Abstract
This chapter discusses opportunities for the new digital economy, a strategically important factor of the economic growth for contributing to the Central Asia Digital Silk Road concept. Focusing on new opportunities for international cooperation, including the development of digital technologies, the chapter also draws attention to the fact that technology advancement causes changes in the economic system which may result in digital inequality. It argues that the O&G industry can become a key driver of growth and development and could potentially boost competitiveness across all sectors. The authors consider a set of public policies in ICT-related sectors in Kazakhstan. These policies are focusing on diversification from the O&G sector, supporting domestic companies and research, encouraging export-oriented projects, and pushing companies to join international initiatives.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Similar content being viewed by others
Notes
- 1.
The new digital economy (NDE) is emerging from a combination of technologies, mainly from the ICT space, that are becoming pervasive across mechanical systems, communications, infrastructure, and built environment (UNCTAD, 2017).
- 2.
Co-creation puts the spotlight squarely on consumer-company interaction as the locus of value creation (Prahalad & Ramaswamy, 2004).
- 3.
Dispersed business networks that are organized and coordinated by global firms as a common project of independent suppliers, which has its certain time frame and sequence of actions (Smorodinskaya & Katukov, 2017).
- 4.
The Karachaganak project brings expertise and knowledge from five oil & gas companies—ENI, Royal Dutch Shell, Chevron, Lukoil, and KazMunayGas.
- 5.
An idea to establish KBTU belongs to the former President of the RK, Nursultan Nazarbayev, who had a number of meetings with official representatives of the UK. This activity resulted in the Memorandum of Understanding signed by the two states in November 2000. British Prime Minister Tony Blair and Nursultan Nazarbayev became patrons of the university.
- 6.
- 7.
Interoperability is the ability of entities of an organization to work together that covers aspects ranging from the technical to the business level (Li & Liu, 2018).
- 8.
Creative destruction as a process of industrial change that increasingly revolutionizes the economic structure from within, destroying the old one and creating a new structure (Schumpeter, 1934)
- 9.
Digital technologies include (1) advanced production equipment, robotics, and factory automation, (2) new sources of data from mobile and ubiquitous Internet connectivity, (3) cloud computing, (4) big data analytics, and (5) artificial intelligence. These technologies and processes are based, in one way or another, on advanced ICT, so that the driver of the NDE is the continued improvement in ICT (UNCTAD, 2017).
- 10.
Karachaganak news (2018). Available at: http://www.kpo.kz/fileadmin/user_upload/karachaganak_news_2018/NOVOSTI_SENTJABR__2018.pdf
- 11.
Digital divide between technological levels of domestic and foreign enterprises.
- 12.
A net exporter is a sector that contributes to the growth of the economy via the trade balance and therefore should provide more employment and business opportunities (McKinsey, 2016).
- 13.
Since 2018—Qazaqstan Industry and Export Center JSC or QAZINDUSTRY.
- 14.
Waldrop, M.M. (2001). Claude Shannon: Reluctant Father of the Digital Age. Available at: https://www.technologyreview.com/s/401112/claude-shannon-reluctant-father-of-the-digital-age/
- 15.
Inspur is a leading global data center and cloud computing solutions provider. Among the world’s top three server providers, they deliver and deploy robust, performance-optimized, purpose-built solutions to major data centers around the globe to address important emerging fields and applications. Source: https://www.inspursystems.com
- 16.
CITIC Bank Corporation Ltd., founded in 1987, ranks 7th in terms of assets in China and is represented in 130 countries. It offers various banking products and services to large corporate clients and individuals, both in China and abroad. The Bank’s total assets have reached US $900 billion. The ratings of the bank: BBB from Fitch and Baa2 from Moody’s.
- 17.
China Shuangwei Investment Co. Ltd. is a limited liability company wholly owned by China Tobacco Corporation. The company is responsible for managing and investing in a number of key strategic projects in the fields of energy, real estate, agriculture, education, medical services, logistics, infrastructure, culture, network information, financial products, energy saving, supporting projects in the tobacco industry, and related advisory business services.
- 18.
Halyk Bank of Kazakhstan is the leading financial group in Kazakhstan operating in various segments including retail, SMEs and corporate banking services, insurance, leasing, brokerage, and asset management. The bank has been listed in the Kazakhstan Stock Exchange since 1998 and in London Stock Exchange since 2006.
- 19.
Operational technology (OT)—technology, which is used in specific operational processes, such as supply chain, manufacturing, and transportation. In the O&G, operational technology is also referred to as industrial control systems (Cisco, 2015).
