state programme digital kazakhstan“П ЦК... · 2020-06-04 · ensuring creation of digital...
TRANSCRIPT
APPROVED
By a decree of Government
of the Republic of Kazakhstan
of "12" December 2017
№ 827
State programme
"Digital Kazakhstan"
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No table of contents entries found.
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1. Program passport
Programme Title "Digital Kazakhstan" State Programme
Reason for development Message of the President of the Republic of
Kazakhstan
"Third modernization of Kazakhstan: Global
competitiveness"
of January 31, 2017
State body responsible for the
Programme development
Ministry of Digital Development, Innovations
and Aerospace Industry of the Republic of
Kazakhstan
State bodies responsible for the
Programme implementation
Central and local executive bodies, state bodies
directly subordinate and accountable to the
President of the Republic of Kazakhstan,
entities of the quasi-public sector
Programme Objective To accelerate the pace of the Republic's
economy development and improve quality of
life for population through the use of digital
technologies in medium term, and to enable the
economy of Kazakhstan to move on a
fundamentally new development trajectory ,
ensuring creation of digital economy in a long-
term perspective
Programme objectives 1. Digitalization of industry and electrical
power industry
2. Transport and logistics digitalization
3. Agriculture digitalization
4. Development of e-commerce.
5. Development of financial technologies and
non-cash payments
6. State for citizens.
7. State for business.
8. Digitalization of state bodies internal
activities.
9. Smart Cities
10. Increased coverage of communications and
ICT infrastructure.
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11. Provision of information security in the
ICT field
12. Increased digital literacy, in middle,
technical and vocational, higher education.
13. Improving the digital literacy of the
population (training, retraining).
14. Support for innovative development
platforms.
15. Development of technological
entrepreneurship, startup culture and R&D.
16. Attracting venture financing.
17. Generation of demand for innovation.
Implementation deadlines 2018-2022
Target indicators Mining and quarrying section productivity
growth in 2022 - 38.9%;
Transport and warehousing section productivity
growth in 2022 - 21.2%;
Agriculture, forestry and fisheries section
productivity growth in 2022 - 82.0%.
Manufacturing section productivity growth in
2022 - 49.8%.
Share of e-commerce in the total volume of
retail trade in 2022 - 2.6%.
Growth of jobs created by digitalization in
2022 is 300 thousand people.
Share of public services received electronically
from the total volume of public services in
2022- 80%.
Share of Internet users in 2022 - 82%.
Population digital literacy level in 2022 - 83%.
Improvement in the rating of the GEF WEF by
the indicator “Growth of innovative
companies” in 2022 - 104th place.
Amount of investment attracted in start-ups in
2022 - 67 bln tenge.
Information and communication technology
development index in 2022 - 30th place.
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Sources and levels of funding A budget of 1421 thousand tenge* shall be
allocated to implement the Programme in
2018-2022, including:
2018 – 20 103 128 thousand tenge*
2019 – 15 791 384 thousand tenge*
2020- 32 691 920 thousand tenge*
2021- 20 923 618 thousand tenge*
2022 – 19 173 092 thousand tenge*,
and funds from other sources of funding not
prohibited under Kazakh legislation.
2. Introduction
2.1. Summary
Objectives of the "Digital Kazakhstan" state programme are: to accelerate the
pace of the Republic's economy development and improve quality of life for
population through the use of digital technologies in medium term, and to enable the
economy of Kazakhstan to move on a fundamentally new development trajectory,
ensuring creation of digital economy in a long-term perspective
Achieving this goal implies moving along two vectors of development:
"Digitalization of the existing economy" - to ensure a pragmatic start,
consisting of concrete projects in the real sector, launching of digitalization projects
and technological rearming of existing economy sectors, public structures and
development of digital infrastructure.
"Building the digital industry of the future" - ensuring long-term
sustainability, launching a digital transformation of the country by raising the level of
human capital development, building institutions for innovative development and, in
general, progressive development of the digital ecosystem.
Programme to be implemented in the period 2018-2022, will provide additional
impetus for the technological upgrading of the country's flagship industries and will
create conditions for a broad and long-term increase in productivity.
Five main areas of programme implementation:
1. "Digitalization of the economy sectors" direction of transforming
traditional economy sectors of the Republic of Kazakhstan, using breakthrough
technologies and opportunities that will enhance productivity and increase
capitalization.
2. "Transition to a digital state" - direction of transforming the state
functions as an infrastructure for delivering services to public and business, in
anticipation of its needs.
3. "Implementation of the digital Silk Road" - direction of developing a
high-speed and secure infrastructure for data transmission, storage and processing.
1 Amounts shall be updated in accordance with the state budget for the relevant financial year.
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4. "Human capital development" - direction of change, encompassing the
creation of a so-called creative society to ensure the transition to new realities - the
knowledge economy.
5. "Creating an innovative ecosystem" - direction of creating conditions for
the development of technological entrepreneurship and innovation, with sustainable
horizontal linkages between business, scientific sphere and state. State will act as a
catalyst for an ecosystem capable of generating, adapting and incorporating
innovation into production.
In these five areas, 17 initiatives and more than 100 activities have been
launched, which can be seen in a clear form in the coming years, as well as activities
that form the basis of the digital sector as a new economy sector of the future, main
result of which will be in the next decades.
Implementation of the programme involves funding in the amount of 141 bln
tenge from the Republican budget. It is also expected to attract more than 169 bln
tenge of the quasi-public sector entities funds.
Beneficiaries of the programme will be the entire population, business and
state bodies of the Republic of Kazakhstan, as it affects all spheres of life and aims at
raising the standard of living for every resident of the state. Programme will lead to
significant shifts in the structure of employment - in particular, by 2022, 300
thousand jobs will be created through digitalization.
Current average level of digitalization of Kazakhstan economy today is not a
barrier, but an opportunity to make a qualitative leap in the development that will
enable country to reach the forefront of global stage. This involves the adoption of a
set of measures and systemic work in five areas described in the Programme and in
activities listed in the annex thereto. List of activities will be updated.
2.2. Global digitalization trends and international experience
Today, the Internet economy is growing at a rate of up to 25% a year in
developing countries, and no sector of economy can even move closer to this pace.
90% of all global data were created in just last two years. Already 35 billion devices
are connected to Internet and share data - this number is five times the total
population of the world. But, at the same time, governments and corporations are
spending nearly half a trillion dollars every year to counteract a new, widespread
phenomenon - cyberattacks.
Digitalization efforts are creating a new society where human capital is being
actively developed — knowledge and skills of the future are being nurtured from the
earliest years, increasing the efficiency and speed of business through automation and
other new technologies, and the dialogue of citizens with their states is becoming
simple and open. Digital revolution is happening in front of us.
These changes are due to many technological innovations that have been
introduced in different industries in recent years. The way in which the production
and acquisition of value added has changed dramatically, new requirements for the
education and labour skills of people are emerging. Commercial Internet of things is
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shaping the future of production industries by using flexible and intelligent
production capabilities, and it provides a revolutionary growth in productivity.
Artificial intelligence is being introduced, including in conservative industries such
as financial services and medicine. 3D printing technology is already contributing to
the transformation of industries such as aviation, logistics, biomedicine and
automotive industry. Blockchain has all prerequisites for a global transformation of
the monetary system. High level of data and ubiquitous availability of
communication are among the factors underlying the "economy of shared
consumption", which is spreading at an accelerated pace globally. Leaders of the
"mixed consumption without physical assets" segment of capitalization exceed the
value of traditional companies with multi-billion-dollar physical assets on balance.
These changes are radical and occur in a matter of years and even months
rather than decades as it used to be. But this is only the beginning, and the world has
yet to survive the main changes. Pace of change is growing, but it is not too late to be
part of these changes.
Digitalization process today affects virtually every country in the world. At the
same time, each country itself determines priorities of digital development. More
than 15 countries in the world are currently implementing national digitalization
programmes. Advanced countries in the digitalization of national economies are
China, Singapore, New Zealand, South Korea and Denmark. China in its "Internet
Plus" programme integrates digital industries with traditional ones, Canada is
creating an ICT hub in Toronto, Singapore is building a "Smart economy", which is
the driver of ICT, South Korea is focusing on the development of human capital,
entrepreneurship and the diffusion of ICT achievements in its "Creative economy"
programme , and Denmark focuses on public sector digitalization.
In these countries, the state plays a key role in launching and implementing the
programme, and success depends on the involvement of private players - what is
called "digital privatization". Today, we are witnessing more and more examples of
states consciously pushing the economic system into the digital future. State declares
a sort of "tender" for the closure of any "inefficiencies" identified as priorities.
Players present their "bids", pilot concepts, and approaches to possible project
implementation. State qualifies proposals and selects the winner from the pilot
project competition. Winner generally does not receive direct state subsidies but is
entitled to implement its turnkey project (in a particular direction, in an industry, in a
region). State provides regulatory support, synchronization and cooperation with key
stakeholders (regional authorities, etc.), as well as incentives for "digitalized"
industries. It is also possible to select a consortium of winners that reduces risks of
implementation while at the same time supporting competition between 2-3 players.
Singapore is the most striking example of the digital privatization approach.
Thus, in 2014, State has initiated the development of Smart Nation concept and
invited business and the expert community to cooperate in refining and implementing
it. Smart Nation is an initiative of the state to improve quality of life through the
introduction of digitalization into the daily lives of citizens. State has formed a
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baseline request for a number of tasks that have been identified as primary challenge
for launching major initiatives within the framework of Smart Nation. Thus, one of
the key initiatives identified initially is the development of a national sensor network
to build a "smart city". Under each task, state organizes a tender to select the
contractor to develop a technical solution. Participation in the tender is open to all
participants meeting the requirements of briefing: thus, state provides a focus not
only on large business but also on the involvement of small and medium-sized
businesses. It is noteworthy that in 2015-2016 more than half of the contracts were
signed with small and medium-sized businesses.
State can provide a "digital leap" in the country through the accelerated
development of specific technologies. In such cases, state assumes the role of an
investor in determining the key, most promising funding lines, based on an
assessment of the long-term return to investment, competitive position, trends, and is
also invested in fundamental conditions of success, such as education and
requalification of staff.
In South Korea, with the active position of the state, backbone companies are
beginning to invest themselves in breakthrough digital technologies. For example,
one of the largest telecom operators in the country - SKT - has indicated its intention
to invest more than 4 billion USD in artificial intelligence and Internet of things.
Operator notes the need for partnerships in the development of new technologies and
also plans to involve local startups in the development of point solutions.
Another global trend is the "state self-digitalization", i.e. the digitalization of
state operations and state-owned companies. Self-digitalization is a challenge that
must be fulfilled by any state aimed at maximizing the value of economy, increasing
welfare, a place in business conduct ratings and a standard of living.
There are two key areas of self-digitalization at the country level:
- Digitalization of public administration: digital-workflow, digital by default
and digital first principles, reconsideration of inefficient processes. In this logic, self-
digitalization covers the entire spectrum of services: internal interaction of state -
G2G, interacting with citizens - G2C, interacting with the business - G2B.
- Digitalization of quasi-public sector entities, which is particularly relevant
for countries such as Kazakhstan, where the state is still responsible, in one form or
another, for the majority of jobs in the economy and hence for the growth of labour
productivity. Since traditional competitive market mechanisms are often not
employed for such companies, measurable KPIs associated with the implementation
of digital transformation are being developed and established (introduction of 4.0
industry technologies and the corresponding creation of value, % of revenue from
new products, training and requalification of staff).
For example, Denmark actively invests in state bodies digitalization. At
present, every citizen and every business has a private account that is used to
communicate with state bodies in real time. Since 2015, all citizens are required to
communicate with state bodies only via the Internet (in Denmark, 95% of households
have access to the Internet), each citizen has a passport (digital ID), and all state
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bodies and municipalities are connected to a single network, allowing interaction
with all departments through a single private account. Business, apart from
communication, has the ability to perform all operations over the Internet, to receive
statements, to pay taxes, and to send reports (electronically, sending and receiving
documents takes 5 minutes compared to 5 days when sent in a paper form). This
system saves 10-20% of the budget each year.
All these changes have long-term economic and social consequences. Such
phenomenon as "shared consumption economy", which is spreading at an accelerated
rate globally, not only has a direct impact on each consumer but also has an indirect
impact on the country as a whole. It is a solution for self-employed citizens,
motivates entrepreneurial activity and increases economic activity. This trend will be
further developed as new assets and consumption items are used together to reduce
individual costs.
It is now clear that the structure and form of employment will change
significantly and rapidly. Development of technologies will facilitate cross-border
remote employment, which does not fear migration barriers.
3. Current situation analysis
World's economic crises pose new challenges and lead to greater state
participation in the economy as a result of public policy orientation towards
providing the necessary social protection for population. Unwillingness of people and
businesses to take risks and the need to change their behaviour as economic agents in
the face of contemporary challenges is a by-product of high state activity.
Nevertheless, digital revolution that is before us makes it necessary for Kazakhstan to
include digitalization in its development plans as a public policy.
In the world's key ICT development rating, which is being calculated under the
UN auspices - ICT and Technology Index - Kazakhstan held 52nd place in 2016 out
of 175, without changing its position since 2015. As a result of Programme and other
strategic directions implementation, country would raise its ranking to the 30th place
by 2022, to 25th in 2025 and the 15th place by 2050.
Kazakhstan is also a catch-up country in the e-intensity rating of International
consulting company The Boston Consulting Group from the point of view of the
current level of digitalization. In order to overcome the catch-up status the
Programme shall need revolutionary, breakthrough actions on all digitalization issues
of global agenda.
These include digital transformation of traditional economy sectors,
development of human capital, digitalization of state bodies' activities, development
of digital infrastructure, as well as breakthrough in the development of digital
entrepreneurship ecosystem and, as a consequence, changing production patterns and
value added in the real sector of the economy.
