Institute For The Future

High Delta Markets: The Future of Innovation in Kazakhstan

High Delta Markets: The Future of Innovation in Kazakhstan

Kazakh culture provides unique opportunities and challenges to innovation

Miss our previous article on High Delta Markets? Read more here.

Kazakhstan is a sprawling, landlocked country in Central Asia.  It is the 9th largest country in the world, and has significant economic power in the Commonwealth of Independent states, in no small part because of a thriving oil and gas industry. Once part of the Soviet Union, it is bordered by Russia and China, as well as Turkmenistan, Kyrgyzstan and Uzbekistan. 

Over the last 25 years of independence Kazakhstan has gone through massive changes—changes in political regimes, achieving independence, rapid economic growth, globalization, and the creation of a thriving oil and gas industry. Among other Central Asian and some other CIS countries, Kazakhstan has the most open policies for information, trade and business.

Looking ten years out, the future of Kazakhstan will be shaped by its unique culture and character. Looking at early signals based on Diana Tsoy’s work studying the Kazakh entrepreneurship ecosystem, we can get a glimpse of what Kazakhstan will look like in the next decade.

Online communication tools will shape and be shaped by the Kazakh cultural norms

In Kazakhstan, there is generally a culture of privacy. This is in part because failure reflects not only on an individual, but on their family as well. This causes people to be more risk averse, even in their communication, whenever it is tied to their identity. Because of this, anonymous online forums are popular. One very popular social network is Kelin (Kazakh for daughter-in-law), an anonymous network for women. On Kelin, Kazakh women can exchange information, learn the rules of communication in the family, raise questions and receive many answers in a safe environment.

There is also, generally, a very strong connection with family for people in Kazakhstan. Within Kazakh culture parents and children have very tight connection. Children tend to be less independent than in western world., including very close parental oversight of schoolwork. This close relationship led to development of several IT platforms and mobile applications, through which parents can monitor not only the grades at school and home-assignments given, but also the time a child starts their lesson, when they have left the school, and even their location through GPS. The platforms can identify abnormal behavior and send alerts in case of emergency. Examples include special mobile applications like E-oku.kz and Mongoose.kz. This close relationship continues as children reach adulthood. According to Kazakh tradition, the youngest son in the family should take care of the parents and live with them in the same house for their entire life. Nowadays, this tradition is often kept, and many old people live with their children.  These cultural specifics will continue to influence online communication tools in the future.

A tight social fabric will drive the creation of peer-to-peer services

In Kazakhstan, doing favors for strangers is commonplace. For instance, on Facebook in Kazakhstan, it is not uncommon to see people posting about someone they have met that needs help, with a phone number or bank account number included for donations. Although to Americans this might look like a scam, it is to many Kazakhs a way to provide or access social support.  Let’s take as an example a well-known case in Kazakhstan of a 2- year-old girl, Zere, who needs a unique surgery. The surgery is very expensive—USD 164,600—and requires transport to California. Her parents have been leading a donation campaign on social media for one year now.  The campaign is very transparent, and they have currently collected USD 140,958 (https://m.facebook.com/HelpZere/). Other examples, that might pop up in the timeline of Kazakhstan social networks include requests to help single mothers, disabled people, or old people, who can not fully provide themselves. Photos of found documents or animals are also posted in the social media, in case someone knows the owner.

Based on this ethos of openness and sharing, the website http://zhaksy-adam.kz/ provides tools to donate money peer-to-peer, or post lost items, providing an internet platform specifically built to facilitate these kinds of exchanges.

Kazakhs will learn love entrepreneurship

In the Soviet era, entrepreneurship was frowned upon. In fact, the Russian word for entrepreneur still carries a negative connotation, meaning something closer to “profiteer.” Because of this, many people are more comfortable using the English word “businessman” which sounds the same both in Russian and Kazakh language, and lacks the negative connotation. However, this attitude is changing, as evidenced by the many local and international startup incubators popping up, like techgarden.kz, http://most.com.kz/, https://startupvillage.ru/en/, http://happyfarm.com.ua/, and others.

Partnerships with China will accelerate innovation

China is investing billions of dollars in the Kazakh economy, with promises of an increase over the next few years as part of their “Silk Road Economic Belt” effort. This will buoy efforts far beyond natural resources, as regional commerce expands through improved infrastructure and partnerships.

For the last 15 years, Kazakhs were mostly consuming imported goods and services, and so have experienced all benefits of the globalized world.  Nowadays, local small and medium businesses are making their first steps at a thriving domestic economy, often run by the professionals who either worked within global companies or studied abroad. They are applying this experience abroad, and adjusting it to the local culture to create new innovations.

Looking at signals like these doesn’t allow us to predict the future, but it allows us to intentionally shape our story of the future, and gives us a better shot at creating a global future that we want. If you’re interested in looking deeper into entrepreneurship in Kazakhstan, get in contact with Diana Tsoy directly at ditsoy [at] gmail [dot] com.