Society has drastically changed with the advent and evolution of technology. Colossal opportunities are provided by technology that plays a significant role in people’s everyday lives. Modern-day technology simplified the access to medicine, education, industry and transportation. At the present time people use technology in their life activities just as they wake up in the morning to check the latest news, text and chat with their friends and counterparts or even put an alarm at night not to oversleep at the beginning of the working day. In the last century and particularly in the last decades astounding progress has been made in technology so it is argued that this progress might have brought a lot of good opportunities to society since there were many advancements registered in the information technology (IT).
The largest area of concentration of IT and the global epicenter of technological innovations is the Silicon Valley. Silicon Valley is the region in the southern part of San Francisco in Northern California, United States, where there are the research and educational centers, electronic industry enterprises and leading technological companies in the field of IT. Thanks to Silicon Valley inventions like personal computers, microprocessors, contact lenses and others have entered our lives making it more comfortable. Silicon Valley is home for many worldwide known technology companies including Apple, Google, HP, Intel and eBay. Moreover, Silicon Valley is the global generator of IT startups. Many countries such as China, Japan, England, South Korea and India tried to repeat the experience of Silicon Valley. Kazakhstan also attempted to found the ground for IT startups by creating the international technology park named Astana Hub.
Astana Hub was created on behalf of the First President of Kazakhstan Nursultan Nazarbayev according to the state program of Digital Kazakhstan for free development of domestic and foreign technology companies [Official Site of the President of the Republic of Kazakhstan, 2018]. At the present time, Astana Hub is the priority project of digital modernization of the country. The hub aims to develop innovative IT projects, produce and support IT companies and become the eye of attracting IT professionals from around the globe. Therefore, Astana Hub could be considered as Kazakhstan’s Silicon Valley.
Astana Hub has two development programs for startups – Acceleration and Incubation development programs. The Acceleration development program is the first stage of IT startups, in which projects that meet the selection criteria and requirements are provided mentoring of high-qualified professionals in the field of IT, hours of training, networking, office space and promotion in media. The Incubation development program is a more general and comprehensive program that assists participants with attraction of investment and provides expert advice and access to information base. Moreover, the Astana Hub conducts activities to support IT startups to work with corporations in the long-time perspective and implements educational activities. Training takes place both offline and online where the educational program is based on the best world practices and according to the latest market demand. Moreover, during the spread of COVID-19 pandemic, the Astana Hub launched a new program “Startup in a pandemic” in which selected participants will be able to realize their startup online without leaving home in one month [Astana Hub, 2020].
Despite the multiple programs for IT startups, the Astana Hub launches social programs. For instance, Astana Hub and UNICEF are going to create the Social Innovation Laboratory, the purpose of which is to build up programs in the area of social innovation focused on the interests of children of Kazakhstan [UNICEF, 2019].
International openness is the main feature of the hub since foreign companies and IT professionals are actively involved in its work. Special tax regime applies for both Kazakhstani and foreign companies. On December 27, 2018, the First President of Kazakhstan Nursultan Nazarbayev signed a law that exempts participants and companies of Astana Hub from paying several taxes – individual income tax, corporate income tax, VAT and social tax on non-residents of the country. According to the Astana Hub administration, this measure saved approximately 807 million tenge (1,93 million dollar) in 2019 for companies-participants of the hub [Business Kazakhstan, 2020]. Furthermore, the Astana Hub provides a simplified visa and labor regimes for foreign professionals [Florinsky, 2020]. These measures allow Kazakhstan to become a more attractive country for international investors, specialists and participants. During the first two years, Astana Hub attracted 29 billion tenge (55,1 million dollar), which proves the investment attractiveness of technology park programs and policies [Official Source of the Prime Minister of the Republic of Kazakhstan, 2019]. Moreover, the attractiveness of the hub to international specialists will increase the competence of domestic professionals and improve the work and knowledge of Kazakhstani participants of the hub’s development programs.
On November 6, 2018, Astana Hub began to conduct its activities. For the first year of work, the hub collected over 130 applications from all over Kazakhstan, of which twelve best startups were selected to participate in the acceleration development program. The startups included mobile and online services for searching automobile spare parts, returning cashback by phone number and medicine. About 17,000 participants attended over 600 hours of lectures. In total, more than 400 participants and 200 startup projects completed educational programs in the first year of Astana Hub [Kursiv, 2019]. Moreover, the Astana Hub created 1,182 workplaces, which is one of the most significant results of the hub [Kapital, 2019].
