CIA HISTORICAL REVIEW PROGRAM RELEASE IN^
ORR PROJECT HO.
COMPUTERS IN THE SOVIET ECONOMY
Prepared for The Joint Economic Committee of Congress
B6
r/ee
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in tho Soviet'
Introduction
Soviet Union has not kept pace with the US in development oftechnology. Obviously, this lag has not prevented the USSR from
achieving spectacular results In its military/space programs. In the area of
economic, business, and industrial accounting, hovovor, the lack of electronic
aqui [sent
data processingthe rudimentary state of development of thia branch
of the Soviet computer Industry are causing the Soviet leadership great concern.
The directives for the Five Yearajor emphasis to algni-
fleant ly increasing the production of computers, particularly those capable of
handling large volumes of data.
respect nov eh ova to electronic computers by the business communities
governments of tho technologically-advanced nations can be attributedto the promotional work of the Free World computer producers (principally
US firms) who undertook to study economic activityiew to developing
computers and computer techniques that vould lighten the burden of admlaistra-
tion. This promotional force has cotlace to dare in the centrallyeconomies of the coanunistact that helps explain why the
Soviet hierarchy is only at this lata date vigorously pressingroduction
prograa intended to equip its Industrial enterprises and bureaucratic structure
computers'for data processing and analysis.
development vork In the USSR was concentratedesearch
under the Academy of Sciences, and vaa focussed primarily on computers
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suitable for scientific calculations. Much discussionoderate amount
of real effort haa been given to the development of computer systems for process
control. Heavy emphasis was placed on the development of analog and digitalappropriate to priority military and space programs and consequently,
until fairly recently, the Soviet computer industry did not have the capability
to design or to produce computers especially adapted to commercial or economic
applications. Little research vaa directed toward the development of peripheral
equipment or programming devices necessary for data, processing applications.
Oving particularly to tardiness ln recognizing the value of electronic data pro-
computers, as well as to parsimony in the allocation of resources to their
development and production, the Soviet Union today lags about five yoars behind
the US in this area of computer technology. There le little evidence that digital
computers vere routinely employed in data handling roles in the USSRthey seem to havo been used almost exclusively for problem solving.
elated awakening to the benefits that industrialised Western
countries vere realizing from the application of data handling computers ih commercial activities, the USSR, beginning innstalled them at a
eiow but Increasing tempo in enterprises and otate administrative organs for
processing plan data, scheduling production and performing accounting tasks.
contrast, US computer manufacturere, stimulated by the sales
of the business market, have concentrated since5 on
on ralainc operating speeds
the development of expanded internal and external memory systems/ on increases
la assortment and efficiency of input/output apparatus una on making
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their computers easier to use. Ease of use has been facilitated by provision
of additional programming languages and accessability to the computer from
remote consoles. In the Free World, aad particularly in the US, computers
nov used in almost every phase of economic activity from market research
business accounting.
Requirements for Computers in the USSR
factors have led to the recognition by Soviet officials ln recent years
reatly Increased requirement for computers for the Soviet economy. One
factor hae been the growing difficulty of contending with the flood of informa-
tion that accompanies growth in economic activities. The other Is the strength-
ening conviction of Soviet planners that resource allocation can be better managed
by mathematical
is obvious that the successfulentrally controlled,
industrialized .economy depends on "the ability to analyse vast amounts
In the Soviet Union, the collection, processing, transmission, storage,
and arrayment of data on every aspect of economic life, transmitted^between
duction, distribution and saleB units and production control,'.
centers aVvarious levels of authority, through multifariousa data processing task unparalleled in human experience. This task is
done Inefficiently at the present time (principally by vast numbers of.
armed vith abaci and desk calculators). Even punch card machinery, which has
been ln production for years in the USSR, contributes relatively little compared'
with the army of clerks. he Soviet system of accounting and statistical
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collection alone employed about three million persons, quite apart from the hordes employed in the planning system, the material technical supply system, and the financial and banking eyetem.l/ Moreover, the volume of data on economic activity to be reported tends to proliferateisproportionately higher rate than the growth of economic activity. Ihe preservation of the centralized system of oconomlc management In the USSR depads on, among Other things,ery considerable increase in labor productivity ln the processing of data.
Ihe idea of using mathematical methods to allocate resources for maximum output vac discussed by Kantorovitch The Increasing complexity of the planning process has engendered active interest In these methods. Olven valid statistics and simplified economic models, mathematical methods would permit testing drafplans for 1neons1standes and Imbalances. Implementation of the advanced concept of cybernetic control of the economy, which envisions the drafting of plans, issuing of instructions and regulation of plan Implementation down to the enterprise level by computersompletely automated manner, ie not being seriously considered. rogram would have not only on enormous requirement for very fast computers with very large memoriesecessary condition for its Implementation but would also deny virtually all significant economic decision
making at the enterprise level. The supply of the necessary computer
tj . Kitov and Iu. I. Cheraiak; "Avtomatiiatslla upravlencheskikh rabot",
Avtcaatlzatsliarosy shlcnna la Elektronlka, Vol. I,.
