from Free World designs such as four-wheel drive and power steering for wheeled tractors and automatic transmission for wheeled and tracked

xip^eeply frozen*lgh rate*ing the; gpld mining .flaaspn iri Magadan by several

Iddzing; wp'rk on aborder'. The tractors proved tooversized, and underpowered, withconsumption. Moreover, rubber partslinks wore out rapidly, and the oil hadchanged very

Machine Tools

, ,Although the USS^is, the word's -

producer of machine tools, its product mix'is heavily weighted with general purpose machines, and in almost all categoriesboth general and special purposeits tools are equaled orin efficiency, durability, and accuracy by those of the United States. Because of its large output, the average age of the USSR's machine tool inventory is considerably younger than that of the United States, but because of the emphasis on standard models, the technological composition of the stock is much less advanced than that of the United States.

The USSR is far behind the United States in the use of numerically controlled machine tools. While the United States produces numericallymachines with continuous path control on five axes and with automatic tool changing devices, the USSR has achieved only point-to-point control on two and three axes without automatic tool changing. The production of numerically controlled machine tools accounts for no moreercent of the value of output of Soviet machine tools.

productionis very small, delivery load-imes are very long, and the Soviet Union therefore is dopendent on imports from the Free World for tooling for substantial investment programs like the new passenger car plant at Tol'yatti.

outstanding example of thethat the USSR is building into new plantsof the long leadtime they require isfor' the' T'dl'yatil Motorillion worth of gear-cutting equipmentaxle gears for the Soviet FIAT. Thesupplied by the Gleason Works of thebefore the endill notnd will not be in full production Meanwhile, Gleason is now sellingcutting bevel drive gears thathich replacescutters and ten finishing cutters soldUSSRrice The newlabor productivity in this operation by

more than scvon times and requires less than half the floorspace of the older machines.

USSR is the world leader inmachining (EDM) andercent of world output ot The United States has put littlethe development of these machines butload the USSR in tho development ofmachining (ECU) and electron beamand welding, both techniques of in the aerospace Industries.

Although tho Soviet aircraft industry is the world's second largest, it produces only about one-fifth as many planes as the United States but about three-fifths as many military aircraft. Because the USSR long has stressed research onsupersonic and hypersonic flight, the industry can produce fighters and intercopters.egual. in perform-a'rico 'to" any 'In the world*. Because of enginehowever, the performance of Sovietaircraft lags somewhat behind that of the West. The new Soviet civil transports now enteringare considerably better than theirbut because of these deficiencies they are still inferior to similar Western aircraft in rango, payload, fuel consumption, and engine life. Passenger accommodations on the largest transports are also inferior to those on comparable Western aircraft.

At any point in time. Western transports in sorvice lead those produced by the USSR. For example, thehe only Soviet jet transport comparable in load and range to, thend the Britishirst flewut because of delays attributableumber ofin design did not enter regular service until Similarly, theoviet transport similar to theade its first flight in but because of control problems and structural deficiencies was not placed in series

product!.

v

with

t's .

it technology" crdsdly' ' hnologyapplications In semeapabilitythe

nterceptor, Foxbat,naw-nearlhg

- ' -rhn^'K B'- Ita WM>iiit.iea exceed ' . -those-sof any operational aircraft'other than' tnV '" "

&r.s strategic reconnaissance The Soviet^Flagon/fl twin-jet

now in production and service, has betterthan any

lthough the USSR is testing aircraft with variable geometry wings IVGW) like the USthe best of these, the Flogger, requires two or three more years ofbefore it can become operational, it is much lighter thanll and not likely to serve in so many different roles.

' "the keen 3haVgiVn

the Unitedroader technological base than the USSR for the development of advanced strategic bombers. There is no evidence that such ffu aitcraftunder development in the

atn 'rom the slower)upersonic transporthich recently made its first flight, will add to Soviet capa-

^hif araa* Daaod on exPericnce with thend the US industry is able to undertake the design of SST's with speeds in the Machange.

The USSR leads the world in theystems for very large helicopters. The USSR also was first in such features of helicopter design as rear ramp loading, electrical bonding on external controls, ice detector systems, rotor blade deicing system, autopilot, stubwing, oxygen system, and blade tip lights. On the other hand, the United States hasubstantial lead in the design and production of high-speed tactical helicopters and associated weapons systems, as well as in rigid rotor and compound helicopters.

Si,

Electronics

h classifiodries, ji. pr and most a

officially ry, shares with the

other strategic' ihdu's-iet economic resources-.

-related. From a

basebecomeorld's second largestndustry, and its-'

level -bt -production -of military electronics'Jjnates thatUni-tad .

echflolbgy bmbodLod.-in. Soviet -eguipmeht, however, is generally..of<,the-Unitedor at loast.equipmenthas beenthat is, designed ;the use of transistors. and semiconductor- In the-USSR,-the wide-scale-application of -to electronic equipment, even inof military electronics, has becomeduring the past two or three years.

There are significant disparities in the technology embodied in the basic semiconductorthemselves: the United States manufactures mainly silicon devices using epitaxialnd-the USSR produces mainly" germanium transistors and apparently has only recentlyapability for the mass production of silicon planar devices. Thus US electronic equipment, thanks to the inherently superior indices of silicon planar devices, tends to exceed its Sovietin all important operational parameters.

