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Context for Science and Technology Activities in Kazakhstan

This chapter addresses recent developments that provide a context for considering specific science and technology (S&T) issues in subsequent chapters. As discussed below, S&T permeates large segments of the economy of the country. The committee considered policies and programs that the National Center for Scientific and Technical Information (NCSTI) identified as relevant to S&T activities as well as additional policies and programs that the committee considered important. The committee did not have time to delve into the details of many policies and programs, but it nevertheless obtained an overview of directions that are being taken by the Kazakhstani government. NCSTI agreed that a comprehensive review of all relevant policy, program, and related organizational developments was beyond the scope of this report.

CONCEPT OF S&T

Too often, building S&T capacity in a developing or middle-income country is considered a distinct development challenge separate from strengthening activities in traditional development sectors such as health care, agriculture, energy, communications, construction, and water resources. The following concept reflects the importance of integrating S&T with economic development sectors and has been used by the committee in addressing the S&T capacity of Kazakhstan:

S&T includes the natural sciences, engineering, technology, the health sciences, and the economic and social sciences. S&T activities are components or enabling elements within programs directed to achieve educational, economic, social, and political objectives. This concept recognizes the pervasive role of



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Science and Technology in Kazakhstan: Current Status and Future Prospects 1 Context for Science and Technology Activities in Kazakhstan This chapter addresses recent developments that provide a context for considering specific science and technology (S&T) issues in subsequent chapters. As discussed below, S&T permeates large segments of the economy of the country. The committee considered policies and programs that the National Center for Scientific and Technical Information (NCSTI) identified as relevant to S&T activities as well as additional policies and programs that the committee considered important. The committee did not have time to delve into the details of many policies and programs, but it nevertheless obtained an overview of directions that are being taken by the Kazakhstani government. NCSTI agreed that a comprehensive review of all relevant policy, program, and related organizational developments was beyond the scope of this report. CONCEPT OF S&T Too often, building S&T capacity in a developing or middle-income country is considered a distinct development challenge separate from strengthening activities in traditional development sectors such as health care, agriculture, energy, communications, construction, and water resources. The following concept reflects the importance of integrating S&T with economic development sectors and has been used by the committee in addressing the S&T capacity of Kazakhstan: S&T includes the natural sciences, engineering, technology, the health sciences, and the economic and social sciences. S&T activities are components or enabling elements within programs directed to achieve educational, economic, social, and political objectives. This concept recognizes the pervasive role of

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Science and Technology in Kazakhstan: Current Status and Future Prospects S&T in development and is somewhat broader than more traditional definitions of S&T that focus on research and on science and engineering in education. From the vantage point of developing (and middle-income) countries, S&T should involve interconnected national and international systems of activities that encourage the acquisition and generation of important knowledge and the application of this knowledge to improve the quality of life and the security of populations.1 Thus, S&T is integral to the capacity of the public and private sectors in Kazakhstan to: provide technical services that support economic and social development—such as the provision of health care, education, agriculture extension, transportation, communications, maintenance and upgrading of water and sanitation facilities, management of natural resources, and energy and environmental services; assess the economic and technical merits of technologies being considered for use and within that context carry out research, development, technology transfer, technology adaptation, and technology application activities; produce industrial goods and agricultural products based on technologies and modern management methods that are well suited to the local environment; prepare and evaluate implementation of economic, trade, industrial, agricultural, health, educational, environmental, and other policies that have technical dimensions or that influence the acquisition and use of technical resources; participate in international trade negotiations, environmental treaty discussions, and other types of policy dialogues involving technical issues of political, economic, and social importance; conduct programs that heighten public awareness of the potential and limitations of modern technologies to improve the well-being of the public; and develop an appropriate physical infrastructure, a robust human resource base, and a network of educational and training institutions to support the foregoing activities.2 Within this broad context, the primary focus of this report is on research, development, S&T services, and technology transfer and on the S&T dimensions of higher education. 1 National Research Council, The Fundamental Role of Science and Technology in International Development, The National Academies Press, Washington, D.C., 2006, p. 18. 2 Ibid., pp. 18-19.

