Problems and Perspectives of Transition to the Knowledge-Based Economy in Kazakhstan

Despite of the highest level of the gross domestic product (GDP) per capita in the Central Asian region, Kazakhstan, with its long history of centralized planning, constantly experiences economic insecurities. This trend is mainly explained by the over-reliance on the natural resources and failures in economic diversification. Therefore, this paper considers the knowledge-based economy (KBE) as the framework for the long-term sustainable development of Kazakhstan and explores problems and perspectives of it from the 1996 to 2014. Methodology of the study includes quantitative research by using four steps analyses, such as principal component analysis (PCA), descriptive analysis, multiple linear regression (MLR), and paired t-test. The study shows that 83% of the GDP growth variations in the model can be explained by the final KBE indicators such as Control of corruption; Enrollment in general secondary schools; Computer, communications, and other services; and Research and Development (R&D) expenditure. Although Kazakhstan had poor support of KBE indicators and still practices extractive national institutions, the recent Third Economic Modernization is expected to boost the KBE in the country. The main recommendation of the paper is to profoundly diversify the country’s economy towards enhancing the four pillars of the KBE, such as promoting favorable general enabling environment, improvement of education sector and skills of workforce, and enhancement of information infrastructure and innovation sectors.