Three reasons to invest in Kazakhstan
Today, I would like to discuss three important reasons to consider investing in Kazakhstan in the medium term, from my perspective:
These factors have a direct and positive impact on the opportunities for Kazakhstani entrepreneurs and scalable businesses, unlike commonly mentioned reasons such as "strategic location" and "potential logistics hub."
The level of demand and labor productivity are key factors for GDP growth, which are influenced by various factors including population growth rates, educational level of the population, and their professional skills.
- Population growth rates compared to the global average forecast;
- Increase in internet access;
- Democratization of access to knowledge worldwide.
These factors have a direct and positive impact on the opportunities for Kazakhstani entrepreneurs and scalable businesses, unlike commonly mentioned reasons such as "strategic location" and "potential logistics hub."
The level of demand and labor productivity are key factors for GDP growth, which are influenced by various factors including population growth rates, educational level of the population, and their professional skills.
Population growth as the main driver of demand and human capital
Kazakhstan, with its ninth-largest area, faces challenges in terms of business profitability and economic logistics solutions due to its low population density. However, there is reason for optimism as the population of Kazakhstan recently reached 20 million and continues to grow.
According to the World Bank's forecast, the population of Kazakhstan is expected to grow by 14.3% during the period 2020-2030 and by 37% by 2050. While many countries will be trying to offset a slowdown in population growth or even a decline in GDP formation, we are fortunate to have a growing population. This is a key factor in driving demand and human capital.
Internet access as a window to the world and an accelerator
In 2010, only a third of the population in Kazakhstan had internet access, which was a disadvantage compared to other countries. By 2021 Kazakhstan’s internet access rates spiked to over 90%, one of the highest levels worldwide, way above peer countries from the upper-middle income group.
We can complain about the quality of the internet today all we want, but we cannot deny the fact that, thanks to the state's digitalization policy and the telecommunications industry players, 9 out of 10 citizens in our country have decent chances of exploring new opportunities in the global virtual economy.
We have yet to fully witness the impact of Metcalfe's Law, which states that the value of a network is proportional to the square of its nodes or users. As more people gain internet access, there are significant business opportunities that emerge. With broader internet access, businesses can discover new customers, suppliers, and partners. Additionally, they can save time on information and solution searching, access the latest technologies and knowledge, and accelerate the development of efficient business models. I believe we will continue to be amazed by the exponential growth of social networks, e-commerce, innovations, and startups.
We have yet to fully witness the impact of Metcalfe's Law, which states that the value of a network is proportional to the square of its nodes or users. As more people gain internet access, there are significant business opportunities that emerge. With broader internet access, businesses can discover new customers, suppliers, and partners. Additionally, they can save time on information and solution searching, access the latest technologies and knowledge, and accelerate the development of efficient business models. I believe we will continue to be amazed by the exponential growth of social networks, e-commerce, innovations, and startups.
The role of democratizing access to knowledge is crucial
As a participant in the Bolashak education program in the 1990s, I appreciate the importance of having the chance to receive a high-quality education. At that time, this opportunity was limited to only a select few. However, today, thanks to the internet, the majority of individuals who possess curiosity, self-discipline, and a thirst for knowledge can easily pursue it.
In 2011, Peter Norvig and Sebastian Thrun, computer science professors at Stanford University, conducted an incredible experiment. These AI experts offered a free online course on "Artificial Intelligence" to anyone interested, without any restrictions based on gender, age, education, or citizenship. Out of the 160,000 individuals from 190 countries who enrolled in the course, 23,000 successfully completed the training and passed the exams. The following results were particularly surprising to me:
In 2011, Peter Norvig and Sebastian Thrun, computer science professors at Stanford University, conducted an incredible experiment. These AI experts offered a free online course on "Artificial Intelligence" to anyone interested, without any restrictions based on gender, age, education, or citizenship. Out of the 160,000 individuals from 190 countries who enrolled in the course, 23,000 successfully completed the training and passed the exams. The following results were particularly surprising to me:
- Neither money, physical absence from Stanford's campus, age, gender, nor citizenship became obstacles to successfully completing the course. Only 14% of the participants who signed up managed to complete it and pass the exam, thanks to their own curiosity and self-discipline.
- The youngest student was 10 years old, while the oldest one was 70. Such a diverse group would have been impossible in a traditional face-to-face class at a university.
- A total of 248 students achieved a perfect score on the exam, and none of them were attending Stanford in person. Furthermore, the highest score achieved by a Stanford student was outside the top 400 ranking. One can only imagine the challenge faced by the Stanford administration in explaining to their clients why the cost of education, $40,000 per year, couldn't match the enthusiasm for knowledge of "someone from somewhere unknown".
Today, 12 years later, it is no longer surprising to have the opportunity to acquire knowledge online.
Last year was a turning point for me personally. Thanks to internet access, I was able to take courses on decentralized finance and the metaverse from the University of Cyprus. I also gained practical skills in digital marketing, created my own website from scratch, built a decentralized website, and even participated in a blockchain buildathon without knowing a single line of code.
Opportunities to obtain knowledge are available to anyone with an internet access. Thanks to the initiative of the Ministry of Science and Higher Education, in 2023, adapted versions of 654 courses from Coursera in Kazakh and Russian languages became available to Kazakhstani students. Additionally, our citizens who are proficient in English have access to a wealth of knowledge from around the world.
Last year was a turning point for me personally. Thanks to internet access, I was able to take courses on decentralized finance and the metaverse from the University of Cyprus. I also gained practical skills in digital marketing, created my own website from scratch, built a decentralized website, and even participated in a blockchain buildathon without knowing a single line of code.
Opportunities to obtain knowledge are available to anyone with an internet access. Thanks to the initiative of the Ministry of Science and Higher Education, in 2023, adapted versions of 654 courses from Coursera in Kazakh and Russian languages became available to Kazakhstani students. Additionally, our citizens who are proficient in English have access to a wealth of knowledge from around the world.
Conclusion
I believe that the impact of these three factors will be unique to Kazakhstan. Although it may be tempting to underestimate them individually, their combined effect is hard to overestimate.
Sources:
1. Population estimates and projections and the internet usage rates, the World Bank, October 2023. Analysis and visualization in Tableau - Bakhyt Arslan.
2. Ford, M. (2015). The Rise of the Robots.
3. Speech by Sayasat Nurbek, Minister of Science and Higher Education of the Republic of Kazakhstan, at the nFactorial School startup competition on August 11, 2023.
1. Population estimates and projections and the internet usage rates, the World Bank, October 2023. Analysis and visualization in Tableau - Bakhyt Arslan.
2. Ford, M. (2015). The Rise of the Robots.
3. Speech by Sayasat Nurbek, Minister of Science and Higher Education of the Republic of Kazakhstan, at the nFactorial School startup competition on August 11, 2023.
16 December 2023