Piskunov and B. Saltykov 35 The relative easy money of clients prevented the natural selection of

potentially most efficient research teams and institutions since these could afford t o pay all their staff including the ballast. Funds continued t o be wasted on worthless, antiquated studies directed by their privileged, "dis- tinguished" leaders. Unfortunately, despite a considerable increase in R&D allocations, all these factors prevented fundamental changes t o occur in the quality of Soviet R&D.

The ballast was also preserved due t o the fact that labor relations and hiring methods remained unchanged. Hope was still placed on material incentives t o stimulate productivity growth in science, whereas the main feature of a market (i.e., efficient economy), as is well-known, is the existence of labor market.

Regional science labor markets sprouted rapidly in a number of large cities of the USSR in the late 1980s. However, as a rule, they were second employment markets. These markets consisted of hundreds of thousands researchers and engineers working on a contract basis for the organizations of the non-government sector where the customer exercised control by the ruble and the performer had his reputation a t stake. Here one could order a specific job from a single or several specialists instead of hiring a whole institution. At the same time, most actors in this sector bore no risks since they were permanently employed elsewhere.

As time passed, we witnessed the emergence of second or black science, or to be more exact, an entirely new innovation sector. Due t o a lack of essential legislation, operating time, materials, equipment and, of course, final products began t o be abused. The latter as a result of the problem of property rights for R&D products, which was not even close t o being solved in the Soviet Union a t that time.

In 1990 and 1991 the consumer market, business relations, and confi- dence in the ability and influence of institutions were practically completely disrupted. As sociologists put it: uthe peak of social disintegmtion was reached; the situation in Soviet science was markedly changed for the worse."

Demand for R&D products on the part of industrial and agricultural enterprises dropped considerably, budget financing opportunities for R&D were curtailed (both on the national and republican levels), and a process of disintegration of a number of R&D institutions set in. Unemployment in science become a stark reality and a t the same time the influx of young researchers simultaneously declined considerably. The bmin dmin process gained in strength. The persistence of these trends were sure t o damage scientific potential in the USSR and may have had irreversible effects since

36 Transformation of Basic Structures scientific institutions and teams disintegrated rather quickly, while their es- tablishment would take much time and effort.

What was needed a t this time was a radical change in the goals and criteria of science policy. The then existing economic and political situation should have been reoriented from the past focus on the transfer ambitious large-scale projects from the U.S., European, and Japanese to Soviet soil t o a realization that the main issue on hand was the need t o support the survival of those structures in Soviet science that were still capable of as- serting themselves. The main difficulty of this time and beyond was the search for realistic survival mechanisms that need not require multibillion ruble investments, since these were simply not available.

Restructuring processes observed in Soviet science generated severe so- cial problems and contradiction^.^ Unless efficiently resolved, and as long as the priorities in science policy remain based on the past technocratic ideology, the system could not survive.

Suggestions for Reorganization of Science and Research in the Transition to a Market Economy

During the transition t o a new system as is happening today, a considerable portion of R&D resources should be allocated t o create the so-called buffer systems capable of alleviating the conflicts that are yet in their initial stage.

The personnel dismissed from R&D institutions and design bureaus should not become unemployed. It is necessary t o invent generators of new jobs that are t o be designed in accordance with the dynamics of the situation or t o organize a planned evacuation of some Soviet specialists abroad. Their resettlement and employment in foreign countries through a government supported system of international cooperation is completely different from individual emigration and employment.

A system of small-scale science-intensive ventures may become the most efficient solution t o the problem of providing jobs for skilled researchers inside the country. This is a specific social-production system which has t o be created as soon as possible. Another priority issue for new science policy is to ensure rapid design and implementation of a program for establishing incubators of small-scale ventures for R&D personnel.

In our opinion, the major difficulty which explains the failures of all previous reasonable attempted changes in Soviet science was a strong belief

'Here we use some ideas suggested by S.G. Kara-Murza.

