The goal of strategic investment is to stay as one of the major players in the industry. Being the leader is not necessary, but letting the deep core and knowledge in manufacturing to erode is strategic weakness.
Some manufacturers that produced basic sellable goods survived (steel foundries, fertilizer makers)
I mean, sure, many factories were not competitive since they were highly subsidized and faced no competition on internal market. But USSR had an immense R&D potential and engineering education was top-notch.
When the price of a corporation falls below their paper assets it tends to attract A certain kind of investor disinterested in long term value. I’d venture a good number of soviet parts suppliers saw their revenues dry up when their clients were dismantled, it wouldn’t have taken more than a few such links in the supply chain being dismantled to break the entire supply chain given the level of centralization.
One country took the radical/liberalist path, another chose the one that doesn’t tarnish the economy.
As much as I hate libertarians today, in 1990s they did an awesome job.
Don't forget that prior the collapse of the USSR, ukraine was not an independant country from russia, while poland has always been "independant" during socialist times.
The true reason for those who wonder was the fact that ALFA was making electronics for MiG, Su, Tu and for missiles. I had family and friends working there btw.
This was quite a classic move during the "privatisation" in '89-90.
I know this first-hand because it has happened to my country each and every time an US backed president was elect. It's happening right now, they're attempting to sell our only semiconductor company.
The Soviet Union was destroyed from within much the same way the 2010s arab springs/ukraine and more recently also tried with HK.
The Soviet Union collapsed because of massively broken economy. That's just basic science. They exported oil and imported grain. Russia imported GRAIN for gods sake. Then oil prices collapsed. Next? They did nothing and just ate through the resources until they were no more.
And then 'evil liberals/evil west destroying the great country' happened, when finally USSR had no money to pay for the social obligations and for massive military.
This are the undisputed facts, supported by a vast trove of internal documents from the late USSR and first years of the Russian Federations.
A monograph by Egor Gaidar [1] is an excellent source referencing tons of the original documents.
Sorry for Russian, not sure this is available in English anywhere.
I get that it's easier to think that source of our problems is some evil mastermind and conspiracy. But think of the Occam's razor — this is explained much easier by sheer incompetency and stupidity and no checks and balances to mitigate them.
1. https://ru.wikipedia.org/wiki/Гибель_империи_(монография)
Let's remind that full-on opening of the market was not what the west promised, but it's what they pushed for once the reforms passed a point of no return and they wouldn't take "no" for an answer. Propaganda is what won the cold war.
But let’s look at other ex-Soviet countries. Territorial quarrels and dumb nationalism were unthinkable back then. Look at Azerbaijani and Armenians, ethnic Ukrainians and Russians in Ukraine, Georgia...
USSR could've easily continued its existence if it went full "North Korean." Union's army had no problem to force populace to eat grass in case of a complete economic collapse.
I attribute the single most important contribution to Union's collapse to US funding exchange visits for hundreds of USSR's senior officials, and completely nullifying their will to struggle: https://news.ycombinator.com/item?id=24728237
The very same thing has happened to China, and Xi is trying hard to undo it.
His message of absolute committment to, and inreversability of "opening up" don't mean anything to 99% of ordinary citizens.
Whom he addresses these messages to are not ordinary Chines, but elites whom he tries to convince to the best of his abilities to not to drop the ball on him, and the system.
Which was a direct consequence of surreal levels of corruption, incompetence, and double digit percentages of country's GDP coming, and going out of existence annually as a result.
If anybody are to call names, those would've been the most hardcore brezhneviks themselves.
Those resources they ate through -- when were they accumulated? I find it hard to believe that they became a superpower by just coasting on the wealth that existed in 1917.
in 1940 they went toe to toe with the worlds greatest industrial super power (or second greatest - depending how you count) in war and won.
The economic development achieved by the Soviet Union in the first half of its reign was incredible.
They made the best rockets, fighter planes, super computers.... But they never made a TV with a remote control.
