Russian evolution

Link-ups with western companies such as Airbus are helping the former Soviet Union’s hi-tech industries to commercially exploit their engineering expertise. Andrew Lee reports.

Technology specialists from EADS, western Europe’s biggest aerospace and defence company, will soon become the latest to set up shop in Moscow, eager to find out what the Russians know.

Twenty years ago, it is very likely that such a journey would have ended in a dark room on the receiving end of some less than polite questions from unsmiling gentlemen in trenchcoats.

Yet last month, EADS and the Russian Academy of Sciences stood side by side to hail a deal for high-level technology co-operation and development. The Franco-German giant will open a technology office in the Russian capital and work closely with the cream of its engineers and scientists to find new avenues of mutual benefit.

The irony is priceless. One of the companies behind the Eurofighter – designed specifically to shoot the planes of the Soviet Union out of the sky – welcomed with open arms to within a few miles of the Kremlin.

Since the collapse of the communist state, technological exchange between Russia and the West has tended to be something of a one-way street and confined to highly specific sectors.

Its nuclear industry has been the recipient of much western technical and financial largesse, for the simple reason that nobody wants another Chernobyl sending radioactive clouds hither and thither across Europe.

Russia’s energy sector has been similarly blessed, its massive natural resources being a prize too good to resist for global giants such as BP.

But the EADS move is symbolic of the growing interest of western technology companies in a potential goldmine of more general expertise in Russia and the rest of the former Soviet Union.

It would also surely attract a nod of approval from those such as the oil magnate Mikhail Khodorkovsky, one of Russia’s wealthiest businessmen, who has often spoken of the need for his country to evolve into something more than a massive repository of raw materials.

This being Russia, however, nothing is ever that simple, and Khodorkovsky probably has other things on his mind.

At the time of writing, he was locked in a Moscow prison cell after being arrested over fraud allegations, the latest move in a long-running power struggle between President Putin and the businessmen who grew rich under his predecessor, Boris Yeltsin.

The arrest caused a run on the Moscow stock market and gave western investors another sharp reminder of the chaos that can break out in Russia – seemingly at a moment’s notice.

It is unlikely, however, to deter those who see the rewards of working with the Russians.

Their technology has for many years struggled against a bad press, stillexemplified in the minds of many by the crash of its ‘Konkordski’ TU-144 supersonic airliner in 1973.

In reality, the country has a scientific research base which is in many respects the envy of many western economies. You are also unlikely to see the type of hand-wringing common in the UK over the ‘skills gap’ created by a lack of highly trained engineers. Under the Soviet system, engineers were respected and well-paid, and many are now eager to put their expertise to use in the wider world.

This is arguably the greatest legacy of the Soviet era to the new Russia. What it has found immensely difficult is adjusting to the market-driven philosophy of the western technocracies.

If the country can only learn to apply the fruits of its research, many in the West believe the sky is the limit. Indeed, a raft of fully-formed technologies are gathering dust on the shelves of the research institutes of the former Soviet Union.

Flintstone, a UK technology commercialisation specialist, does nothing but scour the Russian federation for such opportunities (see sidebar). Its chief executive David Chestnutt is well-versed in the ups and downs of the country’s nascent commercial hi-tech sector. He admitted that the Khodorkovsky arrest was ‘not helpful’, but insisted that the game is worth the prize, especially if you look beyond the sometimes uncertain political scene to the excellence of the technical infrastructure beneath it.

‘The Soviet education system was fantastically good. Its engineers, for example, are of the highest calibre,’ said Chestnutt. ‘What has been difficult for them to overcome is the problem of exploiting a technology commercially; they did not know how to go about it.’

Chestnutt believes the situation is changing, albeit slowly. ‘There are now some big Russian organisations looking at their country’s home-grown technologies, seeing the opportunities and beginning to put money into them.’ Add to that the growing interest of the West, and it would be tempting to think that the Russian well of new technologies could be drained dry within a few years.

That is unlikely, according to Chestnutt. ‘Whatever happens, the range of technologies is so vast that we believe there will be ample opportunities for us.’

Technical universities and specialist institutes abound, providing a research base awesome in both its speciality in particular sectors and the sheer number of researchers focusing on them – 400,000 in 4,000 institutions.

