By Leila Yergozha
Nazarbayev University Graduate School of Business and Economic Research Institute conducted Panel Session “Global Entrepreneurship Monitor: Kazakhstan and the World Practice” at the Astana Economic Forum on May 22, 2015. The session represented a unique platform of communication for the leading experts in the field of entrepreneurial research. Acting entrepreneurs and business owners joining the session have learned about the level of entrepreneurial activity in Kazakhstan compared to the rest of the world, while representatives of the public sector were presented the new initiatives and policies on improving the business ecosystem. Within the framework of the panel session the preliminary results of the initial GEM Kazakhstan 2014 National Report written by the National team have been presented for the broader audience.
As Mr. Timur Zhaksylykov, Vice-Minister of National Economy of the Republic of Kazakhstan pointed out in his welcome speech development of entrepreneurship in Kazakhstan is of great significance for the country and the government. The Development Strategy “Kazakhstan-2050”, new political course of the state, identifies development of entrepreneurship as one of the long-term priorities for the country. In these circumstances, studies on entrepreneurship have particular importance, as the purpose of these kinds of studies is to identify issues of development of entrepreneurship as well as revealing the factors influencing and contributing to it.
Michael Herrington, Executive Director of Global Entrepreneurship Research Association (GERA), emphasized in his presentation that entrepreneurship and small and medium-sized enterprise (SME) development is vital to the well-being of any country in that it is a means to job creation and the alleviation of poverty as well as decreasing unemployment which in many countries is far too high especially in the so-called developing economies. Nowadays, large businesses are not creating jobs, moreover in most countries around the world, companies are: downsizing, restructuring and retrenching. Call it what you like, but they are getting rid of people and automating as much as possible. So in order to prepare ourselves we need to know more about entrepreneurs, what their perceptions are, what makes then “tick” and how we can help them. One way of doing this is through rigorously designed research that is harmonised and allows for cross- country comparison. Such a research engine is the “Global Entrepreneurship Monitor or GEM” as it is commonly known.
The session continued by presentation of Ehud Menipaz, Professor of Ben Gurion University and Team leader for GEM Israel who defined GEM as one of the very few surveys based on the collection of primary data on individual entrepreneurial activities, as well as on social values and personal attributes which contribute to or hinder such activities. His presentation was devoted to GEM conceptual framework, the “black box” that has been opened in order to test the characteristics of the assumed relationships between social values (how the society values entrepreneurial behavior), personal attributes (perceptions about opportunities, capabilities to act entrepreneurially, entrepreneurial intentions and fear of failure) and various forms of entrepreneurial activity (different forms of entrepreneurial activity along the life cycle of a venture: nascent, new business, established business, share of high ambitious ventures, discontinuation; and motivation for venturing :opportunity vs. necessity based ventures).
Ramon O’Callaghan, Founding Dean of the Nazarbayev University Graduate School of Business presented results for GEM Kazakhstan 2014. Within the framework of Adult Population Survey (APS), National team conducted face-to- face interviews and surveyed 2100 Adults in August and September 2014 in the respondent’s language. The sample was stratified by gender and population group, then by region and community size. All 14 regions of Kazakhstan as well as two biggest cities Astana and Almaty were included into survey. Team also interviewed 36 experts asking them to assess various elements of the local economic and social infrastructure such as: Government Policy, Government Entrepreneurship Programs, Entrepreneurship Education, R&D Transfer, Entrepreneurial Finance, Commercial and Legal Infrastructure, Market Openness, Physical Infrastructure and Cultural and Social Norms that are seen to pertain to the development and nurturing of entrepreneurial activity. From the results of APS GEM Kazakhstan team revealed that: 1) Total early-stage Entrepreneurial Activity (TEA)[i] Rate in Kazakhstan is 13, 7% ; 2) Established Business Ownership[ii] Rate in Kazakhstan is 7.4% 3) New Business Ownership[iii] Rate is 6.2% 4) Nascent Entrepreneurship Rate is 8.1%[iv]. For example, within the Asia & Oceania geographic region, Kazakhstan emerges as having the 2nd highest ranking in terms of the general population’s perception of entrepreneurship as a ‘good career choice’. In terms of the general public’s perception of the relative social status of entrepreneurs, Kazakhstan was 4th in the region. Similarly, Kazakhstan ranked 4th in the region in terms of perceived media attention on the subject of entrepreneurship. After his comprehensive report presentation Professor O’Callaghan informed the audience that National Report will be released in September of 2015.
The session was continued by presentation on Entrepreneurship, Innovation, and Competitiveness by Mr. Michael Enright – Professor of Hong Kong University, who helped design and then managed the Competitive Advantage of Nations Project at Harvard Business School in the 1980s and undertook the first competitiveness project in a developing country based on the CAON methodology. He highlighted the role of competitiveness in national economic development and defined competitiveness from the perspective of being more productive. He also provided insights into links between the knowledge-innovation-creative economy and entrepreneurship (and intrapreneurship) that does the work of the knowledge-innovation-creative economy as well as to the links between GEM reports and competitiveness.
The second part of the session has begun with the presentationby Robert Rosenfeld, Professor of Duke Corporate Education, who shared with his experience of teaching at SME Executive Development Program[v] at Nazarbayev University that provides business education and support to entrepreneurs in Kazakhstan who want to significantly grow their businesses. Over 1,600 participants have undertaken the program and learned to understand the management, marketing, financing, operating and planning components of growing profitable businesses, to reflect on the challenges facing leaders of small and medium businesses in Kazakhstan by networking and learning from other participants, to interact with legal, financial and investment experts from within the Kazakhstan business community and to produce a market growth plan to assess and receive feedback on the commercial potential of new business ideas. Business results reported by participants (2011-2014) shows that after the completion of the program participants observed 65% growth of new products and services and 60% growth in net profit margin, experienced 49% increase in number of employees, 31% of them have been able to attract external capital into the business. After the very prominent achievements reported by Robert session was continued by presentations of local businessmen Andrei Strelets and Aitugan Mukashev. Both are local entrepreneurs having businesses in agriculture sector and very interesting success stories to tell.
The session uniting academia, business and politics has become a platform for productive dialogue.
[i] Percent of those sampled who indicated involvement in a nascent, young business, or both
[ii] Percentage of individuals aged 18-64 who are currently an owner-manager of an established business, i.e., owning and managing a running business that has paid salaries, wages, or any other payments to the owners for more than 42 months;
[iii] Percentage of individuals aged 18-64 who are currently an owner-manager of a new business, i.e., owning and managing a running business that has paid salaries, wages, or any other payments to the owners for more than three months, but not more than 42 months.
[iv] Percentage of individuals aged 18-64 who are currently a nascent entrepreneur, i.e., actively involved in setting up a business they will own or co-own; this business has not paid salaries, wages, or any other payments to the owners for more than three months.
[v] The program is sponsored by the Ministry of National Economy and supported by DAMU found.