First, I want to thank all the experts who have participated in the work of the Military-Industrial Commission. Good work, everyone. Our work in the aerospace industry particularly was plagued by a string of failures. We had six accidents. Russia is a space power. Russian spacecraft have long been exploring space, so for us any trouble in space is invariably a painful blow to our reputation. That’s why the Prime Minister decided to hold a large meeting of professionals in order to find a proper legal format for the Federal Space Agency’s activity.
What are we going to do with the aerospace industry, which is now reminiscent of the Kievan-Rus in its period of feudal fiefdoms? It’s operating at 40% capacity with a lot of redundant functions. It lacks a unified technological policy and is faced with many other problems. On 10 September, we held a meeting with Dmitry Medvedev, after which a Federal Space Agency expert group was formed which decided that we should build a Rosatom-style public corporation. Two more expert groups were created: one at the Government’s Expert Council and the other in Skolkovo. We ended up with different points of view, which gave rise to experiments and research. We ended up with the right decision, in my opinion. It was in many respects based on our study of the expertise of foreign space agencies. I am very grateful to the experts here: they did a great job and didn’t disappoint us.
As far as the Public Council is concerned, we do use it at the Military-Industrial Commission as well. But this is not the Public Council at the Military-Industrial Commission. There’s too much going on there: lots of confidential information, classified files, top secrets, etc. Sometimes they overdo it with the secrecy thing during the competitions and tenders. The Federal Service for Defence Contracts is starting to open this information and make it available to Russian businessmen. Indeed, the subjects discussed there are very complex, so we use the Public Council not directly at the Military-Industrial Commission, but at the Chairman of the Military-Industrial Commission. We have had two meetings so far. The Expert Council is led by Army General Mahmut Gareyev, President of the Academy of Military Sciences, and the Chairman of the Presidium is fairly well-known political analyst, Mikhail Remizov. He, too, I believe, is a member of the Government Expert Council. We had two large meetings here at the Government House. The first was about the tragedy in Krymsk and Gelendzhik. We focused on the prevention of such disasters rather that providing relief to man-made and natural disasters.
Does it make sense to put together a map of hazardous facilities that can result in consequences comparable to the use of weapons of mass destruction if something goes wrong? As a matter of fact, the outcome of this meeting was used at the Prime Minister’s instruction on preventing tragedies like the one in Krymsk.
The second meeting was held a few days ago. It focused on two important and high-profile topics: imports of arms and military equipment. What imports are we referring to? How did the Ministry of Defence, led by Minister Serdyukov, handle this? What things should be under new leadership? What should the extent of localisation be? Who is the subject of these relationships? Should the Ministry of Defence buy equipment on the open market or should the industry take over this business so we have access to transferred technology and can then focus on gaining knowledge that we do not currently have. The second topic was about human resources. Clearly, (I mentioned this today at the Government meeting when we discussed industrial competition) it’s not the tanks, guns or aircraft that compete in the modern world, but corporations with all their resources, capabilities, and expertise.
The subject of corporations is closely connected with an entirely new approach to human resources. The average age of the 2 million-strong work force in the military-industrial complex is 48 years, but you won’t find anyone 48 years old there. They have 20-year olds and 60-year-olds, that's it. There are no middle-aged employees there, same as at the Foreign Ministry: people have left fow somewhere in abroad or joined the business community. The Public Council has developed several proposals, and we will consider them soon. We have made these proposals available to the Ministry of Education and Science, and on 19 December at a meeting of the Military-Industrial Commission we will be deciding on how to retain personnel in the defence industry. What should we do to encourage smart people rather than mediocre students to attend our technical colleges. We need the best people in Russia to work for us. We need professions like designer, engineer, and so on to take on a whole new meaning for young people. That's what we need.
With regard to the Expert Council, we are also looking forward to the meeting on 19 December, where we will report on the establishment of the Public-Private Partnership Council. We want to draft a plan to attract private business into the Russian defence industry. Currently, their numbers are negligible, although there are large corporations that are already working for the defence industry, such as the Military-Industrial Company, which makes armoured vehicles (Russkie mashiny corporation) or a major concern, RTI Sistemy, which is an integral part of the cooperation effort in aerospace defence, which also includes Almaz-Antey, Kometa and RTI Sistemy. And this RTI Sistemy is a private company. But this is not enough; private business makes up 60% of the defence sector in the United States, and we would like to bring this level up to 30-35% in Russia.
There are many questions: how do we bring in people who can turn around this previously closed sphere and implement the national armaments programme, change the rules of the game, give the whole system, which has been neglected for 20 years, a good shakeup and bring in fresh blood? This is particularly important in connection with the establishment of the Advanced Studies Foundation, which will work in defence and security. It’s similar to the American DARPA. Therefore, we will not be able to resolve weapons programme-related issues, if we don’t bring fresh talent into the Russian defence industry. To do this, we must realise that we have to take very serious measures in order to protect our intellectual property. We have to start a totally different dialogue between the state, represented by the Defence Ministry as the customer, and the industry. So that a private business person who takes the risk and invests in R&D understands that his investment will be paid back through production. However, he must have guarantees before he engages in this kind of dialogue. Many other things need to be discussed as well in order to create this environment and involve a powerful, energetic, not-yet-sought-after capital investment in the Russian military-industrial complex, as represented by 1, 352 enterprises. Can you believe it? That’s a huge legacy that we received from the Soviet Union. Each company is different not only in terms of ownership and expertise, but also in terms of its condition. But in general, these are technically backwards operations, which we try to overhaul through the federal targeted programme Defence Development. We will invest up to 3 trillion roubles to get the industry up and running and ready to fulfill complex defence orders. This is a difficult task, because we are trying to solve several issues at once: to field modern weapons, military weapons and special equipment to the armed forces. The second goal is to create an innovative high-tech industry. Third, this industry should be working not only for the defence industry, but also make use of any technology transfer for civilian purposes. We need parallel approaches: one working for defence, the other manufacturing civilian products. This is what we lacked in the Soviet Union. The fourth goal is to train completely new highly skilled employees who understand what it takes to work in today's tough markets. The fifth goal is to find leaders with systemic thinking and universal knowledge, not only in the field of science but also politics, because defence and security are all about big politics.
That's all I wanted to share with you. Once again, I’d like to express my gratitude to the experts and I wish you good luck with your work.