. Kantorovitch, formerly at the Leningrad Branch of Mathematics Institute imeni Steklov of the Academy of Sciences, USSR is now the Director
of tho Laboratory or Mathematical-Economic Methods of the Institute ofof tht Siberian Department of the Academy of Sciences, USSR in Novosibirsk.
capacity jto tam efy-teie-rire* condd-feto^would be toorain on Soviet industrial resources to be practical in the foreseeable future, and the implied Increased interference with the process of optimizing production at the enterprise level would run counter to current policies.
The satisfaction of most of the USSR's requirements for computers for processing economic information are envisionedrogram officially adopted /for implementation in the Five Year. 2/ This prograa, the cul-
mination of proposals now rather well known to students of the Soviet economy, calls for the creation oftate network of computer centers for the collection and processing of economic Information and the solution of problems of planning and control in the national The existing network of the state statistical system, which has computing centers and machine calculating stations ln all-union republics and oblaet and kray centers, aa well as aore
j machine calculation stations ln administrative regions and cities, is to be
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expanded and supplied with modern computing equipment, and will form the base of the state network of computer centers. Along with the state network of computer centers^ sectorial and departmental systems of planning, accounting, control, and information processing will be created as necessary andwith the state network. %j Presumably these sectorial andnetworks will enttoipaes the computers in enterprises and in groups cf
77 Decree of the Central Committee, CPSU and Council of Ministers USSR,
published in Izvestiya,./ . Starovskiy, Chief Central Statistical Administration, USSR,va
Garcia,
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Jj Academician A. Dorodnltayn, head of the Computing Center, Academy of Sciences of
the USSR, in an article ln Pravda,otal of0 general-purpose digital computers had been installed in
the US by the end5 according to Electronic
2/ V. A. Kirillln, Chairman of the State Committee for Science and Technology,peech broadcast from
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accounting, and thc solution of complex engineering problems.
interest in applying electronic data processing to the problems of
management was highlighted inhen V. D. Lebedev, then
Coalman of the USSR Sovnarkhoz, announced plans to modernize management
by installing computerslants and combines5 and
These plansatural consequenco of the' recently intensified interest
of the Soviet leaders la improving the efficiency of industrial management. Such
interest is epitomized by the findings of the Collegium of the USSR Sovnarkhoz,
vhlch met In" to discuss the Introduction of computing equipment and
quantitative economic methods Into industrial management. The Collegium con-
eluded that major attention should be given to "the comprehensive mechanizationengineering and administrative labor, including engineering and design cal-
culations, norm (vork standards) setting,aterial and technical
supply, econoctic information, accounting, analysis of production activity,
lants are currently so equipped and these are considered
pilot projects.
USSR has shown an interest in the application of computer control to
industrial processes since theapid increase ln Industrial
productivity through automation became an Important national goal, nevertheless,
this program has proceodedery limited way, probably largely because of
slowness in cofapleting applied research on the processes to te controlled.
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10/ Skononicheskeya Gazota, Mo. 3T,
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Among thc Industrial processes to vhich computers have been applied in the
steel smelting and rolling, and train dispatching. Altho-jgh Soviet industry continues to lag behind US industry in the application of computers to Industrial automation, increases In computer production and research on applications in Soviet Industry are contributing to the number and variety of computers for process control. Moreover, particular emphasis on the need for process control computers is given in the directives for the Five Year Plan for
The requirements of the serviceransportation,electric power, have been little satisfied so far by the parwy-few Installations of computers presently working out linear programs In these areas. Ihe success of these applications is reflected in plans for greatly expanding the production of the appropriate computers.
The production of digital computers vab carried outaboratory scale
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Keeping in mind that digital computers for installations supporting military/space activities have first claim on Soviet computer production, that many machines are needed by aoientific Institutes not employed la direct support of military/space activities, and, further, that many of the existing machines are of obsolete design, slow, difficult to maintain, and mg ought to be replaced, it can be estimated that equipping the economy with the necessary data processing equipment willrotracted task.
forong time ln the USSR, with productionommercial scale
beginning about Consequently, although high rates of increase in output
achieved every year, the shortage of computers remains acute* Thecompares estimated production of computers In the USSR with the US. It
can be seen that,igher growth rate is estimated for the Soviet
Union, the lead of the US in absolute terms Increases everyuring the
Seven Yearhe production area at the major.vers greatly expended. It ia expected that the high priority now
the production of computers will continue
of US and USSR Production of Computers and Data
Processingof Current US Dollars b/
2 0 . 2 3 4 5 Growth
35 45 55 70 95 2CO
5
D Rubles have been converted to dollars at the rate6 a* y. Kcither the estimates of production for the US nor for the USSR include special purpose military computers.
