Business Incubation and Innovation Development in Kyrgyzstan. Mrs. Zamira Akbagysheva

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1 Business Incubation and Innovation Development in Kyrgyzstan Mrs. Zamira Akbagysheva President of the Congress of Women of the Kyrgyz Republic, General Secretary of the Union of Business Incubators and Innovation Centres of the KR

2 Legal Base and Types of Incubators The first governmental resolution on business incubators dates to There are two types of incubators in the Kyrgyz Republic : incubators established as nongovernmental organizations, usually with the legal status of foundations or NGOs; business incubators created by the government ministry of Labour and Social Protection (MLSP), i.e. governmental organizations.

3 Number of Business Incubators and Regional Distribution Nowadays there are 64 Business-incubato rs in the Kyrgyz Republic, 45% of Business-Incu bators have no any juridical status, the quantit y of real acting Business-Incubators is % of incubator staff have participated in training courses and seminars most of which were related to business issues such as business planning and finance.

4 Business-Incubators in the Kyrgyz Republic The Business-incubator make already first steps in the way of program purposes and tasks realization, established at the consitutive conference. The Kyrgyz government has in recent years supported the foundation of business incubators particularly in rural areas.

5 Support to Business Incubation Business incubators were established either following a decision of the ministry or through the initiative of local employment departments. Frequently, incubators are supported by the local administration, for instance the majority and the village council. In addition, individuals and local companies contribute by donating equipment or construction materials, and some simply help though manual labor.

6 Non-Governmental Organizations Non-governmental organizations support the establishment of business incubators. Particularly active in fundraising with donors and in creating incubators the Union of Busines s Incubators and Innovation Centres. Thanks to the determined and lobbying effo rts the Union has managed to attract considera ble donor funding and political attention.

7 The main aim of the Union is to support SMEs by the creation of infrastructure: incubators, innovation centres and technological parks. The Union provides services such as training, seminars, conferences, internet and computer equipment. The members of the Union are governmental and non- governmental organizations: Innovation State Center of Innovation Technologies, the Dialogue Foundation for Public Education, the organization Business Incubator of CWK, the Ak-Dobo business incubator and other BI. In terms of financing, each founding member pays 10,000 Som per year. Donors USAID, DFID, the World Bank also private sponsors- Interglass and Reemstsma support the Union s s projects.

8 International Donors and the Private Sector International donors have supported incubators in the Kyrgyz Republic since The first business incubator in the country was founded in 2000 in Bishkek by GTZ. The premises were provided by a private company on a rent-free basis for 11 years. From late 2001 to 2004, five incubators were established in the framework of the programme Europe Aid/TACIS two each in Naryn oblast (Naryn and Kochkor) and Batken oblast (Isfana and Khaydarken) and one in Talas oblast.

9 In the Kyrgyz Republic employment effects have so far been limited. About jobs were created with the help of business incubators in each region. Overall 120 companies have been accommodated in the 20 incubators surveyed. However, 20% of them have been in business before and must thus be discounted when considering the creation of new companies.

10 In Kyrgyz incubators the overall structure of tenants appears homogenous and very traditional. Companies in the production sector focus on sewing, handicrafts, souvenirs and food processing, where as services include repair shops, hairdressers and barbers, cafes and joinery. This structure is similar in governmental and donor founded incubators. However, in NGO founded incubators, the share of service companies is, at 76.5%, much higher than in other incubators.

11 Perspectives of development of BI and IC of KR: BI need legal status. We must show preference for non governmental juridical form as usual all over the world. We would like, all of the incubator s room will be responsible for the constructional standard and the standard of technical equipment. The affinity of incubator and also efficancy would fade in providing of priveleged taxation BI clients. We would like the government will grant the basic financial subsidy, at least for incubators, which are parts of it s structure. And there is demand to continue the education and to enhance information possibilities and skills of incubator staff.

12 Thank You for Your Attention!