Moreover, in the area of military electronics, tho USSR continues to use equipment containing hybrid packagesthat is, both transistors and obsolescent electron tubes. Thus, even in the few high-priority military areasfor example, missile/space guidance and control systems and strategic early-warning radar systemswhere the USSR hasough parity with the United States in terms of equipmentSoviet equipment tends to be larger, heavier, loss transportable, more difficult to maintain, and loss reliable than similar US equipment.

he gap in component technology is widening. In the United States the transistor is giving way

.with" the. Unit

tecjinoi' LfiQ "'even-

computcruy, elect]

sion-

speedy memory size,CCeSS Horeover, the

upplied ^by US industry,are their^oviotJSnSTE ^ Production are based STSnf BOlowrcomputers"now made' integrated circuits

men?uce the size ofand lower manufacturing costs.

the2nni JS%?a?Put" technology is widening, Cd.Statec is now moving into fourth gener-

cale integration

by neater spoed and reliability. The Shi BESmT attained-dviCt- computer 1operations per second, compared toillion operations per

duL5UrCe?Cly.pr0duCed 1DM modeIs- Althoughas far back as, andful of BESH-6

machines have been produced. The USSR is making

great efforts to reach US state-of-the-art^n 9

computer technology, but the prospects of doing

soap remote without direct access to US technol-

n thc technology of industrial andnstrumentation, the USSR lags well behind the United

representative of theelect">nic instrumentation,those of the United States, ' roeasuretJbandwidth (the mostsingle index of complexity, flexibility, and overallscilloscopes capable of sensing radio frequencies aboveillion cycles per second

into:electronic switching Systems.gy of carrier Xmultipiexing) sVstems fdr cable and radio relay communications, the capacity ofavailable systems in the United States is at leastimes greater than those produced in theUSSR.

color television provides aexample of deficiencies in Soviettechnology in the consumer area. Although"successf ullycolor "picture tube in"laboratory as early as it failed to evolve

a technology for series production in the factory.esult, Soviet plans to introduceommercial scale have been delayed for several years. Recently, the USSR purchased the crucial color tube manufacturing know-how from the United States to ensure volume production of color-television receivers

USSR currently lags perhaps threeyears behind the United States intechnology. The US Army's Scoretransmitted prerecorded messagesthes the United States followedearly success with the Courier, Telstar, Syncom satellites which paved the way for US launching in5 of Earlyworld's first satellite to be deployedand used regularly for commercial During that same month, the USSRfirst successful testsatellitedesigned for communications relay. The USSR

contrast, the ting satisfactory wireJ1

tiKewiseV' three' Intelsat II

u^Jh

Jransraitter power of "the Molniya

recently orbited by the United States have an Sr-

rhi^?apaClt^l'2Q0 channels- Thus, while the channel capacity of Soviet comsats has remained

US te^nol^ical advancJ has canlcT^ 3increase in comsat channel capacity in the same period.

The USSR has progressed rapidly in developing the ground segment of its Comsat program during the *

used ,ntil the ground segment used to handle Molniya transmissions consisted of only two common carrier ground stations, one at Moscow and the other at Vladivostok. However, in

"SSR PUtnetwork

ZlZS.lt"Orbita" ground stations capable of receiving one channel of television

Itvia Molniya. Unlike the terminals at Moscow and Vladivostok, none of the Orbita stations

ble totelephone and telegraoh traffic orround-to-sate11ite transmission "

-ilXRET

A1-that is, they :rtb abls receive all types of caimuni catior.

. Measured-comaechnology, can-be- expected -to -reflect

T^ere ar;aUSSR xntends toomsat into equatorial- syn- '" chropousAorbitv -possibly-some time latehe USSR';alloQStttempt to -provide its-future-comaats with increased channel -capacityapability fdr simultaneous rolay of both television and multichannel voice" communications (this latter capability iseature of tho Intelsat III satellites). If achieved within the next year or two, those advances could narrow the comsat technology gap between the USSR and the United States in the short run. However, USis also moving rapidly ahead. The fourth generation of Intelsat satellites, for which the United States is prime contractor, is already under development-. Thin- new satellite Is'being designed'wo-way voice channels, foraccessarge number of ground stations, andseful lifetime of seven years. If the Intelsat IV series is deployed as scheduled,S lead of at least three years over the USSR in comsat technology is likely to befor the foreseeable future.

Consumer Goods

The technology of production in Sovietgoods industries varies widelyrom highly modern bread factories to archaic textile mills. The typical Soviet bread factory employs aflow process that starts with tho mixing of ingredients in largo vats on the top floor of the multistory building. As the product descends, floor by floor, the dough is processedariety of bread products, baked, and delivered unwrapped to special trucks at the ground level which transport it to the distributing bakeries. The process is distinguished by tho small number of employees

preservation, of.

foods-is canning in- glass 'jars; The USSR is par tic-deficient- in equipment for automatic packaging liquid dairy products in paper containers andwrapping and packaging butter

Soviet textile mill equipmentears behind that of the United States. Efforts are being made to modernize the mills with domesticallymachinery, but most of it differs very little from that.produced'SO-'years-agoi "For-the production of textiles from synthetic fiber, the USSR ison imported machinery. Soviet textile plants lack modern finishing equipment, and the quality of fabrics is therefore very poor by Western standards. Preshnnking machines are few. Steaming of expensive woolen fabric at some dressmaking factories is now being introduced, but equipment to make wrinkle-free, no-iron, and permanent-crease materials is not yet being produced. Because bleaching machinery is lacking, most Soviet cotton fabrics are dyed without first being bleached, thus givingrab

in the footwear industry, lessf the operations arc mechanized andercent of the equipment is obsolete, according to Soviet statements. In leather processing,ercent of the machinery in use is considered obsolete, and new domestically produced machinery is below world Technology in the Soviet clothing industry is geared to mass productionmall range of

sn.iplt:. . ckw.in! rol.i'.iv

to the west as are the textile and footwear industries.

6 I

Original document.

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