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Although, In the early years of production, analog computers vere aominated.
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product mix In the USSR, as in the US^ls now heavily weighted in favor of digital computer0. Most of tie digital computers in production are of the general purpose type, although an Increasing number of special purpose designs
are in serial production for use in industrial control or Industrial planning
operatio:.s. The Soviet^ produces very few general purpose digital computers that
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be considered large by US standards. ost computers produced
the USSR were similar to those in production la the US during the period
5 the USSRumber of new models of general purpose
computers, such as thendnd
URAL-lJ* and Most of these embody the memory size, high operatingperipheral equipment necessary for data processing applications. Iheya significant advance In both technology and capacity and should be in pro-
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duction, for the next few years. Tees the largest and fastest known Soviet computer, and ls claimed capable of averaging one million operations per second. It Is not likely to be generally available in significant nimsbers in the next year or two. The URAL snd MINSK machines are typical of the new production
of computers that are likely to be available for general purpose uses in
Immediate
was nothat the first transistorized computers were intro-
ln the USSR, comparedn the US. Although ell models of Soviet
brought into production since" have been transistorized, the
production of electron tube-type computers was not completely discontinued until Tl7 Professor Andrei P. Yershov, head of the Computer Center Programming Department,
Division, Soviet Academy of Sciences, Novosibirskeeting of the TorAjkchlacry in Culver City, California in5 that the
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ore memoryordsblt length and an access timemicroseconds. igh degree of parallelism permits an average performancemillion instructions per second. The computer will costillioncan be. used for time sharing operations. Yershov described the URAL-16 having both fixed andbit word0 operationsa core memoryords, memory accesstimeicroseconds,drum mc, oryrom Electronic
ore do IndlcatlonG of production of third generation
with integrated circuitry, representative of the latest state-of-the-art
the US. In fact, the development of integrated circuit components forcomputers has been identified by ajor assignment for
electronics industry ln the plan for the next five.
dearth of peripheral equipment has persistently plagued Soviet computer
who have data handling requirements. This is, as mentionedon-
of the long delay in recognising the need for computers for data handling
The peripheral equipment described in connection with the newly announced
digital, computers Includes auxHilary memories of magnetic tape and drum types,
improved page and line printers, and better punch card and paper tape readers.
Unfortunately for the USSR, thc quality of this peripheral equipment still leuves
much to be desired. considers the lag of Sovietthis area to be too great to be satisfactorily overcome Id an acceptable period
of time through domestic research and development and recomaeads Importing the
necessary equipment or licenses to produce lt. He reasons that the cost of
acquiring it in this way would not greatly exceed the cost of domestic production
(including research and development costs) and that any additional costs are Justi
fled by the Importance of shortening the delivery period.
rapid growth of the industry is independent on the availability of
capital, cooponents and trained labor. The component supply has
12/ V. A. Klrlllln. op. cit.
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13/ Ac&cemicion A. Dorodnitsyn, op. clt.
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probably been somewhat eased by the rapid growth In production of semiconductors,
which according to an official aourco. Increasedercent/
There are reports, however, that the quality of transistors used in Soviet
is below world standards for this purpose. The provision of the skilled
labor required for computer production hasersistent problem and Is likely
toontinuing one. The necessity for using labor with Inadequate Bklll tends
to reduce productivity in the Soviet computer Industry and to contributeow
quality product and excessive maintenance for the user.
V. Isstlrational Problems
factors inherent in the organization and operation of the Soviet
economic system tend to preclude optimum application of computers. Soviet pro-
auction philosophy tends to emphasize series productioninimum assortment
of standardized models to the detriment of users who heed computers tailored to
their particular requirements. Moreover,tandardized computer has become
obsolete,eplacement model more responsive to user needs has been developed,
the production of the obsolete model usually continues for an excessively long
period. Tnie situation Is chronic ln all Soviet machine building industries
because the production loss Incurredlant in changing models typically leads
to losses of bonus payments to the management and the work force. Delay in the
appearance of improved models also has occurred because of poor communications
resulting from'bureaucratic separation of computer users, producers, and designers.
This situation can be contrasted with that In the US where the producer not only A. I. Shokin, Minister of tho Electronics Industry,
is alao the designer, but frequently has his representative physically present
on the user's premises to maintain the computer aad provide direct liaison between
user and designer.
the USSR, very few services presently accompany the saleomputer.
The customer receives limited instruction in programming, operating ond main-
taining his computer, but once it haa been Installed the manufacturer takes no
further responsibility for its maintenance. Spare parts are often unobtainable
from the computer manufacturer aad oven from component canufacturera, and the
user is forced to employ makeshift expedients to keep his machine operating.