The list is seemingly endless, and named with characteristic Soviet-era bluntness that requires no further explanation – the Institute of Microelectronics and High Purity Materials, the Research Institute of Robotics and Engineering Cybernetics, the Moscow Institute of Electronic Technology.

The St. Petersburg Aerospace Instrumentation University, for example, via its recently-created technology transfer unit the International Institute for Advanced Aerospace Technologies, is stepping up its efforts to promote its technical prowess in areas such as navigation and control systems, aerodynamics and collision avoidance.

There are, indeed, not just institutes but entire cities built around technical specialisation in a particular field. One of the most notable is the former ‘closed’ city of Zhukovsky, a settlement the size of Milton Keynes built around a giant aeronautical research operation.

Aerospace engineering is one of the areas where the West has been quick to recognise the value of Russian expertise, dating from Soviet efforts to keep up with NATO (see sidebar).

The latest EADS venture is partly the result of a decade of growing co-operation between the Russians and commercial aerospace manufacturer Airbus, in which EADS is the majority shareholder.

This year, the East-West relationship moved from courtship to something more serious. In June, Airbus opened an engineering centre in Moscow – its first in eastern Europe. The facility, called ECAR and run jointly with local aerospace engineering group Kaskol, will specialise in disciplines including fuselage structure and stress.

Airbus sent 30 Russian design engineers to Toulouse and Hamburg for special training before starting work at the engineering centre, which it expects to eventually play as big a part in its product development as its more established westernoperations.

ECAR was not this year’s only evidence of the strengthening bond between Airbus and Russia. Last month Aeroflot, the nation’s flag carrier airline – once a byword for backhanded jibes at Russian technical deficiency – took delivery of thefirst of 18 Airbus A319 aircraft destined to join its fleet by the end of next year.

It is the growing links between Russia and EADS – not just Airbus, but other business units such as space systems – that lie behind the new Moscow technology centre.Detlef Mueller-Wiesner, vice-president of EADS’ corporate research centres, said the office was intended to provide a formal structure for the type of co-operation the company has been engaged in with various Russian agencies for years.

‘Russia is a large country with many institutions. On the other hand EADS is a large company. The process of developing this co-operation has sometimes proved a little sticky without a formal way of proceeding.’

The Moscow centre is especially concerned with strengthening the links between EADS and Russia’s multitude of universities and institutes, providing a route through which those from the country’s scientific and research communities can work with the company.

‘It will act like a technology broker,’ said Mueller-Wiesner. ‘In a specific situation we will be able to move very quickly. If we have a need on the table from one of the EADS business units for a particular technology we can bring in the right people from the Russian side.’

EADS insists that it is acutely aware of the sensitivities involved in working in Russia, particularly in not being seen as an external consumer of assets that puts nothing back in.

‘The education level, particularly the theoretical education level, is very high. One important thing to say is that we are not going into Russia because the workforce is cheaper,’ said Mueller-Wiesner. He claimed that a balance was possible that benefits EADS, gives Russian researchers an outlet for their technologies and treats the country’s research community with the respect it deserves.

According to Mueller-Wiesner, a successful relationship depends as much on western companies modifying their attitudes as the other way around. Under its own terms, he said, the old Soviet technology development apparatus operated perfectly well in supplying the society it served – especially its military – with what it needed. The changes have been forced upon it because those needs have changed.

Russia, then, remains an enigma. Dr. Rajkumar Roy of Cranfield University, who took part in the UK engineering mission to the country last year, said that the Russian authorities are well aware of the need to exploit the technological potential at their command.

‘At present international companies are going into Russia, setting up their own groups, doing their own thing and using the labour.

‘That’s not doing Russia any good, because its own companies cannot leverage the country’s technology and go global in the way they would like to.’

It is no accident, said Roy, that Russia’s most successful indigenous businesses are those connected with the extraction and processing of the country’s massive raw materials reserves.

Moving beyond that will mean putting the structures in place to allow an efficient, reliable process of technology development, transfer and commercialisation to occur.

According to Roy, that has as much to do with issues of law, tax and the adoption of international quality standards as with what goes on in the laboratory. Incidents such as the arrest of Khodorkovsky will happen from time to time, he said, but the situation is gradually improving.

