Strategic approach to the production management of innovative production in Russian militaryindustrial complex

Strategic and Enterprise Planning

The article focuses on the current situation in a civilian sector of a military-industrial complex (MIC) as well as the ways of its innovation increase. The undertaken activities of vertically-integrated MIC’s companies are characterized and the reasons of stagnation of the civil production turnout are revealed, mainly in the case of the shipbuilding industry. As the State Program of Armaments is implemented and defence expenditure gradually declines, the lack of a strong civil sector increases the risk of MIC’s stagnating development after 2020. This will lead to the process frustration of the engineering and manufacturing capital assets renewal and launching a new cycle of development of advanced arming samples and defence technology. A number of crucial enterprises-producers of final production develop a strategy and take steps towards its execution to shift to a modern industrial model. However, a problem of creation of a selector's chain that is able to produce the components including high-tech and dual-used goods still remains. The significant import dependence of sectors exerts additional pressure. The author reviews the ways of strategic decisions as well as the best ways to recover the corresponding chains based on the practice of the restructurings implementation inside the holdings and approaches to encourage the innovation. The way of addressing the strategic decision based on advanced personnel of holdings is suggested. Their activity is connected with implementation of risk-based R&D. Established enterprises maintain the possibilities of usage experimental, testing, engineering and manufacturing infrastructure of the parent company the and have connections with potential innovation consumers. They are not burdened with antecedent debts and are able to raise finance on the parent company as well as development institutions on the age and competitive basis. The parent company by dividing the risks with innovators has the possibility of reintegration of such enterprises in midterm and long-term outlook and also the expansion of innovations in the whole holding including the maintenance of technologies’ transfer from the civilian sphere into the defence one and back.