Abstract
Economic competitiveness, and with it the survical of democracy in Eastern Europe, depends in large part on the ability of the region to manage technology for manufacturing exports. Most East European products are now oriented toward civilian and military needs of the former Soviet Union, and cannot now be sold anywhere. The communist system of central planning and soft budgets provided no incentive to manage technology or any other resource. Innovation was hampered by isolation from changes in world markets and technology, and by the separation of teaching, research, and production. Teaching was carried out on schools and universities, research in government institutes, and production in state-owned enterprises. Eastern European scientific and technological infrastructure is oversized, under-equipped, and politicized, but includes a strong nucleus which could be reformed and reoriented towards world markets. This process is beginning in several countries. But public support is lacking, as are funds for long-range investments. Strategic alliances are urgently needed with western firms and researchers with an understanding of world markets.
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