| The reasons were rather simple: lack of motivation which is beyond the innovation in capitalism. The enterprises were part of ministries, and their directors were just managers working for salary. (https://en.wikipedia.org/wiki/List_of_Ministries_of_the_Sovi...) You can imagine state economy composed of 30-40 large corporations, like Walmart or LIDL running every grocery store, or Microsoft being the only software manufacturer. Remember stories of turf wars in Microsoft, between old and new technologies? Same thing was in the entire USSR. Soviet government distributed investments, so you had to convince them. This was possible if you had a lot of political weight. If you managed to get investment funds, your enterprise could not gain extra profit, because prices were regulated, and even if you were more efficient in production and over-produced for high demand, you did not own the extra money. So, the prize for introducing a new product would be just a bonus and probably a state decoration. And it was often not worth the trouble fighting with the higher ranks in the ministry. Another issue was central planning ahead of time. For instance, my father in his research institute would make demand plans for microchips and other electronic parts 2 years ahead (so that if there's more demand, the manufacturers have time to plan and budget for that). This meant, it was really hard to introduce new hardware, and little incentive to try manufacturing new chips. It was much easier to run the enterprise and do the plans as usually. |