Second Phase of Kazakh-World Bank Commercialisation Project Announced at AEF

ASTANA – A new phase of the multi-million dollar commercialisation collaboration between Kazakhstan and the World Bank was announced this week at the Astana Economic Forum during a panel on Developing an Innovation and Commercialisation Ecosystem in Kazakhstan. Local and international experts also assessed the current commercialisation environment in Kazakhstan and offered advice for its improvement.

Opening the May 22 panel, Vice Minister of Education and Science of Kazakhstan Takir Balykbayev commented on Kazakhstan’s progress and commended the establishment of the International Centre for Materials Science as part of a project between the Kazakh government and the World Bank.

Kazakhstan and the World Bank have been cooperating on commercialisation since 2008 through the joint Technology Commercialisation Project (TCP), a $64.3 million dollar collaboration to help finance and support commercially viable innovation in the country. The U.S. research foundation CRDF Global also cooperates in the programme, whose most recent branch is the Technology Commercialisation Centre (TCC) in Astana. Now, Balykbayev announced, in a sign of the success of the first phase and the World Bank’s confidence in Kazakhstan’s commercialisation potential, a second phase of the programme will be launched in the fall, this time with 80 percent of its funding coming from the World Bank. The second phase was initiated by the World Bank, he said.

Kazakhstan is analysing its funding structure for research and development, and looking to increase its funding for research and development, he also noted.

Damir Yegizbayev, general director of the TCC in Astana, elaborated on the second phase of the TCP. In the second phase, the plan is to transfer the experience of TCC to Kazakhstan’s top universities “so all the developments, all the methodologies will be concentrated not only in one commercialisation technology centre but at these higher[education] institutions.” They also plan to help develop new recommendations for creating more commercialisation centres and for the protection of intellectual property rights. An online commercialisation portal is also planned to be launched within the next two months.

Yegizbayev noted that the TCC had established 33 companies in one year and that more than 10 of those had had positive results. In a later presentation, TCC Lead Expert Erik Azulay explained the best practices he thinks have led to the success of TCC’s grant programme (after 10 months, six real sales and three licensing deals, with seven months to go before any real results were expected).

Though Kazakhstan had had the right structures in place – research institutions, funding programmes and industrial needs – best practices hadn’t yet been brought to bear in commercialisation. TCC has brought the application of international best practices. Their application process is streamlined and accessible online, applications are reviewed by a team of several people that includes both scientific and commercial representatives, and all applicants are given feedback, he said. In selecting projects to fund, the decision is made by committee, in a matter of days, and the commercialisation potential of selected projects is crucial. Finally, selected projects are mentored throughout the process by a commercialisation manager, who helps them through unfamiliar business processes.

Also, Azulay noted, “The grant is not the goal!” The goal must always be actual commercialisation.

“Innovation is needed as a tool of economic development in Kazakhstan,” said Yevgeny Kuznetsov, a World Bank innovation consultant. He advised Kazakhstan to look to Australia, Norway, Chile and Argentina, where innovation is used to harness and hone their existing extractive industries. He also said that Kazakhstan had reason to be optimistic: in recent years, the country has seen 55 scholarly publications on innovation, amended 15 laws and regulations that were hindering innovation and development, created the International Materials Science Centre and taken other steps to support innovative development.

Other international experts advised on best practices in creating commercialisation centres and incubators. “There’s a perception that people want to emulate or replicate or duplicate what exists in America,” said Thomas Nastas, a member of the International Science and Commercialisation Board of the Technology Commercialisation Project. “But in emerging countries … the culture of risk is much different.” This is particularly true when it comes to the culture of failure, which he argued is much easier to bounce back from than in, for example, the U.S. as failure in the developing world is often a death sentence, he argued. Investors in the developing world focus only on results, and money that is invested in ideas that fail is perceived as wasted.

Currently, the TCP is filling the gap in the commercialisation finance chain that should be occupied by public innovation funds. “What we have to demonstrate is that we’ve got technologies that are both customer ready and investment ready,” Nastas said. However, customer ready and investor ready are not equal, he cautioned. It is necessary to fully fund all stages of the long commercialisation process, and not imagine products or companies to be “ready” too early, lest investors and customers lose confidence, he argued.

Nastas also pointed out that innovation in Kazakhstan is more diversified than might be expected in a resource-dependent economy. Many successful projects are coming out of the agricultural and life sciences fields.

President Nursultan Nazarbayev has instructed the government to develop a law on commercialisation of technology, reported Deputy Chairman of Science Committee of the Ministry of Science and Education Aidyn Zeinulla. “We need to increase funding at the under-funded experimental stage, really,” he said. Almost 90 percent of startups cease to exist at this stage, he said, possibly depriving the country of interesting new products to market.

Therefore, the Ministry of Science along with Kazakhstan’s top universities is developing a draft law on commercialisation. The law will regulate the commercialisation process, define legislative norms and define incentives for the use of commercialisation, including specific fees for things like intellectual property and other related issues. The law will also define commercialisation as a priority area for research at the country’s higher education institutions. The draft law will be presented to Kazakhstan’s Parliament this year.

Managing Director of the Astana EXPO Company Saltanat Rakhimbekova, member of the International Science and Commercialisation Board of the TCP Sergey Netesov, Director of the Global Commercialisation Group Sid Burback and entrepreneur Sarsenbek Montayev also took part in the discussion.