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Science and Technology in Kazakhstan: Current Status and Future Prospects THE KAZAKHSTANI LANDSCAPE FOR USING S&T The World Bank released the following summary assessment in March 2006 of its findings in Kazakhstan: Kazakhstan has made commendable progress in stabilizing its economy and carrying out structural reforms over the past decade. Increasing oil revenues, spurred by a favorable conjunction of higher prices and larger production volumes, contributed to growth rates that have averaged around 11 percent since 2000, with per capita income rising above $2,000 in 2004, 65 percent higher than in 2000. Against this favorable backdrop, Kazakhstani officials have concluded that the country’s long-term prosperity and economic well-being will depend on how well and wisely the country invests its oil windfall to develop the non-oil sectors of the economy and promote sustainable, broad-based, economic growth. A key conclusion flowing from this review is that the country must make the transition from producing and exporting primarily unprocessed raw materials to producing and exporting more knowledge intensive, value added goods and services.3 The committee generally agrees with this assessment, although as noted in the Preface, the committee understands that the “oil windfall” has been put into a “rainy day” fund and will not be used simply as a new source of investment capital. In addition, the committee concurs with the following conclusions of the World Bank: Kazakhstan emerged from the Soviet Union with a strong cadre of scientific leaders in high-technology fields such as atomic energy and space research and a well-educated workforce. Since the early 1990s, a number of key scientific researchers have left the country or have shifted to more lucrative business careers, the average age of the remaining scientific workforce has risen significantly, and educational standards have eroded considerably. Many research and educational institutions operate in isolation from each other and from domestic and foreign industry. Research institutes frequently set their own priorities without regard to the government’s scientific priorities, the needs of the public sector, or the interests of the private market at home or abroad. The quality of equipment and instrumentation in research and in teaching laboratories is poor, with little equipment purchased in recent years. High value-added activities in the oil sector are dominated by international firms, with Kazakhstani firms supplying relatively low skill services and low value-added products.4 3 World Bank, Project Information Document, Appraisal Stage for Technology and Competitiveness Project, March 24, 2006. 4 Ibid.

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Science and Technology in Kazakhstan: Current Status and Future Prospects However, the committee is unaware of efforts by the World Bank or by any Kazakhstani or other international organization to address a critical impediment to the advancement of science in Kazakhstan. Unfortunately, a hierarchal approach to the organization and management of science is omnipresent in the country. Junior and middle-level scientists and educators are often unwilling to make even minor decisions that have not been cleared with senior staff, and there is reluctance to make suggestions for new approaches, since they might upset administrative or management personnel. This problem will not be remedied until senior people retire and a new generation assumes leadership positions. Even then the problem will be overcome only if the next generation has been trained in more global approaches to management. Thus, it is essential to expose Kazakhstani scientists and educators at every level to a 21st-century approach to S&T and research and development (R&D). An important way to achieve this goal is to promote maximum contact between Kazakhstani managers and scientists and Western colleagues. Against this overall background, the challenge for the government is to devise policies and programs that will encourage development and use of S&T more effectively for economic and social progress. Opportunities for industrial development based on advanced technologies have received most of the recent attention of the Kazakhstani leadership when addressing the upgrading of the S&T infrastructure. The leadership is particularly interested in achievements and experiences of industrialized countries as models in its search for rapid mastery of advanced technologies. However, the committee is concerned about possible neglect of (1) the need to upgrade S&T-related services using well-established technologies that should be provided through the systems of a number of mission-oriented ministries such as the Ministry of Health and (2) the importance of using well-known techniques for improving the performance of the agriculture sector, which sustains a substantial portion of the population and contributes to export earnings through cultivation of grain, raising of livestock, and production of food-related commodities. Additional comments on these concerns are included in later chapters of this report. Greater attention should be directed to understanding the relationships between expanding the availability of technologies, old or new, and employment creation and displacement. Continued growth of the economy should result in more jobs, particularly in the service sector, although there may be dislocations in some sectors. At the same time, there should be considerable opportunities for job creation in the construction, food, and natural resources sectors. More effective use of technologies, leading to increased investments in these and other areas, should in general expand these opportunities. At the same time, given the limited cadre of technically qualified specialists, movement of personnel should be expected. The committee recommends that the intersections of technology and employment be on the research agendas of social scientists in Kazakhstan to

