Finally, there is one incentive program that mer- 

 its special mention because it aims at stimulating 

 the interests of researchers, design engineers, and 

 producers alike in the entire research-to-production 

 cycle, in the economic aplication of R&D, and in the 

 reliability and performance of new technology. The 

 source of this program is the Fund for the Creation 

 and Introduction of New Technology. At industrial 

 plants, this fund is generated through deductions 

 from the cost of production amounting to 0.2 to 1 

 percent of the wage funds of industrial production 

 personnel. At research institutes and design bureaus 

 these funds are specially provided for in their bud- 

 gets and range from 4 to 10 percent of the annual 

 wage fund. Enterprises retain 25 to 50 percent and 

 R&D facilities retain up to 50 percent of these funds 

 and divert the rest into centralized incentive funds 

 at their respective ministries which are used to re- 

 ward work on especially massive and important pro- 

 jects. 9 



The size of bonus awards depends on the annual 

 economic savings due to technological innovation and 

 is determined on the basis of the scale presented in 

 Table 11-1. Staff members of research institutes and 

 design bureaus can claim 30 to 50 percent of the bo- 

 nus, technology developers 20 to 35 percent, and pro- 

 duction workers 25 to 40 percent. Ninety percent of 

 the incentive funds should be used to reward those 

 who directly participate in the work and 10 percent 

 should go to those who assist in innovation and util- 

 ization. For completion of projects ahead of time, 

 the size of the bonus is increased by 25 percent. 



Interesting features of this system are (1) the 

 association of rewards with results regardless of the 

 organizational affiliation of the participants, (2) 

 the flexibility intended by the centralization of a 

 large share of the fund, (3) the rigid and somewhat 

 arbitrary character of the shares of bonuses as a 

 function of the stage of R&D, and (4) the reliance on 

 the ubiquitous measure of "economic return." The un- 

 reliability of this measure, the decline in the bonus 

 share with rising benefits, and misapplication of 



195 



