QazInnovations: Kazakhstan seeks to bring volume of innovative products to $5.5 billion by 2025
QazInnovations National Agency for the Development of Innovation seeks to help Kazakhstan bring the share of innovation-active companies to 25 percent by 2030 and bring the volume of innovative products to 2.5 trillion tenge ($5.5 billion) by 2025, said Madiyar Abilov, director of Innovation Ecosystem Development Center at QazInnovations, in an exclusive interview with Kazinform.
Innovations and science are closely intertwined with the country's leadership recognizing the importance of science and innovation in achieving their goal of transitioning from a resource-based economy to a knowledge-based one. Importance of investing in innovations and science has repeatedly been raised by President Kassym-Jomart Tokayev.
«Manufacturing industry is rapidly developed only by innovation and high technology. This is obvious. That is why the economy of Kazakhstan should be based on scientific achievements. It is not enough to conduct research and obtain a patent. It is necessary to use scientific discoveries in production,» said Tokayev in his address to the first session of the Kazakh Parliament on March 29.
How does Kazakhstan promote innovation?
Kazakhstan has a number of tools to support small and medium-sized businesses, large enterprises, innovators, start-up entrepreneurs, provided by various government agencies, development institutions, national companies and holdings. Innovators are supported through various programs and initiatives aimed at stimulating the development of scientific and technological innovations, as well as increasing the competitiveness of Kazakh enterprises in the global market.
Kazakhstan promotes innovation through the creation of innovation centers, simplification of business registration, and startup support.
There are several innovation centers in the country, including Astana Hub and TechGarden, which provide entrepreneurs and startups with assistance in the development and commercialization of their ideas. The Tumar Venture Fund was established to stimulate the financing of projects in the seed stages as part of the Stimulating Productive Innovation project implemented with the World Bank.
To develop the culture of investment, the educational courses for investors, Investor School, were created on the basis of the Astana Hub. This is an intensive course on venture capital investment for business owners, investors and business angels. The program of the course is aimed at formation of holistic view of the methodology of evaluation and investment in technology companies throughout the investment lifecycle - from sourcing to investment exit.
Kazakhstan has also greatly simplified the procedure for registering a business, which promotes entrepreneurial activity and stimulates the emergence of new innovative projects.
With these measures in place, what are some of the problems that Kazakhstan still faces?
However, despite these efforts, there are still problems that need to be overcome to achieve the full development of the innovative economy in the country.
Photo: vuzopedia.ruDespite the fact that Kazakhstan has programs for financing innovative projects, there is still a lack of funds, which could hinder the development of innovative projects. There is lack of sufficient financial support for startup projects, including through the provision of soft loans and subsidized loans from the state.
Kazakhstan has also insufficient number of qualified personnel. There is a need to increase the number of qualified specialists in the field of innovations to improve the quality and quantity of innovative projects.
There is still a low culture of innovation in Kazakhstan, which makes it difficult to disseminate innovative ideas and introduce new technologies. That is, not everyone fully understands the need to develop and implement innovation.
To stimulate the angel investment market, it is necessary to promptly introduce tax preferences in the legislation. For example, in Russia, losses incurred by an angel investor in unsuccessful projects are compensated with personal income tax refunds from a successful startup. This measure is expected to reduce the risks for business angels, so they will invest more in the riskiest, but at the same time the most innovative enterprises.
Most importantly, perhaps, there is a low level of critical mass of projects. Limited presence of startups, low potential for exits and weak development of the stock market, limited scalability due to the small population, lack of competent specialists in the field of venture financing and talent outflow.
What are some examples of innovative products recently introduced in Kazakhstan?
If we talk about the example of innovative grants for the commercialization of technology from QazInnovations, we can note the following projects. Alina Group acquired innovative technology and equipment for the production of marble filler for a plant for the production of dry construction mixtures and paint and varnish products.
Steklo-Service modernized the production complex for industrial glass processing with the use of innovative processing technologies.
Kazelectromash benefited from new innovative production of cross-linked polyethylene cables with improved technical characteristics for the power industry (energy, mining and metallurgical industry, oil and gas, construction industry) instead of paper-insulated cables.
These examples demonstrate that Kazakhstan is actively developing innovations and technologies. The introduction of new products and services helps improve the quality of life of the country's citizens.
In what areas does Kazakhstan excel in innovation?
Kazakhstan is actively developing innovative projects in various sectors of the economy: energy, agriculture, medicine, information and communication technologies (ICT), space technology, transport and logistics.
