timate test is survival in the market. Conversely, 

 a Soviet organization may meet its plans and be re- 

 warded but be less profitable and innovative than 

 other organizations. It may underfulfill its plans 

 but be more efficient than other organizations. In 

 American business evaluation rests largely at the 

 bottom line: profit in the market. In government 

 there is no comparable bottom line. To a large ex- 

 tent, it is the appearance of success that counts, 

 much as in the Soviet environment generally. 



Soviet criteria have, then, an artificial quality. 

 Though several economic levers, such as cost, price, 

 and profitability, are used, they become transformed 

 essentially into administrative levers. There is al- 

 so no acceptable criterion of fulfillment, no entire- 

 ly satisfactory measure of research and innovative 

 output. The economic effectiveness of proposed R&D 

 is calculated mainly to award bonuses rather than to 

 decide whether to undertake the R&D in the first place, 

 Decisions regarding evaluation and incentives, more- 

 over, are taken predominantly on the basis of planned 

 or estimated economic return, not on real results and 

 savings. The link between economic benefit and bonus 

 awarded is tenuous. Though calculations of the ac- 

 tual economic return are, in principle, to be made 

 following the application of R&D results, they are in 

 practice rarely computed or recorded. The quality 

 of planning and performance are judged only in terms 

 of the plan itself; the planned targets become the 

 evaluative criteria. Hence, a real need exists to 

 build evaluation and adaptation into the Soviet plan- 

 ning and assessment process. 



In sum, both countries have made progress in broad- 

 ening and refining the criteria for planning and man- 

 aging R&D. There are still difficulties — the uncer- 

 tainties inherent in the R&D process; the lack of gen- 

 erally accepted methods of evaluating the results, 

 effects, or benefits of R&D; gaps in information; 

 loopholes in procedure; the growing complexity of R&D 

 projects. American and Soviet decision makers alike 

 are reaching for more sophisticated analytic tech- 

 niques to improve planning and resource allocation, 



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