At the same time, Kazakhstan is not starting from scratch. In the 1990s, state
programme for industrial and innovative development was launched, Bolashak"
International Education programme "was launched, and an "e-government" forming
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was initiated in 2005. Also, a number of elements of the innovative ecosystem are
already in place in Kazakhstan, and the Alatau TIP SEZ, "Nazarbaev University"
AEO, Astana hub international technopark is being launched. 3/4 of the adult
population of our country has a basic level of digital literacy, more than 3/4 have
access to the Internet. This is a significant base from which we can build on the
implementation of the Programme.
One of the steps towards creating the conditions for transition to an
information society was "Information Kazakhstan 2020" State Programme, approved
in 2013. As a basis for digital transformation of a country's economy, the Programme
has contributed to the development of the following factors: the transition to the
information society, improvement of public administration, establishment of "open
and mobile government" institutions, increasing accessibility of the information
infrastructure not only to corporate structures but also to the citizens of the country.
As a result of three years of the "Information Kazakhstan-2020" State Programme
70% of activities have been fulfilled and target indicators have been exceeded by
40%. However, the rapid development of IT on a global scale dictates its rules and
requires an adequate and timely response. The next step for Kazakhstan, therefore, is
to initiate the process of transforming the key sectors of the national economy,
education, health, and the state's interaction with society and the business.
Head of State, in a message to people of Kazakhstan on 31 January 2017, has
announced the Third modernization, in which the digitalization is a mainstay, has
noted the need to cultivate new digital industries and that "it is important to promote
communication, universal access to fibre-optic infrastructure. Digital industry will
boost all other industries." In the National Plan to implement the Message of the
President to the Nation of Kazakhstan as of January 31, 2017. The criteria for
achieving the objectives of the Third Modernization - Kazakhstan shall join the 30
developed countries of the world by 2050. To this end, the average annual economy
growth rate should be 4.5-5%. Key drivers in the new growth model should be the
economy sectors that can provide 70% of GDP growth, increase employment, exports
and investment attraction. Accordingly, priority areas in the vanguard of the third
modernization have been approved. The remaining 30% of growth is to be provided
by the social sectors (healthcare, education) and ICT in short-term.
In the fifth priority of the Third Modernization, President of the country has
identified the need to combat cybercrime, religious extremism and terrorism. In the
message of the Head of State, a separate request has been made to the Government
and National Security Committee to develop "Cybershield of Kazakhstan" Concept,,
aimed at ensuring the information and communication security of society and the
state in the field of information and communications, as well as protecting privacy of
citizens in using information and communication technologies.
There is, therefore, a willingness and all necessary prerequisites for achieving
the ambitious goal set out in this Programme and implementing the changes
necessary to achieve it.
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3.1. Digital transformations in the economic sectors
New digital revolution is changing today's production modes, supply chains
and value chains. Industry 4.0, one of the drivers for digital transformation of
industry, is a concept of production organization where additional value is provided
through integration of physical facilities, processes and digital technologies, at which
physical processes are monitored in real time, decentralized solutions are made, and
machines interact with each other and people. Full digitalization of all physical assets
and their integration provide the basis for a shift from mass production to mass
individualization, increased flexibility of production, and a reduction in time of new
product development, allowing to introduce new business models and adopt
personalized approach to working with customers. All of this greatly enhances the
efficiency and competitiveness of industrial enterprises.
Mining, manufacturing and electricity
Subsoil use is currently the basis of the real sector of Kazakhstan's economy.
However, the sector of high reprocessing of manufacturing industry is still
underdeveloped. Electricity industry provides for the needs of population and
production, but requires a shift to a more technological and saving level.
Kazakhstan is one of the world's leaders for mineral resources. Country's raw
material base is the world's first largest explored reserve of zinc, tungsten, barite, the
second for uranium, silver, lead and chromite, the sixth for gold, the twelfth for oil,
and the fourteenth for natural gas reserves.
In 2015, as a whole, due to decline in prices for mineral resources there was a
reduction of production in mining by 2.5%, oil production reduction by 1.7%, coal
and lignite by 5% and iron ore by 22%. In 2016, the decline in mining production
was 2.7%. However, in the long term, the oil and mining sector retain important
value for the functioning of Kazakhstan's economy. At the same time, labour
productivity in subsoil use remains low, as is the technological capacity of
production.
In the mining and manufacturing industry, the key trend is to move to a new
technological level in accordance with the concept of Industry 4.0.
At present, Kazakhstan's mining industry insufficient technical capacity, in
comparison with world leaders, which generally leads to low productivity and
competitiveness. Despite the fact that some of deposits in the country are equipped
with modern equipment and developed data networks (21%), a substantial portion of
the deposits are in need of modernization. Thus, 56% of the deposits are
characterized by a lack of networks or insufficient development, and 23% of the
deposits require a complete replacement of equipment.
Among the most important constraints to the development of digital
component of mining industry are limited financial resources, shortage of skilled
personnel with hybrid specialization, both in industry and IT, lack of understanding
of economic benefits of implementing digitalization, as well as limitations on
infrastructure.
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Manufacturing industry is the economy sector, development of which is one of
the most important conditions for the sustainable development of Kazakhstan.
Manufacturing sectors generate demand for high-tech services, create engineering
competencies and provide quality jobs. In the process of technological development,
more than 80% of manufacturing enterprises are characterized by a low degree of
automation and penetration of digital technologies. For example, oil refining is
currently using annual planned refinery shutdowns for repairs, which indicates
unoptimised repair and maintenance processes, and consequently increases overall
costs.
The main trend in energy is the introduction of various Smart technologies to
ensure effective information exchange among all elements and network tenants,
protection and recovery from major failures, natural disasters, external threats.
Sphere of environmental protection requires prompt, reliable and complete
information. In this regard, automation issues are of strategic importance, as future
environmental performance will not only be a product of the material base, staff skills
but also the reliability and speed with which all environmental information is
presented.
Transport and Logistics
A quality transport and logistics infrastructure provides a powerful boost to the
economy by increasing the cohesion of territory and reducing the overhead costs of
delivering goods to their destinations.
In order to maximize the impact of communications infrastructure
development, transport linkage of the territory must be developed in parallel, both
through the development of all types of transport and cheapening of its value and
through the development of infrastructure for the forwarding and delivery of goods.
Kazakhstan now has a highly developed network of railways, but an inadequate
network of roads and excessively expensive air transport. Multimodal
transcontinental transport of goods from Europe to Asia is developing, but there is
also a great potential for growth. There is a small amount of sea and river transport
that also has untapped growth potential.
With regard to examples of international practices in addressing the
aforementioned problems of the transport industry, the United States developed the
first standards on the intellectual transport system in the mid 90s. Between 2002 and
2012 the National Intelligent Transport System Program was implemented in the
United States. In Japan, the establishment of an Intelligent Transport System began in
the first half of the 1970s. last century from scientific research, which was later
documented as a social-oriented program to improve national welfare. China's
"Strategy for China's Intellectual Transport System Development" was adopted in
2007. Relevant tasks for the development and implementation of intelligent transport
services are reflected in the China's five-year economic development plans.
Thus, in order to ensure the continued growth of the logistics and transport
industry, it is necessary to envisage introduction of the transport system, that would
enable the increase of transit capacity via vehicle management, enhance transport
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security via rapid processing of information and the development of optimal and
rational decisions and managing impacts.
Experience of foreign countries shows that the increase in traffic increase can
be achieved, including through optimizing the paper flow, using the "E-Freight"
International standard, in the process of airfreight, and the development of
multimodal transport.
Problems of the industry lie in several dimensions and relate to internal and
external contours:
- low control of transit and imported cargo;
- lack of capacity to monitor, analyse and forecast all types of transport for
decision-making;
- poor logistics infrastructure.
Problems listed above are both a waste of transit capacity and a barrier to
domestic production.
Agriculture
Agriculture is one of the key branches of Kazakhstan's economy, providing
food and economic security as well as the labour potential of the country, especially
in rural areas. According to the 2016 data for agriculture, forestry and fisheries
amounted to 4.6% of the country's GDP, this industry employs 18% of the country's
working population.
Gross production of agricultural products (services) in 2016 across the country
has amounted to KZT 3 684.4 billion, which is 5.4% above the 2015 level. In 2016,
crop production grew by 7.5% and livestock products - by 2.8%. Nevertheless,
agriculture remains a sector of untapped growth potential.
Despite the positive trend in the gross output of agriculture, production has
generally lagged behind the growth of consumption and incomes of the population,
and continued productivity and competitiveness of products does not enable the
production growth, which causes a high percentage of imports in internal
consumption. With the accession of Kazakhstan to the World Trade Organization,
requirements for increased competitiveness in external markets have also intensified.
Experience of developed countries, such as the US, Canada, Australia, has
shown that digital technology is radically changing this traditional industry. Modern
geoinformation systems and large data from various sources, including IoT,
contribute to big harvest without soil depletion, with rational use of resources.
Commercial Internet of things allows to create automated farms with remote control.
Well-developed system of logistics and e-commerce can reduce the cost of delivering
agricultural products to final consumer, even for small farmers, while maintaining its
quality. This is an important factor in conservation and development of
environmentally friendly products production, both in terms of preservation of
nation's health and in terms of the realization of export potential.
Today, in the agricultural sector of Kazakhstan, the proportion of farmers using
digital technology in agricultural production is negligible, which has a negative
impact on the growth of productivity. In addition, agricultural land is either not used
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as intended or used inefficiently, and this is difficult to control because of the large
territory size, low population density and lack of the necessary infrastructure status
monitoring and use of land with analysis and forecasting in short and long term.
Fisheries are important as a source of income, a basis for economic growth,
employment generation, increased exports of fish products, other potential
opportunities, and a renewable source of biological diversity. Uncontrolled illegal
harvesting and illicit trafficking in fish products can lead to disappearance of fishery
resources and food shortages, and there is an emerging need to detect illicit fish
trafficking.
There is a great potential for transformation in agriculture through digital
technology, and in a full-scale programme of digitalization the agriculture is able to
achieve a qualitatively new level of development and become a driver of the
country's economy. Main direction of the agriculture digitalization programme
activities is the improvement of productivity and preservation of country's food
security.
E-commerce
Trade is the most important driver of economic growth in Kazakhstan. Share of
wholesale and retail trade; repair of automobiles and motorcycles in Kazakhstan's
GDP for 2016 has amounted to 16.8%, and its contribution to GDP in some years of
the last two decades was 2 percentage points. However, e-commerce today accounts
for a relatively small proportion of retail turnover, 1% in 2016.
At the same time, in developed and developing countries, e-commerce is
rapidly developing, and its positive impact extends not only to the business sector but
also to the quality of life of the population in the country as a whole. In particular,
through e-commerce population gains access to more goods at lower prices, for
example, by engaging in international trade. From a business impact perspective, it is
worth noting that growing popularity of e-commerce leads to an increase in the
number of people wishing to open their own businesses in this area.
It is expected that in the next 10 years, attractiveness of electronic commerce
will increase through a number of qualitative changes. These include improved
delivery efficiency, including through new delivery modes, extensive use of client
analytics, increased product assortments, and increased popularity of mobile
commerce.
At the same time, it is necessary to take into account a number of barriers to
the development of electronic commerce that are present at all stages of a value
chain.
Thus, in process of attracting clients, limited promotion of electronic
commerce and players is a limiting factor, and electronic commerce is not advertised
on television and outdoor advertising, which also prevents new consumers from
being attracted.
In organizing access to the electronic platform, there are frequent technical
failures of IT systems among players in the e-commerce industry. However, inability
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to adapt systems widely to use them on mobile devices remains one of the most
common problems.
In addition, in Kazakhstan there is a lack of specialists with specific
competencies needed to develop the industry, such as internet marketers and content
professionals.
Supply, shipping and delivery of the goods are compounded by inadequate
transport and logistics infrastructure, which is a source of expensive and long
logistics.
Low culture of online consumption, low level of awareness among citizens,
poor availability of debt financing for SME and adverse economic conditions of high
cost of capital are added to above-mentioned difficulties.
There are also key issues in the area of e-commerce legal regulation. These
include complex customs procedures that restrict export of electronic commerce
companies, absence of tax concessions and other effective incentives from the state,
restrictions on development of foreign companies, including cross-border trade and
large shadow trade.
Financial sector
Financial sector is an important element of the economy, and speed and quality
of changes are dependent on its condition. Electronic payments and electronic
commerce have now become an integral part of the financial sector. Financial
industry has traditionally been a leader in the introduction and application of
innovative technologies and digital services to interact with clients. Virtually all
banks provide services through remote channels. 70% of the banks provide services
to individuals through the Internet and mobile banking, 55% of banks provide
services based on mobile solutions. Thus, volume of payments by individuals using
the Internet and mobile banking in 2016 was 2.6 times higher than in 2015. Provision
of electronic services by brokers was simplified for investors, including trading
activities based on the client digital signature and provision of electronic services
through the private account. This has facilitated market access for regional investors
and allowed investors to trade financial instruments on the Kazakhstan stock market
from anywhere in the world.
Further digitalization of financial relationships is barred by the lack of an
effective regulation and harmonized standards for the financial sector electronic
interaction with public information systems and databases, a universal mechanism for
remote identification of clients, and insufficient financial literacy among the
population.
Involvement of the population in formal financial system is an important
element. In order to improve the availability of financial services, particularly
payment services extrabank ecosystems are developed - electronic money systems,
mobile operators are implementing decisions on payment of goods and services from
the billing account. However, these solutions are limited by the service provider's
ecosystem, which limits the mass use by population. One example of the most mobile
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payments development is Sweden and Kenya, despite differences in approach -
banking and non-bank platforms.