Bibliography
ACCA. (2017). The Belt and Road Initiative: Reshaping the global value chain. Shanghai, China: Association of Chartered Certified Accountants.
Accenture. (2013). Is the energy industry drowning in data?. Retrieved from https://www.accenture.com/in-en/~/media/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/Technology_8/Accenture-Digitizing-Energy-Industry-Drowning-Data.pdf
Adewuyi, A. O. & Oyejide, T. A. (2012). Determinants of backward linkages of oil and gas industry in Nigerian economy. Resource Policy, 37(4), 452–460.
Aiginger, K. (2007). Industrial policy: A dying breed or a re-emerging phoenix. Journal of Industry, Competition and Trade, 7(3–4), 297–323.
Akorda (2019, September 12). Kassym-Jomart Tokayev held a meeting with the founder of Alibaba Group Jack Ma. Retrieved from https://www.akorda.kz.
Altenburg, T. (2011). Industrial policy in developing countries: Overview and lessons from seven country cases. Bonn: DIE (Discussion paper 4/2011).
Ambalov, V., & Heim, I. (2018). Cluster nodes as a unit for value co-creation: The role of information technologies in competitiveness of the oil and gas industry. In W. Liu, K. Nakata, W. Li, & C. Baranauskas (Eds.), Proceedings of 18th IFIP WG 8.1 international conference on informatics and semiotics in Organisations, ICISO 2018 (pp. 155–163). Reading, UK: Springer.
Amighini, A. (2017). China’s belt and road: A game changer? Milan, Italy: ISPI.
Arger, A. (2015). The Silk Road and its impact on globalization. Washington, DC: Washington State University.
Astana Times. (2018). Kazakhstan develops smart oil transportation programme. Retrieved from https://astanatimes.com/2018/05/kazakhstan-develops-smart-oil-transportation-programme/
Baldakhov, U., & Heim, I. (2020). Institutional reform in Kazakhstan. In I. Heim (Ed.), Kazakhstan’s diversification from the natural resources sector: Strategic and economic opportunities. London, UK: Palgrave Macmillan.
Beysembetov, I. K., Bekibaev, T. T., Zhapbasbaev, U. K., Makhmotov, E. S., & Sayakhov, B. K. (2017). The use of digital technology to optimize oil pipeline transportation. Pipeline Science & Technology, 1(3), 219–232.
Bodrožić, Z., & Adler, P. S. (2018). The evolution of management models: A neo-Schumpeterian theory. Administrative Science Quarterly, 63(1), 85–129.
Buckley, N. (2017, April 12). Financial Times. Retrieved from https://www.ft.com/content/900d96ee-1ade-11e7-a266-12672483791a
Buckley, P. J. (2016). The contribution of internalisation theory to international business: New realities and unanswered questions. Journal of World Business, 51(1), 74–82.
Caperna, A. (2010). Integrating ICT into sustainable local policies. In Silva, C.N. (Ed.), Handbook of research on E-Planning: ICTs for urban development and monitoring (pp. 340–364). Hershey, PA: IGI Global.
Choudhry, H., Mohammad, A., Tan, K. T, & Ward, R. (2016). The next frontier for digital technologies in oil and gas. Retrieved from https://www.mckinsey.com/industries/oil-and-gas/our-insights/the-next-frontier-for-digital-technologies-in-oil-and-gas
Çilan, Ç. A., Bolat, B. A., & Coşkun, E. (2009). Analyzing digital divide within and between member and candidate countries of European Union. Government Information Quarterly, 26(1), 98–105.
Cisco. (2015). A new reality for oil & gas. Retrieved from https://connectedfutures.cisco.com/report/a-new-reality-for-oil-gas/
Cooper, J. (2006). The digital divide: The special case of gender. Journal of Computer Assisted Learning, 22(5), 320–334.
Dey, B., & Ali, F. (2016). A critical review of the ICT for development research. In B. Dey, K. Sorour, & R. Filiery (Eds.), ICTs in developing countries (pp. 3–23). London, UK: Palgrave Macmillan.
Drucker, P. F. (1992). The age of discontinuity: Guidelines to our changing society. New Brunswick, USA/London, UK: Transaction Publishers.
Dunning, J. H. (1980). Toward an eclectic theory of international production: Some empirical tests. Journal of International Business Studies, 11(1), 9–31.
Dunning, J. H. (1995). Reappraising the eclectic paradigm in an age of alliance capitalism. Journal of International Business Studies, 26(3), 461–491.
Dunning, J. H., & Lundan, S. M. (2008). Multinational enterprises and the global economy (2nd ed.). Cheltenham, UK: Edward Elgar.