One of the successful and well-known projects created under the Astana Hub is a non-integration service for delivery of parcels Tastamat [Zakon, 2019]. Tastamat is mobile postamats in which individuals can receive the parcel 24/7. This feature makes a startup unique, because an individual can pick up his parcel at a convenient time in a convenient place. Another well-known startup is Clockster, a service that allows employers to monitor the working hours of employees [Usenova, 2018]. This startup worked with KFC and the clients of startups are not only Kazakhstani companies, but also from Russia, UK, Singapore and Czech Republic. These representative examples demonstrate the effectiveness of the Astana Hub and its work of developing and supporting startups.
Overall, technology has become an integral part of the life of a modern individual, and undoubtedly the future of humanity depends on the development of technology and startups. Governments in all countries are attempting to assist startups by creating an attractive investment environment and providing expert support. According to the state program of digitalization, the government of Kazakhstan is actively developing the field of IT by opening the Astana Hub technology park, which actively supports the startups. For three years of its activity, the Astana Hub has attracted foreign investment and created many workplaces. Startups implemented under the Astana Hub were given to be known and opportunity to work with international companies. Slowly but surely the Astana Hub becomes Kazakhstan’s Silicon Valley, the epicenter of progress, development and technology.
Astana Hub (2020). The International Technology Park Astana Hub Has Developed a New Program “Startup in Pandemic”. Retrieved from https://astanahub.com/ru/news/show/577. Accessed on 10.05.2020.
Business Kazakhstan (2020). The Number of Companies Receiving Tax Preferences in Astana Hub Exceeded 200. Retrieved from https://www.dknews.kz/inner-news.php?id_cat=15%20&&%20id=61070. Accessed on 10.05.2020.
Florinsky, Vladislav (2020). Answer by Astana Hub: What Model of Startups Development in Kazakhstan Was Formed in Two Years. Retrieved from https://the-steppe.com/business/otvet-astana-hub-kakaya-model-razvitiya-startapov-v-kazahstane-sformirovalas-za-dva-goda. Accessed on 10.05.2020.
Kapital (2019). Results of the First Year of Operation of Astana Hub. Retrieved from https://kapital.kz/tehnology/82474/rezul-taty-pervogo-goda-raboty-astana-khub.html. Accessed on 10.05.2020.
Kursiv (2019). Astana Hub Companies Raise Over 17 Billion Tenge. Retrieved from https://kursiv.kz/news/kompanii/2019-11/kompanii-tekhnoparka-astana-hub-privlekli-bolee-17-mlrd-tenge. Accessed on 10.05.2020.
Official Site of the President of the Republic of Kazakhstan (2018). Participation in the Official Opening Ceremony of the International Technology Park of IT Startups “Astana Hub”. Retrieved from https://www.akorda.kz/ru/events/astana_kazakhstan/participation_in_events/uchastie-v-ceremonii-oficialnogo-otkrytiya-mezhdunarodnogo-tehnologicheskogo-parka-it-startapov-astana-hab?q=астана%20хаб. Accessed on 10.05.2020.
Official Source of the Prime Minister of the Republic of Kazakhstan (2019). IT Startups Attracted 29 Billion Tenge of Investments in Two Years of Astana Hub’s work. Retrieved from https://primeminister.kz/ru/news/29-mlrd-tenge-investiciy-privlekli-it-startapy-za-2-goda-raboty-astana-hub. Accessed on 10.05.2020.
Zakon (2019). How Have Residents of Astana Hub Surprised Tokayev. Retrieved from https://www.zakon.kz/4995685-chem-rezidenty-astana-hub-udivili.html. Accessed on 10.05.2020.
UNICEF (2019). UNICEF and Astana Hub launch Social Innovation Lab. Retrieved from https://www.unicef.org/kazakhstan/Пресс-релизы/unicef-и-astana-hub-запускают-лабораторию-инноваций-social-innovation-lab. Accessed on 10.05.2020.
Usenova, Dariya (2018). Clockster: How a Startup for Time Tracking Works. Retrieved from https://the-steppe.com/business/clockster-kak-rabotaet-startap-po-uchetu-rabochego-vremeni. Accessed on 10.05.2020.
Note: The views expressed in this blog are the author’s own and do not necessarily reflect the Institute’s editorial policy.
Dautova Ilana holds a Bachelor of Science degree in Economics from KIMEP University (Almaty, Kazakhstan). She has also studied at the Foundation course at Lancaster University (Lancaster, United Kingdom) and on the exchange program at Ewha Womans University (Seoul, South Korea). Previously, she worked as a business development manager at the POSCO International Corporation.