Experience in such countries as UK, Sweden, Austria, Singapore, Korea,
Australia has demonstrated that creation of technology platforms to ensure the inter-
institutional remote identification of population, introduction of open platforms in the
financial sector, building an integrated digital environment of interaction and
communication between financial institutions, clients and public authorities,
improves the quality of services in financial sector. All of this corresponds to the
global trend of digitalization, transforms the industry and creates prerequisites for the
widespread availability of financial and other services.
Modern technology trends dramatically change the paradigm of financial
service delivery - new areas and directions, business models, lower cost of financial
services, and since risks inherent in the industry.
ICT industry development
Three major sectors should be identified in the IT market structure: hardware,
licensed software, and IT services.
According to IDC agency data, volume of IT market for the Republic of
Kazakhstan has amounted to 1 687 million USD in 2015 against US $2.0 billion USD
in 2014. Share of hardware segment is estimated at 81.2% or 1 369 million USD,
share of licensed software is 7.5% or 126.8 million USD IT services at 11.3% or
190.5 million USD.
In 2016, country's IT market has amounted to 1307.4 million USD, share of
hardware amounted to 84.3% or 1101.8 million USD, licensed software to 4.7% or
62.1 million USDand IT services to 11.0% or 143.5 million USD. For comparison in
countries such as England and France, the share of IT services in 2016 was 46.5%
and 43.7%, respectively. In Eastern European countries, for example Poland and
Czech Republic, the share of IT services in the total IT market has amounted to
32.6% and 34.9%, respectively. In Russia, the share of IT services amounted to
23.8%. At the same time, the amount of local content that is included in the gross
value added of a country is very small, largely generated by IT services and not more
than 30% of the IT services volume.
These data show the low effectiveness of IT investment, low level of
cybersecurity, and need to take action to promote local content.
According to the Kazakh Association for IT companies LEA, 2 560 companies
operating in the field of information technology are registered in the country in 2016.
These companies carry out a variety of activities, and of these, 770 companies are
involved in the development of software. Among these companies there are IT
companies that provide a high percentage of local content (up to 100%) in the
projects they implement.
Global practices has shown that creation of conditions for IT companies
development and formation of a full cycle of startup support are maintained by
technological parks. Country's techno-parks, however, have not been adequately
developed, including because of the poor performance of information technology
17
development institutions established in the segment. Venture Financing institute in
Kazakhstan has also not been adequately developed.
It should be noted that conditions of technological development and
cybersecurity of countries are the full support of existing domestic IT companies that
are working to increase value added in the information technology sector, and
working with trusted software. At the same time, forming and development of a
start-up direction, with the participation of technological entrepreneurs from all over
the world, are a development prerequisite.
3.2. Digitalization of state bodies activities.
Programme has set ambitious targets for the digitalization of state bodies
activities. To achieve these objectives, a support infrastructure will be established in
the form of adapted legislation, business support measures, education and science,
business facilitation, reduction of transaction costs in conjunction with state.
Moreover, state will anticipate the needs of its citizens to obtain services, making
available as much time as possible for productive work and stimulation of
economically active behaviour.
E-government
In the previous stage of informatization, state had established the "E-
government" of the Republic of Kazakhstan in the form of basic infrastructure and
information systems of state bodies directly or indirectly involved in the provision of
public services.
As of July 2017, more than 740 services have been translated into electronic
form, and 83 mobile services have been implemented. In 2015, the volume of public
services provided in electronic form on Web portal has amounted to over 36 million,
and in 2016 it amounted to about 40 million. As of September 2017, the number of
registered unique users reached over 6.6 million people.
As of October 2017, there are 349 service centres operating in the country. In
2013, a single contact centre was established at the "e-Government" call centre with
toll-free number 1414. A single contact the centre receives at least 14,000 cases per
day from citizens, and the number of cases is projected to increase by an average of
15% of the total cases number annually. This creates a heavy load on operators, leads
to problems with getting through, and reduces the quality of services. A large number
of calls contain similar cases, and they could be converted to auto-processing or self-
service mode.
An open government site has been set up on the e-government web portal. As
of October 2017, the "Open Data" portal contained 2 376 data sets, 17 132 draft
regulatory legal acts and concepts of bills were discussed, and 14 928 budget
documents published.
Despite the results achieved, the problems associated with the lack of
openness, customer orientation and proactiveness. For example, state bodies are
reluctant to disclose information that can be used to generate added value in the form
of up-to-date and demand-open data.
18
Profile activities of state bodies are automated, however, there are still areas of
activity not sufficiently covered by informatization. Advent of new technologies
makes it possible to provide services of higher quality than those that are currently
being implemented. For example, the use of big data technologies can lead to a
fundamentally new approach to the analysis of population needs and, as a result, to
improved quality of service.
Indispensable conditions for the entry of Kazakhstan into the top 30 developed
countries are not only the growth of GDP to the level of developed countries, but also
bridging of the socio-economic development gap, in particular the progress made in
improving performance of health system, and thus maintain a high level of health,
longevity and quality of life for the population.
Digital technologies in health can help solve major problems: accessibility and
quality of health care, as well as prevention of disease.
Health care has a direct impact on the duration and quality of life of
population, including the maintenance of employment and economic activity age.
Health digitalization reduces the number of medical errors, improves quality and
speed of service, and improves the quality of management decision-making.
Currently, government projects in developed countries are aimed at developing
a coherent national-level architecture that collects, processes and exchanges data on
the health of citizens and health system. Main objectives are to obtain a single
information environment, with the possibility of monitoring health of each individual,
improving health system as a whole, improving quality and accessibility of health
care, reducing the number of errors, build a system where in the centre there is
patient and information about his or her health.
In 2004, Kazakhstan has established a national telemedicine network. By the
end of 2016, it had combined 204 health facilities, with the help of district-level
health workers (144 district and city hospitals) to be consulted by colleagues from
regional and republican hospitals and centres. In 2016, 28 060 Tele-Medical
consultations were held, most of which were in cardiac consultations - 4 674
sessions, pulmonology - 3 666 sessions, neurology - 2 720 sessions. During the
period from 2004 to 2016, medical patients received over 133 thousand Tele-Medical
consultations.
However, health system still has large areas that are not covered by digitization
and that do not use modern opportunities for increased efficiency.
There are also problems in rulemaking process, including lack of a single
information space; lack of transparency and severity of the link between monitoring
and rulemaking, where legal monitoring is done manually; there are no tools for
analysis prior to the development of NLA, and there is a need to further improve
information systems that are transparent and work in a single information space.
Smart Cities
Modern world is placing high demands on urban infrastructure. Large cities
experience problems of transport logistics, technical and social urban infrastructure,
quality of the urban environment, efficient management of urban development,
19
further development of the city's public, business and residential space, taking into
account the increasing population of the city.
Since 2012, city of Astana has been implementing the "Integrated Life-Support
system" project, which covers development of video surveillance systems,
introduction of photo-video recording of violations, establishment of a data centre,
centre for operational management and intellectual contact centre. Initiatives of
Smart school (19 schools out of 88 connected), Smart street lighting, Smart clinic (2
out of 10 clinics connected) are being implemented. In Almaty, a photo-video
recording system of violations has been introduced, and in 2015 "Onai" electronic
ticket system in public transport was launched.
3.3. Development of digital infrastructure
Information and communication infrastructure
Today, information and telecommunications infrastructure is becoming an
essential element of economic development. Without a modern, accessible
telecommunications infrastructure, Kazakhstan cannot be anchored in the world
economic and information space. Availability of ICT is the foundation for building
the digital economy.
Main part of the developed ICT infrastructure is broadband Internet access.
Broadband access is provided by wired technologies such as FTTx, ADSL and
Wireless technologies 3G, 4G, and satellite communications. Telecommunications
infrastructure has been established to provide people and businesses with broadband
Internet access in cities and regions of Kazakhstan; however, to date it has not met
the needs of rural population. In order to reduce digital inequalities, there is a need
for more quality and coverage of broadband internet access for rural communities.
Governments in many parts of the world see Broadband Internet access as a
key element of their development programmes. European Union is implementing the
digital Agenda initiative of the "EU 2020" strategy, where broadband Internet access
is identified as the basis of the modern European Union economy. United States
funds projects from federal budget to improve the access of rural population to fibre-
optic infrastructure. Canada, as part of "Digital Canada 150" strategy provides
investment for expansion of high-speed Internet services for 280 thousand
households in rural and remote locations.
According to information from the Statistics Committee of the National
Economy Ministry of Kazakhstan, in 2014 the proportion of Internet users (including
mobile) aged 6-74 is 63.9%, in 2015 - 72.9%, and in 2016 - 76.8%. 4G network
coverage in 2015 was 65.5% of the population, and 69% in 2016.
In rural areas, there is a digital divide - a lag in the development of data
transmission network. In 2014 density of urban Internet users was 72.6%, 52.7% in
rural settlements, 76.4% and 68.3% in 2015, 81.3% and 70.9% in 2016 respectively.
Overcoming the information inequality of regions is compounded by the country's
size, presence of more than 6 600 rural settlements, some of which are located in
remote and inaccessible localities. In global experience, this problem is being
20
addressed by development of satellite communications and broadcasting, which
provide:
- possibility of equal access of the population to information, including public
services, and information resources of the national television broadcasting;
- up-front meeting the growing information needs of people, businesses and
the state.
KazSat 2 and KazSat 3 satellite systems were launched with a total capacity of
2 160 MHz. 16 communication operators provide satellite and cellular services
through 7 000 earth stations. According to the National Satellite Broadcasting
Network "Otau TV" data, the total number of subscribers to the service has exceeded
1 million in 2015. As of July 2017 356 radio-television stations have been
commissioned, providing 77% of the country's population with digital terrestrial
broadcasting.
At the World Radiocommunication Conference (WRC-19) in 2019, ITU is
expected to adopt the new generation of 5G mobile communication standards.
Depending on the standards adopted by ITU, authorized body will undertake relevant
work on the introduction of 5G technologies in the territory of the Republic of
Kazakhstan.
Provision of information security in the ICT field
Integration of Kazakhstan into the World Informatics and telecommunications
system has already resulted in a multiplier of information and communication
infrastructure objects in public administration, business and industrial facilities
management systems, increased the provision of ICT services by operators handling
personal data of citizens.
In recent years, there has been a dramatic increase in threats to information
security, both in public information systems and in the banking and industrial sectors.
For example, according to the EMC's "Global Data Protection Index", the amount of
missing data worldwide has grown by 400% since 2012. Total lost data amounted to
an average of 2,36 TB. Unscheduled downtime and data loss cost to organizations
around the world each year over 1.45 billion US dollars. According to the
International INternational Telecommunication Union's cybersecurity index in 2017,
Kazakhstan had taken 83rd place from 193 countries, i.e. was at a low rating level.
This index takes into account the level of development of legal environment,
technical prerequisites, organizational measures, development of competencies and
cooperation within and outside the country.
In parallel with the development of broadband access networks, transformation
of information and communication infrastructure, transfer of business processes of
economic agents into an online environment and automation of technological
processes in industry, energy, banking and ICT services, there is a need for a
coherent and consistent policy to ensure the security of information space and
communications infrastructure.
Main challenges and threats to security in the use of ICT affecting the
efficiency of processes of Kazakhstan economy digitalization are reflected in the
21
cybersecurity concept of "Cybershield of Kazakhstan" and provide for using trusted
technologies to ensure integrity, confidentiality, information availability, and user
authentication when processing.
Effective implementation of economy digitalization will be ensured only with
unity, sustainability and security of information and communication infrastructure,
the reservation of data and confidence of citizens in processes based on ICT-based
solutions.
3.4. Development of human capital
Digital economy requires digital skills of population to reap its benefits. At
present, the level of computer (digital) literacy is 76.2% and needs to grow in the
coming years. To date, the Ministry of Education and Science is already introducing
a number of initiatives:
1) in 3-4 grades, the subject of "Information and communication technology"
has been introduced, generating common basic knowledge of modern information
technology for effective use in learning and daily life;
2) there are 372 robotics clubs that are teaching the common basics of robotics
programming.
However, taking into account the new requirements for younger generation,
there is a need to review the content of secondary education through the development
of creative thinking and technical skills.
In technical and professional, higher, postgraduate education, according to data
from the Ministry of Education and Science of the Republic of Kazakhstan:
1) on the basis of 3 (three) specialties, the subject of "Information and
communication technology" has been introduced to ensure that students have a basic
knowledge of the use of ICTs in practice within chosen profession;
2) professional standards are developed which will become the main basis for
technical and vocational education programmes, higher education and postgraduate
studies.
Also to date, 14.5 thousand educational grants have been allocated for the
training of ICT specialists over the period 2014-2016, while the output for the same
period was 94 thousand people.
At the present time, there is a shortage specialists in ICT specialties with
professional knowledge and skills in the chosen profession.
Digitalization is far ahead of the existing production requirements system for
occupations in the labour market. Lack of an operational link between labour market
and education system can lead to preparation of untapped staff and release of
personnel in "dying" occupations. Content of all levels of education needs to be fully
reviewed through the development of digital skills of all professionals.
3.5. Innovative ecosystem
Reality today is an endless whirlpool of change, and it is taking place so
rapidly that it is important to adapt to the new conditions in time. Success in the long
22
run is possible only when fundamental changes in the system itself are taking place,
forcing the system to progress. It is precisely these true engines of progress (along
with human capital) that include the start-ups - instrument of renewal and
development, not so much the economy in its physical dimension (GDP growth), but
the transformation of public consciousness, birth new culture of technical
entrepreneurship.
A layer of technological entrepreneurs will be created to create such a culture.
It is important to understand that every successful entrepreneur is worth a hundred
and a little less successful and thousands more small entrepreneurs seeking to
introduce new products and services, which in itself is a positive effect on the
economy. It is necessary to reach a state in which children will dream of becoming
entrepreneurs and creating companies, with their ideas changing Kazakhstan from
within.
