This article examines the development and functioning of industrial research in the Soviet Union. From early on, it took the path of creating institutionally separate Scientific Research Institutes (NII) within various branches of industry. Defense research was especially privileged. The growing scale of scientific research, however, did not resolve the problem of linking development with industrial production, which contributed to the technological lag that manifested itself by the mid-1950s. Reform of industrial research and development launched by Khrushchev produced a greater number of research organizations and their increased specialization, but did not resolve the main problem. An attempt to use economic stimuli for the adoption and use of new technology, introduced as part of Nikolai Kosygin’s reforms, similarly failed, largely due to the resistance within the existing system of central planning and the lack of material interests on the part of industry.
The postindustrial innovation economy began to develop in advanced countries after the middle of the twentieth century. Its main resources are scientific knowledge and information, and innovation technologies determine the tempos of postindustrial countries' GDP growth and economic power. During the last 15 years, revenues from the export of natural resources have constituted the chief source of economic growth in the new Russia. The absence of long-term strategy and the destruction of Soviet industrial potential resulted in a loss of time and a catastrophically rising gap between Russia and advanced countries. The new "banking capitalism" accumulated enormous funds that were not reinvested into industrial development and the innovation economy, but remained frozen and devalued in the course of inflation, or worked for foreign economies as "capital drain". It is not too late to turn around the tendency of the last 15 years and reorient the Russian economy from resource-driven to innovation-driven. Russia's intellectual capital is still the fourth largest in the world, as measured by the number of scientists and engineers involved in research and development. What is lacking is political will.
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