‘Five or six years ago doing anything in Russia was very difficult in terms of dealing with problems like their Mafia and all the rest of it.

‘But it is getting better. Basically, the Russians are a proud people, proud of what they have achieved in the past and want to show the world what they can do in the future.’

Sidebar: The material benefits of soviet isolation

Appropriately for a state forged from the production of iron and steel, materials technology is one of the fields in which the former Soviet Union proved a prodigious innovator.

Liverpool-based Flintstone Technologies is attempting to introduce some of the products of Russia’s decades-long research efforts to western markets, and materials have proved the most fruitful area.

‘Materials technology is an area that fitted with our own expertise,’ said chief executive David Chestnutt. ‘There is a huge research base on which to draw. Our business model has been to identify a technology and to develop it in the West as quickly as possible.’

So far, Flintstone’s portfolio of technologies – or at least those about which it will talk in public – is heavily weighted towards materials.

Its list includes: Hardide, a process for creating super-hard tungsten carbide surfaces on steel and other materials; Keronite, which hardens and increases the resistance to corrosion of aluminium, magnesium and titanium; and Firestop, a flame-retardant designed for use with plastics, textiles and metals.

Chestnutt, who has travelled widely in the former Soviet Union searching for such innovations, said the former communist state existed in what amounted to a parallel universe to the technology research complex of western economies, with the same goals but often an entirely different approach to reaching them.

Using the example of Firestop, which had its origins in the Soviet era, Chestnutt said that both the West and Russia had an interest in developing technologies that could prevent fires, especially in aircraft and other high-risk environments.

The West approached the problem by using bromine to create flame-resistant materials. The Russians, working in isolation, came up with the phosphorous-based compound that is the basis for Firestop. This forms a char barrier when exposed to heat, protecting the material beneath it and slowing the spread of fire.

According to Chestnutt, both approaches were effective in their application as fire retardants. ‘They both work, but were the result of different mindsets,’ he said. ‘The Russians were working on their own. There was no sharing of academic papers, no access to what was going on in the West.’

So if the western retardants work just as well, why, other than technical curiosity, should anyone be interested in the Russian variant?

The reason is that bromination is out of favour with regulators, particularly in Europe, and could be the target of restrictions on health grounds.

Flintstone hopes that this may open the door for its bromine-free alternative – whose Russian developers would have viewed the need to satisfy EU legislators as the least of their worries.

Sidebar: When space was the showcase

During the Soviet era, aerospace received the unflinching backing of the authorities for reasons of both national prestige and military necessity.

The Russian space programme, is cash-starved and creaking. Yet it remains a major technological achievement that is still carrying out launches, as the US tries to pick up the pieces of its Space Shuttle project.

While space was the Soviet Union’s technological showcase to the world, its military aerospace industry was charged with the task of ensuring the very survival of the communist state, giving it an urgency of purpose that exposed both the strengths and weaknesses of the system. In broad terms, the Soviet military capability managed to just about keep pace with, and in some areas surpass, its western counterparts.

The process by which individual technologies were delivered to the voracious defence apparatus was, however, highly unpredictable.

Dr. Peter Dickenson of Cranfield University’s School of Industrial and Manufacturing Science, who has studied innovation in high-performance aerospace materials, pointed out that the Soviet regime’s evolution of advanced aircraft composites was different to that of parallel western efforts to develop new materials.

In western Europe and the US technology networks operate along the familiar lines of joint ventures, licensing agreements or strategic alliances. But in Russia, development came against a background of a rigid state command structure at the centre, surrounded by a more ad-hoc group of alliances – some formal, others less so – between various agencies with a common interest in development of composites.

On occasions, the relationship was based on nothing more than one party doing a favour for another. ‘While the rigid hierarchical network predominated, there were significant patterns of formal and informal horizontal relationships, which were essential to short-circuit the rigid bureaucracy.’

Dickenson said the end result was one of contrasting success. Across a broad range of composite materials the Soviet Union’s development lagged behind western aerospace industries by between five and 10 years.

‘Set against this must be the achievements of the networks which made materials for the successful Buran space shuttle, a technological feat matched only by the US,’ he said.