Fraumeni, B. M., & Okubo, S. (2005). R&D in the national income and product accounts: A first look at its effect on GDP. In C. Corrado, J. Haltiwanger, & D. Sichel (Eds.), Measuring capital in the new economy (pp. 275–322). Chicago, IL: University of Chicago Press.
Geppert, M., Matten, D., & Walgenbach, P. (2006). Transnational institution building and the multinational corporation: An emerging field of research. Human Relations, 59(11), 1451–1465.
Gleick, J. (2011). The information. New York, NY: Panteon Books.
Grübler, A. (2003). Technology and global change. Cambridge, UK: Cambridge University Press.
Han, T. & Ghobadian, A. (2020). Chinese investments across the New Silk Road. In I. Heim (Ed.), Kazakhstan’s Diversification from the Natural Resource Sector: Strategic and Economic Opportunities. London, UK: Palgrave Macmillan.
Hanclova, J., Rozehnal, P., Ministr, J., & Tvrdikova, M. (2015). The determinants of IT adoption in SMEs in the Czech-Polish border areas. Information Technology for Development, 21(3), 426–444.
Heim, I. (2019). Local content policy and value co-creation: Adopting information technologies in the oil and gas industry. Unpublished PhD dissertation.
Heim, I., Kalyuzhnova, Y., Li, W., & Liu, K. (2018). Value co-creation between foreign firms and indigenous SMEs in Kazakhstan’s oil and gas industry: The role of information technology spillovers. Thunderbird International Business Review, 61, 911. https://doi.org/10.1002/tie.22067
Huanxin, Z. (2015). Digital Silk Road linked to ‘net plus’. Retrieved from the website of the State Council of the People Republic of China http://english.www.gov.cn/news/top_news/2015/12/24/content_281475259901640.htm
Industrial Internet Consortium (IIC). (2015). Beyond digitalisation: The convergence of big data, analytics and intelligent systems in oil & gas. Retrieved from https://futurerobotics.files.wordpress.com/2015/09/beyond_digitization_an_iic_energy_task_group_white_paper.pdf
Institute of Energy for South-East Europe (IENE). (n.d.). New Silk Road to Boost Asian oil and gas development. Retrieved from https://www.iene.eu/new-silk-road-to-boost-asian-oil-and-gas-development-p1759.html
Jones, R. (2017). Economics after Moore’s Law. Retrieved from http://www.softmachines.org/wordpress/?p=2097
Kabanda, S., & Brown, I. (2017). Interrogating the effect of environmental factors on e-commerce institutionalization in Tanzania: A test and validation of small and medium enterprise claims. Information Technology for Development, 23(1), 59–85.
Karachaganak News. (2018). Retrieved from http://www.kpo.kz/en/news-room/company-news/company-news/article/kpo-held-an-international-digitalization-forum-in-uralsk.html
KazInform. (2017a). The Prime Minister announced priorities of Digital Kazakhstan program. Retrieved from http://lenta.inform.kz/en/pm-announced-priorities-of-digitalkazakhstan-program_a3064476.
KazInform. (2017b). Digital Kazakhstan program to be submitted to Head of State for approval. Retrieved from http://www.inform.kz/en/digital-kazakhstan-program-to-besubmitted-to-head-of-state-for-approval_a3092695.
KazNU (2018). Vectors of digitalization. Retrieved from http://www.kaznu.kz/en/3/news/one/12390/
Kretschmer, T., & Claussen, J. (2016). Generational transitions in platform markets—The role of backward compatibility. Strategy Science, 1(2), 90–104.
Levy, M., & Powell, P. (2003). Exploring SME internet adoption: Towards a contingent model. Electronic Markets, 13(2), 173–181.
Li, Q., & Liu, K. (2018). An abductive process of developing interactive data visualization: A case study of market attractiveness analysis. In W. Liu, K. Nakata, W. Li, & C. Baranauskas (Eds.), Proceedings of 18th IFIP WG 8.1 international conference on informatics and semiotics in organisations, ICISO 2018 (pp. 289–298). Reading, UK: Springer.
Lind, P., Sepúlveda, E., & Nuñez, J. (2000). On the applicability of a computer model for business performance analysis in SMEs: A case study from Chile. Information Technology for Development, 9(1), 33–44.
Lusch, R. F., & Vargo, S. L. (2014). Service-dominant logic: premises, perspectives, possibilities. New York, NY: Cambridge University Press.
Mack, C. A. (2011). Fifty years of Moore’s law. IEEE Transaction on Semiconduction Manufacturing, 24(2), 202–206.
Malinovsky, B. (1998). Essays on history of computer science and technology in Ukraine. Kyiv, Ukraine: Feniks.
