AC001 FIRST LINE NATIONAL INDUSTRIAL POLICY: A NEW SYSTEM OF VALUES AND IDEAS BEHIND THEIR REALISATION ANDREl KOKOSHIN, Russia's First Deputy Minister of Defense, Corresponding Member of the Russian Academy of Sciences istory demonstrates that Despite the variations in the reforms, vast potential of research-intensive tech- successful implementation carried out in these countries, an "econom- nologies and a real chance to develop them. of large-scale social and ic miracle" was always one component of Our country's specialists belong to the economic reforms in all their success. The achievement of a worthy small elite of the international community, countries, regardless of the place in the hierarchy of developed coun- capable of developing and operating highly differences in their condi- tries, genuine sovereignty and national sophisticated technological systems requir- tions and start-up posi- security was invariably based on the devel- ing, for their part, high standards of man- tions, inevitably depends opment of a progressive production struc- agement and the cooperation of hundreds of on the achievement of ture, oriented above all towards a better enterprises, research institutes and design “Military Parade” • Electronintorg ltd. AVA Multimedia Publishing Group accord among the majority quality of life for the population, the required bureaus. This ability may be considered one on. a long-range national number of jobs, and a stable position in the of Russia's most valuable assets, our nation- goal, which guarantees world's research-intensive high technology al property. However, for many years these maximum integration of markets. assets have been squandered due to huge personal and group interests. This goal will A comparative analysis of Russia's actu- military expenditures, which made the onlyH become the principal driving force for al potential leads one to conclude that years national economy inefficient. Now, the abili- social progress, if it is achieved via a strate- of hard and goal-directed work can also lead ty to develop and operate highly sophisticat- gic-line of behavior, based on logic, which is to "an economic miracle" in our country. ed technological systems is endangered. relatively simple for the masses to under- By cooperation with a number of other It is not sufficient to implement a mere stand, and certain state policy. CIS countries, Russia has accumulated a set of medium-range programs to realize the MILITARY PARADE 1994 MAY C JUNE 1 AC001 FIRST LINE accumulated potential. A consistent national industrial policy is the formation of civil society and a new democratic statehood. required, representing a strategic line of the state, entrepreneurs Russia can compete on a par in the world markets of aviation, and trade unions, supported by most of the society and aimed at rocket and space technology, ship-building, machine-tool building, The national goal of Russia's scientific and technological devel- opment could be formulated as a market-based reform of the national innovation system, capable of guaranteeing the use and development of the accumulated potential of high technologies and services, required for economic growth based on the promo- tion of higher living standards and a better quality of life, on the competitiveness of our domestic industry, resource conservation and environmental protection. forming competent and mainly self-developing organizations - the heavy power-plant engineering, etc. In many cases it is important for major forces of productive economic activities in a market economy Russia to penetrate the world markets in cooperation with its strate- and gradually ensuring Russia a worthy place in world markets gic foreign partners, i.e. those companies and financial-industrial (including, above all, our own) and integrating Russia, on the most groups which stand for equal and mutually beneficial cooperation. advantageous terms, into regional and global telecommunication Russian rocket, space and aviation industries may become a and transportation systems. kind of "driving forces" to give impetus to a wide complex of associ- Russia must adopt a national industrial policy, which could serve ated technologies. It implies, first and foremost, development of as a genuine basis for national accord and contribute to stability in super-fast railway transport, automobile industry, electronics, instru- “Military Parade” • Electronintorg ltd. AVA Multimedia Publishing Group Members of the Government of the Russian Federation took part in the solemn flag-raising ceremony on the newest destroyer "Besstrashny", built at the Northern Shipyard in St. Petersburg. First Deputy Defense Minister of Russia Andrei Kokoshin also visited the Baltic plant, where the construction of the nuclear missile cruiser "Peter Veliky" nears its completion. MILITARY PARADE 1994 MAY C JUNE 2 AC001 ВОЕННЫЙ ПАРАД ment making, etc. These trends should be among the state's top priorities. The state budget pattern and system of state benefits and privileges should be formed according to these priorities. Large-scale pene- tration into the world markets of industrial and particularly research- intensive products is extremely difficult and requires persistent and long-term efforts in economics and politics. Activities on the interna- tional scene should also be aimed, inter alia, at the achievement of this goal. Matters are also complicated by the fact that Russia's research- intensive potential is concentrated primarily in the defense sector and that one should therefore simultaneously take into account the effect of several factors. and diversification programs with state defense contracts and the Some factors concern the critical situation in our defense indus- implementation of a long-term arms and military hardware develop- try, caused by the slashing of government contracts for arms and ment program. military hardware in 1992, which amounted to 67-68%, as well as A great deal depends in this respect on the development in the the parallel processes of conversion, diversification of production near future of a market mechanism for the realization of conversion and transformation of ownership forms. Recently the pendulum of and diversification programs, including, inter alia, the stimulation of the Russian industry swung from "excessive militarism" in the oppo- demand. The solution of this problem envisages, along with some site direction, showing extremes, which are inherent in Russian other measures, provision of the solvency of the state customer, who national character. Massive efforts are to be made to provide an will meet in turn the interests of state consumers such: as passen- optimum in this sphere. gers, telephone subscribers, entrepreneurs in the delivery business, The Ministry of Defense does not play a leading role in the elab- etc. oration and implementation of conversion programs. However, it is Therefore it would seem that money allocated to conversion pro- vitally interested in enterprises producing certain high-technology jects should be granted to a larger extent to particular customers “Military Parade” • Electronintorg ltd. AVA Multimedia Publishing Group and research-intensive products, maintaining their high technologi- engaged in the development of a specific element of infrastructure. cal level and retaining their skilled personnel. The availability of a suf- In all industrially developed countries the state assumes responsibil- ficient number of such enterprises will be a major contribution to the ity for the development of infrastructure (communications, transport, deterrence from any large potential military aggression. Besides, power engineering). This is one of the vital prerequisites for a pro- great importance should be attached to the linkage of conversion ductive use of conversion investments. It is impossible to achieve a MILITARY PARADE 1994 MAY C JUNE 3 AC001 FIRST LINE modern efficient economy and industry without developing the infra- conservation and environmental protection. To achieve it, we must, structure. In addition, conceivable development of Russia's infra- first and foremost, accelerate the elaboration of normative acts, in structure performs a political function: it helps maintain territorial order to itemize, establish and specify the rights of owning, using integrity of the country and provide its social and cultural homo- and disposing of the results of scientific and technological activities geneity. for the previous period, build up a mechanism for the enforcement In present circumstances, we require a concerted mechanism of legislation on intellectual property and establish an information “Military Parade” • Electronintorg ltd. AVA Multimedia Publishing Group for the implementation of conversion programs and their orientation infrastructure for the conversion and privatization of state enterpris- toward the State Program of Conversion of the Defense Industry, as es. well as social consensus on the national goal of Russia's scientific Meanwhile, we must complete as soon as possible the drafting and technological development. of a law on state scientific and technological policies, in order to In the most general terms this goal could be formulated as a guarantee the integrity of a law-based regulation system, governing market-based reform of the national innovation system, capable of the organization and state support of research and development, the guaranteeing the use and development of the accumulated potential realization of scientific and technological achievements,