Abstract
Both policy makers and scholars from the East and West have expressed a need for an up-to-date and comprehensive account of the actual state, structure, and progress of research and development management and organization in, what was until recently, the Soviet Union. Certain aspects of R&D in the USSR have been reviewed and analyzed in the literature, but a thorough overview from Western sources supported by actual Soviet data would be beneficial to gain an understanding of this complex system during the time of economic transition. This study aims to provide this understanding.
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Economic growth is an increase in a geographic or political region’s capacity to produce goods and services and the actual increase in their production. Traditionally, the accepted measure to monitor growth has been the annual rate of increase in a particular area’s gross national product (or the rate of expansion of per capita national income). There is considerable awareness of the shortcomings of this measure, especially because it does not appear to always measure adequately nonmarket activities, transactions in the black economy, value of leisure or free time, and disbenefits of industrialization such as environmental damage or destruction of aesthetics. The all-encompassing term to more reliably describe actual changes in the standard of living is economic development. Essentially, development (originally from biology but also applicable to economics) refers to the progressive changes in size, shape, and function during the life of an organism (Goetz, 1988, p. 45). In this analysis, the role of the organism is taken by economic man or a regional or political economy.
The original work on this topic is entitled An Inquiry into the Nature and the Causes of the Wealth of Nations, by Adam Smith, first published in 1776. These comments are a synthesis of the summary of some of Smith’s ideas given by Chirot (1989, p. 16).
In the past, the countries of Eastern Europe were classified using different expressions ranging from Iron Curtain countries and socialist countries to centrally planned economies (CPEs), administrative and command economies. The countries in this group include: Bulgaria, the former Czechoslovakia, Hungary, Poland, Romania, the former Soviet Union, and the former Yugoslavia. Today, these nations are undergoing fundamental changes in their structure and character, and are therefore often referred to as emerging market economies (EMEs).
This is exemplified by the strong emphasis on importing knowledge (for long-term benefits) to Japan rather than on simply capital (for immediate, short-term benefits) during the early stages of the post-World War II buildup period.
Particularly little in light of Khrushchev’s vision of the USSR overtaking the USA as the leading world economic power in the second half of the twentieth century.
In fact, this situation did not change much until the 1950s. At this time, GNP per capita in Japan was 17% (relatively less than the comparative figure in 1900) and in the USSR it was 34% of the corresponding US level. An interesting point regarding this indicator over the next four decades is that while the Soviet level was 118% of the Japanese in 1900, it grew to more than twice the Japanese level by 1950. In 1987 the GDP per capita in Japan was 164% of the Soviet level-a complete turnaround (Figure 3.3).
These titles are from New Scientist (13 March 1986), Science (Vol. 238), New Scientist (11 March 1989), The Economist (24 March 1990), and Nature (5 April 1990) respectively.
For further discussion of this material refer to Gomulka (1986, pp. 42-61). He investigates R&D and innovative activities in centrally planned economies and extracts various principles that appear to be incompatible with rapid innovation from the results of numerous empirical studies conducted in Eastern Europe.
An example of this is described in a study of the machine tool industry in the Soviet Union: “The Soviet machine tool industry, developing independently of western assistance, has become the world’s largest producer of machine tools. However, emphasis has been on large-scale production of relatively simple-to-produce, general-purpose machine tools at the expense of special-purpose and complex types.” (Grant, 1979, p. 555).
Some examples are theoretical physics, applied mathematical methodologies and other mathematics, metallurgy, advanced ceramics, nuclear fission and fusion, and lasers.
Marx’s words for science, R&D, and technology are translated as “practice, experimental science, and materially creative science” in Mikulinski and Richta (1983, p. 42).
In the Soviet Union, calculations based on newly available data have shown that the median one-firm concentration ratio (that is, the share of total output by an individual enterprise in a particular sector of the economy) is as high as 61%. For comparison, the American figure for the top four firms is only 37% (Kahn and Peck, 1991, p. 65).
GOSPLAN’s involvement in the R&D policy making was due to its function in compiling production plans that would have been influenced by the realization of new products or processes.
In many Western countries (i.e., United States, Germany, United Kingdom, and Canada), the universities perform the lion’s share of basic research in the economy in addition to the teaching function.
Total state expenditures for R&D were 37.8 billion rubles in 1988. Of this 75% was designated for use in the MIC (Yakovets, 1991, p. 2).
Collected from the paper by Ageev and Kuzin (1991). The authors also thoroughly cover the Western literature on technological change as it pertains to the Soviet situation.
In 1989, 15.3 billion rubles were spent on defense-oriented R&D in the USSR. This amounted to 71% of the state allocations for scientific activities.
Estimates indicate that from 25% to 50% of machinery is obsolete and that annual repairs cost over 40 billion rubles in the engineering industry and employ the time of tens of millions of workers (Ageev and Kuzin, 1991, p. 9).
Venture capital is an important source of R&D financing, particularly for smaller enterprises or entrepreneurs, in market economies. High capital mobility, competition between financing sources, and a sound credit and financial system contribute to the opportunities for successful advances in science and development for parties that might be excluded from the conventional type of simple, traditional financial allocation of a command system.
Soviet personnel policies in the R&D field, which were based on hierarchy, secrecy, and autocracy, caused problems with respect to the stimulation of creative work, the active participation rate of skilled personnel, scientific and technological progress, and the democratization of the S&T sector.
The rate of growth in the number of R&D personnel in the 1980s frequently dropped below 1% per year, whereas it ranged between 3% and 5% in the USA during the same period. The figures below indicate a much slower relative increase of R&D specialists in the USSR than in the USA throughout the 1980s (Gokhberg and Mindely, 1991, p. 5).
A statement by Gurii Marchuk in an article in the new science newspaper Poisk in July 1989, while he was president of the Academy of Sciences (quoted in Fortescue, 1990, p. 223).
Already in 1988, the share of enterprises engaged in industrial R&D rose from 51.2% to 66.4% (Motorygin and Glaziev, 1991, p. 17). Again, the necessity to do-it-yourself has arisen.
In the case of basic research the academy and the military industrial complex were largely dependent on state subsidies. In 1991, state budget revenues fell by as much as 70% (partly accentuated by the war of laws between the different levels of government). Expenditures on R&D in the MIC fell, in nominal terms, from 15.3 billion rubles in 1989 to 13.2 in 1990. With a 19% inflation rate in 1990, the real decrease is approximately 33% (ibid, p. 11).
13.5% of R&D (by value) was carried out in the nonstate sector in 1990.
For example, in early 1989 the library of the Academy of Sciences subscribed to approximately 4,000 journals. The Harvard University library alone subscribes to about 160,000.
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© 1994 Springer-Verlag Berlin Heidelberg
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Schneider, C.M. (1994). Technological Development, Growth, and R&D Management in the USSR. In: Research and Development Management: From the Soviet Union to Russia. Contributions to Economics. Physica, Heidelberg. https://doi.org/10.1007/978-3-662-30372-6_3
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DOI: https://doi.org/10.1007/978-3-662-30372-6_3
Publisher Name: Physica, Heidelberg
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