In recent years, the ICT industry is booming - it is the digitalization of everything that can be digitized, it is different marketplaces and basically everything related to IT solutions and Artificial Intelligence. A proof to that is innovative grants by QazInnovations for commercialization of technologies. In 2022, the competition for innovative grants from QazInnovations received 146 applications on priority areas: ICT, including Industry 4.0 - 92 applications; new materials, additive technologies, nanotechnologies - 8 applications; biotechnologies, new technologies in medicine and public health - 9 applications; new technologies in manufacturing industry - 7 applications; environmentally friendly technologies, energy efficiency, energy conservation, and alternative energy - 11 applications; new financial technologies - 10 applications; electronic industry - 4 applications and robotics - 5 applications.
Photo: tribune.kz
Based on the results of the competition, innovative grant agreements were concluded with 17 projects, all of them from the ICT industry. It is approximately the same for 2021. Because the ICT industry is rapidly scalable, it is easier to commercialize compared to projects/start-ups from other industries. You don't have to do a bunch of clinical or preclinical studies like in medicine, publish research papers in foreign accredited journals, get FDA and other patents, or test your «spacecraft» many times until it takes off.
Taking into account global trends and domestic competence, the Council for Technology Policy under the government of Kazakhstan approved medtech, agritech and greentech as priority areas for economic development at the end of last year. The state will prioritize support for projects and in general stimulate the buildup of a critical mass of projects particularly in these areas.
How does QazInnovations work with the private sector and academia to stimulate innovation?
Commercialization of technologies and stimulation of innovations is a very important and timely phenomenon for domestic science. The process of transferring scientific developments to industry has already broad support in the world, while in Kazakhstan such a mechanism is still being established.
To work properly with the private sector and academia to foster innovation, we need to ask the following questions - how do we become technologically advanced, how do we gain a critical mass of innovation, what do our scientists lack to become innovators and where are the gaps.
For this purpose, let us consider the formula of innovation: suppose we have an innovator who can generate ideas, to create a scientific and technological innovation he or she must also be a scientist, but to commercialize his or her development, i.e., enter the market, he or she must also be an economist.
Photo: phonoteka.org
Only under such conditions, innovator + scientist + economist, can we achieve the creation of high-tech innovation and generally stimulate innovation.
In addition to support measures already provided, to gain a critical mass of innovation it is necessary for innovators/scientists to develop and implement their ideas into a finished prototype. For this purpose, it is important to create prototyping laboratories, the so-called FabLab, on the basis of universities.
We propose to include the innovation course in university curricula, which will include training in auditing, marketing, intellectual property protection, technology transfer and acceleration.
Where does Kazakhstan's innovation ecosystem stand compared to other countries in the region or the world?
Kazakhstan's innovation ecosystem is relatively young, but rapidly developing. It is a complex system of interacting elements - government agencies, the business community, investors, startups, academic institutions and technology incubators.
Compared to other countries in the region, such as Russia, China, Korea, Japan and Singapore, Kazakhstan's ecosystem is at an earlier stage of development. However, the Kazakh government is developing and implementing measures to support innovation activities, including tax incentives, grants for startups, and programs to support small and medium-sized businesses. Kazakhstan is actively attracting foreign investment and technology, especially in information technology and the digital economy.
Photo: cnipmmr.ro
Compared to developed Western countries such as the United States, United Kingdom and Germany, Kazakhstan's ecosystem is still in its infancy. However, our country continues to actively invest in the development of scientific and technological research, as well as attracting talented and experienced specialists from abroad.
Overall, Kazakhstan continues to make significant efforts to attract attention and investment from developed countries, and is becoming an increasingly attractive entry point for innovative startups and technology investors.
What goals does QazInnovations set in stimulating innovation in the country and how do you think the innovation ecosystem of Kazakhstan will develop in the coming years?
The mission of QazInnovations is analytical, methodological and operational support for the development of the national innovation ecosystem. By 2031, we want to become a key development institution - a so-called think tank, providing an independent assessment of the national innovation ecosystem as the Innovation Observatory.
The national agency will foster innovation activity as part of the Entrepreneurial Code of Kazakhstan. At the same time, the procedures and format of their provision will be revised to improve efficiency, expediency and compliance with international practice, for example, the development of business incubators, prototyping centers, and technology competence centers.
To increase the capacity of the innovation system, focusing on the Global Innovation Index, where we were ranked 81st in 2022, we have fixed indicators, developed roadmaps to improve our performance in the Global Innovation Index at the Council for Technology Policy.
Photo: e-vid.ru
One of the strategic goals of QazInnovations is to increase the innovative and technological potential of the country. We seek to provide innovation grants, bring the share of innovation-active companies to 25 percent by 2030, bring the volume of innovative products to 2.5 trillion tenge by 2025. It is expected that if these targets are achieved, the share of innovative products will reach 5 percent of GDP by 2030.
All these figures are envisioned in the Technological breakthrough through digitization, science and innovation national project, approved by the government decree and is a document of state planning system designed to implement a long-term Kazakhstan Development Strategy until 2050.
And QazInnovations as the only national institution in the field of innovative development of the country makes every effort to achieve these parameters.