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Science and Technology in Kazakhstan: Current Status and Future Prospects assist the government in considering important impacts on society of promoting specific technological achievements. In order for the government to be able to sustain large investments in S&T, particularly investments with long-term payoffs, the positive impacts of expanded reliance on S&T on the everyday lives of the general population must be evident in the near term. Supporting advanced technology approaches in the search for “breakthrough” technologies is important in some areas, as discussed in Chapter 2. But modernization and more effective use of established technologies are essential in supporting the day-to-day activities of the entire population and in reducing poverty in many areas of the country. VISION OF THE GOVERNMENT OF KAZAKHSTAN The president of Kazakhstan has established the goal of Kazakhstan becoming one of the 50 most technologically competitive nations of the world by 2015.5 According to the Ministry of Education and Science (MES), Kazakhstan ranked 56 as of September 2006.6 Given the steadfast commitment of the president to this goal, the parameters used by MES in measuring progress must certainly receive attention. Many Kazakhstani organizations are developing strategies and programs to help the country reach the goal as soon as possible. The committee found that articulation of the goal has served as an important catalyst for launching a number of significant S&T-related activities. At the same time, however, the committee is concerned that preoccupation with reaching the goal in the next few years could result in the neglect of some aspects of development that in the long term are critical to sustainability of economic growth and social progress (e.g., conservation of water resources, reduction of environmental pollution, improved nutrition). As a key component of the nation’s S&T approach, the Ministry of Industry and Trade (MIT) prepared a Strategy for Industrial-Innovation Development for 2003-2015 and a related Implementation Plan.7 This effort has become entwined 5 “Kazakhstan, Reaching for the Stars,” Foreign Affairs, September/October 2006, special section sponsored by the government of Kazakhstan. 6 Speech by Vice Minister A. Abdymomunov, MES conference, “Future of Science and Technology,” Astana, September 25, 2006. He stated that the following criteria, which had been developed by the World Economic Forum, were used in this rating: transfer of technology, capabilities of engineers and scientists, technology index, capabilities of specialists providing scientific and technical services, technological readiness, protection of intellectual property, quality of scientific research institutes, and availability of venture capital. See also the World Economic Forum, http://www.weforum.org/en/initiatives/gcp/Global%20Competitiveness%20Report/index.htm. 7 Strategy of Industrial-Innovation Development of the Republic of Kazakhstan for 2003-2015, Press Service of the Ministry of Industry and Trade, Astana, 2003.

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Science and Technology in Kazakhstan: Current Status and Future Prospects with a collaborative program with the World Bank scheduled to begin in 2007, as noted in the Preface. It involves support of scientific groups of excellence; establishment of an instrumentation center open to all interested researchers; and expansion of technology transfer programs, commercialization, and advisory services. The emphasis on groups of researchers rather than laboratories or other organizational entities is intended to highlight the importance of development of individuals. Directly related topics are discussed in subsequent chapters. Since the development of the World Bank program, a broader framework for the S&T infrastructure has emerged. This framework is encapsulated in large measure in the proposed draft of the State Program for the Development of Science in the Republic of Kazakhstan for 2007-2012. The State Program draft includes many activities that are also addressed in the aforementioned strategy on industrial innovation. However, the State Program draft is under the management of MES and therefore has an understandable emphasis on education and research.8 The State Program draft calls for seven areas of activity: Improvement of the system of state management of S&T development. Improvement of the mechanisms for financing scientific research, development, and design activities. Improvement of the integration of science and education. Strengthening the technical and equipment base for conducting research, development, and design activities. Development of a system for certification of scientific and scientific education cadres and accreditation of scientific organizations for raising the effectiveness and quality of scientific research, development, and design activities. Improvement in the information base for the development of science. Protection of intellectual property rights.9 Preparatory steps are to be taken during 2007-2009 for implementation of the proposed State Program. They include changes in the legal and normative basis for scientific and technical activity, modification of the system of state management of scientific and technical development, and reform of the basis for financing research, development, and design activities. From 2007 to 2013 the proposed State Program is to be implemented with a focus on (1) integrating science and education, (2) preparing the scientific workforce, and (3) developing the scientific infrastructure to help raise the contribution of local science to production activities. Planned activities of particular 8 Proposed Draft of State Program for the Development of Science in the Republic of Kazakhstan for 2007-2012, Astana, 2006, provided by NCSTI in July 2006. 9 Ibid., Section 4.

