In 2010 expenditure on technological innovation in Kazakhstan, overall amounted to 235.5 billion tenge, which is only 26.6% of the total innovative cost of enterprises for the purchase of machinery and equipment. This compares to research and development of new products, methods production (transfer), and new production processes, which received only 11.3%.
Such a structure of cost allocation for innovation is characteristic of countries with low scientific potential. In western European countries, 80% of expenditure is allocated for innovation, with more spent on research and development [1].
These show the predominance of the state strategic planning and forecasting in Kazakhstan, as compared to the more pragmatic foreign models.
It is seen from the comparison of approaches that the state, with its inherent functions, is an active subject of the modern market economy: economic, social, administrative, and other similar mechanisms.
- State-owner: generates the sector of public enterprises and national companies, the management of which is part of its
- State-enterprise: participates in national and other high-risk projects, using its existing assets, including public and private partnerships, and manages its own or joint businesses;
- State administrator: coordinates and controls the activities of all economic players, including its own business, and that of the public sector of the national economy; and
- State corporation: creates conditions for acceptable activities for all economic players, directing them to form the Universal Lobar Society or a welfare
Subsequently, the Kazakhstan practice had confirmed the complexity of innovation development and identified inefficiencies in transitioning to an innovative economy as initially elected. Accordingly, during 2009 – 2010 the Government adopted swift action to change this situation in terms of the most critical areas and points of application. A more thorough analysis of the causes and effects impeding economic development was conducted. The failure in the industrial sector was considered to be the main deterrent in transitioning to an innovative economic model. The reason for adopting a new state program of innovative development was based on rapid industrialization, which was originally about implementing more effective ways for the state to regulate innovative processes [2].
To ensure further innovative development of enterprises, the following is recommended.
Commercialization of technologies should be linked directly to the practical application of scientific and technological activities, in order to introduce into the market either new or improved products, and processes and services, that have a positive economic effect.
A systematic approach to commercializing technology will give a significant impetus for a rapid introduction of scientific and technical activities in the economic cycle. This will eventually allow the state to create new jobs, to return to the budget through tax revenue, invest in research and development work, and improve the overall competitiveness of Kazakhstan in the global technology market.
To create a normative legal base for the development of a system for intellectual property and commercialization in the Republic of Kazakhstan, the interests of all stakeholders in intellectual property and commercialization should be taken into account, to ensure investments are stable and secure. This measure will allow research institutions to participate in all forms of intellectual property and commercialization, and likewise for researchers working in public research institutions. As well, it will allow them to manage and own a share of the stocks in an innovative company. This would reduce the risk of scientific unities creating their own intellectual-property based business.
In particular, according to the experience of European countries, state support for the use of the commercial potential of research institutes and universities, stimulates and motivates scientists and institutions to commercialize their knowledge and technology. The continuous transfer of knowledge from the public sector to the private should be developed. It is necessary to arrange measures to recognize domestic patents abroad, develop a system of intellectual property for implementation into the economic circulation, and develop a state system of intellectual property valuation.
It is also necessary to create a system of information exchange - a state created network of institutions for innovative development, to support innovative projects at all stages. As a part of such a system of information exchange, the mechanism of forwarding on information, which promises innovative projects among institutions of innovative development, should be established. An information exchange system should also be an effective tool of “linking" the research and development with the business, resulting in the formation of new companies based on the results of applied research.
To build competencies in the field of technology, a development priority would be to provide commercialization training to staff supporting the commercialization process and their primary beneficiaries.
The development of human resources is required for successful commercialization. Training, exchange of experience, and targeted outsourcing of professional advice will play a central role in creating a sustainable system of technology commercialization in Kazakhstan. In this regard, it is necessary to encourage local experts to participate in various programs that improve competence in the field of commercializing innovation and to visit foreign structures of technologies for best practice in commercialization.
The transition of Kazakhstan’s innovation system from a model driven by the state to a sustainable system driven by the private sector is necessary to reduce administrative barriers and tax incentives, provide access to finance, create innovation clusters, develop the business environment, and to create demand for innovation [3,4].
The reduction of administrative and technical barriers, together with improved access to finance will contribute to the emergence of a large number of innovative companies.
The openness of the domestic markets will lead to an increased access to global knowledge and technologies. In this case, the transfer of advanced knowledge and technologies could be implemented through the creation of an enabling environment and incentive tools, including the following important directions:
- the involvement of foreign innovative companies of small- and medium-sized, and the creation of joint ventures among these;
- the maximum use and attraction of scientific potential from fellow scientists who are successfully working in foreign research institutions; and
- disclosure of foreign patents and licenses with the transfer of advanced technologies to improve the competence of local specialists [5].
