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Are there enough entrepreneurs in Kazakhstan?

July 3, 2020

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Aldiyar Auyezbek

Analyst

The long-term stability of the economy is related to the entrepreneurial activity of the population, since entrepreneurship creates jobs, provides income to the population and meets the demand of consumers for various goods and services. The purpose of this article is to answer the main questions: is the level of entrepreneurial activity in Kazakhstan sufficient? and are there differences by region or district?

One of the indirect indicators of entrepreneurial activity is the number of operating enterprises (legal entities, branches and individual entrepreneurs) in the "business sectors" (CCЕA: 5-82 according to the OECD) per 1000 people of the economically active population (labor force). This approach allows us to compare regions adequately, taking into account different demographic composition (The article "Demographics for business") (only the adult working population is taken into account, in contrast to the classic calculation for the entire population).

The average business activity in Kazakhstan is 94.6 enterprises per 1000 people of the labor force (data for 2020). Only 7 of the 17 regions have a value higher than the national average (Figure 1).

There is a pattern of how activity differs depending on the specialization of regions in terms of employment (Blog "How the structure of the labor market reflects the level of development of the country's economy").
 

The maximum values are observed in years. Nur-Sultan (192,0) and Almaty (152,8), which specialize in business services. Also, high values are observed in Shymkent (108.3).

High and average indicators are observed in industrial regions. High values are in Atyrau, Mangistau, Karaganda and Aktobe regions. The average values (75-94, below the national average) are found in the West Kazakhstan region, Pavlodar, East Kazakhstan and Kyzylorda regions.

Minimum values are located in the agricultural regions of the country in the South and North: Turkestan (52.3), Almaty (55.2), Zhambyl (64.1), North Kazakhstan region (70.4), Akmola (72.8), Kostanay (74.5) regions.

At the level of districts and city administrations (4-sign CATO), the activity map changes (Figure 2). Business activity is uneven at the regional level and has high indicators only in certain locations.
 

Thus, only 23 out of 203 locations have indicators higher than the national average (94.6). 20 of which are city administrations.

Three districts with high indicators: Burlinsky district, West Kazakhstan region (103.7), Zhylyoysky district, Atyrau region (102.8), Karakiyansky district, Mangistau region (98.7). In all three districts, industrial enterprises are located, around which companies of suppliers of services and goods are created.

Conclusions:
1. In most regions and districts of Kazakhstan, there is no "critical mass" of enterprises that are a source of jobs, stable income, private investment and innovation.

2. High activity is mostly observed in city administrations, where there is a concentration of sales markets and competencies.

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