PROBLEMS OF COMMERCIALIZATION OF RESEARCH RESULTS IN KAZAKHSTAN

Commercialization is an attempt to profit from innovation by incorporating new technologies into products, processes, and services and selling them in the marketplace. For many new technologies, commercialization implies scaling up from prototype to volume manufacturing and committing greater resources to marketing and sales activities. In industries such as pharmaceuticals and aircraft, commercialization is also contingent on receiving product approval from relevant organizations. Manufacturers must assess the likelihood of securing funding from internal and external sources, their ability to develop or gain access to manufacturing equipment and supplies, and the size of potential markets. Without the proper infrastructure to support their efforts, firms cannot be assured of winning returns from their investment, and competitors with a better support infrastructure may be able to capture the market. Pioneers in a new market often lose out to imitators with better financing, infrastructure, and strategy.

Firms must be able to:

1)   finance new technology ventures;

2)   hire and train skilled scientists, engineers, managers, and production workers;

3)   protect their innovation from imitators;

4)   acquire or access complementary skills and technologies required to make an innovation useful;

5)   gain market acceptance [1].

For an easier assimilation of the six themes that lead to the commercialization of innovations, following figure should be created (Figure 1). It shows how the six themes fit into the main activities of discovery, development, and deployment that broadly describe the process of innovation commercialization.

Development of the innovation infrastructure began in 2003 with the establishment of the Centre for Engineering and Technology Transfer, merged in to the National Innovation Fund in 2011, having founded the first technology parks in 2004. Although technology parks were formally intended to develop all types of industry-science linkages (ISL), their actual knowledge intensity and impact on the diffusion of innovation has been somewhat limited. Their facilities have been used largely for business centre style activities (providing administrative support and consulting services, office rentals, laboratories, lecturing and exhibition facilities), and a recent evaluation concluded that technology park firms in Kazakhstan were not significantly more innovative than other firms [3].

A Technology Commercialization Project in Kazakhstan, financed by the World Bank over the period 2008-2012, seeks to improve the scientific performance and commercial relevance of research performed by inter-disciplinary teams of scientists selected through a transparent and competitive process. The project targets existing segments of national R&D capacity with potential, after restructuring, to produce internationally competitive scientific outputs (knowledge supply), linked to the national and foreign technology market (knowledge demand). Close linkages between the scientific institutes and private businesses are strongly encouraged by requiring compulsory co-financing arrangements (up to 25%). R&D quality is to be supported by international cooperation linkages, as well as by access to the latest laboratory equipment and the attraction of young, talented scientists. A newly established technology commercialization office is expected to support efforts to connect with markets.

The more quantifiable objectives of the project are defined through a set of output indicators, such as publishing activities and the number of licenses sold [4].

Currently, there are following main difficulties that hinder the development and commercialization of scientific and technological product:

1.   The lack of clear guidelines for the choice of the direction of the search. In the first phase, you should identify the areas of science and research institutions, where to look for interesting and promising development.

2.    The complexity of an adequate assessment of commercial technologies. If you ask the authors to present a business plan for its production, they are likely to present a plan to finance of their studies instead. Practically, we are dealing with the lack of a pragmatic view of the business by the authors to their development. Apart from the usual problems of adequate assessment in this case, prevent many factors related to intellectual products: the need for additional research, planning, research project, etc.

3.    Personnel problem – R&D results commercialization process requires a comprehensive approach, effort and knowledge of a team of professionals, including qualified lawyers and appraisers.

4.   The incompleteness of the majority of studies. A small amount of research is close to serial production. Funding for Kazakhstan science basically involves the provision of funds for research, and the introduction and commercialization of the results practically means not provided, resulting in many promising developments "stuck" at the stage of experimental samples [5].

Intellectual property rights (IPR) create basic incentives for the commercialization of research outputs and the development of ISL. The importance of these incentives is particularly high given the underdevelopment of knowledge entrepreneurship in the country. Despite some positive steps in this direction, there is still considerable potential to enhance the role of IPRs in Kazakhstan’s innovative development. In particular, the low capacity of knowledge institutions to deal with IPR issues is a barrier to innovation. Improving the innovation impact of industry-science linkages (ISL) will require coordinated policy actions at all levels of the innovation system, employing a wide range of policy instruments as part of a systemic, comprehensive approach. ISL policy must reflect the specific characteristics of innovation agents on both the supply and demand sides of knowledge production and use. Factors which interfere to the successful commercialization of innovations are given in the table below.

Table 1 Terms for the development of commercialization and the factors hampering innovation activities in Kazakhstan

Terms of innovation	Factors hampering innovation activities
The demand for innovation	Underdevelopment of the national high-tech market; State erroneous position to warrant the incompatibility of fundamental research to the innovation process
Capacity development (achievements, personnel, infrastructure)	The lack of institution innovation managers, professional experience and knowledge in the field of commercialization of innovative structure
Incentives and motivation to engage in innovation activities	The lack of policies of state protectionism of national science, including the innovative grants, grants for youth and women; favourable conditions for venture capital funds
The legal, economic and organizational conditions	Inharmonious legislation on IP; the absence of a developed institute of public contracts; bureaucratic restrictions innovation as the costs of transition from a planned to a market economy; lack of regulation of product markets and related standards, competition rules

 

To improve commercialization, it seems to be crucial to build good relationships among all the functions involved directly (such as R&D) or in support roles. The task of creating the innovation infrastructure, part of which should be a single national technology innovation commercialization, designed to combine the departments and agencies, research centres, research institutes, expert organizations, private business and become the basis for a new national intellectualization project to society as a basis for economic growth. Considered above issues of creating conditions for the development of innovative infrastructure for the commercialization of research results define the objective necessity for further comprehensive study the problem and search for constructive mechanisms for its decision.

 

List of references

1.     U.S. Congress, Office of Technology Assessment, Innovation and Commercialization of Emerging Technology, OTA-BP-ITC-165 (Washington, DC: U.S. Government Printing Office, September 1995).

2.     Datta, A., Reed, R., Jessup, L. Commercialization of Innovations: An Overarching Framework and Research Agenda. American Journal of Business, 2013, 28(2), pp. 147-191.

3.     S. Radosevic and M. Myrzakhmet. Between vision and reality: Promoting innovation through techno parks in an emerging economy, Technovation, 2009, 29 (10), pp. 645-656.

4.     United Nations. Innovation performance review of Kazakhstan. Geneva, 2012.

5.     S. Muhamedzhanov. The main problem of science in Kazakhstan is lack of demand. Kursiv, 2014.

6.     K.S. Mukhtarova, A.Zhidebekkyzy. Development of green economy via commercialization of green technologies: experience of Kazakhstan. JAFEB, South Korea, Seoul. Volume 2 number 4, 2015.