though the bonus indicators and decision time frame 

 have been modified recently to make them more hospi- 

 table to innovation, these adjustments have not yet 

 significantly altered the rules structure in favor 

 of technological change. Indeed, the new incentive 

 system itself has become so complex that management 

 is probably more uncertain than before about just 

 what consequences and rewards may be expected from 

 alternative choices. There are still no precise rules 

 to guide decision making. The problem remains one of 

 trying to decide which of the many assigned tasks car- 

 ry the most weight in the minds of one's superiors and 

 must be attended to. In general, the primary success 

 indicators still revolve around the fulfillment of 

 output-related rather than innovation-related tasks. 

 Innovation continues to risk failure to meet the ful- 

 fillment of plan targets for output and brings few 

 rewards for success. Indeed, bonuses for new technol- 

 ogy usually do not compensate for the decline in pri- 

 mary bonuses that inevitably comes with innovation, 

 at least not in the short run. In sum, the special 

 incentive programs -for innovation in the USSR still 

 do not provide a real counterweight to the general 

 incentive structure designed to support current eco- 

 nomic production and technology. The two incentive 

 systems continue to coexist and to contradict each 

 other. 



In the United States as well innovation continues 

 to be a difficult and dangerous business with a high 

 failure rate. Indeed the balance of risk and reward 

 seems to have settled increasingly on the side of 

 constraint as the general rate of innovation fell in 

 the 1970s. The major barriers are still market-rela- 

 ted uncertainties. Increasing uncertainties about 

 government regulatory policies and future rulings al- 

 so adversely influence market behavior and private 

 S&T initiatives. The growing burden of regulation 

 over the past decade, in fact, has perceptibly slowed 

 the process and increased the cost of innovation in 

 several areas. Given these uncertainties, management 

 usually finds alternative investments that can yield 

 a potential return equivalent to that of R&D and at 

 far less risk. Nonetheless, the rewards for success- 



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