That's a regurgitation of a great lie. Krusev indicated in his memoire that economic data of Stalin's years was defying kindergarden level arithmetics, was utter garbage, and he gave few convincing examples of that, and here, I would believe him.
Union's economy saw few ups, and downs during its existence, and those under Stalin, and Breznev were not ups by any extend of imagination.
Do not rely on state propaganda, look at the results
Some facts from Wikipedia: At the opening of operation Barbarosa the Red Army had four to one advantage over the Nazis in tank numbers.
By 1941 lend lease tanks were 6.5% of Soviet tanks, about a quarter of medium and heavy tanks.
Where do you get "up to 40%" from?
Even if true my point still stands.
According t Alex Nove in 1900 there was not a metal lathe in all of Russia. They could de clinker locomotives, but not make a gear box. By 1941 they were out stripping the Germans.
That is the greatest economic achievement of the twentieth century.
(IMO the Bolsheviks were sadistic psychopaths, but credit where credit is due)
Again, you are regurgitating a myth.
I would not doubt the 4 to 1 outgunning of USSR vs. Germany. Indeed Union's army was incomparably materially superior due to decades long total dedication to military buildup, but that does not preclude the fact the industry was still barely going, and that this material advantage melted like butter within first months of war.
"probably" does not cut it.
The lie is the Soviets were bad economic managers. They pulled off the most incredible feat in industrialising their economy in less than fifty years, more liek twenty five useful years.
The millions of starved peasants, slaughtered "class enemies", exiled dissidents.... They were there too. Not pretty, not moral, not desirable, but incredible achievement nonetheless.
I am not sure, how in the context of such a system "efficiency" can be measured. But in raw capacity there has never been anything like it until the Chinese in the nineties and naughties with their own millions of starved peasants, slaughtered "class enemies", exiled dissidents....
The "massive industrial advantage" was nothing not to be expected from the most resource rich country on the planet.
Yet, the country was, by all accounts, from both most staunch communist party sources, and contemporary anticommunists, completely incapable of running during the crisis, and "all in" strategy of manufacturing one gun, one tank, one shell, one plane in massive amounts was a result of desperation, not industrial might.
How is making more tanks, guns, and aeroplanes done on desperation and not industrial might?
I think ideology has gotten in the way of reason!
Yes, by throwing ten million of their own citizens at the problem.
They won because Hitler ran out of bullets before Stalin ran out of targets.
It. was. not at all.
But never could make consumer goods. When the economy had to pivot to a consumer lead one, they found that all the economists with different ideas had been shot....
This is published in English as [1] Yegor Gaidar, "Collapse of an Empire: Lessons for Modern Russia".
TLDR is maybe this [2] write-up of a talk, 8 pages, very interesting.
[1] https://www.amazon.com/Collapse-Empire-Lessons-Modern-Russia...
[1] https://www.aei.org/wp-content/uploads/2011/10/20070419_Gaid...
This can't happen in EU today.
aerospace, energy, semiconductors,
telecom, drugs/biotech
Airbus is absolutely crushing Boeing in terms of quality. Granted, we are woefully behind on the 'space' part of aerospace.
> energy
CERN is anchored to the EU. ITER is anchored to the EU. We are world leaders in wind energy.
> telecom
Except for everyone in the West scrambling to replace Huawei with Ericsson tech.
> drugs / biotech
BioNtech made the first breakthrough on a COVID vaccine.
The EU has many issues, but losing leadership in the sectors you mentioned is not one of them.
Such a hyperbole statement.
Airbus has the edge in the narrowbody aircraft market, especially A321, while Boeing is plagued by 737 MAX problem.
OTOH Airbus is well behind Boeing in the widebody segment. Boeing had 1,464 787 orders as of Aug 2019, 882 of those had been delivered. Airbus had only sold 913 A350. A380 has been discontinued while Boeing can still count on B748 freighter.
Of course 2020 threw a wrench to the airline industry and it remains to be seen how well it will recover post pandemic. Both Airbus and Boeing are affected deeply.
