The Soviet Union was a scientific powerhouse. Since its collapse, however, government funding for research and development has plummeted. Can foreign companies give Russian science a way out?

Once one of the jewels in the crown of Soviet achievements, Russian science has endured over a decade of savage budget cuts, demoralization and the so-called "brain drain."

Faced with a precipitous fall in both funding and prestige, many talented Russian scientists have chosen to take their expertise elsewhere, and, of those who stayed in Russia, many opted out of science in favor of more lucrative ventures. Some have fared well – leading russian tycoons have high degrees in science and mathematics – while others have been reduced to selling coffee or shoes or keeping low-paying jobs in academic institutions.

But experts say the brain drain has slowed in recent years, and now there is a reverse phenomenon – many Western high-tech corporations are heading in the opposite direction, setting up valuable research links and projects with Russia’s scientists and engineers.

Russian technological expertise is still highly regarded and companies such as Boeing, Intel, Siemens, General Electric and many others have already come to tap the country’s rich vein of scientific potential.

Some hope that Russia’s ailing science infrastructure can be the base of a world-class center of high-tech research and development once again.

"I think Russia’s scientific expertise is one of Russia’s greatest assets," said Sergei Kravchenko, Boeing’s vice president in Russia. "It’s one of the country’s key assets that could contribute to the success of the Russian economy."

The aviation giant was one of the first companies to seize the potential of Russian scientists, having set up their first research development center in Moscow in 1993 and now employing more than 350 scientists and engineers working in seven Russian cities.

"I can show you our latest, most advanced planes like the 777 and point out the parts contributed by Russian expertise," he said. "Carbon brakes, aerodynamic improvements on wings, solutions for noise reduction – they’re all proof of the quality of the work done by our teams in Russia."

He added that the projects outsourced to Russian engineers were of a high-profile nature, and not just chunks of research thrown abroad as an afterthought.

"These are at the leading edge of our research, and we believe we are working with some of the best mathematicians in the world," he said, adding that at any one time the company was in co-operation with "15 to 20" of the country’s top research institutes.

The technical prowess of Russian scientists aside, Western companies outsourcing research and development to Russia are of course attracted by the financial benefits.

With Russian scientists earning an average of less than $100 per month, or up to 60 times less than employees in similar positions in developed countries, Russia offers a pool of scientific labor at least as qualified as their Western counterparts at a fraction of the cost.

The high-skill, low-cost paradigm has also satisfied Intel.

Like Boeing, the computer-technology firm has also been cooperating with the Russian research and development community since 1993 and now has over 600 employees in three research bases in Moscow, Nizhny Novgorod and Sarov.

At the end of last year, Intel’s CEO gave the operations his vote of confidence, announcing plans to bring the number of staff employed on research and development facilities to 1,000 people.

Alexei Odinokov, director of the Nizhy Novgorod laboratory, said that Russian mathematicians were showing the benefits from the legacy of rigorous Soviet education.

"I think a different culture developed behind the Soviet Union," he said. "They know a lot more about the fundamentals because they spend so much time studying the basics and really understanding fundamental algorithms, rather than simply memorizing them. This means they can prove much more creative."

Underlining that "this is about more than offshore software development," Odinokov said that, among the technical teams employed by Intel in Russia, is one group of 30 researchers devoted to developing frontline architectural solutions in advanced fields like video processing.

Intel’s activity is one example of a "stand-alone" project with the firm employing workers directly at its own installations.

But Russia’s hard-hit scientific research institutes have also been linking up with foreign firms. The most successful institutes get up to 25 percent of their income from foreign sources, be it grants or private contracts.

Amid the general chaos of post-Soviet science, one of the best adaptors has been the Kurchatov Institute, a major research center under the Soviet rule. Originally established in 1943, it was a major base for Russia’s nuclear program, but now incorporates private and public entities and a technology park and has cooperative ventures "with every major country, in every field you can think of," according to its president, Yevgeny Velikhov.

The Institute has over 5,000 scientists under its umbrella, working in nuclear energy, materials, medicine, laser technology, electronics and other fields.