Effectively functioning startups ecosystem is a chance for Kazakhstan to
become a "point of attraction" for the best minds and generator of progressive ideas
in both ICT and other industries. This is not an easy task, but even the smallest delay
in its implementation can delay development of the country for years. That is why it
is now so important to lay the groundwork for launching long-term changes, to which
activities to develop the startups ecosystem are directed.
Key elements of a developed startup environment are: technological
entrepreneurs talents that are the main source of innovative ideas; professional
investors involved in "smart" financing; efficient ecosystem is an infrastructure that
supports development of entrepreneurs.
In implementing the programme for the development of the startup
environment, Kazakhstan cannot fail to take into account some of existing difficulties
that are specific to industry at this stage of development. The most important of these
is the lack of a critical mass of entrepreneurs and venture financing.
Thus, there are very few technological startups in Kazakhstan compared to
other countries. According to the data available, for 2015 Kazakhstan had only about
200 startups, whereas in Russia this number was 3 800 and in Israel 6 000. Low
level of R&D expenditure (0.2% of GDP vs. 4.1% in Israel) demonstrates the risk of
this situation remaining in the future.
One of the specific features of startup environment in Kazakhstan is primarily
the state nature of the startups financing, mainly through the National Agency for
Technological Development and Techgarden autonomous cluster fund, providing
annual grants of 20 thousand USD to 100 thousand USD. At the same time, there is
little or no support for professional venture investors.
Creation of a live startups ecosystem is a task for decades. Global goal is to
create the conditions for a "serial" release of a huge number of startups. At the same
time, state can act as a catalyst for change.
Realizing that the prerequisite is availability of technological entrepreneurs as
a class, many Israeli universities offer a compulsory entrepreneurship course in
technical faculties. There is also a system of "orders" for technology projects where
23
customers are large local and international companies, and students are the
performers. Regular lectures and master classes are held with invited successful
entrepreneurs.
Since it is not possible to create a critical mass of Kazakh entrepreneurs in the
short term, international experience should be considered. In general, countries with
developed ecosystems see foreign entrepreneurs and technology specialists as a
source of specific know-how needed to develop local ecosystem of startups. Their
experience, as well as technology of research and development, of entrepreneurship,
of management all of the skills that foreign professionals can offer, may help speed
the formation of startups local ecosystem. In addition, they provide a variety of
cultures and knowledge, which in the future can become a competitive advantage for
the ecosystem as well as for each participant.
Example of Singapore, where there are good universities and need for talent
was still higher than the offer. Short-term solution was to create incentives, such as
support for research and funding for foreign scientists, assistance with moving to
Singapore, and introduction of favourable migration rules. In the long run, education
scholarship programmes have been established, a partnership has been established
with Duke University and GlaxoSmithKline to establish a research support fund.
Today, there are about 6,000 scientists from around the world living and working in
Singapore, approximately 52% of those employed in startup industry are foreigners.
Special visa support programmes have also proved to be effective in attracting
technology entrepreneurs. In particular, the United Kingdom's Technical Nation visa
programme, established to reduce shortage of highly qualified technical entrepreneurs
in large companies and startups has considerably simplified the visa issue system for
technical specialists. Thus, in 2014, Tech City UK government organization was
granted the right to issue more than 200 British work visas per year for non-EU
professionals, but with unique experience and competence in priority for the UK - IT
and information security, finance, etc. Technology specialists working together were
allowed to apply for group visa applications. This experience can also be used in the
creation of "Astana hub" technology park to attract foreign technical specialists and
entrepreneurs.
So far, Republic of Kazakhstan has weakly developed venture financing
institute, there are no major startups in the ICT field that have received venture
financing in the territory of the Republic of Kazakhstan, weak entrepreneurial
initiative, weak startups support infrastructure. There are financial and regulatory
constraints, as well as high risks for start-up entrepreneurs. Entrepreneurship and
startups creation are poorly promoted among schoolchildren and students, and the
number of business incubators is very limited, around 20 in total in the country, while
one of the leaders of digitalization, China, has about 400. Majority of the population
prefers to open their own business rather than employment as an employee. From the
point of view of creating a venture industry, experience of Israel is interesting,
showing that state can be a decisive link in establishing a framework for venture
financing. Fund for co-investment (Fund of Funds) has been established and has had
24
a mandate to invest in established funds up to 40% of total amount of allocated
investment, with the condition of majority investment from foreign fund and
investments of local financial institutions. Each fund management company had a
call option for the state shares to their redemption at original cost (plus a minimum
interest), which added to the motivation and inherently "cheap" money. Result of this
measure was essentially the establishment of Israeli venture industry: 100 million
USD of public investment has turned into 5 bln USD under the administration of
established funds in a decade.
In Australia, in December 2015, National Innovation and Science Agenda
programme was adopted to support innovation and science, aimed at enhancing
scientific capacity to generate knowledge, invest in human capital, transition from
commodity development model to a diversified innovative economy. One of the
measures has been to reduce capital gains tax for startups, as well as 20% tax
incentives for income not exceeding 200 thousand USD per annum for companies
engaged in innovation. A total of 840 million USD were allocated for the
implementation of programme including improvement of computer literacy among
students in higher and secondary education, training of ICT specialists, research
activities at universities, establishment of a support fund for startups and access of
Australian startups to the Silicon Valley and other technological hubs.
Target startups state support can be effective, but the primary focus remains on
system measures: attracting Kazakh and foreign entrepreneurs, supporting investors,
supporting the development of infrastructural facilities, and stimulating and providing
access to demand for small companies.
4. Goals, objectives, target indicators and indicators of Programme
implementation outcomes
Programme Objective: to accelerate the pace of the Republic's economy
development and improve quality of life for population through the use of digital
technologies in medium term, and to enable the economy of Kazakhstan to move on a
fundamentally new development trajectory, ensuring creation of digital economy
in a long-term perspective
Target
Indicator
Responsi
ble
executor
Source
of
inform
ation
Units
of
meas
urem
ent
including by years
2016/
2017 2018 2019 2020 2021 2022
1 2 3 4 5 6 7 8 9 10
1. Mining and
quarrying
section labour
productivity
growth (by
2016);
MIID, ME Statisti
cal data
% - 8.8 15.5 22.7 30.4 38.9
25
2. Transport
and
warehousing
section labour
productivity
growth (by
2016);
MIID Statisti
cal data
% - 3.7 6.5 10.7 16 21.2
3. Agriculture,
forestry and
fisheries
section labour
productivity
growth (by
2016)%.
MA Statisti
cal data
% - 9.4 29.4 44.8 62.4 82.0
4.
Manufacturing
section labour
productivity
growth (by
2016).
MIID,
MoE, MA
Statisti
cal data
- 10.5 20.5 30.3 39.8 49.8
5. Share of e-
trade in total
volume of
retail trading
MTI Statisti
cal data
% 1 1.4 1.7 2 2.3 2.6
6. Growth of
jobs created
through
digitalization
MDDIAI,
Zerde
NIH JSC
(as
agreed)
MIC
data
thou.
peopl
e
- - 50 100 200 300
7. Share of
public services
received
electronically
from the total
volume of
public services
MDDIAI MIC
data
% 78 81,6 81,8 82 82,3 78
8. Share of
Internet users
MDDIAI,
communic
ation
providers
«QazTech
Ventures»
Statisti
cal data
% 77 78 79 80 81 82
9. Level of
population
digital literacy
LEA,
MDDIAI,
interested
state
bodies
MNE
SC
statistic
al data
% - 77 78.5 80 81.5 83
10.
Improvement in
MDDIAI
«QazTech
World
Econo
Ranki
ng
- 103 107 106 105 104
26
the rating of the
GEF WEF by
the indicator
“Growth of
innovative
companies” in
2022
Ventures» mic
Forum
website
positi
on
11. Level of
investment in
start-ups
MDDIAI,
MIID,
MNE
MIC,
MID,
MNE
data
bln
tenge
- - 4.8
15.2
35.9
67.0
12. Information
and
communication
technology
development
index
MDDIAI UN
website
Ranki
ng
positi
on
52 49 44 39 34 30
Direction 1. Digitalization of economic sectors
Task1. Digitalization of industry and electrical power industry
Results
indicators
Responsi
ble
executor
Source
of
inform
ation
Units
of
meas
urem
ent
including by years
2016/
2017 2018 2019 2020 2021 2022
1 2 3 4 5 6 7 8 9 10
1. Share of
design
documents of
subsoil users
in the
information
system of the
authorized
body in the
field of
hydrocarbons
MoE MoE
data
% - - - 25 50 100
2. Share of oil
and gas
companies
using IIoT
solutions
(Industrial
Internet of
Things -
monitoring
devices for
online oil
accounting) -
MoE MoE
data
% - - - 30 95 95
27
and integrated
with the
information
system of the
authorized
body in the
field of oil and
gas
3. Share of
large and
medium-sized
enterprises
using digital
technologies
MIID MIID
data,
statistic
al data
% - - 3 5 7 11
Excluded in accordance with the Decree of the Government of the Republic of Kazakhstan dated
12.12.19, No. 949
4. Share of
local
automated
systems to
prevent system
disruption
(LASPSD)
sets, connected
to the
Centralized
System of
Emergency
Automation
(SCEA)
MoE,
KEGOC
JSC
Official
data of
KEGO
C JSC
% - - - 25 75 100
Task 2. Transport and logistics digitalization
Results
indicators
Responsi
ble
executor
Source
of
inform
ation
Units
of
meas
urem
ent
including by years
2016/
2017 2018 2019 2020 2021 2022
1 2 3 4 5 6 7 8 9 10
1. Annual
transit traffic
of goods
carried in
containers
MIID MIID
data
ths.
TEU
104 536 1243 1108 1362 1498
2. Share of
republican
importance
roads which
use digital
technologies
MIID MIID
data
% 0.4 0.85 22.8 40 80 100
28
Task 3. Agriculture digitalization
Results
indicators
Responsi
ble
executor
Source
of
inform
ation
Units
of
meas
urem
ent
including by years
2016/
2017 2018 2019 2020 2021 2022
1 2 3 4 5 6 7 8 9 10
1. Growth in
food exports
(by 2017)
MA MA
data
% - - 27 44 61 69
Task 4. Development of e-commerce
Results
indicators
Responsi
ble
executor
Source
of
inform
ation
Units
of
meas
urem
ent
including by years
2016/
2017 2018 2019 2020 2021 2022
1 2 3 4 5 6 7 8 9 10
1. Increase in
the number of
online retail
orders (by
2016)
MTI Statisti
cal
data,
data of
Kazpos
t JSC
% - 56 95 144 205 281
Task 5 Development of financial technologies and non-cash payments
Results
indicators
Responsi
ble
executor
Source
of
inform
ation
Units
of
meas
urem
ent
including by years
2016/
2017 2018 2019 2020 2021 2022
1 2 3 4 5 6 7 8 9 10
1. Growth of
cashless
payments
through digital
technology (by
2019)
NB (as
agreed)
NB
data
% - - - 18 27 35
Direction 2.Transition to digital state
Task 1. State for citizens
Results
indicators
Responsi
ble
executor
Source
of
inform
ation
Units
of
meas
urem
ent
including by years
2016/
2017 2018 2019 2020 2021 2022
1 2 3 4 5 6 7 8 9 10
29
1. Level of
satisfaction
with the
quality of e-
services
received by
population
MDDIAI MDDI
AI data
% - 80 81 82 83 84
Task 2. State for business.
Results
indicators
Responsi
ble
executor
Source
of
inform
ation
Units
of
meas
urem
ent
including by years
2016/
2017 2018 2019 2020 2021 2022
1 2 3 4 5 6 7 8 9 10
1. Positions in
the Doing
Business
rating on the
Taxation
indicator
MoF World
Bank
Site
Ranki
ng
positi
on
50
55
45
40
40
35
2. Increasing
the outreach of
private
enterprise to
public support
by automating
their delivery
MNE MNE,
MA,
MIID
data
Thou.
subjec
ts
- 145 150 200 250 300
Task 3. Digitalization of state bodies internal activities.
Results
indicators
Responsi
ble
executor
Source
of
inform
ation
Units
of
meas
urem
ent
including by years
2016 2018 2019 2020 2021 2022
1 2 3 4 5 6 7 8 9 10
1. E-
Government
development
index
MDDIAI UN
website
positi
on
33 30 - 28 - 25
Task 4. Smart Cities
Results
indicators
Responsi
ble
executor
Source
of
inform
ation
Units
of
meas
urem
ent
including by years
2016/
2017 2018 2019 2020 2021 2022
1 2 3 4 5 6 7 8 9 10
1. Number of LEA LEA units - 1 2 3 4 5
30
cities in
Kazakhstan
that have
entered one of
the global
ratings of
smart cities
data
Direction 3.Implementation of Digital Silk Road
Task 1. Increased coverage of communications and ICT infrastructure
Results
indicators
Responsi
ble
executor
Source
of
inform
ation
Units
of
meas
urem
ent
including by years
2016/
2017 2018 2019 2020 2021 2022
1 2 3 4 5 6 7 8 9 10
1. Rate of
broadband
access of in-
home
networks entry
to Internet
MDDIAI,
communic
ation
providers
(upon
agreement
)
Statisti
cal data
% 78 79 84 84.2 84.5 84.8
Task 2. Provision of information security in the ICT field
Results
indicators
Responsi
ble
executor
Source
of
inform
ation
Units
of
meas
urem
ent
including by years
2016/
2017 2018 2019 2020 2021 2022
1 2 3 4 5 6 7 8 9 10
1. Raising the
level of global
cybersecurity
index of
Kazakhstan
MDDIAI "Global
index of
cyberse
curity
and
cyberw
walth
profiles"
report
of the
Internati
onal
Teleco
mmunic
ation
Union,
official
Internet
resource
% 0.352 0.380 0.780 0.790 0.800 0.810
31
Direction 4. Development of human capital
Task 1. Increased digital literacy, in middle, technical and vocational, higher
education
Results
indicators
Responsi
ble
executor
Source
of
inform
ation
Units
of
meas
urem
ent
including by years
2016/
2017 2018 2019 2020 2021 2022
1 2 3 4 5 6 7 8 9 10
1. Share of
schools that
have
introduced
basic
programming
in primary
education
MES MES
data
% - - 24 48 73 100
2. Increase in
the number of
professionals
with basic ICT
competencies
MES MES
data
thou.
peopl
e
250 260 270 280 290 300
3. Number of
ICT
professionals
graduated
(annually)
MES MES
data
thou.
peopl
e
17 18 20 22 25 30
Task 2. Improving the digital literacy of the population (training, retraining)
Results
indicators
Responsi
ble
executor
Source
of
inform
ation
Units
of
meas
urem
ent
including by years
2016/
2017 2018 2019 2020 2021 2022
1 2 3 4 5 6 7 8 9 10
1. Share of
professional
staff trained in
digital literacy
MDDIAI MDDI
AI data
% - 0.22 0.44 0.66 0.88 1.1
Direction 5.Creating an innovative ecosystem
Task 1. Support for innovative development platforms.
