RESEARCH REPORT UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION (UNIDO)

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1 RESEARCH REPORT UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION (UNIDO) INSTIGATING DEVELOPMENT OF DOMESTIC TECHNOLOGY AND ENTREPRENEURSHIP IN CENTRAL ASIA EREL MOSE SAUL MUNDP 2018 Commitment to Development Research Report

2 Basic Overview of the Issue Domestic technology and entrepreneurship is one of the most prominent factors in ensuring economic growth and development to raise the quality of living standards. Since the industrialization era, more and more nations have been investing their resources to develop technology that benefits the society as a whole, as increased technology equates to increased production thus overall economic growth. With domestic technology and entrepreneurship lying so center to improving the life standards of a country, n countries are not foreign to developing domestic technology and promoting entrepreneurship. Countries are not only seeking to augment the efficiency of traditional extractive sectors but also to make greater use of information and communication technologies and other modern technologies. For example, solar energy, to develop the business sector, education and research. Bolstered by strong economic growth in all n countries (with the exception of Kyrgyzstan), national development strategies are nurturing new high-tech industries, pooling resources and orienting the economy towards the export markets. Many national research institutions established during the Soviet-era have since become outdated with the development of new technologies and changing national priorities. This has led countries to reduce the number of national research institutions since 2009 by grouping existing institutions to create research hubs. Explanation of Important Terms Domestic Technology Domestic technology is the incorporation of applied science into the home. There are many aspects of domestic technology. On one level, there are home appliances, home automation and other devices commonly used in the home, such as clothes dryers and washing machines. MUNDP 2018 Commitment to Development 1

3 Entrepreneurship The capacity and inclination to develop, establish and manage a business venture along with any of its risks in order to make a profit. An example of entrepreneurship is the starting of new businesses. In economics, entrepreneurship combined with land, labor, natural resources and capital can produce profit. Entrepreneurial spirit is characterized by innovation and risk-taking, and is an essential part of a nation's ability to succeed in an ever changing and increasingly competitive global marketplace. Economic Development The focus of federal, state, and local governments to improve our standard of living through the creation of jobs, the support of innovation and new ideas, the creation of higher wealth, and the creation of an overall better quality of life. Detailed Background of the Issue The goal of countries is to gain greater economic and social benefits from digital technologies and access to entrepreneurship incentives. However, there are certain administrative barriers to entrepreneurship activities in. Extreme Licensing and Regulatory Necessities The regulatory and licensing barriers are the continuation of the Soviet system of permissions where one must obtain approval from the authority to proceed on many tasks. Although n governments are vocal in their support and approval for the free market system, business owners and operators appear to be obliged to seek permission from the government at every single step of executions. The permissive entrepreneurial climate, characterized by over-regulation, continues to impose losses on entrepreneurial activity across all sectors of the economy. MUNDP 2018 Commitment to Development 2

4 When entrepreneurs attempt to seek legal redress to register, they soon discover a different level of obstacles: those who pay bribes can keep prices artificially low and force competitors out of business. Such arrangements have tremendously negative effects on the overall competitive nature of the economic system and the free interplay of market forces. Many see joining the informal sector as the only way to remain in business. Insufficient Banking System and Deprived Banking Practices Scarce banking availabilities in levy impossible demands on entrepreneurs. discussions in different countries highlighted the fact that the timeframes and terms of credit for repayments are irrational, collateral is difficult to provide, and finding a guarantor to help secure a loan is hard. Moreover, banks have little incentive to extend credit since over half of their profit is from teller and cash operation services. Another reason for the poor banking practices is the high risk of delinquency or bad loans. For example, in Uzbekistan, 50% of the borrowers default on their loans, resulting in high interest rates -17% annually on the average and dropping slightly in the first year. The high interest is a very heavy load, particularly for people that work in seasonal industries. Additional burdens include unreasonable demands for audits, inspections, and documentation. Major Parties Involved Kazakhstan Since 2006, the number of internet users in Kazakhstan has increased from 8.3% to 68.1% thanks largely to the development of a modern telecom infrastructure in the country. This has also helped raise Kazakhstan s ranking in the 2014 UN E-Government Survey to 28th position. In the Global Competitiveness Report of the World Economic Forum, Kazakhstan ranks 62nd place for number of internet users and 58th for users of broadband internet, out MUNDP 2018 Commitment to Development 3

