INTELLIGENCE COMMUNITY RESEARCH CAPABILITIES ON SOVIET HIGH TECHNOLOGY INDUSTRIES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85-01156R000100070012-7
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 5
• Document Creation Date: December 21, 2016
• Document Release Date: July 14, 2008
• Sequence Number: 12
• Publication Date: August 19, 1983
• Content Type: MEMO

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The Director of Central Intelligence
Washington, D.C. 20505
National Intelligence Council
NIC #5451-83
19 August 1983
MEMORANDUM FOR: Deputy Director for Intelligence
THROUGH: Chairman, National Intelligence Council
FROM: Maurice C. Ernst, NIO for Economics
Jan P. Herring, NIO for Science & Technology
SUBJECT: Intelligence Community Research Capabilities on
Soviet High Technology Industries
1. Intelligence Community research capabilities on Soviet high
technology industries are grossly inadequate. What capability exists is
mainly in the CIA/DDI. Unless these capabilities can be increased,
intelligence support for export control policy and the ability to assess
the potential impact of new and evolving technology on future Soviet
weapons systems will be seriously degraded.
2. A thorough understanding of the Soviet and East European high
technology industries, including microelectronics, computers, telecommuni-
cations equipment, scientific and industrial instruments, special chemicals
and nonferrous materials, numerically controlled machine tools, and
robotics, is necessary to assess the rate of modernization of the Soviet
economy, and especially Soviet capabilities for producing modern weapons
systems. These industries produce critical components and materials for
nearly all modern weapons systems, and their role is rapidly increasing.
In many cases, the greater part of these industries' production is used for
military purposes; indeed, their links with weapons production are so close
that the Soviets treat these industries bureaucratically as being part of
the defense complex. Without the rapid development of these industries,
the USSR will not be able to keep up with the US and its Allies in the
development and production of sophisticated weapons; reliance on a brute
force approach as in the past will no longer suffice.
3. Detailed technical knowledge of these industries also is essential
to intelligence support on export controls. Since weapons and their com-
ponents are all embargoed, nearly all export control issues are concerned
with products and technologies which are used to produce weapons, and these
products and technologies have come primarily from the industries in ques-
tion. Recent Soviet development of these industries has been possible
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thanks largely to massive imports of Western equipment, technology, and
know-how, through both legal and illegal channels. Moscow has full access
to the products and technology of the high technology industries in Eastern
Europe and because of this relationship the level of high technology in the
East European countries is equally important to that of the USSR itself.
4. To deal with questions such as these, the Intelligence Community
needs information on critical elements of each industry: technical level
of new technology; R&D projects; production equipment and technology;
costs; industrial strategy; intra-CEMA cooperation; and use of. legally and
illegally obtained Western products, technology, and know-how. These
aspects of high technology industries need to be analyzed in an integrated
manner so as to obtain a clear picture of how rapidly Soyiet capabilities
are changing and what are the forces behind these changes. The future
quality and reliability of Soviet defense production must be analytically
assessed.
5. These critical Soviet and East European industries are not being
studied in a systematic fashion anywhere in the Intelligence Community.
There is expertise in a variety of places on aspects of these industries,
and from time to time this expertise is mobilized to address particular
issues on technology transfer, export controls, or the characteristics of
weapons systems. However, no one is responsible for integrating the
analysis of all aspects of these industries. Furthermore, without such
analytical leadership, the capability to conduct such analysis is eroding
and a fairly large body of IC collection resources is being expended with-
out good analytical collection guidance. This negative trend exists
despite the greatly increased emphasis on the technology transfer problem
and the massive increase in the volume and sophistication of Intelligence
Community collection and production on this problem.