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Science and Technology in Kazakhstan: Current Status and Future Prospects interest for this report are (1) establishment of five national laboratories, each with a distinct program profile determined by the five areas of priority interest that are currently being identified (see Chapter 2); (2) centers of the national laboratories at 15 geographically dispersed universities where selected applied technology aspects of the national laboratories’ areas of priority interest will be emphasized (see Chapter 3); and (3) establishment of business incubators at research centers and universities for commercialization of small engineering projects (see Chapter 4). An important component of the program is to be the establishment of a Science Fund, which is discussed below. Funding for R&D (measured in local currency) should increase by 25-fold from the local currency (tenge) equivalent of $103 million during 2005. Annual inflation rates have been predicted by the government to be 7 percent and by Western experts to be 15 percent. Thus, the real increase in R&D support, even if fully funded, will be significantly less than 25-fold but nevertheless should be very substantial. By 2012 the private sector is to provide 50 percent of national R&D expenditures compared to 7 percent in 2005. Eventually, the private sector is to fund two-thirds of the national R&D effort. It is important for the government to encourage substantial increases in private-sector funding of R&D, but the foregoing goals are excessively optimistic. A large number of private-sector companies are currently committed to minimizing expenses by continued use of outmoded equipment. Only a handful of companies have shown interest in investing resources in new processes and products, even if in the long term these investments would increase profit margins. Also, most technologies of interest to companies prepared to upgrade their activities are readily available on the international market. Still, encouraging private support of local R&D activities, as discussed in Chapter 4, deserves high priority by the government. For example, the requirement that multinational companies operating in Kazakhstan must spend a certain portion of their investments for acquiring local content of the equipment and services being used in the country provides a mechanism to link these companies with local S&T institutions. One Western oil company is considering investing in local R&D to help perfect corrosion-resistant drilling equipment suitable for extracting offshore oil with high sulfur content. If substantial progress is achieved in moving toward the spending targets that the government has established, particularly the targets for private-sector support of R&D, the S&T base of the country can be significantly transformed. Of special importance are increases in salaries for researchers, which can encourage the most talented scientists to pursue careers in the laboratories of Kazakhstan. The president’s goal of moving Kazakhstan up on the international competitive index is ambitious, especially as other countries also seek to move upward. The plans described above to help achieve the goal will require efforts by many

