Is Kazakhstan Becoming the Next Silicon Valley?
Why International Investors Are Starting to Pay Attention to Kazakhstan
Kazakhstan has recently become an unlikely hub for tech startups. In the first half of 2020, when COVID-19 was already a force to be reckoned with, Kazakhstan has attracted many international investors.
Once the pandemic struck, the government stepped in with crisis management measures that helped minimize losses in the IT sector. The Kazakh government is also expected to support the sector with grant program for startups. By 2024, startups are expected to account for 5% of the GDP.
Even before COVID-19, startups already had a strong presence in Kazakhstan and had been integrated into the national economy. They have been facilitated by Kazakh investment funds and promotional platforms like business accelerators and incubators.
How Did Kazakhstan Become a Hub for Startups?
There are several factors that make Kazakhstan an interesting market for startups. Geographically, it’s one of the five countries that make up Central Asia, but it also borders China and Russia. It is the ninth largest country in the world and is rich in natural resources, including oil and gas. For over a decade, the government has been pushing to invest in innovation instead of relying on oil exports.
Kazakhstan is the most developed country in the Central Asia region in terms of GDP per capita and in digital services. Though it has a relatively small domestic market, it is home to a powerful eCommerce market. It acts as a global leader in mobile traffic consumption with an average monthly usage of over 5 gigabytes.
For all of these reasons, Kazakhstan attracts the majority of foreign investments in the Central Asia region. Some of the most popular investment areas include digital education, digital health, digital agriculture, fintech, and infrastructure.
Incubators and Accelerators in Kazakhstan
Kazakhstan has more than 20 incubators and accelerators for IT programs and business innovation, most of which are internationally recognized.
Is Kazakhstan the Next Silicon Valley?
At this point, it may be a bit of an exaggeration to label Kazakhstan as the next Silicon Valley or even to say that it has a fully formed startup ecosystem. However, all the elements are in place for it to become something bigger. It has an important trifecta of government support, foreign investors, and local initiative, which all make it a region that is ripe for further startup growth and an interesting area for international investors.
