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conversion program, which has funding of about $80 million annually, was having difficulty attracting good proposals from within the Minatom complex. Of special concern is the lack of attention to the development of long-term customer bases in parallel with the development of new or improved commercial technologies.

The overall status of the economy is obviously important in determining the likely success of small firms. In recent months the economic indicators for Russia show that the situation has stabilized and is indeed improving. Clearly, increased world prices for oil have been a major factor in this gradual turnaround. As to the future, there is no reason to believe now that the situation will soon deteriorate.

There was a consensus that technoparks can provide important pathways for marketing the products of research activities. While the position of each firm is rather unique, two general principles concerning technoparks emerged. First, technoparks should have the capacity to expand as new firms are born and old firms find new customers. Second, technoparks should only accept firms that have a reasonable chance for market success. While technoparks can provide secure space, communications infrastructure, and sometimes advisory services, they cannot change the basic technical capabilities and customer orientation of a firm.

Tensions that exist within Russia concerning privatization of technological activities that have roots in government facilities were apparent during the discussions. Many officials and managers within the Minatom complex seem to believe that technologies developed within a Minatom facility should be commercialized by the facility and not handed off to a private firm that has its own profit motivations. Others argue that only through privatization efforts will technologies be brought to the marketplace at an affordable cost without the benefit of government subsidies. Two approaches were cited in attempting to reduce this tension. In Sarov, the All-Russian Scientific-Research Institute of Experimental Physics (VNIIEF) has established a daughter company that serves as a holding company for several granddaughter companies, with VNIIEF retaining from 10 to 80 percent ownership interest in the latter firms. In Obninsk, the Institute for Physics and Power Engineering (IPPE) has spun off technologies to private firms with negotiated agreements concerning compensation to IPPE for its technological contributions. An assessment of the successes of these approaches would seem appropriate.

Another area of major concern was the almost exclusive focus of both the Russian research institutes and the Department of Energy programs on “technology push,” whereby technologies are developed and then customers are sought. No examples were cited of the research institutes responding to “market pull,” or indeed of even consulting with potential customers prior to developing technologies intended for the commercial marketplace. However, the three small innovative firms the Western



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