ASTANA - Kazakhstan has to boost innovation to ensure technological transformation and long-term economic growth, according to Saltanat Igenbekova, an analyst at Halyk Finance.
She noted that the country's growth sustainability largely depends on its ability to develop sectors capable of exporting medium- and high-tech goods and services. This is especially critical for oil-exporting nations such as Kazakhstan.
Kazakhstan continues to specialize in less complex products, as shown by the International Index of Economic Complexity. Factor productivity has not demonstrated steady growth in recent years, and innovation activity among enterprises remains weak. The share of innovative products in GDP has stayed at roughly 1.5% over the past two decades.
The World Bank recommends that upper middle-income countries focus on three areas such as investment, innovation and inclusiveness. In Kazakhstan, however, spending on research and development (R&D) lags behind global standards. The United Nations data shows that Kazakhstan invests only 0.1% of GDP in R&D, far below the world average of 2%. This limits technology transfer, commercialization of innovations and the quality of human capital.
In the Global Innovation Index 2024, Kazakhstan ranked 78th out of 133 countries, slipping from 77th place in 2020. While the country performed relatively well on innovation inputs such as infrastructure and digitalization, it ranked lower on outputs, reflecting weak results from existing investments.
Productivity, a key indicator of industrial diversification, rose 9-10% in the early 2000s but has since stagnated, even falling 5% during the 2020 pandemic. This stagnation highlights the lack of technological progress and inefficient use of resources.
Igenbekova noted that Kazakhstan's industrial and innovation policies over the past 15 years relied heavily on administrative support measures, such as subsidies, tax preferences, tariff and non-tariff protection, which preserved existing businesses but failed to increase productivity or competitiveness.
"Current programs are designed more to keep companies afloat than to drive innovation and global market expansion," she said.
According to the Bureau of National Statistics data, enterprise innovation activity reached 11.9% in 2024, but most spending goes to buying modern equipment rather than developing new technologies. Mining accounts for 40% of innovative exports, while manufacturing contributes less than 18%, underscoring the economy's commodity focus. Enterprises remain reluctant to invest in their own R&D due to high risks, long payback periods and lack of financing. Many operate with outdated equipment and energy-intensive processes, making innovation adoption more difficult.
Igenbekova stressed that long-term growth requires shifting from short-term state support to structural reforms. Priorities should include developing high-tech, export-oriented sectors, fostering private entrepreneurship and strengthening competition. Increasing R&D investment, strengthening intellectual property protection, and improving human capital through education and skills training are essential.