R&D Contracts in the Soviet Union

As the Soviet economy recovered from WWII devastation, economic officials struggled to design better incentives for promoting rapid technological progress in industry. One such effort established model contracts for R&D work. Central planners hoped that these contracts would provide more incentives for scientists and engineers to develop and implement new technologies (See Stanford paper).

Model R&D contracts, however, never became an effective tool for promoting industrial innovation in the USSR. When viewed in contrast to a more radical reform, a "socialist license," the limitations of model contracts become more obvious.

Socialist licensing was proposed by an official at the Soviet patent office (State Committee for Inventions and Discoveries), an agency whose top management came from the military-industrial complex. Such licenses would have given R&D organizations greater financial benefits from new technologies by allowing them to collect licensing fees from cost savings and quality improvements.

Economic officials, however, rejected socialist licensing, viewing it as a challenge to the Communist Party's central planning authority. They settled for the more limited R&D contracts, which primarily affected institutes in the educational ministry (MinVuz) and Academy of Sciences, linking them more closely to industry, especially to facilities in the military-industrial complex.