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Science and Technology in Kazakhstan: Current Status and Future Prospects institutions on a variety of fronts. The suggestions set forth in subsequent chapters of this report, if implemented, will increase the likelihood, but certainly not guarantee, that the goal will be achieved while at the same time the S&T capabilities of Kazakhstan respond to the broader needs of the population. ORGANIZATIONAL AND FINANCIAL STRUCTURES In the autumn of 2006 the government of Kazakhstan established the Supreme Science and Technology Commission, chaired by the prime minister. The 30 members represent the scientific community, relevant ministries and agencies, parliament, national companies, and business. However, an individual member representing a company has voting rights only if his or her company invests annually at least 1 billion tenge (about $7.5 million in 2006) in support of S&T development in Kazakhstan. One of the commission’s primary tasks is to establish national S&T priorities. In a related responsibility, it will send reports to the government every three years concerning S&T priorities and developments. Within the organizational framework of MES, an interagency science committee that reports to the commission is to provide a single focus for government approval and financing of R&D activities. The new Science Fund will support applied R&D activities with an emphasis on projects involving matching funds from industry ranging from 25 to 75 percent of the costs of projects. The target is to have the fund eventually responsible for dispensing 25 percent of the entire R&D budget of the government. As to private-sector support of R&D through matching funds or directly, only seven enterprises provided support for R&D at their in-house laboratories and at R&D and educational institutions with up-to-date equipment capabilities in 2005. Thus, there is a question as to whether there will be enough good projects to warrant matching funds on a significant scale. Also, as industry becomes directly involved in the use of government funds, questions will undoubtedly arise as to the decision-making mechanisms for approving projects. Consideration might be given to simple grant funding by the government of feasibility studies as an initial step toward larger matching-fund projects. The following summary of the Kazakhstani government’s budgeting process highlights the many sources of public funding for S&T. There will soon be (1) competitive grant programs of the new Science Fund and (2) special governmental allocations for support of the national laboratories (e.g., $40 million during 2006 for the biotechnology center, which MES has proposed as the basis of a national laboratory for biotechnology). The government will continue to provide (3) support for the core costs of operating and modernizing the entire public-sector research infrastructure, including investments in capital upgrades and purchase of essential equipment when appropriate. MES will administer two grant programs. These programs will provide (4)

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Science and Technology in Kazakhstan: Current Status and Future Prospects support for fundamental science activities in fields such as mathematics, mechanics, physics, earth sciences, medicine, biology, and social sciences, on a noncompetitive basis in order to ensure a broad base of science capabilities, and (5) support on a competitive basis for projects in fields of national significance such as mineral resources, mining, renewable energy, health care, agriculture, water management, seismology, ecological security, and warning and liquidation of emergency situations of natural and technical origins. Apparently, MES intends to ensure that the applied research programs that it supports are among the best in the country while preserving all basic research programs, even those of secondary quality. The committee recommends that MES distribute the majority of funding for both basic and applied research through competitive mechanisms, targeting particular fields of basic science for support as necessary to ensure a broad base of science capabilities. Of particular importance for applied R&D are the funding mechanisms that are in various stages of introduction within MIT under the new “holding” organization named the Kazyna Fund. This fund was initially capitalized in 2006 at $1 billion. The S&T-oriented funding mechanisms under the umbrella of the fund include (6) grant programs of the National Innovation Fund, (7) loans of up to 30 years by the Development Bank of Kazakhstan, (8) venture capital of the Investment Fund, and (9) equity investments of the Small and Medium Enterprise Support Fund. The mix of various types of publicly supported research in Kazakhstan is to change from the current division among basic research (20 percent), applied research (70 percent), and development (10 percent) to a future division of basic (15 percent), applied (35 percent), and development (50 percent). While the need for more emphasis on development seems clear, effective public financing of development at the projected level will be difficult, particularly if the private sector is expected to provide matching funds for the activities. Also, an increasing portion of government funding is to come from (10) allocations by regional (oblast) governments in addition to allocations of national governmental bodies. Finally, there will certainly be (11) special government allocations for politically attractive projects, such as support of the research infrastructure at the advanced technology university to be established in Astana. Kazakhstan, like every country, must take into account the history and personalities of its scientific community, political realities, and governance issues in adopting its own administrative structures. Foreign models and experiences may be helpful in providing options for consideration, but they are seldom appropriate for complete adoption. Nevertheless, the committee is concerned about the approach being considered of transferring responsibility for all government grant funding for R&D to MES, with the mission-oriented ministries no longer having control over the grant financing of R&D activities of institutions that report to them. In 2005 about 50 percent of the government’s support for R&D flowed through MES.