Mazzucato, M., & Tancioni, M. (2012). R&D, patents and stock return volatility. Journal of Evolutionary Economics, 22(4), 811–832.
McKinsey. (2016). Digital Europe: Pushing the frontier, capturing the benefits. McKinsey Global Institute. Retrieved from https://www.mckinsey.com/~/media/McKinsey/Business%20Functions/McKinsey%20Digital/Our%20Insights/Digital%20Europe%20Pushing%20the%20frontier%20capturing%20the%20benefits/Digital-Europe-Full-report-June-2016.ashx
McKinsey. (2017). Beyond the super-cycle: How technology is reshaping resources. McKinsey Global Institute. Retrieved from https://www.mckinsey.com/~/media/McKinsey/Business%20Functions/Sustainability/Our%20Insights/How%20technology%20is%20reshaping%20supply%20and%20demand%20for%20natural%20resources/MGI-Beyond-the-Supercycle-Executive-summary.ashx
Milis, K. (2008). Critical analysis of policy measures for the advancement of the level of computerization of SMEs. Information Technology for Development, 14(3), 253–258.
Min, S.-J. (2010). From the digital divide to the democratic divide: Internet skills, political interest, and the second-level digital divide in political internet use. Journal of Information Technology & Politics, 7(1), 22–35.
Morris, M., Kaplinsky, R., & Kaplan, D. (2011). Commodities and linkages: industrialisation in Sub Saharan Africa. MMCP discussion paper; no. 13.
Narula, R. (2016). The Modern MNE as an efficient meta-integrator: emerging market MNEs need to foster internal embeddedness to succeed. Discussion paper N JHD-2016-02. Reading, UK: Henley Business School, University of Reading.
National Bank of Kazakhstan. (2018). Direct investments statistic according to the directional principle. Аstana: National Bank of Kazakhstan.
National Development and Reform Commission (NDRC). (2015). Vision and actions on jointly building silk road economic belt and 21st-century maritime silk road. Retrieved from http://en.ndrc.gov.cn/newsrelease/201503/t20150330_669367.html
Nazarbayev, N. (2018). Seven facets of the Great Steppe. Retrieved from https://www.akorda.kz
Nazarbayev, N. (2019). Interview: BRI a great idea with perspective. Xinhua Net. Retrieved from: http://www.xinhuanet.com/english/2019-04/27/c_138014919.htm
Ntwoku, H., Negash, S., & Meso, P. (2017). ICT adoption in Cameroon SME: Application of bass diffusion model. Information Technology for Development, 23(2), 296–317.
OECD. (2001). Understanding the digital divide. Paris, France: OECD Publishing.
OECD. (2011). OECD guide to measuring the information society. Paris, France: OECD Publishing.
OECD. (2013). Enhancing Skills through Public-Private Partnerships in Kazakhstan’s Information Technology Sector. Retrieved from https://www.oecd.org/countries/kazakhstan/Enhancing%20Skills%20though%20Public-Private%20Partnerships%20in%20Kazakhstan’s%20Information%20Technology%20Sector.pdf
Ostrom, E. (1990). Governing the commons. New York, UK: Cambridge University Press.
Ostrom, E. (2005). Understanding institutional diversity. Princeton, NJ: Princeton University Press.
Pak, I. Т. (2012). From the history of the development of computer science in Kazakhstan. Almaty, Kazakhstan: Ministry of Education and Science of the Republic of Kazakhstan.
Prahalad, C. K., & Ramaswamy, V. (2004). Co-creation experiences: The next practice in value creation. Journal of Interactive Marketing, 18(3), 5–14.
Qureshi, S. (2015). Are we making a better world with information and communication technology for development (ICT4D) research? Findings from the field and theory building. Information Technology for Development, 21(4), 511–522.
Ramamurti, R., & Hillemann, J. (2018). What is “Chinese” about Chinese multinationals? Journal of International Business Studies, 49(1), 34–48.
Rao, S. S. (2005). Bridging digital divide: Efforts in India. Telematics and Informatics, 22(4), 361–375.
Rimmel, G., & Diedrich, A. (2000). Exploring the logic of E-business and the new economy. In Proceedings of 2nd SNEE conference on economic integration in Europe. Mölle, Sweden.
Rodrik, D. (2007). One economics, many recipes: Globalization, institutions, and economic. Princeton, NJ: Princeton University Press.
Rodrik, D. (2018). New technologies, global value chains, and developing economies. No. w25164. National Bureau of Economic Research.