5 of a total of 144 countries. Kazakhstan aspires to become one of the 30 most competitive countries in the world. A new program Digital Kazakhstan 2020 aims to help boost the economy with the help of modern technologies. Creating a digital platform to increase competitiveness of sectors of the economy and increasing standards of living are the main objectives of this program. Kyrgyz Republic The Kyrgyz Republic is developing a program called Digital Kyrgyzstan The Government has launched a portal for e-services, including municipal services for the citizens, and plans to start providing G2B services in spring Talai Baiterekov, Director of the E-Government Center, said at the presentation that, Armed with the report we will work along the suggested criteria. There are not only useful outcomes but also risks, which we need to take into account, especially while integrating new technological products. We are at the stage of moving towards a digital future and cannot think of digitizing our government. The Kyrgyz Government currently collaborates with Kazakhstan and has signed a Memorandum of Understanding with Zerde. Baiterekov reiterated the country s willingness to collaborate with all countries in the region to solve common problems and to advance the development of the Kyrgyz Republic with the help of digital technology. One of the main priorities for the country at present is increasing digital literacy among the population. Uzbekistan Since 2012, the Government of Uzbekistan has taken concrete steps towards implementing digital technologies and has launched two programs to advance digital development in the country: the ICT Infrastructure Development Program (9 projects) and the E- Government Development Program (28 projects). The Ministry for Development of Information Technologies and Communications oversees these programs (since 2015). Within the E-Government program, Uzbekistan has launched MUNDP 2018 Commitment to Development 4

6 265 online services and 600 government agencies, implemented user feedback on service quality and e-participation, increased transparency in public service delivery, set-up a callcenter, and established One-Stop-Shops in 194 districts of the country. Chronology of Important Events Date Description of Event 2003 More than half of Uzbekistan s computer users get access to the Internet 2011 Construction began of a technopark in the village of Bikrova near Ashgabat, the Turkmen capital 2012 German Federal Ministry of Education and Research signed a declaration of intent with the Committee for Coordination of Science and Technology Development under the Cabinet of Ministers of the Republic of Uzbekistan Two research institutes were created by presidential decree to foster the development of alternative energy sources in Uzbekistan, with funding MUNDP 2018 Commitment to Development 5

7 from the Asian Development Bank Relevant International Documents UN Women: Promoting Innovation, Skills and Young Women s Entrepreneurship The United Nations Foundation Global Entrepreneurs Council (GEC) Feasibility Study for a United Nations Technology Bank for the Least Developed Countries United Nations Secretary-General s High-Level Panel on the Technology Bank for the Least Developed Countries Past Attempts to Resolve the Issue Although past attempts to improve domestic technology and entrepreneurship has been done in other countries, the progress of has been considerably smaller. Bilateral agreements between countries regarding the improvement of technological development exchange has specifically benefitted n countries Uzbekistan and Kyrgyzstan. These bilateral agreements showed themselves in the form of conferences, charities, and closed meetings between head of states and ministries. Solution Alternatives Countries should focus on lifting administrative barriers for entrepreneurship and focus on adopting an open, free-market based economic system and have incentives for citizens to invest in technology. Small businesses wanting to do business in another province that does not recognize their existing registration need to pay hundreds of dollars to do so and complete extra, often duplicative paperwork, just to get their goods across the border. Free trade agreements are essentially contractual arrangements between countries concerning their trade relationships. They may be bilateral or multilateral, that is, between two countries MUNDP 2018 Commitment to Development 6

8 or more than two countries, and they result in lower tariff barriers between the participating members. All of these will enhance the competitiveness of n exports in the partner market and add to the attractiveness of n as an investment destination. Bibliography Technology. Wikizero.net, Bc2lh. Strengthening Entrepreneurship Ecosystem Project within the EU Invest Programme. CEED Bulgaria, ceed-bulgaria.org/strengthening-central-asia-entrepreneurshipecosystem-project-within-the-eu-central-asia-invest-programme/. - Private sector - International Cooperation and Development - European Commission. International Cooperation and Development, 23 Dec. 2015, ec.europa.eu/europeaid/regions/centralasia/eu-support-private-sector-development-central-asia_en. South, East and. Innovation Policy Platform, Useful Links MUNDP 2018 Commitment to Development 7

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