As Russians anxiously watch the sliding price of the rouble, the rest of the world watches the Russian economy wondering if it will implode. Faced with a collapse in oil prices, sanctions from America and the EU and a ban on food imports from the west, Russia is facing a straitened future.
Higher prices for food and consumer goods are unpleasant for Russian citizens. But the real damage to the country’s economy may come from the effect of sanctions on advanced medical and engineering equipment. If the ban continues and aging instruments are not replaced, Russia will have to rely on plan B — their own technologies.
The thing is, there’s a small problem with plan B. There is precious little home grown high tech in the country, especially in advanced engineering, medicine and biotech. This is not a new development. It was a similar scenario 24 years ago, at the final collapse of the Soviet Union. More to the point, it was like that throughout the Soviet period.
The Soviet Union had no shame in copying concepts and, sometimes, entire products from the “rotting west”
From the 1940s at least, Russian innovation relied heavily on foreign blueprints. Of course, there were notable exceptions, say, Kalashnikov’s AK-47. But for the most part the Soviet Union had no shame in copying concepts and, sometimes, entire products from the “rotting west”.
The list is legion. There was the Vyatka, a Soviet version of the Vespa, that stole everything from the Italian brand, from streamlined design down to a five-letter name (Вятка) starting with V and ending in A; the Tonika, an electric guitar based on the Fender Jaguar that was generally reckoned to be unplayable; the Buran spacecraft, the Soviet answer to the US space shuttle that only ever made one flight; and the grimly unentertaining Sea Battle arcade game, modelled on the Sea raider submarine arcade game machine made by Midway, manufacturers of Space Invaders and Pac Man arcade consoles.
Among the first and most egregious borrowings from the west was the development of the Soviet atomic bomb programme. The USSR detonated its first A-bomb, codenamed First Lightning, on 29 August 1949. As American analysts noted, its design was highly similar to the Fat Man plutonium bomb that the US dropped on Nagasaki four years earlier. That’s because blueprints from the American programme had been supplied to Moscow by Klaus Fuchs, a promising physicist and a Soviet spy in the Manhattan Project. Yuli Khariton, the designer of the Soviet bomb, noted that the USSR was working on its own design when the copied blueprints arrived.
The Soviet A-bomb design was ditched in favour of the American model, saving at least two years of R&D
However, the Soviet design was ditched in favour of the already-tested American model, saving at least two years of R&D. Fuchs, who was also instrumental in providing the Soviet Union with engineering drafts of the US H-bomb, was not working alone. Kim Philby, then chief of British counterintelligence, and Julius and Ethel Rosenberg, executed for espionage against the US in 1953, were also involved in the A-bomb project. Former Soviet leader Nikita Khrushchev wrote in his memoirs that the Rosenbergs in particular “provided very significant help in accelerating the production of our atomic bomb”.
As the arms race waned in the 1980s, stealing and hardcore espionage became less necessary. In space technology for instance, American experts stated that there were no fundamental differences in design, capability or function between the US Space Shuttle and Buran. Both spacecraft were virtually identical in shape and size, with the same delta wings, vertical tail structures, cargo bays and payload capacities. Even the paint job, white with black trim, was much the same. However, as a lot of engineering information on the American shuttle was unclassified and open, it was no longer a question of spying, just a matter of knowing where to look for research.
The true motive of Russian venture capitalists, warned the FBI, was to steal classified technologies
This inclination of Russians to save time and cut costs on R&D by using someone else’s blueprints is not forgotten and fresh allegations still surface from time to time. Last year, the FBI's Boston outpost issued a warning to Boston-area technology companies and research facilities that partnership with Russian venture capital firms might cost them more than they realise — their intellectual property. The true motive of Russian venture capitalists, warned the espionage agency, was to steal classified emerging dual-use technologies.
The FBI’s stance was triggered by their monitoring of the Skolkovo foundation, a Russian state-funded high-tech hub on the outskirts of Moscow. Their claim was not based on direct evidence of a new “venture-tech” espionage model but rather on Skolkovo's track record of corruption and lax intellectual property enforcement, and the sudden emergence of joint partnerships between Skolkovo and a number of US high-tech companies.
It is quite obvious that Russia does not have a great reputation when it comes to technological espionage. It also goes without saying that it is not the only player in the field as the recent cyber attacks on Sony attributed to North Korea have dramatically highlighted. Across the world, China is also busy gathering political, military, corporate-strategic and scientific information. Countries like Russia and China conduct technological espionage to bridge the technology gaps within their population. Those gaps can be explained by the legacy of a centralised innovation system that arises by default with a centralised government.
Technological processes run by administrators doesn't encourage the disruptive technologies which lead to significant leaps forward
It should be said that there are some advantages to a centralised approach to innovation. For example, research can be easily planned and systematised, and inventors are safe from entrepreneurial failure; it’s impossible to go bankrupt if funding is not dependent on commercial success. However, central planning and the idea that the future can be directed according to, say, a five-year plan, is the inherent weakness of such an approach. Technological processes run by administrators usually leads to the improvement of the existing technologies. But it doesn’t encourage the disruptive technologies which lead to significant and unpredictable leaps forward.
The path ahead for Russia doesn’t look promising. A falling economy, continued sanctions on technologically advanced products, a few local alternatives and stunted innovation will create a long-term problem for the country. Warnings from the FBI will sustain fears in the startup and investment community about working with companies from Russia.
Is there a way out? In the last couple of years, the Russian government has come up with a whole set of incentives and specialised funds for spurring development in the high-tech sector. However, the absence of an innovation culture and early stage investment funds, together with the dominance of a centralised approach, are a drag on growth. And the geopolitical tensions abroad, coupled with a wave of new patriotism and anti-western propaganda at home, is pulling the country increasingly towards a closed, controlled system, arguably not that different from the old Soviet one.
The technological capability of the USSR was famously poor. But if Russia’s relations with the west continue to ossify, the country may soon turn back to supporting indigenous companies through the provision of imported intellectual property the “old-fashioned” way.
Text: Olga Shvarova