Results
indicators
Responsi
ble
executor
Source
of
inform
ation
Units
of
meas
urem
ent
including by years
2016/
2017 2018 2019 2020 2021 2022
32
1 2 3 4 5 6 7 8 9 10
1. Number of
startup
companies
supported by
parks
incubators and
accelerators
MDDIAI,
JSC
"NIH"
Zerde "(as
agreed),
ITP ACF
"(as
agreed)
MDDI
AI data
Units - 200 300 500 800 1000
Task 2. Development of technological entrepreneurship, startup culture and R&D.
Results
indicators
Responsi
ble
executor
Source
of
inform
ation
Units
of
meas
urem
ent
including by years
2016/
2017 2018 2019 2020 2021 2022
1 2 3 4 5 6 7 8 9 10
1. Number of
international
applications
for patents
from
companies/indi
viduals
resident in the
RK
MDDIAI Official
Internet
resourc
e of
"Nation
al
Institut
e of
Intellec
tual
Propert
y" RSE
of MJ
RK
Units - - 33 53 73 93
2. Growth in
the number of
startups which
have passed
the
acceleration
programme, in
"Astana Hub"
technopark
MDDIAI,
Zerde
NIH JSC
(as
agreed)
MDDI
AIdata
Units - 33
90
150
220
298
Task 3. Attracting venture financing.
Results
indicators
Responsi
ble
executor
Source
of
inform
ation
Units
of
meas
urem
ent
including by years
2016/
2017 2018 2019 2020 2021 2022
1 2 3 4 5 6 7 8 9 10
1. MDDIAI World positi 102 100 95 90 85 80
33
Improvement
in the GCI
WEF rating on
the "Ability to
innovate"
indicator
Economi
c Forum
website
on
Task 4. Generation of demand for innovation.
Results
indicators
Responsi
ble
executor
Source
of
inform
ation
Units
of
meas
urem
ent
including by years
2016/
2017 2018 2019 2020 2021 2022
1 2 3 4 5 6 7 8 9 10
1. Share of IT
services in
total IT market
(in numbers
comparable
with
developed
countries)
MDDIAI Official
IDC
Data
% - 15.6 19.7 23.8 27.9 32.4
2. Percentage
of IT services
local content
MDDIAI,
Zerde
NIH JSC
(as
agreed),
CGO
MID
data
% - 26.8 37.6 48.4 59.2 70
5. Main areas of focus, ways to achieve the objectives of the Programme
and related measures
Programme involves implementation of a set of interrelated measures that must
be implemented to achieve key ambitious goal of creating an innovative economy,
listing in 30 developed countries by 2050 and transforming society and production so
that we are not left out of the modern technological world. Achievement of this goal
requires consolidation and mobilization of society as a whole and a breakthrough in a
short period of time.
Given the emergence of new technologies, innovative methods and tools in the
ICT field, additional new initiatives will be implemented as required under the
Programme.
5.1. Digitalization of economic sectors
Successful implementation of this direction by 2022 will mean the following
achievements:
1. Increasing productivity level to the level of top 30 countries of the world in
each of priority industries.
34
2. Competitive export production in priority industries.
3. Capitalization of the largest companies in the Republic of Kazakhstan has
come to a fundamentally new level.
4. Developed local e-commerce.
5. Reducing the share of underground economy to a level comparable to the
top 30 countries in the world.
Widespread adoption of digital technologies will give impetus to the
development of traditional basic industries by increasing productivity, enhancing
their competitiveness, including on the international market. Thus, digitalization will
result in growth of domestic exports to external markets, both in the primary and
agro-industrial sectors, which, in turn, will increase capitalization of the largest
production companies. Also to increase productivity, Programme is implementing a
set of measures for technological rearmament of basic industries, where 4.0 industry
elements will be applied.
A network of internet-connected objects, including sensors capable of
collecting and exchanging data from the embedded systems will be implemented as
part of the "Implementation of digitalization projects by large mining complex
companies".
Specific hardware requirements in the implementation of 4.0 industry projects
will be synchronized with requirements of the State programme for industrial and
innovative development.
In the long term, successful implementation of measures will lead to a gradual
change in the economy structure, with an increasing role for electronic commerce,
ICT and financial sectors, as well as for the industries of new economy.
Digitalization of industry and electrical power industry
Digitalization provides ample opportunities for a leap in the development of
key economic sector for Kazakhstan.
Mining industry
Vision of mining industry in Kazakhstan by 2022 involves establishment of a
high-performance industry with a wide application of autonomous technology and a
decision-making system, mainly based on large data analysis. Entire value chain will
introduce sensors and advanced analytical tools that enable visualization, running,
and making a scenario-based simulation of data. In addition, introduction of
autonomous machinery, regulation of basic production processes in automatic mode
will minimize human participation and increase the safety of production.
Main project in the field of mining digitalization is the introduction of a digital
mine. Digital solutions will improve the performance and security and maintenance
of hardware and equipment used.
Creating conditions for stimulating digitalization industry will enhance its
competitiveness by improving control of production processes, reducing losses,
reducing production costs, increasing productivity, efficiency and safety of
production and other.
Oil and gas industry
35
Programme includes introduction of intellectual deposit technology in large
mining companies of Kazakhstan. Emergence of new data analysis tools and speed
with which they are transmitted will significantly increase the flexibility of decision-
making and productivity. In addition, new technologies will reduce the cost of
exploration and exploitation by providing better and more comprehensive
information, which in turn would improve management of stocks, mining and
processing.
Also, a system for accounting for production of commodity oil using control
instruments will be introduced to ensure transparency and reduce the level of shadow
turnover.
To improve and ensure transparency in distribution of social gas for
population, the Programme plans an event to create information system designed to
collect information on supply, tracking and turnover of liquified petroleum gas, for
statistical analysis of data based on mandatory reporting and forecasting of balances,
as well as integration with automated on-line auction site for the purchase of social
gas.
In order to ensure the effectiveness and transparency of the subsoil use rights
granting processes on hydrocarbons, an exercise will be carried out to finalize the
existing integrated information system for online auction to grant subsoil use rights
and online amendments to contracts and their supplements.
In order to ensure continued supply of fuel within the country, Programme will
upgrade its repair activities and move to an increased interrepair period in the
refinery, by equipping control, replacement equipment and implementing automated
maintenance and repair management system.
Extractive and manufacturing sectors
Backbone enterprises in mining and metallurgical industries will implement
projects to introduce production process management systems, enterprise resource
planning, positioning of personnel and equipment, implementation of "smart mines",
an example of implemented uranium mining project, a large data analysis, and other.
Restructuring and modernization of production will continue with a view to
improve productivity and environmental performance. This direction assumes
creating conditions for stimulating digitalization industry (introduction of Industry
4.0 elements) to enhance its competitiveness by improving control of production
processes, reducing losses, reducing production costs, increasing productivity,
efficiency and safety of production and other. Main elements of Industry 4.0 include
additive technologies, collaborative robots, hardware-optimized equipment,
unmanned vehicles, predictive maintenance, machine training and artificial
intelligence, cloud technologies, digital and virtual engineering, intelligent planning
and production control, integration of production process management information
systems, industrial Internet, monitoring of systems status, complementary and virtual
reality, etc.
Digitalization industry will focus on developing its own technologies and
competencies, ensuring coordination among participants in industrial and innovation
36
ecosystem, removing barriers, popularizing digital technologies and developing
appropriate enabling measures.
Pilot projects are planned for creation of model digital factories in
manufacturing and mining industries, where technology of 4.0 industry will be
introduced to demonstrate the effectiveness of digital technologies in production.
In order to improve safety of personnel working in hazardous areas, questions
will be developed on regulatory changes, introduction of surveillance systems,
accident alerts, positioning and search of staff, and other solutions using digital
technologies.
Electric power industry
Target state of electricity industry is characterized by further intellectualization
of energy systems (Smart Grid). Intelligent Energy system will be able to manage the
behaviour of all its stakeholders to ensure sustainable, adaptive, cost-effective,
reliable and secure electricity supply.
Task of constructing and effectively functioning of intelligent energy system
affects all participants of the electricity industry: generation, transfer, distribution,
marketing, consumption, and systemic operating. In this regard, in accordance with a
common technical policy, a comprehensive modernization is required, with new
equipment permitting integration of distribution networks and electrical stations into
the intellectual grid. Introduction of full accounting for energy consumed and
produced, so-called Smart metering system, and subsequent automatic processing of
big data will allow to systematize the management of load (demand response),
including improving tariff policies for end-users.
Introduction of intelligent energy management systems and energy
conservation technologies within industry will be stimulated to improve efficiency
and reduce the loss of power. This will allow consumers to interact with the grid, in
particular to be able to choose tariffs, manage own electricity consumption, and
develop own renewable energy supply and sell electricity.
In particular, National electricity network is planning to implement initiatives
to improve efficiency and reliability of Kazakhstan's unified energy system, thus
increasing the transmission of electricity through the network, reduce power
imbalances when working with adjacent grids, reduce the number of consumer
blackouts in network-related technology violations.
Planned adaptive management technologies that are based on synchronized
vector measurements will provide real-time visualization and real-time control. This
will allow monitoring energy system sustainability, efficient use of power system
equipment by maximizing transmission capacity, and establishment of new electrical
power network management algorithms by current system state settings, assess the
state of system in online mode.
Transport and logistics digitalization
Main challenge facing digitalization sector is to increase the volume of transit
freight. It is expected that the reduction in transit time will significantly increase the
volume of transit traffic in rail sector across all destinations from China through
37
Kazakhstan to Europe, Turkey and Iran. Main effect will be achieved both through
introduction of e-flow, including in the area of air operations, and through the
implementation of an intelligent transport system that will increase the volume of
freight traffic by providing quality and safe road infrastructure between Kazakhstan's
regions and international traffic. Intelligent transport system combines the functions
of video surveillance, traffic management, driver warnings about weather conditions
and e-payment of transport services.
For systemic integration of vehicles, infrastructure, users and information
technology, a IDs will be developed consisting of subcomponents with their phased
introduction, including a set of technical means to automate collection of funds for
use of roads, system of dynamic weighing of vehicles installed on major road
transport corridors, traffic management systems. This provides an opportunity to
inform drivers of the situation on the road, to establish systems for analysis and
prediction of climatic conditions, to use video monitoring systems and to detect
violations of TSR, including the unimpeded transit through the territory of
Kazakhstan.
Experience with the introduction of ITS in a number of other countries shows a
30% decline in the number of road casualties and a 15% decrease in maintenance
costs. In addition, introduction of ITS will reduce the burden on Republican budget in
terms of road maintenance through fee-based plots, increase the road interrepair
periods by 1 year and increase the transit flow.
In the multimodal transport segment, basic condition for improving the quality
of services will be development of technical and operational interoperability of
freight rail corridors, based on the implementation of digital technologies creating a
barrier-free transport environment.
Programme also includes a number of measures to improve the efficiency of
the roads operation, increase efficiency in transport and improve the forecasting of
passenger and freight traffic.
Agriculture digitalization
In order to further develop country's agricultural sector, a number of activities
are planned for the automation of agricultural products traceability with inclusion of
all the involved authorized organizations in the process, which will enable to quantify
and trace the entire life cycle of agro-industrial products. Implementation of
traceability system will have a direct impact on the attraction of investment to the
industry and expansion, both in the export line and in the geographical distribution of
agricultural and deep-processing products. Introduction of full monitoring under
traceability system will also improve agricultural quality standards, which
multiplicatively influences the attractiveness and competitiveness of Kazakh products
in external markets.
In order to implement "precision farming", a pilot project will be carried out in
a number of farms using "precision farming" elements, including the use of
meteorological stations. As a result of the pilot project, economic viability of the
widespread use of "accurate farming" will be determined.
38
Development and introduction of precision farming elements for all regions of
the Republic of Kazakhstan is intended to simplify activities, increase yields and
productivity in the sector. Manufacturer will be able to make a decision based on an
array of real-time data on the condition of crops, moisture, nutrients, nitrogen,
potassium, phosphorus, pests, and precipitation. In doing so, introduction of precision
farming will be carried out in conjunction with the acquisition of new machinery,
implementation of technologies and as farmers become ready.
Also included are activities to automate the monitoring of natural resources,
including the turnover of fish and fish products, protection, reproduction and use of
animals, monitoring of specially protected natural areas, and use and protection of
water fund, water use and oversight of waterworks. This activity will reduce and
subsequently eradicate poaching and illicit trafficking of fish products, illegal logging
of forest resources, collection and timely processing of information on the activities
of organizations and enterprises involved in natural resource-related business
activities. Water monitoring is particularly important in view of the particular
importance of water resources and provision of energy for all sectors of Kazakhstan's
economy.