Rolland, N. (2015). A fiber-optic silk road. Retrieved from https://thediplomat.com/2015/04/a-fiber-optic-silk-road/
Sabirov, B., & Shakulikova, G. (2020). Diversification and local industry development. In I. Heim (Ed.), Kazakhstan’s diversification from the natural resources sector: Strategic and economic opportunities. London, UK: Palgrave Macmillan.
Salnikova, O. V. (2013). Small business development based on the information and communication technologies. American Journal of Economics and Control Systems Management, 1, 10–14.
Schumpeter, J. (1934). The Theory of Economic Development. Cambridge, MA: Harvard University Press.
Selmier, W. T., II. (2020). Kazakhstan as a logistic linchpin in the Belt and Road Initiative. In I. Heim. (Ed.), Kazakhstan’s Diversification from the Natural Resource Sector: Strategic and Economic Opportunities. London, UK: Palgrave Macmillan.
Sha, N. (2019, July 12). SF Airlines launches route links China, Kazakhstan. Caspian Policy Center. Retrieved from https://www.caspianpolicy.org/sf-airlines-launches-route-links-china-kazakhstan/
Shannon, C. E. (1948). A mathematical theory of communication. Bell System Technical Journal, 27(3), 379–423.
Shen, H. (2018). Building a digital silk road? Situating the internet in China’s belt and road initiative. International Journal of Communication, 12, 2683–2701.
Shinkeeva, G. (2018). Telecommunication sector of Kazakhstan: Results of 2016. Almaty, Kazakhstan: Rating Agency RFCA.
SJTU. (2015) Federico Musto of Arduino: Our real boss is. SJTU ParisTech Review. Retrieved from http://parisinnovationreview.cn/en/2015/11/11/federico-musto-arduino-community/.
Smorodinskaya, N. V., & Katukov, D. D. (2017). Dispersed model of production and smart agenda of National Economic Strategies. Economic Policy, 6, 72–101.
Sternberg, T., Ahearn, A., & McConnell, F. (2017). Central Asian ‘characteristics’ on China’s new silk road: The role of landscape and the politics of infrastructure. Land, 6(3), 1–16.
UNCTAD. (2010). Creating business linkages: A policy perspective. New York, NY/Geneva, Switzerland: UN/UNCTAD.
UNCTAD. (2017). The ‘new’ digital economy and development. New York, NY: UN/UNICTAD.
UNCTAD. (2018). Statistics Data Center. Retrieved from: https://unctad.org.
Van Alstyne, M. W., Parker, G. G., & Choudary, S. P. (2016). Pipelines, platforms, and the new rules of strategy. Harvard Business Review, 94(4), 54–62.
Vargo, S. L. & Lusch, R. F. (2016). Institutions and axioms: an extension and update of service-dominant logic. Journal of the Academy of Marketing Science, 44(1), 5–23.
Vargo, S. L., Wieland, H., and Akaka, M. A. (2015). Innovation through institutionalization: A service ecosystems perspective. Industrial Marketing Management, 44(1), 63–72.
Verdu, M. (2017). The IoT will enable the gas and oil industry to cut production costs by UP to &30 per barrel. Barcelona: IoT Solutions World Congress.
World Bank. (2018). Research and development expenditure (% of GDP). The World Bank. Retrieved from https://data.worldbank.org/indicator/GB.XPD.RSDV.GD.ZS
Wu, W. (2017). China’s digital silk road: Pitfalls among high hopes. Retrieved from https://thediplomat.com/2017/11/chinas-digital-silk-road-pitfalls-among-high-hopes/
Yensebayev, R. (2018, December). Digital Kazakhstan: Transforming through modern technology. Astana Times. Retrieved from https://astanatimes.com/2018/02/digital-kazakhstan-transforming-through-modern-technology/
Zerde (2017a). “Digital Kazakhstan” State Program. Retrieved from https://zerde.gov.kz/en/activity/program-control/digital-kazakhstan/#hcq=4K3MWCq.
Zerde (2017b). Holding activities. Investment projects. Retrieved from https://zerde.gov.kz/en/activity/investment-projects/Common-notarial-informationalsystem-Project/.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2020 The Author(s)
About this chapter
Cite this chapter
Ambalov, V., Heim, I. (2020). Investments in the Digital Silk Road. In: Heim, I. (eds) Kazakhstan's Diversification from the Natural Resources Sector. Euro-Asian Studies. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-37389-4_5
Download citation
DOI: https://doi.org/10.1007/978-3-030-37389-4_5
Published:
Publisher Name: Palgrave Macmillan, Cham
Print ISBN: 978-3-030-37388-7
Online ISBN: 978-3-030-37389-4
eBook Packages: Economics and FinanceEconomics and Finance (R0)