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Science and Technology in Kazakhstan: Current Status and Future Prospects The other 50 percent flowed through other ministries. The proposed approach of centralization is not the practice of most industrialized and middle-income countries (e.g., the United States, Russia, Israel). Presumably, the new approach is to improve coordination and to ensure that resources are focused on priority issues. But there are other mechanisms that can achieve these objectives without reducing the mission agencies’ authority over research that supports their mission objectives. Of particular concern to researchers should be the requirement that all applications for R&D support would go through a single entry point that might be biased toward the interests of a single ministry. Finally, MES has limited experience in addressing many technical issues in the applied sciences, and strengthening the relevant capabilities of MES seems essential. As previously noted, S&T services provided by R&D facilities should be fully recognized. Services with an underpinning of well-established R&D programs are particularly important in supporting the efforts of mission-oriented ministries to design and manage technology-intensive programs for which they are responsible. Thus, the committee recommends that before control of all R&D government funding becomes centralized within MES, careful analyses should be carried out by the interagency Science Committee to assess both the positive and negative impacts of such centralization on the capabilities of the institutions subordinate to the mission-oriented ministries. Particular attention should be given to past experiences of the institutions in responding to requests from the ministries for S&T support. Another concern is confusion as to the meaning of R&D and S&T when financial decisions are considered. The government often refers to financing of R&D as financing of “science.” In the Russian language the word nauka, which is translated as “science,” is often used to encompass R&D. At other times the government uses the terminology “science, design, and development” to more precisely define R&D. As discussed at the beginning of this chapter, S&T is far broader than R&D, and incorrect terminology can give an understated level of financing of S&T. Recent attempts by the government to define “innovation,” as discussed in Chapter 4, further add to the confusion. The government should be more precise when discussing S&T expenditures, R&D funding, and levels of support for innovation, recognizing that services that extend far beyond R&D are a very important S&T activity. The definitions developed by the Organisation for Economic Co-operation and Development should be helpful in this regard.10 INTERESTS OF THE RELEVANT MINISTRIES While the Supreme Science and Technology Commission will be responsible for oversight of a variety of interrelated activities of various ministries, many 10 See www.oecd.org/topic/0,2686,en_2649_37417_1_1_1_1-37417,00.html.

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Science and Technology in Kazakhstan: Current Status and Future Prospects important decisions, including decisions of interest to multiple agencies, will continue to be made at the ministerial level. The five ministries that provide R&D funding of primary interest for this report are MES, MIT, the Ministry of Natural Resources and Energy, the Ministry of Agriculture, and the Ministry of Health (MOH). Other ministries provide smaller amounts of R&D funding. Each ministry has a strategy and administers state programs for promoting development in its sector. Each is responsible for a number of research institutions. MOH is responsible for medical universities, while the other higher educational institutions are under the purview of MES. Presumably, all or almost all of the more than 200 research institutions currently under the purview of the five ministries will continue their activities. Most institutes have long histories dating back to Soviet times, some earlier. Many have recorded impressive achievements in their fields of interest and are well known to international partners. Others are less prominent but nevertheless are considered important by various ministries. Still others are largely orphan institutions with few advocates in the government ministries. Twenty-five of the most important institutes in fundamental science that had been components of the Academy of Sciences are now clustered under four administrative centers that report to MES.11 The relationships between these four centers, which are to stimulate effective transfer of research results to paying customers, the other ministries, and the new national laboratories, have not yet been developed. MES has the lead for establishing national science policy in consultation with the other ministries. Still, this topic is so vital to the nation that there will undoubtedly be interagency concerns as to the reach of MES authorities. In particular, MIT has broad S&T interests that overlap with the interests of MES. These interests include exports and imports of technology-laden products, stimulation of private industrial investment in Kazakhstan, and promotion of technology transfer in the country. MIT also supports a number of scientific institutions that fall within MIT’s purview. MIT’s technology transfer activities are addressed primarily in Chapter 4. Nevertheless, MIT’s efforts to promote technology-related industries deserve mention both in this chapter and in Chapter 2, which addresses priorities. For example, MIT selects industrial “clusters” of activities that offer potential for economic return. Clusters are considered to be geographically proximate groups of interconnected companies and trade organizations. They should work with nearby governmental bodies and with research and education institutions to enhance their international competitiveness. However, the convergence of common interests of individual specialists and their organizations, rather than centrally determined geographic locations, should be the primary factor in determin- 11 When the Academy structure was changed, there were more than 40 institutes that were transferred to MES. That number has steadily decreased to about 25, due to mergers and closures.

