TABLE 1 Ioffe Institute's Income and Expenses, 1991 and 1995

Income (%)

Expenses (%)







Soviet Academy of Sciences

33 1/3





Industrial contracts

33 1/3




Government grants and programs

33 1/3


Infrastructure (utilities, etc.)



International programs (e.g., International Science Foundation, ISTC)



Scientific materials



example—rarely raises salaries; rather, the additional money covers salaries that have not been paid for several months. On the other hand, even though institute directors may reallocate a researcher's other salary and research funds to maintain some overall equity in pay among employees, ISTC grants are given directly to the researchers and allow only 10 percent for overhead.

Table 1 compares the Ioffe Institute's income and expenses for 1991 and 1995; it provides a stark, and typical, example of the impact of the economic decline in the FSU. In 1991 the institute required only 25 percent of its budget for salaries and was able to devote almost 50 percent of its budget to research. Today, most of the institute's funds go toward salaries and infrastructure, with almost nothing left for equipment costs. The director also noted that, overall, the budget is about 5 percent, in real terms, of what it was in 1991. It is not clear what factors are included in his comparison, but the bottom line is one of severe deterioration. The Kurchatov Institute's director told a similar story: whereas previously 10 to 12 percent of his institute's budget was for salaries and up to 70 percent was for equipment, today 60 percent is for salaries, 30 percent for infrastructure, and almost nothing is available for equipment.

The effect of such a drop in funding for the science and engineering infrastructure is severe: institutes have had to redirect their budgets away from operations, equipment, and facilities to pay what amount to barely poverty-level salaries. There is abundant evidence that the science community, particularly the experimentalists, is becoming technically obsolete.

The impact on science and engineering personnel is equally severe: under such deteriorating economic and social conditions, those who remain in science in the FSU do so with little hope of regaining their former prominence or quality of life. Others have left their fields altogether to work abroad or to develop businesses in banking and other commercial sectors in the FSU. In this environment the threat exists that weapons scientists and engineers will be tempted to emigrate to countries of proliferation concern.

The difficulties faced by the science and engineering communities in the FSU clearly are part of the larger economic situation there, and a recovery of the former is dependent on a strong economic recovery overall. In addition, private industry will have to learn that R &D investment is important for long-term survival and profitability. The FSU's financial problems are compounded by the need for structural change. Some research institutes must shift their emphasis to civilian R&D, while others will have to find resources from nongovernment sources. Some institutes (the Kurchatov Institute and the Ioffe Physical-Technical Institute, for example) have already had some success in doing both, while other institutes will probably have to close. The great challenge for Russia is to handle the transition to a market-driven economy in such a way that the intellectual and physical resources in its science community are not completely and irrevocably lost.

Some of the difficulties confronting the science and engineering communities are a legacy of the years of communist control. As noted in a 1994 report by the Organisation for Economic Cooperation and Development: “in the transition towards a new system, the principal sources of resistance may be the corporatist traditions and the patterns of allegiance which have long structured economic and social life and which are now directed towards maintaining acquired advantages or appropriating new sources of wealth in a context of crisis and penury.”2 Although science and technology were given a special prestigious place in Soviet society, the system also led to a number of significant drawbacks, including:

  • ideological interference with academic freedom;

  • a large and highly distorted research base;

  • isolation from the international science community;

  • separation of research, design activities, experimental development, and industrial production, even among the republics; and

  • an underdeveloped civilian infrastructure (e.g., communications, information, consumables, support services).


Organisation for Economic Cooperation and Development (OECD), Science, Technology and Innovation Policies, Federation of Russia, vol. I, OECD, Paris, 1994, p. 13.

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