6. Historically, production capabilities in Soviet and East European
high technology industries were covered by analysts in ORR, and later in
OER, while R&D for these industries was done in OSI. This effort slowly
eroded during the period of detente; more recently it has been further
weakened by several developments:
o After the DDI reorganization, the responsibility to follow these
industries in the Soviet Union went to SOYA, but without the
necessary positions or people. SOVA does research, inherited from
OSR, on Soviet military industries, but so far has done little on
the high technology civilian industries.
o Several of the former OER industry analysts went to the Technology
Transfer Center and continued to respond to export control ques-
tions much as before, but have had little or no time to do basic
research on the industries themselves.
o The expansion, first in OSI, then in OGI, of the effort on
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international industrial competitiveness, which gives particular
emphasis to Japanese high technology industries also has diverted
positions, time, and expertise away from Soviet Bloc industrial
work.
Several experienced analysts retired and were not replaced.
o Responsibility for the East European high technology industries
went to EURA after the reorganization, but that office has neither
the positions nor the expertise to do the job. Consequently, this
account is being covered incidentally by analysts in other units,
or not at all.
It has become increasingly apparent that research on Soviet high technology
industries is not taking place. There have been no DDI research products
on these topics in the past two years.
7. The IC's current efforts to produce an NIE on Soviet military S&T
(NIE 11-12) has been adversely affected by this inadequate research base.
The most. important key technologies that affect future Soviet weapons per-
formance are those that are developed in the microelectronic and computer
sectors. Soviet capability to actually produce and maintain the future
high tech weapons will depend on Soviet progress in their production equip-
ment and instrumentation sectors. The IC's analytical resources to address
these important industrial sectors are so sparse that it often takes three
to four times as long to produce the needed NIE inputs as it should. More
importantly, this estimate is the one IC input that DoD must have in their
current long-range procurement planning cycle to ensure that current US R&D
decisionmaking is relevant to the future Soviet threat.
8. The extent and importance of this problem also was evident during
the discussions in preparation for a NATO meeting attended by the NIO for
Economics dealing with the NATO work plan on economic topics. To help
buttress the ad hoc analysis done in COCOM, the US wants the NATO Economic
Committee to sponsor a series of studies-on Soviet and East European high
technology industries, including the role of Western goods and technology
in their development. The ball is entirely in our court, since the
Europeans have very limited research capabilities. Unfortunately the best
the Intelligence Community can do is produce a study next spring on the
computer industry and even this will require assigning a senior technology
transfer analyst full time to the task. A study on microelectronics can
perhaps be completed next summer, thanks to an external contract by the
Technology Transfer Assessment Center, but the Community's top expert on
Soviet microelectronics is currently working on Japanese and European
industries. The long waiting period for even a single study takes much of
the steam out of a US initiative to which most NATO countries are lukewarm
at best.
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9. A solution to this problem can only be found within the DDI.
Other components of the Intelligence Community can help marginally, but
have never taken on this particular responsibility. Although we are not in
a position to recommend any particular solution, any solution adopted would
have to take into consideration the following:
o The need to study high technology industries in an integrated
fashion.
o The need to know the technical capabilities of the high technology
industries in Western countries (including Japan), as well as
those in the USSR and Eastern Europe.
o The practical impossibility of developing an in4ependent expertise
on East European industries, given the scarcity of needed experi-
ence and skills.
o And, to support the above analyses, the need for in-depth research
on Soviet and East European industrial publications, as well as
use of classified intelligence sources.
In practical terms, responsibility for these industries could be in SOVA,
in the OSWR's Technology Transfer Center, or in OGI. In any event, the
three units would have to work very closely together. An alternative would
be to create one international industrial assessment center to support all
of. the DDI; it could be located in either OGI or OSWR.
Maurice C. Ernst
an JP.?Herring
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NIC #5451-83
19.August 1983
SUBJECT: Intelligence Community Research Capabilities on
Soviet High Technology Industries
DCI/NIC/NIO/ECON:M.Ernst:bha(19 August 83)
Dist:
Orig - DDI
1 - DDI Registry
1-DCI
1 - DDCI
1 - ER
1 - D/SOVA
1 - D/OSWR
1 - D/OGI
1 - NIO/USSR-EE
2 - NIO/S&T
1 - C/NIC
1 - VC/NIC (H.M.)
1 - VC/NIC (C.W.
2 - NIO/Econ
/-S6)b.1
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