In order to better promote Kazakhstan’s high-technology products in international markets, it is necessary to strengthen regular interaction among stakeholders (e.g. the export-oriented high- technology and innovative enterprises and companies; joint-stock company “National Agency for Technological Development”; JSC with their “Damu Entrepreneurship Development Fund”; and JSC with their “National Agency for Export and Investment”).
Today, Kazakhstan functions under the principle of tax legislation unity, which provides a single regime for all businesses, regardless of the innovative component of their products.
At the same time, innovative companies are in need of an unprecedented legal regime that will minimize administrative barriers.
In order to develop possible administrative and tax incentives for innovation, the following actions are needed:
- explore the possibility of developing and implementing mechanisms for the promotion of enterprises that work in the legal field; and
- consider the desirability of introducing a special tax regime to facilitate the conditions for innovative enterprises during the first five years of
Financial inclusion remains a key limiting factor for the development of entrepreneurship in Kazakhstan. This is due to the reluctance of the banking sector to finance risky and innovative projects. In particular, these are projects, belonging to small- and medium-sized businesses, which, in most cases, can provide only limited resources to secure a loan.
In our opinion, for these purposes, it is necessary to work through the following measures:
- increase the issuance of microcredits and small grants to promote pilot implementation of capacities and entrepreneurial initiatives;
- develop financing of equity instruments and tools, aimed at financing the early stages of development of the company; and
- develop corporate venture capital, by encouraging large companies, including foreign companies, to acquire shares in the new innovative
The creation of innovative clusters will increase the innovative activity of business entities, as well as lead to the emergence of synergies. For example, form clusters of participating companies, which are more likely to create new products than single enterprises. In this case, the activity of enterprises within the cluster can overlap and complement each other. The formation of innovation clusters, simultaneously, promotes interchange between related industries and fierce competition within industries.
When building an effective national innovation system, the attention should be focused onimplementing measures that increase the demand for innovation. Most countries that are rapidly developing their innovative systems do not succeed, due to poor demand for innovation.
As shown from international practice, central to the system of national innovation are businesses with their own capacity for carrying out research and development that enables them to innovate successfully.
Today, a weak demand is the key constraint to the promotion of innovation within the country. The formation of demand for innovation should be provided by the state through regulatory measures and incentives.
The activity of innovative infrastructure should focus on providing the necessary financial, methodological, and information support at all stages of the innovation process. It should also create and promote new developments that provide advanced scientific development, and introduce high- technology industries. The main elements of the innovative infrastructure are: a special economic zone, “Park of innovative technologies”; regional technical parks; venture capital funds; industrial design offices; and international technology transfer centers.
By interacting with each other, these elements of innovative infrastructure will provide an integrated system of support for innovation at all stages of implementation, and this will allow companies to:
- maximize capture of innovative subjects with tools supported by the state;
- establish an effective system of commercialization and promotion of innovation, based on national scientific research; and
- establish a system of transfer, localization and distribution of the necessary foreign technologies.
Integrative processes provide an opportunity for Kazakhstan to expand its markets and increase its capacity for innovation. Competitive pressure creates a huge incentive for Kazakhstan enterprises to innovate. To take full advantage of these opportunities, it is necessary to make effective policy measures to support further modernization and diversification of the economy.
The questions regarding innovative processes, management improvement, and innovative achievements are now becoming more relevant.
Literature:
- Kurmanov, N., Yeleussov, A., Aliyev, U., & Tolysbayev, B. (2015). Developing Effective Educationa Strategies in Kazakhstan. Mediterranean Journal of Social Sciences, 6(5), 54-61.
- Yeleussov, A., Kurmanov, N., & Tolysbayev, B. (2015). Education quality assurance strategy in Kazakhstan. Aktual'ni Problemy Ekonomiky= Actual Problems in Economics, (164), 142-150.
- Koshanov, А. К. (2012). Industrial and innovative challenges of globalization and factors of a high technology competitive national economy creation. ENU Messenger, 1, 6-16.
- Radosevic, S., & Myrzakhmet, M. (2009). Between vision and reality: Promoting innovation through technoparks in an emerging economy. Technovation, 29(10), 645-656.
- Smirnova, Y. (2013). The Innovation Infrastructure of Kazakhstan: Why did the Innovation “Boom” not Happen. Quality Innovation: Knowledge, Theory, and Practices: Knowledge, Theory, and Practices, 322-339.