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Science and Technology in Kazakhstan: Current Status and Future Prospects ing how and where clusters emerge and develop. As of July 2006, the selected clusters included agriculture and food processing, oil and gas machinery, cargo, construction materials, metallurgy, tourism, and textiles. The committee did not have access to the justifications for selecting these topics. Nevertheless, the choice of textiles is questionable. Given the intense international competitiveness in this field, the uncertain quality of products that use the short-fiber local cotton, and the lack of a significant polymer industry in the country, Kazakhstani companies will probably have difficulty effectively competing on the international market or even the domestic market. Perhaps the decision was based on a political imperative of providing employment opportunities for depressed southern regions of the country, even though cotton growing with uncertain payoff would take a heavy toll on limited water resources. The effort by MIT to select areas for investment of public funds based on economic analyses should be encouraged, recognizing that at times political intervention in the process will be inevitable. KAZAKHSTAN’S COMMITMENTS TO USING INTERNATIONAL EXPERIENCE The government has made a major commitment to the integration of successful practices of other countries with the realities of the Kazakhstan environment for carrying out R&D, improving education, and supporting private- and public-sector businesses. The government has sent its officials and specialists around the globe to learn from the approaches of others—to Singapore, Ireland, Germany, Chile, the United States, and many other countries. And the government has carefully studied the findings.12 Of course, many government officials know well the Soviet and Russian approaches. For example, a large number of Kazakhstani specialists consider their scientific degrees from Moscow State University to be equivalent to or better than scientific degrees from leading Western universities. Many graduates of this and other universities located in Russia retain their educational ties and through these linkages stay abreast of developments in Russia. At the same time, few Kazakhstani specialists have confidence in adopting Russian approaches in order to achieve technological competitiveness. As to industrial development, in the past about 50 major Soviet enterprises sustained much of the industrial technology base of the country. Many of the enterprises had defense industry orientations. Almost all have either disappeared or been transformed into unrecognizable forms. Production equipment made in Soviet times is still being used in many enterprises, with the necessity of spare part linkages to Russia. But as the influx of Western equipment through interna- 12 Op. cit., Proposed Draft of State Program for the Development of Science, Section 2.

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Science and Technology in Kazakhstan: Current Status and Future Prospects tional companies and direct purchases by Kazakhstani companies continues, the industrial ties to Russia are weakening. Although trade with China as well as with Western countries is growing rapidly, Russian imports still exceed imports from China, the United States, and France combined. As to the generation of technology in Kazakhstan, government surveys indicate that 5 percent of new products available in Kazakhstan are provided by foreign companies operating there, 3.7 percent by Kazakhstani private companies, and 0.6 percent by state-owned companies.13 The bulk will continue to come from abroad for many years whether it be in space-oriented fields, nuclear and other energy areas, transportation and communication, construction, or other fields. Of course, an important objective for the country is to begin complementing and in some cases replacing this dependence on foreign technology with reliance on locally generated technologies. A few Kazakhstani researchers still long for a reemergence of subsidized Soviet-style design bureaus that were the bridges between laboratories and state-owned factories. But these elderly specialists who are still active are decreasing in number. Their views seem irrelevant to current thinking in Astana and Almaty. Kazakhstani officials are increasingly looking to the West and to the East for their entry points into the global world of high technology. International peer review is a mantra that now permeates many offices of the government of Kazakhstan. Of course, some officials and specialists are not convinced that foreign experts should be guiding the route to national development. However, these skeptics have little choice but to accept the reality of the government’s effort to seek foreign advice. This report along with reports of other foreign organizations and individual specialists are clearly considered important by the government. Several examples of peer review systems that are being established are as follows: At the level of providing advice on national priorities to the Supreme Science and Technology Commission, an International Expert Council, with 75 percent of the members from abroad, is to be established. At the level of assessing the results of R&D programs, an expert council is to be established by MES, with at least 60 percent of the scientists being from abroad. At the level of selection of projects to be financed by MES, an expert council with 50 percent foreign specialists is being organized. As to the World Bank proposal for a program to award research grants, MIT is organizing a 100 percent international expert panel to recommend recipients of grants who would establish groups of excellence.14 13 Information provided by NCSTI, September 2006. 14 Ibid.