In addition to creation of new and evolving state information systems in
Kazakhstan's AIC, condition for the creation and implementation of automated
systems in agricultural formations is mandatory and important. Experience of all
world's leading agrarian countries is an undeniable example of such an approach. A
multitude of IT solutions for all the many processes in agricultural production and
processing directly and primarily affect the efficiency of business, productivity,
profitability and ultimately - competitiveness, from small-scale farming to large
agricultural formations.
Therefore, MA will build transparent and calculated principle for the IT
community and agricultural formations on the scaleed implementation of the required
and efficient automation systems for agribusiness, as well as mechanisms to promote
best practices of automated systems in agricultural production.
Improving the competitiveness of domestic agricultural products and their
processing products is closely linked to the need to promote and position domestic
products in both domestic market and export markets.
As part of solving these challenges to develop agro-based products promotion,
the platform for electronic commerce among farmers, distribution centres, trade
networks, markets and stabilization food funds will be implemented.
Development of e-commerce
Programme involves a wide range of measures aimed at removing the country's
existing barriers for development of Internet commerce in general, as well as
increasing the competitiveness of local players. Proposed measures are in the area of
regulating electronic commerce, increasing the acceptance of electronic payments,
increasing digital and financial literacy among people and businesses, promoting e-
commerce, developing infrastructure and logistics and so on.
39
Regulation will regulate the promotion of consumer protection in electronic
commerce, including effective remote referral tools to relevant authorities, possibility
of returning goods at the expense of trader, Introduction of a single register of e-
commerce players and others aimed at raising the level of public and stakeholder
confidence, as well as facilitating business transition into online commerce.
Establishment of a support infrastructure that includes direct and indirect
measures, including the establishment of e-commerce and fulfillment service support
centres, will also be a priority.
Issues will be elaborated on the expansion of list of own products (work,
services) according to activities corresponding to the objectives of the Special
Economic Zone "Park of Innovative Technologies" aimed at accelerated development
and dissemination of electronic commerce.
Facilitating access to concessional financing, reducing or excluding certain
types of taxes for e-commerce players will also increase the competitiveness of
entrepreneurs and encourage the conduct of business online.
As part of the increased acceptance of electronic payments, issues will be
developed to encourage the introduction of a simplified mobile payment mechanism,
taking into account international experience, developing a system of incentives for
entrepreneurs to conduct cashless payments, full conversion to the use of electronic
invoice.
Development of financial technologies and non-cash payments
Vision of digital finance industry in Kazakhstan by 2022 presupposes a
proactive financial community, which plays a key role in a well-functioning financial
sector with a well-developed market infrastructure for payment services.
Financial sector will be transformed using technologies such as distributed
registries, supply of new financial instruments, simplification and acceleration of
procedures through integration with public information systems. Thus, financial
community's proactiveness involves the implementation of open-source technologies
(open API) and, in general, active cooperation of banks, infrastructure companies and
financial technology companies with each other, supported by a regulator (NB) to
reduce level of online fraud, introducing new services and products, improving client
experience, and improving sustainability of the financial system. To achieve the
objectives of proactive financial sector development, measures will be taken to
promote and develop innovative organizations focused on developing customer
products and services, building ecosystems as part of financial and non-financial
services (retail, financial consulting, etc.).
To ensure security, facilitation and development of digital services, including
public, social and commercial, it is intended to construct a model of remote
identification, including based on different biometric indicators, based on principles
of the risk-oriented approach. Model involves identification of clients using the
database of state and commercial companies, as well as service of public authorities,
commercial companies and the social sphere (education, health, population census
and others).
40
Introduction of a digital identification mechanism will be a fundamental
infrastructure. This will create a universal digital environment for communication
and communication between financial institutions, clients, state bodies and
organizations. This will qualitatively improve the level and effectiveness of financial,
public and other services.
Conditions will be created for online services to be provided by insurance
organizations with the option to conclude insurance contracts in electronic form,
electronic information exchange between the insured (beneficiary) and the insurer in
the event of an insurance case, damage assessment, necessity to change the terms of
the contract (after-sales service), and storage of the electronic contract in a single
insurance database and round-the-clock access to the insurance contract by customer.
Introduction of mechanisms and standards for electronic interaction of
financial organizations, state bodies, citizens and entrepreneurs will lead to a
"paperless", open and highly competitive financial sector by 2022, providing security
of transactions and reduced transaction costs.
Financial sector will provide tools for development of e-commerce and
initiatives to create an innovative ecosystem so that payments can be made quickly,
easily and reliably, inspect counterparties, gain access to financial instruments of
business development and state support.
Together with building paperless invoicing infrastructure, as well as other
contractual documents, it is necessary to modernize the interbank payments system
and possibility of interbank transfers in real time, which would reduce the transaction
costs of SME, increase confidence of B2B market participants in the instruments of
non-cash settlement, and develop direct payments between enities (legal and
individuals).
Particular importance will be given to the development and implementation of
a set of measures to promote non-cash turnover. Financial and non-financial
measures will be implemented for representatives of SME, joint activities with major
international payments systems, banks and other market participants to improve
financial literacy of population.
ICT industry development
Development of ICT industry is a key component of digitalization of all
economy sectors. To ensure successful implementation of digital agenda, the
Programme includes a number of activities aimed at supporting the industry's ICT.
International experts estimated that during the world economic crisis from
2007 to 2011, when other industries stagnated, the number of jobs in the ICT
technology in the ICT industry in the countries of the Organization for Economic
Development and Cooperation, contributing to the world economy.
The feature of industry is that IT is an essential part of modern business,
contributing to achieving results and positive economic indicators for other sectors of
the national economy.
On the other hand, introduction of information technology requires the
adoption of effective measures to ensure cybersecurity.
41
Key to the development of ICT industry is the growth of share of information
technology services, as it is this source that can increase share of local content in ICT
industry and support domestic small and medium-sized ICT enterprises.
One of the measures for cybersecurity is the establishment of National Registry
of trusted software and products of electronics industry of the Republic of
Kazakhstan, use of which will be a priority in formation and development of the
country's information infrastructure.
In order to create a competitive ICT industry, state efforts will be directed
towards the creation of a favourable enterprise ecosystem in this sector.
It is the stimulation of demand for IT in priority and other sectors of economy,
removal of barriers to the export of goods and information technology services, and
formation and development of a number of qualified domestic ICT companies. A
roadmap for IT development of the industry will be developed and approved.
Ecosystem also includes promoting the access of domestic IT companies to
venture financing, providing development grants and commercializing promising
domestic innovation technologies, tax and other preferences.
5.2. Transition to digital state
Digital State
Digital transformation creates new business models, including the so-called
proactive data-based service. The more service providers are aware of their
customers, the more personalized offers they can create by providing services that
will meet the needs of customers and even anticipate the needs that customers
themselves may not yet know of. This will provide services to citizens and
entrepreneurs, anticipating the need for a service based on a transaction analysis.
Key to transforming the service delivery and interaction of state with citizens
and business will be to move towards open-architecture principles (open API), in
which a qualitatively new level of cooperation with commercial sector will be built.
This will make efficient use of resources by concentrating on the digital
infrastructure, giving the last mile to provide public services to the non-governmental
and business community. In doing so, non-state information resources will be front-
end, integrating public services into their own ecosystems, where citizens and
entrepreneurs can initiate and receive public services.
State for citizens.
Management model will be implemented when it is not a citizen applying for
public services, but government understanding the needs of citizens, contacts them to
provide public services without the need for physical visits to institutions.
It is planned to integrate information systems and communication channels
currently scattered to implement omnichannel service model by creating a single
"front office" aimed at making information and services accessible at any time,
anywhere, and on any device (contact center, web portal, intelligent messengers,
mobile applications, SMS messages).
42
Moving to this model will allow citizens to start a service from one channel (a
portal, a mobile application or a contact center) and end up in another channel (for
example, signing in a service center).
The first key principle for improvement of all processes (G2C, G2B, G2G) will
be the paper-free interface - elimination of the document flow, move to "one
application" principle. Accordingly, systemic work on process analysis, life
descriptions and integration of information systems will be carried out to exclude
processes in which information is presented on paper media.
If, according to the Gartner methodology, in the early stages of e-Government
development, key performance indicator was the number of e-services rendered, new
performance indicator will be a reduction in the number of public services and
growing number of life situations that are rendered "seamlessly" online. For example,
on the primary count, implementation of these measures will in the near future allow
for the total elimination of more than 20 million certificates.
In modern society, digital information on spatial data has become an
important strategic resource for public administration and has become key to its
sustainable socio-economic development. Country has accumulated a large volume of
data generated by the production of various enterprises. However, the large volume
and non-structuring of data accumulation create an information barrier and
sometimes impede information sharing and management processes based on this
information. New market requirements for information on the locality and
development of information technology necessitate new solutions. The way out of
this situation is to create an environment that enables users to have access to spatial
data electronically and to use them effectively.
In order to harmonize, develop and maintain spatial data, state geodetic
support system will be modernized, a single coordinate system established, open-
source maps established in a single data formats and structures.
Work will be done to integrate scattered inventories into one information
space, to automate procedures so that every new site, whether a home or a road, will
appear on the map updating it when introduced in public service procedures.
Implementation will improve the accessibility and quality of services provided to
population in the areas of land, architecture, construction, environmental
management and environmental protection, geology, housing and agriculture.
A key activity will be the implementation of the "Digital by default" principle,
which provides for the planning and subsequent delivery of public services
exclusively in electronic form, with increased self-service capacity.
A single platform visiting analytical and statistical information on the labour
market will be created to effectively manage processes of people-centred
employment. In addition, in order to improve transparency of the enforcement of
labour laws and prevent their violation in a preventive manner and to formalize
labour relations, conditions and a digital platform will be created for conclusion of
labour relations with recording social benefits and pension payments, and so on.
43
Further development of "open government" and "an open parliament"
principles will be implemented to promote active citizenship and feedback from the
public. Accordingly, "open budgets", a public monitoring mechanism for budget
expenditure, will be developed; "Open NLA" - published drafts of normative legal
acts and concepts of bills for further public discussion; "Public data" -data in public
access for commercial use, not relating to state secrets, personal data and others
specified in the laws of the Republic of Kazakhstan.
Establishment of electronic maintenance systems will provide a better
legislative process, a transparent and accessible mechanism to enable the public and,
in particular, the business community to be able to participate directly in norm-
making process. These measures will help to raise the level of confidence in the
authorities and create a favourable climate for the conduct of business through the
openness of legislative initiatives taken.
Within the Programme it is planned to establish a network of virtual museums
and to electronically convert all museum funds, recordings of concerts, performances,
significant elements of material and intangible historical and cultural heritage. Access
to information can be achieved through setting-up a new unified electronic portal,
that will focus the cultural life of the country on one popular resource. It is the most
accessible format for the promotion of culture and art of Kazakhstan into the global
space and ability to make it widely recognizable.
State for business.
Digitalization of interaction between the state and business is aimed at
reducing the transaction costs for entrepreneurs, increasing the transparency of
decisions taken by state bodies and organizations.
Activities will focus on providing entrepreneurs with "seamless" services and
building infrastructure to implement a single window for business, similar to the
experience of establishing population service centres.
This initiative will be a key one and involves the provision of transparency and
simplification of financial and non-financial support for small medium-sized
businesses as well as other public services for legal entities. In addition, taking global
experience into account, in particular the Singapore's "SMEs Go Digital" programme,
a single platform for small and medium-sized businesses will offer entrepreneurs
access to various IT services such as accounting, human management resources,
financial analysis and others.
The next significant area is the implementation of a set of measures that will
improve the quality of tax and customs administration.
It should be noted that measures to reduce the costs of import and export
operations and to improve quality control of imported goods will be implemented
through "National export strategy of the Republic of Kazakhstan" for 2018-2022,
approved by a decision of the Government of the Republic of Kazakhstan of 26
August 2017, No. 511.
Introduction of a common information environment and marking of
manufactured and imported goods, together with the construction of an electronic
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invoicing platform, will create an ecosystem to provide a warning, limitation and
suppression of unfair competition; guarantees of quality and price of goods
purchased, confirmation of authenticity of goods, and opposition to illegal import,
production and trafficking of goods, including counterfeit products.
Digitalization of state bodies internal activities.
Effectiveness of public administration depends on the level of automation of
processes involved in daily routine operations such as personnel, accounting, budget
planning, planning and execution of public procurement, correspondence with other
public authorities, and so on. For the purpose of effective interaction between state
bodies and paper free principles, it is envisaged to develop a business process
management system built on cloud-based computing with further development into
digital storage. Work will continue on automating such typical tasks, primarily in the
service model of informatization.
In order to improve decision-making processes at state level, a series of works
will be undertaken to develop a large data-based analysis and prediction system.
Global experience shows that more than 40 governments worldwide and 60%
of the Fortune 500 companies are using an architectural approach for innovation.
Architecture of the state body will aim at establishing a long-term (five-year) strategy
for transforming and automating the state bodies activities. Design of the architecture
will identify priorities for automating and financing IT projects. It is intended to
involve non-governmental organizations and citizens through public discussion in
order to develop the most desirable scenarios for interaction between the state and
society.
In order to comply with the Yellow Pages principle, key principle of
automating state bodies activities will be to implement a microservice architecture
when existing and newly created information systems provide API for different
services and applications implemented by private companies.
