Project components

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Information about the Project

The Ministry of Digital Development, Innovations and Aerospace Industry of the Republic of Kazakhstan (MDDIAI RK) with the World Bank implements the Fostering Productive Innovation Project.

Kazakhstan is an upper middle-income resource-rich economy with significant but quite narrowly focused R&D and human capital endowments. Its main natural resource assets are in mineral (oil, gas, ferrous and non-ferrous metals) and agricultural sectors. 

Despite short-term vulnerabilities accentuated by an uncertain global and regional economic outlook, Kazakhstan's medium-term prospects are positive with strong growth on the back of the expanding oil sector and structural reforms envisioned by the comprehensive long-term “Kazakhstan-2050 Strategy” (The Strategy). 

The Strategy foresees the country’s transition to the knowledge economy within 10- 15 years and joining the top 30 most developed countries by 2050. Having implemented a number of successful strategic reforms during the last five years, the country has been focusing on diversifying away from the resource-based growth through a major industrialization and innovation support program and a number of Small and Medium Enterprise (SME) development activities. Structural reforms described in the Strategy indicate strong commitment to building a knowledge economy that would drive growth, diversification, and global competitiveness by improving the country’s key factor endowments—human capital, infrastructure, and institutions. 

The Strategy highlights seven priority areas for action by the government, including the need to improve science potential. Financing of science is set to reach three percent of GDP, with an objective to increase scientific capacity, accelerate knowledge and technology transfer through Foreign Direct Investments (FDI), and to improve efficiency of the National Innovation System (NIS). Productive innovation is seen as a key growth factor pervading and effectively linking all areas of economy and society. Understanding of context and use of innovation is very important because the current level of Kazakhstan’s economic development limits its ability to translate new-to-the-world technologies into economic returns and increase the country’s competitiveness in the global market. Therefore, adapting and efficiently using existing global knowledge and practice would be most cost- and time-effective at this stage, and would boost innovative capacity to the level of critical mass generating a culture of innovative competition in all sectors of the economy and society. 

Fostering Productive Innovation Project in Kazakhstan

On February 2, 2016, the Parliament of the Republic of Kazakhstan ratified a Loan Agreement for the Fostering Productive Innovation Project, which was signed between the Republic of Kazakhstan and the International Bank for Reconstruction and Development.

A joint project of the Government of Kazakhstan and the World Bank is aimed at strengthening the capacity of key institutions of the national innovation system and envisages the introduction of market mechanisms for selecting and supporting innovation projects and technology startups, as well as encouraging private sector participation in them.

Project Objectives

The aim of the Project is to stimulate high-quality, nationally relevant research and commercialization of technologies. 

Project has 5 components:

1. Development of the Knowledge Base for Innovation.
2. Innovation Consortia.
3. Consolidation of the Technology Commercialization Cycle.
4. Strengthening Coordination of the National Innovation System; Enhancing the Capacity of the Existing Institutional Structures.
5. Support Project Implementation. 

The Project will carry out 3 grant programs to fund research group projects focused on high-quality research with commercial potential which will support PhD students. In addition, the planned creation of consortia by bringing together science, industry and government to ensure the needs of the market and the manufacturing sector on the basis of higher education institutions involved in the implementation of the GP IIDK and JSC "Nazarbayev University".

To demonstrate the effectiveness of earlier investments, in technology start-up companies will be formed venture fund through the mechanism of public-private partnership, a brokerage office to generate deal flow and refining technologies and innovative ideas into commercial investment projects. It is expected the establishment of the office of technology transfer abroad for promotion of Kazakhstani technologies and research, and the introduction of new technologies in Kazakhstan.

Implementation period of the Fostering Productive Innovation Project is 5 years, from 2016 to 2020.

 

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