Central Asia, Caucasus lag behind on innovation, EBRD study shows

By bne IntelliNews November 19, 2014

Differences in the perception of the business environment by firms that innovate and those that do not are great in Central Asia and Caucasus countries, according to a study by the EBRD.

The EBRD's Transition Report 2014 found that these differences were particularly large when firms were asked to assess the importance of corruption, workforce skills and customs and trade regulations.

"Firm-level and cross-country analyses of the drivers of innovation also show that firms innovate more predominantly in countries that have better core economic institutions, such as an environment of low corruption and a strong rule of law, countries that are more open to trade and investment and countries that benefit from a highly skilled workforce," the report found. "Better access to finance and higher-quality information and communication technology infrastructure also helps firms to innovate."

Enterprises in the Central Asian and Caucasus region spend a little on research in development - under 0.13% of their turnover, with the exception of Turkmenistan and Kyrgyzstan (at least 0.33%) and Mongolia (at least 0.72%).

This resulted in Armenia, Azerbaijan, Georgia and Uzbekistan ending up a group of countries with low innovation where few companies spend money on buying or producing knowledge and in Kazakhstan, Kyrgyzstan, Mongolia and Tajikistan in a group of countries where firms predominantly buy technology with the share of firms conducting in-house R&D relatively modest.

The study found a positive relationship between spending on R&D and the number of patents held, but, surprisingly, Kazakhstan turns out to have more patents than its R&D spending would predict.

The study singles out Armenia and Azerbaijan which place a strong focus on information and communication technology in their innovation policies for high levels of labour productivity.

Related Articles

Agreements with Armenia highlight of uneventful EU Eastern Partnership summit

The EU and Armenia signed a comprehensive and advanced partnership agreement and a common aviation area agreement at the Eastern Partnership summit on November 24, according to an ... more

Iranian-style KitKat may be headed for EEU as part of free trade deal

Iran is set to export biscuits and chocolate as part of a broader free trade deal with Eurasian Economic Union (EEU) states, Tehran’s Financial Tribune daily reported on November 1. Iranian ... more

Georgia top CEE/CIS performer in World Bank's Doing Business 2018 ranking

Georgia is the only lower-middle-income country to rank among the top 10 countries in the world for ease of doing business, according to the World Bank's Doing Business 2018 report published on ... more

Dismiss