Innovation happens mostly in a bottom-up fashion, either on a big scale, the way it's done in Silicon Valley, or in smaller scale, by for example just having th

Innovation happens mostly in a bottom-up fashion, either on a big scale, the way it's done in Silicon Valley, or in smaller scale, by for example just having thousands of independent grocery stores in a given city, each free to experiment with the way they conduct business. In contrast, in soviet states, everything was centrally organized and ran, which meant zero freedom to innovate at the ground level. This resulted in incredible inefficiency, as better ways of doing thing couldn't possibly be invented (unless the bureaucrat in Moscowwho controlled a given sector of the economy had a genuinely good idea, but that was rare). Research, on the other hand, is much more prone to centralization, so it was doing quite well in the Soviets. Hence they ended up with a lot of research, but not that much innovation.