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Integration Processes of National Innovation Systems as a Response to Global Challenges, 3 May 2011, Astana

Eurasian Regional Integration – Implications for Innovation and Entrepreneurship Policies

Mathias Rauch, Deputy Director

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Contents

1.Regional Integration in Eurasia – Short Appraisal

2. Spotlight: Locational Competition, FDI and Local Entrepreneurship

3. Implications for Innovation and Entrepreneurship Policies in Kazakhstan

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Regional Integration in Eurasia – Short Appraisal Regional (re-)integration in the post-Soviet countries has been put

on the political agenda; at different paces and levels, though:

EurAsEC plays a major role for economic integration; the level of integration within EurAsEC-3 is higher than within the CIS

General level of integration is rather low, particularly instiutionally; key sectors such as energy, extracting and transport show higher integration

However, these sectors are less likely to show high degrees of SME entrepreneurship and innovation activities

Creation of Customs Union in EurAsEC-3 is a significant step toward deeper economic integration (common market?)

Which opportunities for developing an innovative entrepreneurial base may arise from these integration efforts?

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Regional Integration in Eurasia – Expected Economic Effects

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Contents

1. Regional Integration in Eurasia – Short Appraisal

2.Spotlight: Locational Competition, FDI and Local Entrepreneurship

3. Implications for Innovation and Entrepreneurship Policies in Kazakhstan

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The Increasing Role of FDI within EurAsEC-5Developments in intra-regional FDI in EurAsEC-5

Source: EurAsEC (2009).

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FDI and Local Entrepreneurship – Achievable Impacts Increased locational competition for FDI from Non-EurAsEC

countries FDI often cannot be reduced to a flow of capital but also implies the

transfer of technology and knowledge (however difficult to verify): Organisational and management knowledge used by foreign or

multinational companies (MNCs) Technological capabilities and know-how

Knowledge transfer in form of: Contribution to professional education and economic development

in host country Knowledge spillovers to stakeholders such as local

entrepreneurs/SMEsPolicy-makers need to provide an appropriate framework, in order to achieve these impacts. This applies particularlyto transition economies.

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Contents

1. Regional Integration in Eurasia – Short Appraisal

2. Spotlight: Locational Competition, FDI and Local Entrepreneurship

3. Implications for Innovation and Entrepreneurship Policies in Kazakhstan

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Implications for Innovation and Entrepreneurship Policies in Kazakhstan (I)

Regional integration does not automatically imply an enhancement of sustainable entrepreneurial dynamics in the region

Framework conditions need to be developed and implemented in order to increase the rate of technology absorption:

Investment into human development and R&D infrastructure Access to financial resources for innovation (e.g. SME and start-ups) Creation and enforcement of sufficient legal framework (e.g. IPR)

Regional integration process needs to be accompanied by national and transnational policies that aim at improving framework conditions for innovative entrepreneurship

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Implications for Innovation and Entrepreneurship Policies in Kazakhstan (II)

Baseline of a holistic policy approach:

Coherent domestic policy strategy to create favourable framework conditions at national and subnational levels (Business Roadmap 2020)

(Trans-)national coordination of innovation-related policies between national and regional authorities

Targeted policy measures to attract sector-specific and sustainable FDI

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Mathias RauchDeputy Director

Fraunhofer MOEZNeumarkt 9-1904109 LeipzigTelefon +49 341 231039-113Fax +49 341 231039-190Email: mathias.rauch@moez.fraunhofer.de

Thank you for your attention!