Central Asia

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Chronic underinvestment in R&D in Central Asia (chapter 14) – no country spent more than 0.13% of GDP on R&D in 2018 – has spawned a range of systemic challenges that are holding back research and innovation. These include a vocational crisis in the research community and an exodus of skills.

Poor intellectual property protection and complex tax regimes, coupled with the lack of tax rebates and loans for enterprises, are discouraging innovation and making innovative enterprises unattractive targets for investment and lending.

Central Asian governments are taking steps to overcome these obstacles. There is a desire to improve the investment climate for businesses and to use innovation to modernize industry. Uzbekistan has even placed innovation-based development at the top of its political agenda.

There are a growing number of technology parks which benefit from advantageous tax regimes. Governments are also making an effort to improve the status of researchers through measures such as pay rises, competitive research grants, modern research equipment and joint research projects with institutional partners in countries such as Belarus, China, India and the Republic of Korea.

Scientists and engineers are enjoying more international exposure than in the past. For example, the international accelerator programme, Start-up Kazakhstan, is open to participants from the Commonwealth of Independent States and Europe.

Governments are also working with international partners to access green finance. Faced with growing water scarcity and ageing energy infrastructure, they are investing in renewable energy programmes, such as through ‘solar auctions’ in Kazakhstan and Uzbekistan or the construction of the Rogun Dam in Tajikistan. One challenge will be to balance competing demands for innovation from the mining sector, which forms the bedrock of Central Asian economies.

Countries are embracing the digital economy and e-governance. The comprehensive Digital Kazakhstan initiative spans sectors such as energy, transportation, finance, infrastructure, mining, agriculture and education. Both the Alatau Park of Innovative Technologies and Tech Garden Innovative Cluster in Kazakhstan are embracing Industry 4.0 technologies.

Kyrgyzstan is targeting digital public services through its Taza Koom (Smart Nation) programme. There is growing interest among Kyrgyz youth in computer programming, as reflected in recent growth in tech-oriented start-ups and software companies.