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Science and Technology in Kazakhstan: Current Status and Future Prospects Impressive emphasis is being given to the importance of peer review involving foreign reviewers and the need for foreign experts to advise on policies and priorities while the size of the domestic cadre of experts grows. However, considerable attention must be given to selection of “appropriate” foreign experts who not only are well versed in their fields of S&T but also understand the power and limitations of S&T-intensive approaches in Kazakhstan and the needs of Kazakhstani users of S&T services and products. Such experts who are prepared to devote their time to working with the government may be in short supply throughout the world. Also, foreign specialists embedded in Kazakhstani committees must have adequate time and access to sufficient information to be able to express independent views and not become simply endorsers of recommendations they have not been able to adequately consider. Finally, Kazakhstani program managers need to be able to define the tasks that are to be assigned to external experts before the experts are engaged. PRINCIPAL THRUSTS OF THE S&T POLICIES OF KAZAKHSTAN Against this background, the committee has selected for discussion in subsequent chapters several principal thrusts of the policies of the government of Kazakhstan for supporting the development and use of S&T capabilities. According to Kazakhstani officials, the purposes of its policies are to strengthen the nation’s international economic competitiveness, improve the social and economic situation for the country’s population, and enhance at home and abroad the prestige of S&T practitioners and researchers who can increasingly play an important role in Kazakhstan’s social and economic development. To this end, the policy thrusts can be categorized as follows: Encourage through economic incentives investments in Kazakhstan by domestic and foreign companies that rely on modern technologies. For many years the preponderance of such technologies will be acquired abroad. Encourage private-sector enterprises operating in Kazakhstan to increase their investments in R&D activities that are carried out in private- and public-sector facilities in the country, which will both serve the needs of the enterprises and enhance the technical capabilities of these R&D facilities. Provide financial and other types of support to Kazakhstan’s educational institutions, publicly owned R&D institutions, and other organizations to carry out R&D activities and provide S&T services when market mechanisms (i.e., public-sector goods and services) are not appropriate or are simply not developed. Support education at all levels of talented Kazakhstani S&T students and young specialists and provide them with incentives to work in the country’s S&T institutions.

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Science and Technology in Kazakhstan: Current Status and Future Prospects Provide the financial resources needed to elevate the level of scientific research in Kazakhstan to an internationally competitive level in selected areas of particular promise.15 The government recognizes that in the near term the interest of government-owned and private enterprises in the products and services of local S&T institutions will be limited. When they need such products or services, they will usually look abroad for well-proven products or services. Therefore, the government intends to select priority areas for support that will enable local S&T institutions to develop the capabilities to complement the flow of technologies from abroad with technologies that are also of interest to the enterprises that have been developed locally. In short, the government seems to recognize the importance of taking advantage of imported technologies while building an indigenous S&T infrastructure that increasingly provides homegrown technologies. Details of how this approach is carried out are described throughout the remainder of this report. As to basic research, which should be an essential component of the educational process and the foundation for applied activities, the situation in Kazakhstan in many fields lags behind international developments. This topic is addressed in subsequent chapters. 15 The committee developed this characterization, which was endorsed by NCSTI.