The last Digital Almaty Forum 2024 is an important and significant event in Kazakhstan. Thanks to him, many local development companies have the opportunity to declare themselves and attract the attention of investors to their projects. An award ceremony was held for the most successful innovators. Business representatives from various fields were able to get acquainted with the latest developments, discuss current topics at the sessions, ask exciting questions to speakers, etc. Most of the interest was shown in AI technologies, machine learning, AR/VR, business process modeling, and cybersecurity issues were actively discussed . In addition to the stands of such well-known companies as Yandex, Freedom Bank, Bitrix24, Kcell, Altel had a lot of start -ups: Awara, Datanomix, Robotics Education, Sergek, Alabs and others. Communication with a representative of each of them aroused my keen interest, new contacts may be useful in the work and I hope in the near future we will find points of interaction.

All this combined prompted me to study in more detail the current situation of digital transformation taking place in the republic and the conditions in which the participants of the business community are in the implementation of this strategy.  

According to the World Digital Competitiveness ranking (WDCI) Kazakhstan in 2023 The year has improved its position in relation to last year by two positions, taking 34 place in the general list of countries. It remains to take one more such step and it will be possible to return to its former, best rating value over the past 5 years, achieved in In 2021– 32nd place.  (Source https://worldcompetitiveness.imd.org/countryprofile/KZ/digital )

Fig.1 Dynamics of Kazakhstan's digital competitiveness rating (Source: https://worldcompetitiveness.imd.org/countryprofile/KZ/digital )

Digital transformation, like all previous industrial revolutions, is exponential and disruptive. Those who do not attach enough importance to these properties, whether it is the state as a whole or the activities of a single company, may significantly lose their market positions in the future. The successful implementation of the digital strategy eliminates competitors, leaving behind a "scorched field".  Someone goes far ahead, and someone goes into the shadows forever, becoming an outsider forever. In this regard, competition between countries and in business is constantly growing, and digital strategy has become a matter of survival. Digital ratings, on the other hand, help governments and the business community understand exactly what they can focus their resources on and what best practices can be used in the transition to digital transformation.

Kazakhstan managed to achieve a positive result in the changes in the WDCI rating mainly due to: society's readiness for changes, active development and application of new technologies, increased penetration of broadband Internet, growth of the mobile communications market, development of e-commerce, exchange of technological knowledge (universities and business) and changes in legislation on scientific research.

Fig.2 Dynamics of the main indicators of Kazakhstan's digital competitiveness (Source: https://worldcompetitiveness.imd.org/countryprofile/KZ/digital)

 About 99% of the population is covered by the Internet, more than 90% of public services are available online, expanded infocommunication infrastructure and the introduction of next-generation 5G mobile communication technology has begun, the share of e-commerce is continuously growing and the same forecast remains. According to research by the Mordor Intelligence consulting agency , it has doubled from 2.4 BILLION EUR to 4.5 BILLION EUR since 2021). (Source https://www.mordorintelligence.com/ru/industry-reports/kazakhstan-freight-and-logistics-market ). Digital farms for processing cryptocurrencies have also been created, work continues on the creation of model factories and intellectual deposits.

Fig.3 Dynamics of the growth of the e-commerce market in Kazakhstan. (Source: https://www.mordorintelligence.com/ru/industry-reports/kazakhstan-freight-and-logistics-market )

But what prevents you from moving on? It is noteworthy that Kazakhstan ranks 95th among 141 countries in terms of mobile Internet speed, 96th place among 174 countries in terms of fixed broadband Internet speed, the innovative activity of companies decreased from 17.7% to 15%, and the share of organizations in the economy that carried out innovations is only 11.5%.

Among the reasons, it is also worth noting the low availability of venture capital for startup projects. According to the venture capital market research prepared by MOST in partnership with White Hill Capital and Tech Hub AIFC, the total amount of observed transactions in Kazakhstan for 2018-2022 is 87 million ​​USD for 175 transactions. (Source www.mostfund .vc )

Fig.4. The total volume of public transactions in the venture capital market of Kazakhstan (Source www.mostfund .vc )

However, according to industry experts, the observed transactions reflect approximately only 60% of the actual market volume, which indicates a significant number of non-public transactions.

For the further development of the venture capital market, there are a number of serious challenges that we have to face. The venture capital market in Kazakhstan has great potential, but it must be understood that it was formed relatively recently compared to developed countries, so it is not so developed yet and is only gaining momentum. This affects the lack of diversity in funding sources. Unfortunately, traditional investors are in no hurry to invest in high-risk startups. In addition, the development of highly specialized innovation hubs focusing on specific technologies or industries plays a role. 

Most likely, such a comprehensive restriction of access to investments was the reason for the creation of the Silkroad Innovation Hub at the end of last year Silicon Valley - platforms for networking, knowledge sharing and partnership development among IT professionals, entrepreneurs and innovators. It is expected that this will increase the export of IT services and simplify access to investments.

The low level of digital literacy is an important deterrent to improving the rating of digital competitiveness. If we talk about business, then this should be a special focus of attention for company owners and top management.   For example, the director of Digital transformation at P&G (company Top-50 The Most Innovative Companies in 2023, Source https://www.bcg.com/publications/most-innovative-companies-historical-rankings ) Tony Saldana considers the involvement of company owners and top management with their personal, direct participation one of the key factors for the successful passage of digital transformation. And the reason for the widespread absence of this factor in practice is explained precisely by insufficient knowledge about the capabilities of modern technologies. (https://www.reltio.com/blogs/moderndatamasters-tony-saldanha-president-transformant). Most likely, the most obvious positive confirmation of this argument can be called the example of Singapore (the country ranks 3rd in the WDCI 2023 ranking) and the actions of Prime Minister Lee Hsien Loong, the initiator of most of all innovative transformations. As a student, having received higher education in computer science and programming experience (c++), he was well aware of the potential of technology. Therefore, as soon as he took over the post of Prime Minister in the government, he immediately became the personal curator of the Council for Research, Innovation and Entrepreneurship.

If we talk about a personal professional approach, then in our company group we regularly monitor digital maturity, test readiness for changes, evaluate the results obtained, and conduct active training of the company's personnel with the mandatory participation of the company's top management.

          Support is also visible from the business community and from the government at the state level: various forums, conferences, exhibitions are being held, educational centers are being formed. It is worth noting the creation of such structures as the innovation cluster "Park of Innovative Technologies", the national agency "Qazinnovations". The international technopark of information technology startups "AstanaHub" successfully carries out its activities. The Blockchain Center Research Laboratory (winner of the Blockchain Innovation Award "Digital Almaty 2024") and Binance Academy have launched a large-scale educational project in cooperation with leading government organizations in Kazakhstan.  All this together indicates positive changes and movement in the right direction.

          Therefore, I am very optimistic about the changes taking place, I am sure that over time it will be possible to cope with the existing challenges, not a single "star" will rise yet, which will declare itself on the world market and this will give a powerful acceleration to the entire process of digitalization of Kazakhstan.

                                                                                                                                   Sergey Potapov, CDTO "Atasu Group"