Establishment of a "single state system for environment and natural resources
monitoring" will provide a political and legal dimension to: contribute to the
implementation of National Strategy for sustainable development and prevention of
environmental disaster; promote processes of transparency and democratization of
society in the field of environmental protection and natural resources; create the
necessary conditions for access by the general public to environmental information
resources; monitor public opinion on environmental issues. In the economic aspect -
to improve the efficiency of the use of natural resources, social production and
improvement of the population socio-economic conditions. In the social sphere, to
improve health and life expectancy of the population; create conditions for improving
the environmental culture and environmental education of population.
Digitalization of health implies both further informatization of the industry
with introduction of the interoperability platform and development of mobile
healthcare, as well as introduction of breakthrough technologies in augmented reality,
machine learning and artificial intelligence in the processes of student learning,
diagnosis, and management of treatment plans.
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Integrational healthcare platform implies that health systems can interact
flexibly with each other and with external systems, ability to create an ecosystem of
end-user applications with device integration, mobile applications created by
commercial companies, and introduction of an electronic passport of health for every
citizen of the country.
A single data storage with "live data" will be created in stages through the
introduction of regional health information systems. Data collected will then be used
for medical statistics, analysis, and appropriate solutions using the big data
technology. This will make it possible to move towards paperless health care,
optimize and improve aid effectiveness, and ensure continuity of assistance between
different levels and health-care providers. Secure access to key health information
will be provided to all participants in the care process, including the patient itself.
Through personalized notifications and warnings, including through mobile
technology, people will be involved in the process of protecting their own health and
shaping a healthy lifestyle.
As a central hub of health information, e-passports will provide timely and
reliable information to both patients and health professionals, as well as to
government and health financing.
Integration of the information systems of social health Insurance Fund with an
e-passport will improve the soundness and efficiency of expenditure, introduce new
financial incentive mechanisms to improve quality of care.
In order to enhance the transparency of electoral system, the Programme
includes digitalization activities that will ensure establishment of an effective system
for creation and updating of electoral rolls, to be integrated with central state bodies,
public accounting, electoral commissions and local executive bodies. Architecture of
the system will serve as basis for electronic voter registration during the electoral
period, development of public services and further modernization of electronic
electoral system as a whole.
In order to monitor the socio-economic situation rapidly, a single analytical
platform will be introduced to reflect information for presentation at the central
government level as well as in local executive bodies.
A holistic, global digitalization of this direction is required to ensure a secure
legal environment and strict protection of the rights and freedoms of citizens,
interests of legal entities and the state. As part of this work, an "e-business"
consisting of 5 related components will be implemented: Electronic communications
from citizens, a single register of entities and inspection sites, a single registry of
administrative proceedings, an electronic criminal case, an analysis centre.
In addition, further digitalization of law enforcement will continue the
transition to paperless documents, as well as the introduction of information and
analysis systems to enhance their effectiveness.
The next area of focus is the establishment of a geoinformation platform of
special purpose, which will provide a geographic basis for management systems of
military organizations and public security of the state.
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Smart Cities
Smart City Initiative is the realization of conditions for creating cities that are
convenient for citizens by improving their infrastructure.
Strategic direction - creation of urbanized territory in which the resources of
urban services and private initiatives interact and cooperate to ensure sustainable
development of the city and to create an enabling environment for residents and
tourists through the technologies introduced and contextual information analysis in
real time.
To increase efficiency in initiatives and optimize costs, the service integrator
will develop a typical LEB architecture that presents a list of projects using IoT
technologies, Open API, artificial intelligence and other. The approach places centres
on inhabitants and their daily needs in areas of transport infrastructure, security,
social, health and others. Document will define mandatory solutions required to
implement the Smart city across all cities in Kazakhstan, and projects are proposed
for localization according to various factors.
Implementation of these projects will be carried out using benchmarking, i.e.
both best practices of the global community and implemented in the Republic of
Kazakhstan. The main will be the implementation of "collaborative innovation" - a
format for interaction of state bodies with private organizations, which will iteratively
develop new, improved solutions, approaches and necessary changes in LNA.
Smart city concept will include activities for automation of the infrastructure
for housing and utilities and for heating, water and wastewater systems.
5.3. Implementation of Digital Silk Road
Implementation of the direction will be considered successful if the following
development milestones are achieved by 2022:
1. Quality, continuous coverage of the population of Kazakhstan by 4G-
mobile communication.
2. Widespread and high-speed access by individuals and companies to global
data transmission networks.
3. Working and developing cybersecurity system at the country level as a
whole and for each user in particular, provided with competent personnel and modern
equipment.
Implementation of digital silk road in the short term implies two initiatives,
consisting of a number of activities: expansion of network coverage and increased
cybersecurity.
Increased coverage of communications and ICT infrastructure
Expansion of network coverage covers the development of broadband
infrastructure for global data transmission networks with contour protection and
prevention of information security incidents. Availability, stability and security of
data transfer is a necessary technological basis for all initiatives of this Programme
and other programmes related to information technology and digitalization.
47
Initiative includes the upgrading of satellite communications system,
development of fibre-optic communications links up to rural settlements,
improvement of transit capacity and digital broadcasting network.
Immediate priority is to ensure broadband and accessible Internet access in
rural settlements of Kazakhstan, based on fiber, as well as satellite technologies. For
this purpose, one of the priority projects is the construction of fibre-optic
communication lines in more than 1 200 rural settlements under the public-private
partnership scheme. Coverage of rural settlements of the Republic of Kazakhstan
with fibre-optic will provide modern high-speed telecommunications services to state
bodies and budget institutions, more than 2.1 million people will have technical
capability to connect to a high-speed Internet network.
Programme also plans to develop a new generation of mobile infrastructure
(4G networks and 5G in the future) in all district centres of the Republic of
Kazakhstan. 4G standard implies broadband access to mobile Internet and a
corresponding increase in the speed of transmission.
Increased access to Internet may be more attractive to communication
operators as the technology of big data evolves. Collecting and analyzing data sets
from connected users will, among other things, provide a detailed understanding of
the preferences and capabilities of users (both private and corporate) as well as
market dynamics, subscriber life cycle, and external conditions impact.
However, in the development of big data technology, coordination,
convergence and a unified focus are critical. Therefore, the state, which has the
largest volume of data on both individuals and the corporate sector, plays an
important role in the development of big data. Consolidation and development of
state's efforts will be facilitated by the establishment of a technology centre for big
data analysis, a single "data muster point" and provision of reliable functioning,
storage, preservation of national and public Information resources, including through
existing initiatives.
Operation of the basic mobile communication stations, satellite
communications for public authorities, national companies and private organizations,
as well as television broadcasting throughout the country, is provided by KazSat
space communications system, consisting of two communications satellites, KazSat-2
and KazSat-3. As the lifespan of the KazSat-2 apparatus expires in 2023,
commissioning of KazSat-2R space system will be completed by that date.
In order to increase country's transit potential, multilateral partnership will be
developed with communication operators of neighboring states within Program
implementation to create modern, more productive and scalable transport
infrastructure capable to provide telecommunication traffic towards Russia, China
and Central Asia.
Provision of information security in the ICT field
Increased cybersecurity in the framework of this Programme involves
increasing the fault tolerance of the Republic of Kazakhstan's information systems,
protection of the ICT contour and general improvement of information security, from
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the technical means and completing with a culture of safe behaviour of citizens and
companies in shared networks.
Initiative includes the establishment of operational centres for information
security and response services to information security incidents, as well as
establishment of research laboratories and a data processing centre. Legislative
changes and standards of cybersecurity will be introduced as institutional support.
State's infrastructural efforts in this area will be in the form of establishment of
a national focal point for information security in the Republic of Kazakhstan. Main
functions of the Centre are to provide and improve information security for
informatization, as well as to create a common platform for management decisions
based on integrated monitoring of the informatization objects information security
state.
Special attention will be given to the coordination of response to information
security incidents in the Kazakhstan segment of Internet, which would enhance
position of the Republic of Kazakhstan in the cybersecurity index of the International
Telecommunication Union.
In order to cooperate in a fundamental and applied investigation on
cybersecurity issues, the state will provide material and organizational support for the
establishment of malicious code research laboratories, information security means
and test laboratory for information security compliance tests.
Programme involves implementation of a set of interrelated measures that must
be implemented to achieve key ambitious goal of creating an innovative economy,
listing in 30 developed countries by 2050 and transforming society and production so
that we are not left out of the modern technological world. Achievement of this goal
requires consolidation and mobilization of society as a whole and a breakthrough in a
short period of time.
As part of executing the activities plan to implement the concept of
cybersecurity ("Cybeshield of Kazakhstan"), information security issues will also be
developed.
Given the emergence of new technologies, innovative methods and tools in the
ICT field, additional new initiatives will be implemented as required under the
Programme.
5.4. Development of human capital
In order to achieve the set Programme goals for staff qualification, the
education system will be fully updated in accordance with the best world practice.
New education will respond to the needs of digital economy, focusing primarily on
skills in analysing information and developing creative thinking rather than
memorization facts and formulas.
Increased digital literacy, in middle, technical and vocational, higher education
In secondary education, in order to develop creativity and critical thinking of a
young generation, the subject of "Programming basics", beginning with 2nd grade,
will be introduced in stages. Curricula (5-11 grades) will also be updated, primarily
49
in the revision of programming languages to include STEM elements (robotics,
virtual reality, 3d printing and others).
In order to develop and support talented youth, regular hackathons,
competitions and contests, as well as various robotics and programming clubs will be
held.
At the same time, teachers' skills in new digital technologies will be
continually upgraded to improve and absorb new knowledge.
In the area of technical and vocational education, the same activities will be
carried out to increase the access of students to resources and knowledge as for
secondary education (including hackathons, olympiads, competitions and their
training infrastructure).
In addition, model curricula and programmes will be updated on the basis of
professional standards and labour market requirements. New model curricula and
programmes will focus on the training of specialists in the area of design,
administration and testing, taking into account the development of coding skills.
However, the subject of "Informatics" will be introduced to provide basic
digital skills to technical and vocational education professionals.
Further training will be provided to teachers on educational programmes that
have competence in the use of ICT.
In higher, postgraduate education, model curricula and programmes will also
be updated on the basis of professional standards and requirements of the labour
market, taking into account the introduction of "Information and communication
technology" discipline in all occupations.
In order to ensure the graduation of required specialists, the content of
education programmes in ICT fields will be reviewed.
In order to bring the industry and education closer to the educational process of
the country, representatives of enterprises will be recruited from extrabudgetary
funds through opening of centres of competence at the university level. In addition,
ICTs will be opened by chairs of universities in enterprises where courses for
students in ICT-based projects in the economic sectors would be conducted.
Improving the digital literacy of the population (training, retraining)
In the area of retraining, local executive bodies will continuously provide
education and retraining in digital skills to the population, including unemployed.
This event would also involve representatives of small and medium-sized businesses.
In order to increase educational opportunities for all those who wish to acquire
the necessary skills, a national open education platform will be established to provide
online courses, primarily providing basic training in engineering and technical areas
involved, with the involvement of large groups of the best professors from Kazakh
universities and representatives of production.
With that, by applying the concept of lifelong learning, enterprises will conduct
corporate training for professionals, reinforcing the communicative and technical
skills of the profession.
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In general, the Programme will open up opportunities for increased interaction
between educational institutions and entrepreneurs to train competitive professionals.
5.5. Creating an innovative ecosystem
Successful implementation of this direction by 2022 will mean:
1. Increase in the number of technological startup projects initiated in
Kazakhstan and their total capitalization.
2. Existence in Kazakhstan of a private professional venture capital industry
that provides for the needs of the fast-growing ecosystem.
3. "Success stories" of Kazakhstan startups on the international scene,
including "Exits".
In the longer term, objectives are to create all conditions for the emergence of
"unicorns" and smaller, highly capitalized companies in Kazakhstan, as well as to
develop a culture of technological entrepreneurship. This will create both the
necessary institutional environment and incentives for innovation, venture financing,
and the creation and development of technological entrepreneurship.
Innovative ecosystem will be built on the basis of existing techno-parks,
venture funds, research institutes and universities, as well as on the basis of Astana
hub. This environment is designed to create conditions for the attraction of ideas,
technologies, digital solutions and talented professionals from around the world, as
well as the active involvement of citizens of the Republic of Kazakhstan who are
involved in IT projects abroad.
An important consequence of the creation of an innovative ecosystem in the
country will be an increase in the share of technologies of Kazakh origin.
Support for innovative development platforms.
The main breakthrough for this initiative will be the launching of the
International IT Startups techno-park (Astana hub), which will implement measures
to support and develop the digital economy. To this end, the regulatory environment
will be organized, needed to transform the Astana hub into a point of innovation
attraction, both from Kazakhstan and the CIS in general, and from other countries.
Astana hub will be built into the international IT cluster system, such as Israel,
California, Singapore, and Berlin, and will become a bridge for its residents to reach
international markets.
In addition, the initiative involves upgrading the existing infrastructure of
innovative development - incubators and accelerators of the Republic of Kazakhstan -
as well as adapting legislation, including creation of financial and tax preferences to
startups and improve intellectual property protection issues.
Development of technological entrepreneurship, startup culture and R&D.
All successful innovative ecosystems are open to the world and compete for
human capital. Programme will create an enabling environment for attracting
technological entrepreneurs, scientists and other qualified professionals into
Kazakhstan.
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Foreign entrepreneurs and technology specialists are the source of specific
know-how needed to develop the local ecosystem of startups. Their experience, as
well as technology of research and development, of entrepreneurship, of management
all of the skills that foreign spacialists can offer, may help speed the formation of
startups local ecosystem. In addition, they provide a variety of cultures and
knowledge, which in the future can become a competitive advantage for the
ecosystem as well as for each participant.
The task of attracting foreign professionals and scientists requires, first and
foremost, the most favourable conditions for their work and residence, for safety and
for competitive remuneration. In the longer term, such professionals will be provided
with evidence of real use of their development, impact of their participation in the
development of country's digital economy.