Such makeshift repairs may change the operating characteristics of the computer
enough^ to prevent the sharing of programs among users of the same model.
before the decree fortate network of computer centers
announced, measures to correct these deficiencies new* been undertakenUSSR. As recognition of the seriousness of the losses in computerbecame stronger, several official bodies were established toin the utilization of computers, to make suggestions for further
research and to oversee servicing arrangements. At the national level, repre-
scntatives of the Ministry of tho Radio Industry, of the Ministry for Instrument
Making, Means of Automation and Controlnd themit tee for
Ccienco and Technology confer among themselves and with representatives of the
Academy of Sciences and Ministries in which computers ere employed, in order to
decide which newly developed models should be scheduled for production. At the
republic level, computer producers, design facilities and computer users were
formed Into Reduction-engineering associations, concerned with advising one another on the problems of planning, designing, producing, installing, and using the computers located in the particular republic.
The production-engineering organizations and the scientific research institutes
havo beenajor role in the Job of assimilating computers Into the
economy. Between them, they carry out the function that is achieved ln the US
by manufacturer's sales and service representatives and by private data processing
service organizations. Several new cybernetics institutes and economics-engineering
institutes have been founded in the USSR in the last few years to create computer
programs, perform systems engineering for process control applications, design
forms for economic reporting, and train applications and programming personnel.
above measures are to be intensified and expandedunder the provisions
the decree on the state computer network, according to
decree provides that Installation, adjustment, and putting into operation
of the systems and equipment of the state computer network will be contracted
outew organization, the All-Uhlon Planning and Installation Administration,
now being organized under the Ministry of Instrument Making, Automation Equipment
and Control Systems. This administration is toetwork of territorial
planning sections and installation administrations and will maintain cost
on its operations. The Ministry of the Radio Industry Is charged with
Installation, adjustment, putting in operation, and servicing of all computers
and accessories which its enterprises produce. Apparently, the All-Union Planning
157 V- K. Starovskly, op. clt'
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and Installation Administration ia toeneral contractor'a role on
total ayatema and the Ministry of the Radio Industry will be held responsible
tha installation and correct functioning of its conrputor equipment. Itthat the computer centers vill keep books oa their operations. Hence,
it seems likely that an arrangement will be established under which computer
will pay computer producers for servicing their computers. Such a
would enhance the probability that service would indeed bein the USSR with the difficulty of maintaining computersonscientious program by manufacturers to provide service after
oale is probably responsibleecommendation made recently by Dr. 0.
rofessor of Economic Sciences. She asserted that it is rational
to lease automatic data processing equipment to enterprises and let the manu-
facturer assume full responsibility for installing, adjusting and maintaining
lt. This Is, of course, the most common marketing arrangement employed between
computer makers and users in tho Free World.
soviet propensity for maximizing production rather than satisfying
needs has resulted in the design of computers that are difficult tocomputers generally cannot accept instructions in timosaving "programming
language" (such asnd the Soviets have not provided the input/output
equipment needed for the use of tho automatic languuge compilers and translators
"-hat are standard in US practice. Soviet prograicaerB have had to prepareln numericalime consuming process. Moreover, the US practice of
providing, -romputer UBors with standard programs for frequently run problems culova,
seldom employed in the ussr, with tho result that much time is spent ln
redundant programming work. recently, some steps hove been taken to correct
these deficiencies. language compilers for some of the new computers are
entral repository for programs for mathematical problems
has been created at the state scientific and technical library, and several'
economic research institutes are compilingtancard programs for common accounting and control problems in commerce and industry. under the decree for establishing
the state network or computer centers, it la planned that responsible departments
and scientific institutions will continue this work and will provide libraries
of standard programs, autocodes and algorithmic language translators. howover,
the success of these programs will depend on the provision of. necessary input/output
equipment.
efficient use of computers is impeded in tho ussr, not only becauselack of conveniences for programmers, but becauseevere shortage of
qualified personnel for maintenance and programming. technical and economic
institutes have established courses to train people in the application, programming
and maintenance of computers. however, the nucber of students enrolled continues
to be inadequate compared with the present requirements, and more steps will
have to be takon toevere shortage of skilled personnel when the
expected rapid increase in the installation of electronic data handling equipment
occurs.
ussr recognizes the wide application of computers in the economy aot
as aa attractive means of significantly reducing the cost of economic
and management but also as the necessary means of retarding the rapidly
rate of absorption of manpower into non-productive data handling tasks*
Soviet planners realize that they are tardy In developing the technologycomputers to data processing. The correction of their backward position
in this respect has been given great emphasis in the directives for the next
Five Year, but with the explicit acknowledgement that five years
is tooeriod in which toational system of data processing
computers adequate to handle the statistical reporting needs of tha economy.
It is expected that the problem of equipping the economy with computers will
riority national problem at the end of this five year plan period.
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Original document.
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