D. Piskunov and B. Saltykov 3 7 in and adherence t o a certain unified mechanism suitable for the entire R&D sphere. However, two basically different sectors of science emerged in the latter stages of the Soviet Union: the non-profit (conventionally basic) sector, functioning for public benefit a t large, and the commercial sector, where the key incentives are individual profits. These blocks of science were not arranged as some specific organizational structures. They became radically different in terms of operating criteria, the labor motivation, value system, and even the standards of economic behavior.

Therefore, although the general concept of perestroika (freedom, democ- racy, and competitive markets for producers and consumers) is quite accept- able for the entire R&D sphere, specific methods of organizing, managing, and financing must account for individual features of each type of R&D in- stitution. Operating mechanisms of the new non-government sector should be designed on a pattern completely different from that for the traditional branch, military and academic sectors. The regional aspect is also very im- portant: the same problems for an R&D institution in Moscow should be handled in a different way for an institution of a similar type in, say, Riga.

The fall of the curtain that protected Soviet science from the necessity t o compare its results with the levels attained by the international scientific community has revealed abominable gaps in the seemingly continuous front of domestic R&D. A particularly dangerous situation is observed in the civil- ian branch sector of science. Neither the available results, nor the quality of science potential in this sector allow production of new products and devel- opment of new technologies that can be competitive in the world market. In this respect, the Asian way of developing science and technology seems to be most effective and rational. An example would be the purchase of complete, modern enterprises and technologies on the turn-key basis with subsequent adaptation of soviet R&D and economic environment t o the necessary level.

A rational conversion of the military sector should become an efficient way of preserving its scientific potential. This could simultaneously solve the problem of employment for scientists and engineers working at R&D institutions and design bureaus in this sector where demand for military products has dropped drastically. In order t o develop an efficient conver- sion mechanism, current and potential scientific and engineering capabilities of military R&D must be thoroughly analyzed in addition t o the level and types of technologies achieved in the rest of the world and used in the civilian sector. The demand perspective and other factors should also be evaluated.

Next, interface areas are t o be determined, amounts of investments defined, and operating mechanisms for project implementation designed. A critical

38 Transformation of Basic Structures prerequisite for efficient conversion should be mutual interests of all the par- ties involved (R&D institutions, design bureaus, industrial enterprises, bro- kers, trade agencies, etc., including the government). Indeed, many defense sector establishments are very close t o the model of a modern diversified science-intensive company which interacts with a network of independent or semi-independent ventures. However, the organization and management scheme operating in this sector is not suitable for market conditions. It is not capable to adequately respond to the changes in demand structure, t o make instant decisions on the necessary revisions of research agenda, cus- tomer and subcontractors, and so forth. We believe that t o solve the problem of elaborating an efficient conversion alternative it should be necessary to gradually relieve scientific and engineering institutions of the defense sector from ministerial control, t o denationalize and demonopolize this sector.

At present, it is hardly possible t o develop the concept of science policy for the transition period separately from the concept of transforming the higher education system. One may easily forecast that close integration of science with the higher education system during the transition period is becoming a necessary condition for the Soviet science community t o survive in its new polito-economic environment. Perhaps, new hybrid organizational forms will have t o be established and supported that will possess enhanced stability during hard times even if pure scientific efficiency is t o be sacrificed.

Finally, of greatest importance today is the large-scale effort in dissemi- nating modern economic and social knowledge with the purpose of creating a new economic culture in the successor states of the Soviet Union. The changing attitudes t o private property, t o the role of government in the economy and social sphere, t o the rights and responsibilities of an individual and many other new factors in the post-communist regions cause the existing value system t o disintegrate and radically change the standards and rules of economic behavior. At the same time, rapid transition to the use of formal market attributes lacking necessary traditions and inner culture frequently puts new obstacles in the way of solving old problems. In particular, science experiences strong commercial pressure nowadays. There is a serious danger t o lose all values that have been accumulated by the Russian and Soviet science genotype over many decades in the whirlwind of transition t o the market economy. It is the duty of the new government and international science community t o prevent this.

Responsiveness of the Soviet