TECHNOLOGY TRANSFER, EXPORT CONTROL, AND ECONOMIC RESTRUCTURING IN THE SOVIET UNION THE CASE OF SOVIET COMPUTERS Daniel L. Burghart Candidate for the Degree of Doctor of Philosophy University of Surrey 1991 (i) ProQuest Number: 11012602 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a com plete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. uest ProQuest 11012602 Published by ProQuest LLC(2018). Copyright of the Dissertation is held by the Author. All rights reserved. This work is protected against unauthorized copying under Title 17, United States C ode Microform Edition © ProQuest LLC. ProQuest LLC. 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106- 1346 (c) Daniel L. Burghart 1991 SUMMARY Technology transfer is a topic that has received wide attention in recent years, especially with regard to Soviet attempts to obtain technologies from the West that are considered to be sensitive in terms of western security. The effects such transfers have, however, are not always those that would be expected and in many cases have not resulted in the ends that the Soviets hoped to achieve. This paper seeks to examine the true nature and effect of technology transfers between the West and the Soviet Union in the area of computers, especially duing the period from 1985 to the present. It is argued that while such transfers have not been effective in the past, changes in the Soviet Union’s approach to the acquisition and integration of foreign technology, under the program of economic reform now taking place, will increase the effectiveness of these efforts in the future. Based on the results of this case study, it is concluded that the current western approach to export control needs to be re-evaluated in light of these new circumstances, if the policy of restricting such transfers is to remain viable. CONTENTS SUMMARY CONTENTS ACKNOWLEDGMENTS A NOTE TO THE READER INTRODUCTION CHAPTER 1 -THE NATURE OF TECHNOLOGY TRANSFER CHAPTER 2-TECHNOLOGY TRANSFER AND THE SOVIET UNION- THE PRE-GORBACHEV ERA CHAPTER 3-TECHNOLOGY TRANSFER AND THE EARLY DEVELOPMENT OF SOVIET COMPUTERS CHAPTER 4-GORBACHEVS ECONOMIC REFORMS CHAPTER 5-PERESTROIKA AND COMPUTER HARDWARE CHAPTER 6-PERESTROIKA AND COMPUTER SOFTWARE CHAPTER 7-INFORMATION TRANSFERS, TELECOMMUNICATIONS AND THE HUMAN ELEMENT CHAPTER 8-AN ANALYSIS OF TECHNOLOGY TRANSFER IN THE CASE OF SOVIET COMPUTERS CONCLUSIONS-SOME THOUGHTS FOR THE FUTURE APPENDIXES-A THROUGH J SELECTED BIBLIOGRAPHY (iii) Acknowledgments Such an undertaking as this could not have been attempted, much less completed, without the help and support of many people, and while all of them have played a part, I owe a special thanks to the follow ing: To Professor B. P. Pockney, advisor, mentor, philosophical father and friend, whose patience, guidance and encouragement were always present when I needed them. To Professor James Riordan, whose careful reading and gentle suggestions greatly improved not only the text, but my knowledge of and ability to use the English language. To the United States Military Academy and the British Council, for providing both the opportunity and the means to continue and complete this work. To my wife Susan, and my sons Robert and William, who have cheerfully tolerated more than I ever could have hoped for, or ever should have asked them to, in the process. And finally, to my friends, colleagues and associates on both sides of the Atlantic, whose contributions, advice and assistance have added greatly to this work. To them goes much of the credit. The faults that remain are mine alone. Daniel L. Burghart (iv) A NOTE TO THE READER Doing a study of this type has been an enlightening experience, not only in terms of the subject matter, but that being a native American working at a British University several differences of interpretation have been noted in what would normally be considered the common usage of various terms. To assist the reader, a few of these are outlined below. The term 'West' or 'western' is considered to include Japan, both because of its level of development and the fact that it is a member of CoCom, the export control regime that is designed to monitor the transfer of western technology to the Soviet Union. The term 'Soviets' is used as an adjectival noun referring to the Soviet people, similar to the use of the term 'Americans', as opposed to its more restrictive meaning as an elected council. The term 'data', while denoting a plural state, is treated grammatically as a singular, an 'Americanism' grudgingly forgiven by The Oxford Dictionary of Current English. Spellings used throughout reflect the American, as opposed to the British, tradition. I would like to thank both the patience of those who have helped in reviewing the text as well as the reader for allowing me these idiosyncrasies, brought about, in the words of George Bernard Shaw, "by two peoples divided by a common language." dlb (v) " (The Capitalists) will supply us with the materials and the technology which ... we need for our future victorious attacks upon our suppliers." 