"The past decade has been very tough for Russian science and for the Kurchatov Institute," he said, "But we have survived probably better than most: Firstly, because we were already one of the leading institutions and, secondly, because we quickly gained an international profile."

Velikhov said that interest from foreign companies in Russian technology has been growing for some time, but even at the Kurchatov Institute, there are some words of caution for those promoting Russia as a research-and-development paradise.

"I think a more realistic view of what is happening is emerging on both sides," said Velikhov. "Earlier, everyone thought Russia’s great scientific minds could be switched over to making products and innovations for the world market. Now we know there are difficulties in retraining people who might have been largely divorced from the latest scientific innovations."

Under Soviet rule, the importance attached to the country’s nuclear, space and defense programs meant that science and scientists were given relatively lavish funding and had access to the best equipment. That ended with the fall of the Soviet Union.

Whereas before, scientists’ wages were much higher than average, they now earn more than 30 percent below average, according to official figures, putting them roughly on a par with those working in the impoverished arts sector.

Investment in research and development has declined rapidly in recent years.

Irina Dezhina, a leading researcher at the Institute for the Economy in Transition, has studied the difficulties that Russian science has faced in the years since the end of the Soviet Union.

She said that there is a great deal of misunderstanding about the "brain drain" phenomenon.

"The brain drain away from Russia was not really a disaster," she said, estimating that about 10,000 to 30,000 scientists left the country, far short of the 200,000 given by government figures.

Russia probably lost about half of its scientific personnel of 800,000, she said, but the most serious outflow was of those scientists who decided to remain in Russia, but took up new careers in different professions.

"The brain drain to other countries was more of a political issue, because it is obviously a case of transferring expertise directly to another country."

Some bemoan that the work of multinational companies is a similar phenomenon.

Vadim Tsirenchikov, of the Russian Academy of Sciences’ Institute of Europe, said that Russian science was experiencing what he described as the "hoover effect," with the skills of Russian experts turned into cheap resources whose work was in many cases only short-term.

"Russia is being turned from a state that fails to properly use its scientific potential for the benefit of its own citizens into one that does it very well, but for the interests of other countries," he said.

There is also the obvious danger that foreign funding is more volatile and much more subject to changes in firms’ global priorities.

But Dezhina is much more upbeat.

"Of course these big companies don’t come here out of charity," she said, "But the benefit is mutual. Russian scientists get to work on frontline technologies, they might get money for new equipment, and they learn how to gear themselves better towards the market."

Many of Russia’s scientific institutes, she said, have not yet learned how to attract private money, either from Russian countries or from abroad.

Whereas, in the United States, private money funds 70 percent of research, in Russia the figure is less than 20 percent-.

Yevgeny Vinogradov, director of the Institute of Spectroscopy, said his institute had worked with Western European companies, producing solutions for medical equipment.

"In the past 10 years, we lost almost all our of our most talented and experienced scientists above the age of 30, but, unlike many of the other institutes, we’re still here. And, in terms of numbers of research staff, there has only been a small reduction." he said. "We’re lucky that we work in a very specific area of science with strong real-world applications."

But many other institutes have ceased to function altogether, and others have seen their staffing levels decrease.

And despite talk of Russia’s potential to become some kind of high-tech superpower, there may be problems on the horizon. The country has a large amount of latent expertise, but is the requisite talent still being generated?

"I think the universities are losing a lot of high-level professional teachers, and I’m not sure the situation is really improving," said Boris Babayan of the Moscow Center of SPARC-technology, a company founded together with Sun Microsystems way back in 1992.

"Many students have turned to business and economics. There is always the danger that Russia cannot sustain the same level of technical expertise that it is rightly famous for," he said.

But even if this is true, Russia is still getting some serious votes of confidence from international companies.

United Technologies Corp. (UTC), a U.S. group of companies active in a wide range of technologies, has 25 joint projects, including the development of the advanced RD-180 rocket engine.

"It is one of the world's most advanced liquid-fuel rocket engines, and it is produced in Russia, by Russian engineers," said Richard Brody, UTC’s president in Russia. "We think it has a great future, and its technology has many potential applications, both in Russia and the West."

He said the company had already invested $400 million in Russia and saw the country as "one of the most technologically advanced countries on earth."