Fostering Productive Innovation

Project Components

Information about the project

Ministry of Education and Science of Republic of Kazakhstan (MOES RK) with World Bank implements a Project on Fostering Productive Innovation.

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)1. 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 Kazakstan

On the 2nd February of 2016 the Parliament of the Republic of Kazakhstan ratified a Loan Agreement for the Project “Fostering Productive Innovation” 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 aimed at strengthening the capacity of key institutions of the national innovation system, suggests the introduction of market mechanisms for the selection and support of innovative projects and technology start-ups, as well as stimulating the participation of the private sector.

Project Objectives

The Development Objective is to promote 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.

In this project 3 grant programs will be carried out 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.

Duration of the project “Promoting productive innovation” – 5 years, from 2016 to 2020.