In this context, the possibility of introducing e-residence concept will be
developed, an opportunity for foreigners to conduct business in the territory of
Kazakhstan which, for one reason or another, have refused to acquire a residence in
the Republic of Kazakhstan.
In parallel with the attraction of foreign intellectual capital, a qualitatively
different level of research will be achieved in Kazakhstan. To this end, it is proposed
to develop mechanisms to stimulate research activities of organizations in the
Republic of Kazakhstan, to open business schools, and to involve major international
IT companies in opening their research centres. Innovation is not possible without
basic and applied science.
In order to develop R&D, there will be interaction between the startups and the
leading universities countries. To this end, the government will identify assignments
for targeted scientific grants that can be received by startup teams in conjunction with
leading universities.
In addition, the state will provide all facilities to encourage transnational
companies to localize the development of their products, as well as to test the
breakthrough technologies in the territory of Kazakhstan. To this end, a short list of
technological development directions will be identified and a legislative capacity
shall be provided to any company in the world to test them in a controlled
environment, without risk of breaking the existing legislation in their countries. This
mechanism is mainly used in financial technologies, but it can be extended to other
industries.
In addition, the main objective of this initiative is the widespread promotion of
innovation in the Republic of Kazakhstan. In addition to mass-media support, more
targeted mechanisms will be used, such as mentoring programmes for startups from
successful technology entrepreneurs and training of university students in business
basics ( Israeli example). Such practices could also be extended to an earlier stage -
schools.
Attracting venture financing
Development of innovation requires the creation of another necessary
condition - non-state professional venture capital industry. Development of the
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venture industry will require the adaptation of legislative framework for the financing
of startup companies, including development of a draft law on venture investment,
regulating, inter alia, the activities of individual investors.
In parallel with the development and regulation of individual venture
investment, it will be necessary to develop and implement measures to attract
professional venture capital funds to Kazakhstan. To coordinate and support venture
funds based on Astana Hub, the issue of a co-investment fund will be elaborated,
which at an early stage will reduce the risks for private investors. Subsequently,
according to Israel's experience, the role of Fund would be reduced to the private
sector.
However, public investment is made on a return and a fee-based basis, since
venture industry is a high-risk industry, implying an average success in 1-2 projects
from 10 invested. Therefore, the co-investment fund will be created by means of
quasi-public and private sectors as a non-profit organization. Non-profit organization
status allows tracking of the target use of funds invested in the organization without
the need for any specific investment, but only for investment portfolio indicators as a
whole.
In addition to professional financial organizations, venture financing can be
handled by large corporations in Kazakhstan, organizing their own corporate venture
funds. This practice is common to many global telecom operators, technology
companies and second-level banks. The state can facilitate the establishment of such
funds through investment or other incentive measures.
Generation of demand for innovation.
The planned innovation ecosystem will be the driver of economic sector
transformation. In turn, SME, industry, quazi-public sector and state will create
demand for the innovation that is being created to generate a full cycle of generation
and support for innovation.
Innovative development will create the conditions for joint entrepreneurship
(corporate innovations and superclasters), which will identify priority technologies to
enable the creation of new industries. A favourable regulatory environment will be
created and corporations attracted, including transnational ones, for priority
technologies. Partnerships will also be implemented with other international
innovative clusters, including the EAEP/SCO countries and others. Kazakhstan shall
work with countries involved in EUREKA to implement joint R&D activities.
In order to develop corporate innovation, a corporate priority list will be
established to support the introduction of corporate innovation through training and
workshops. These corporations will discuss the various possibilities of bringing their
innovation processes to a new level, including through corporate venture funds,
cooperation with startups (collaborative innovation), etc.
Emphasis will also be placed on supporting and popularizing the innovation
activities of large companies. To this end, the state will involve large private and
national companies in the process of innovation through:
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1. Facilitating linkages with startups to implement innovative projects
("collaborative innovation") to create innovative ecosystems around large companies.
2. Create incentives for the introduction of digital technology in the profile.
Implementation of the above activities will make a contribution to the goal of
the Programme to improve the country's population quality of life .
5.6. Control system
Implementation of the Digital Kazakhstan Programme implies adherence to
five basic principles.
Principle 1 - "digitalization of flagship Industries". The main and fastest
macroeconomic effect of the programme will be the digital transformation of existing
economic sectors. In this context, the main objective of industries digitalization is to
increase productivity, which is achievable both through the introduction of new
technologies and through the concomitant adaptation of existing business processes.
Principle 2 - "overtaking pace". The Republic of Kazakhstan will adopt the
most advanced technologies, without fear of ignoring proven solutions in favour of
after-tomorrow innovation.
Principle 3 - "be flexible". When changes are made to the Programme, an agile
approach may be applied in the cases provided for in the current state planning
system.
Principle 4 - "partnership with business". Effective implementation of the
Programme is not possible without an active private sector role. The state will
involve both large business and SME to address specific problems (areas of
inefficiency) that are logically addressed by private sector efforts. Effective
interaction requires that the instruments of engagement and motivation for economic
agents be refined so that they can cooperate fruitfully with the state. In this context,
special conditions will be created to attract investment in digital projects, that is, to
minimize the costs to the digital transformation of enterprises.
Principle 5 - "adaptation of regulations". Implementation of the Programme
will result in various issues that would require regulatory changes and standards (e.g.
"Big data" or IoT standards). State will show its own initiative to adopt the most
progressive legislation in order to create conditions for a leap, including in
comparison with countries at a similar stage of digital development.
To guarantee continuity of change, the President of the Republic of Kazakhstan
will establish a commission for the implementation of digitalization, which is
designed to monitor, evaluate and adjust activities to achieve the objective of the
Programme. Activities will be synchronized with similar initiatives of the Customs
Union countries - Russian Federation and Republic of Belarus. In addition, the
necessary structure for management of digital transformations will be established to
ensure Programme implementation, initiatives and objectives.
At the Government level, a CDO position has been created, as well as
digitalization offices under the CDO leadership in state bodies, responsible for
digitalization in the industry they supervise, have been established in government
54
agencies. A digitalization project office to provide the necessary methodological and
advisory support to the offices of digitalization state bodies and to provide
harmonization of initiatives in the direction of digitalization, both between state
bodies and between branches and state bodies and business community, IT
companies, techno-parks, universities and scientific sphere.
In order to implement the Programme and achieve global objectives of the
transition to 4.0 industry, a change in mindset, management and organization is
needed. The modern rapidly changing world makes outdated management processes
that are charateristic to excessively bureaucratic command-and-control systems, with
tight management hierarchies, strict control and accountability in action. It becomes
critical not to be able to execute a statement, but to see real goals and achieve them
within a specified time and quality criteria in a rapidly changing world. This requires
a conscious introduction of a variety of management tools, including flexible ones, to
implement projects and initiatives with achievable goals in the short term. Flexible,
otherwise adaptive, management methods enable you to plan for short-term goals
with rapid delivery of results and rapid adaptation to changing conditions. They
require the ability to build network non-hierarchical structures of interaction
(collaboration) of temporary teams working towards a specific goal. Such structures
make it possible not to create an excessive bureaucracy and to involve people with
required competencies to perform the necessary work, allowing them to carry out
interesting and ambitious tasks in return for their accumulated experience and
knowledge.
Accordingly, the Digitalization Project Office, based on the Zerde NICH JSC,
will be a driver for introducing flexible adaptive management techniques and to relay
them to the state bodies' offices of digitalization , with the further involvement of
other state bodies.
In order to achieve the medium- and long-term objectives, management styles
based on the future modelling will be tested and introduced. In particular, foresight
sessions on strategic planning, forecasting changes and developing road maps to
implement these changes will be used on a continuing basis.
6. Necessary resources
Implementation of digital initiatives will be an important link in a number of
activities for the country's further economic growth. Programme has a significant
potential for value added and cost reduction in the economy, which will allow the
country to achieve a GDP growth rate of 4.5-5% per annum on the horizon from
2025, with 1.6% to 2.2%, about a third, to be exclusively on the digitalization. This
scenario provides for a holistic approach to change, maximum involvement and
additional investment, both at the state level and at the level of individual industries
and companies. In so doing, coordinating and guiding participation of state in the
Programme stems from its emphasis not only on direct return on investment but also
on the long-term effects of digitalization on improving the quality of education,
quality of life, investment and business environment.
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Direct effect of investment
Implementation of the programme assumes 141 billion tenge from the
Republican budget, it is also expected to attract 169 billion tenge of the funds of
quasi-public sector entities. According to the preliminary calculation of the direct
effect of the economy digitalization by 2025, it will be possible to create an
additional cost of 1.7-2.2 trillion tenge, thus ensuring an investment return of 4.8-6.4
times by the year 2025 to the total investment, taking private investment into account.
Digitalization has an impact on all sectors and will alter the structure of
economy of the Republic of Kazakhstan as a whole by diversifying and uncovering
the potential of non-primary industries, stimulating startup activity and opening up
"new industries". At the same time, the degree of digital technologies influence in
different industries is heterogeneous - the greatest potential for value creation is
assumed within the traditional branches of Kazakhstan's economy, including the
commodity sector, but it also opens up fundamentally new cost-creation opportunities
in e-commerce, IT sector and financial industry.
The most significant effects in terms of GDP will come from 12 key projects:
1) creation of international technology park of IT startups (Astana hub)
2) introduction of 4.0 industry technologies, including the implementation of
"smart deposit" projects, creation of model factories;
3) introduction of the paper-free principle;
4) establishment of an intelligent transport system;
5) development of e-commerce;
6) creating a digital platform for SME (single window)
7) development of an information system for marking the goods to reduce
shadow turnover;
8) implementation of a set of measures to promote cashless payments;
9) development of open-platform (open API), big data and artificial
intelligence;
10) development of telecommunications infrastructure, including broadband
access;
11) improvement of customs and tax administration and transition to electronic
declaration
12) implementation of Smart City projects.
Quality effect
In addition to achieving economic and competitiveness gains, digitalization
will have a positive impact on social sectors aimed at improving the population
quality of life, one of the key objectives of the Programme. Such initiatives do not
imply a direct return on investment in the short term, but they are important for the
long-term success of the Programme and development of the country (for example,
education) and are necessary as a quintessence of the state role State (development of
health, e-government, smart cities).
Cumulative effect of such initiatives is deferred and will be fully apparent only
after years. The impact of qualitative development of education, health and
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investment environment is expected to begin by 2022. This effect is negligible on the
Programme implementation horizon, but in the long run will significantly reduce the
socio-economic development gap with the top 30 developed countries of the world.
An important result of the programme will also be the acceleration of
Kazakhstan's entry into the Top 30 of the UN ICT development index.
On an even longer horizon, the successful implementation of the digitalization
programme will prepare country for the next challenges to science, technology and
social development, which are still in their first insight.
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Glossary:
ITP ACF "Innovative Technology Park" Autonomous Cluster
Foundation;
AIC agro-industrial complex;
Blockchain - electronic accounting in chronological order of a single
public record of any data and (or) the acts committed by
all participants in a business network;
Bid price of demand, the highest price the buyer agrees upon to
buy currency, securities, assets;
GDP - gross domestic product;
FOCL fibre optic communications lines;
GCI WEF Global Competitiveness Index of the World Economic
Forum;
SB - state bodies
RTA road traffic accident;
ICT - information and communication technologies;
IT - information technologies;
ITS Intelligent Transport System;
PTL power transmission line;
MDDIAI - Ministry of Digital Development, Innovations and
Aerospace Industry of the Republic of Kazakhstan
MES - The Ministry of Education of the Republic of Kazakhstan;
MIID - Ministry of Investment and Infrastructural Development of
the Republic of Kazakhstan
MNE - Republic of Kazakhstan Ministry of National Economy
МТI Ministry of Trade and Integration of the Republic of
Kazakhstan
SME small and medium enterprises;
ITU International Telecommunication Union;
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MA The Ministry of Agriculture of the Republic of
Kazakhstan;
LEA - local executive authorities;
MoE - Ministry of Energy of the Republic of Kazakhstan;
NB The National Bank of the Republic of Kazakhstan;
R&D Research and development work;
RLA regulatory legal acts;
OR oil refinery;
UN The United Nations;
LEA legal entities association;
RTR road traffic regulations;
RK - Republic of Kazakhstan;
USA - United States of America;
Economic agents - economic relationships subjects involved in the
production, distribution, exchange and consumption of
economic benefits;
CSB central state bodies;
Digitalization - use of digital technology to create and/or modify a
business model and to generate new incomes and
opportunities that generate value
Digital
transformation of
economy
- change in the economy management model comprised of
individual digital transformations, as well as a change in
the structure of economy through the development of
efficient digital infrastructures that make the transition to a
new technological and economic patterns, as well as the
creation of new economy branches;
Digital economy - set of public relations arising in the use of electronic
technology, e-infrastructure and services, large data
analysis and forecasting technologies to optimize
production, distribution, exchange, and social-economic
development of states.
Digital Platform - a platform that provides a range of digital interactions
between two or more different digital interaction subjects;
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Digital ecosystem - an interdependent group of digital ecosystem entities and
objects that use standardized digital platforms to achieve
mutually beneficial objectives (such as commercial profit,
innovation or common interest).
Digital technologies technologies that use computer hardware to capture code
impulses in a certain sequence and with a certain
frequency;
3D printers - a peripheral device that uses the method of layered
creation of a physical object based on a digital 3D model;
ADSL asymmetric Digital subscriber line;
API application programming Interface;
В2В Business to Business;
CDO chief digital officer;
G2B Government-to-Business;
G2C Government-to-Citizen;
G2G Government-to-Government;
Fulfillment - a set of operations from the time the customer places the
order to the time of purchase;
FTTх fiber to the x;
IDC - International Data Corporation;
ICT Information and communications technology;
IoT Internet of Things;
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