Innovation performance as a factor of socio-economic development in Kazakhstan

• Published in: IDEAS Working Paper Series from RePEc
• Main Authors: Samambayeva, Aizhan, Manuel Fernández Grela
• Format: Paper
• Language: English
• Published: St. Louis Federal Reserve Bank of St. Louis 01.01.2014
• Subjects: Economic development; Economic summit conferences; Innovations; Knowledge; R&D; Research & development

Relationship between innovation performance and economic development is well-recognised all over the world (Mairesse, Lotti, & Mairesse, 2009, Grossman & Helpman, 1990, Hall, 2001). There are numerous of studies confirming that innovation development leads to economic growth, better productivity and increase in sustainable competitiveness. The assessment contributes to theoretical analysis on innovation and significantly broadens knowledge of innovation performance in developing countries. But the most considerable contribution is made to innovation system of Kazakhstan, which is very poor researched and published. Results of the study provide strengths and weaknesses of innovation performance in Kazakhstan and its position in the global landscape, which can be useful information for future policy making to improve social and economic development of the region. Besides The European Innovation Scoreboard, the most prominent innovation measurement indices are: 1. OECD Science, Technology, and Industry Scoreboard 2013 2. The World Bank's Knowledge Assessment Methodology (KAM) 2012 3. The World Economic Forum's Global Competitiveness Report 2013-2014 Taking into account data availability and level of innovation development, European Innovation Scoreboard is most appropriate tool to measure innovation performance in Kazakhstan. For example, The World Economic Forum's Global Competitiveness Report is difficult to implement due to comprehensive nature of data required that is not publicly available. Moreover, some innovation indicators used in scoreboard are elaborated particularly for developed and sophisticated innovation system. Therefore they include variables that have interpretation value only in case of developed countries. European Innovation Scoreboard is not optimal choice to measure innovation performance in Kazakhstan. However, perfect fitting to Kazakhstan's economy innovation measurement is unlikely will be comparable for other countries as well. Our goal was to find innovation measurement (scoreboard) that can satisfy our targets to elaborate innovation indicators that can be easily interpreted, providing exhaustive analysis of innovation situation in Kazakhstan; and to be able benchmark the country with similar economies (catching-up countries). According to Archibugi, Denni, & Filippetti (2009), European Innovation Scoreboard shoud be considered as measure of innovation performance rather than others. Because it takes into account new forms of innovation. Others mostly represent current endowment of country to develop its competitiveness and growth through technological innovations. The methodology includes 29 indicators, grouped over 7 different innovation dimensions and 3 major groups of dimensions. The group of "Enablers" captures the main drivers of innovation that are external to the firm and it is divided into two dimensions: "Human resources" and "Finance and support", capturing in total 9 indicators. Some indicators are subject to national context. Therefore, more detailed information about issues regarding the calculation of the indicators is presented in the whole version of the paper. The results of study revealed relative competitiveness of the region in supply of human capital. However, the rapid pace of economic development requires highly skilled workforce, especially technical and engineering specialist, in order to support innovation performance in the country. Besides the importance of participation in long-life learning for on-going technical development and innovation, this number is extremely low in Kazakhstan. The main factors hampering innovation performance are insufficient R&D investments (public and private), poor infrastructure, weal linkages between main stakeholders of innovation process. This everything is a result of inefficient public policy on innovation and historical and cultural circumstances. The study has found that generally the innovation performance of the region is similar to that of the country. The indicator of the country and region are slightly different. Unsurprisingly, the indicators have shown that the region is placed at the bottom of catching-up countries. The current research was limited to evaluate factors related to qualitative characteristics of the indicator. Moreover, measuring regional innovation performance showed that more progress is needed on the availability and quality of innovation data at regional level. In general, research showed that innovation level of the country is very low even in comparison with catching-up countries. It can be explained by economic model where output is mainly driven by increased used of labour and capital. As a result a low demand for knowledge and weak linkages between key actors. "Knowledge producing and processing sectors and actors so far remain largely isolated from one another, and their activities are structurally mismatched. This may be explained by the lack of incentives in the business sector to innovate, as innovation is often not seen as necessary to maintain or develop competitive advantages. In addition, the commercial orientation of public R&D capacities (knowledge supply) remains limited. This vicious cycle seems to have locked the national innovation system into a suboptimal, low knowledge intensity equilibrium (Innovation performance review of Kazakhstan, 2012)" See above See above