You are right that for now, Boeing is better in widebodies. But let's see Boeing new aircraft program, because currently Airbus is better prepared for the future.
Well, SpaceX caught with the pants down to everyone. Before the revolution of the reusable Falcon 9, the Ariane 5 was a fine reliable rocket.
Sadly, the Ariane 6 design predates the reusable revolution of SpaceX, how ever they are working on reusable Arianes that are similar to the Falcon 9 and Spaceship (https://www.techforspace.com/european-space-sector/european-...).
That's entirely political and nothing to do with the tech. Huawei's tech is arguably better, cheaper (and available now).
If you knew that important people would use your phones you could as well give them for free - easier to spy on them.
Anchored, yeah sure. So you're listing something that isn't in the EU, which is revealing. ITER is entirely irrelevant. It's a pork project that won't result in much. The biggest breakthroughs in fusion will derive from smaller projects, not giant slow-moving projects like ITER. The next 20-30 years of energy generation is wind, natural gas, oil, solar, some hydrogen and nuclear (and primarily only China is brave enough to build that). Fusion will make zero contribution in that time.
> BioNtech made the first breakthrough on a COVID vaccine.
Moderna was just as well positioned as BioNtech, you're more than reaching. Russia and China also have apparently successful vaccines being deployed.
> The EU has many issues, but losing leadership in the sectors you mentioned is not one of them.
That's true in the sense that the EU never had leadership in most fields to begin with.
It is surrounded by EU countries, in a country that is a pseudo-EU member. You're reaching.
> ITER is entirely irrelevant. It's a pork project that won't result in much.
Unless you have a seer's eye, these kinds of claims are baseless.
> The next 20-30 years of energy generation is wind, natural gas, oil, solar, some hydrogen and nuclear (and primarily only China is brave enough to build that)
Agreed and a sad state of affairs
> Moderna was just as well positioned as BioNtech
Which makes Moderna a leader too? It doesn't diminish BioNtech's work.
> That's true in the sense that the EU never had leadership in most fields to begin with.
You literally had to ignore multiple points in my parent comment to even be able to make this claim. Revealing..
Edit: not to mention we are commenting under an article that partly concerns ASML..
Generalising from 40 years of EU history, I have little confidence. The top US and East Asian processor and semiconductor companies all are extremely successful in the marketplace, in addition to consuming government subsidies. Fostering a competitive market has not been the EU's forte. Indeed the EU narrates this funding as a need to address a "market failure" [1]. I feel that this is one-dimensional, bur entirely predictable from the structure of EU decision making.
Just today, at midnight, the EU lost ARM and DeepMind as domestic industries.
[1] https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52...
It raises to prominence after becoming a Google wholly owned subdiary. I have repeated multiple times in other comments that DeepMind's success is at least built on top of Google's tech and capital.
Interesringly, Google's tech infrastructure were blueprinted by a lot of pioneers and two of the most well known are Urs Hozle and Luiz André Barroso both are of Eu descentdent.
There is no evidence that whatever DeepMind did can be done with another EU partner. Or even anyone who is not Google, largely thanks to Larry and Sergey's personal tastes and experience. I doubt Msft or Amazon have the right culture for DeepMind.
The whole alphabet thing was engineered to allow independency. So that, among other things, a more pure research org can work without the ever encroaching of the profit driven hands inside Google. Mind you, DeepMind absolutely put itself above Google, or at least firmly distance itself from Google, GCP once proposed to use DeepMind brand in marketing materials, and was sharply rejected citing "conflicting brand images".
I have no idea whether any of the relevant antitrust official could still stop it.
It lacks motivation, there is no SV in Europe because one cannot pay competitively with SV for top talent when you tax to death. It is a lot easier to become a billionaire from real stuff (not manipulating stock markets or other financial trickeries) in US than in EU, so the smart and motivated in EU move to US; what is left is ... what is left: either less motivated or less smart or less both.
There are a variety of ways to cultivate a domestic industry, govt committees directly investing doesn’t seem like the leading candidate can. Trade barriers and state sponsored industrial partnerships.