1 V. I. Lenin TECHNOLOGY TRANSFER, EXPORT CONTROL, AND ECONOMIC RESTRUCTURING IN THE SOVIET UNION THE CASE OF SOVIET COMPUTERS Introduction The issue of technology transfer has come to the forefront of debate in the last several years, in government circles, the press and the general public. The United States and its allies traditionally have relied on technological superiority to offset the quantitative military superiority of the Soviet Union during the years of the cold war. To maintain this technological advantage, the governments of the West imposed a regime of export controls to prohibit the transfer of high technology items; failure to Introduction-1 maintain this superiority, it was felt, represented a severe threat to the security of the West. With the end of the cold war and the changes that have occurred in the East, however, many in both political and economic circles in the West are now calling for a lessening of these controls and increased trade with the Soviet Union, not only as a means of lessening tensions between East and West, but in response to the demands of the market system that is the basis of the West's economic strength. 2 This presents a dilemma for decision makers whose job it is to determine policy in this area, for while the world has applauded the events that have taken place in the USSR and Eastern Europe to date, there are no guarantees that these changes are permanent, or that events may not take yet another unexpected turn. What would happen in the case of such a turn of events? What happens should the West once again be required to maintain a technological edge to insure its security? And what happens when the current export controls no longer prove to be effective? Within the broad realm of items that are covered in the general category of advanced technology and affected by export controls, computers form a significant and fascinating subset. Perhaps no other technology better represents the technological revolution that the world has undergone than the microprocessor. There are Introduction-2 few areas of modern society that are not affected in some way by computers; the significance of computers in defense issues alone needs hardly be amplified. In the past, the importance of computers led the Soviet Union to engage in a major effort at obtaining western technology in this area, an effort that directly challenged western efforts to limit the transfer of technology, but whose success to date appears to be limited at best. Now, however, in light of the current attempts at economic restructuring ongoing in the Soviet Union and the policies that accompany these attempts, this situation may be changing. Using computers as a case study, it should be possible to evaluate whether current western export controls are still effective in restricting the transfer of technology in this vital area, or whether the new Soviet initiatives require the West to reexamine its export control policies. The purpose of this study, is to help clarify the debate on technology transfer by examining the significance of western technology to the Soviet Union in the area of computers. Throughout, technology will be treated simply as "knowledge relevant to industrial capability," 3 and technological skill defined as "the mastery of the applications of advances in science to Introduction-3 manufacturing techniques." 4 Technology transfer, for the purposes of this study, is the transfer of technology from one group or country to another, such that it increases the technological skill of those receiving the technology. Further, technology transfer can be considered as being comprised of two key elements or components. The first is the transfer of the ability to use a new technology or skill; the second is the ability to duplicate or improve on the transferred technology, so that eventually an independent capability in this area is achieved. To be considered a successful transfer of technology, both of these conditions must be satisfied. The goal of this paper is to outline the ways in which western technology is transferred to and incorporated in the Soviet economic system. Using the Soviet computer industry as one example of this phenomenon, the case study will examine the effectiveness of western efforts to limit the flow of computer related technology from West to East. The results of this examination, in turn, will be used to determine the general effectiveness of western efforts to limit such transfers of technology, and whether current export control policies need to be revised.