Nowadays, in Kazakhstan and other CIS countries, scientific research and development related to transition to a market is in crisis. Innovations are capable of stabilizing a crisis situation in industrial manufacture, promoting progress and raising the efficiency of the national economic.

Innovation is characterized by :

-higher levels of technology;

-better quality goods or services;

Innovation is an intellectual product, which can be defined as the result of activity in the field of "spiritual" manufacture intended to satisfy the needs of its customers. Such famous companies like Xerox, IBM, Epson, Hewlett-Packard, General Electric and many others major companies to put up billions US dollars of investments in research and development. For instance, General Electric received some 4272 patents in the field of radio electronics and electrical engineering between 1975-1988.The corporation has its own scientific research center and more than 100 laboratories.

Unfortunately, many government programs in Kazakhstan seem to miss the question of innovation support, scientific development and establishing basic infrastructure in the field of innovation. Global investments suggests that investment equivalent to 20-25% of GNP (including expenses on Scientific-Technical Progress as a whole) is necessary for stable development. In Kazakhstan, a similar parameter calculated over the last few years shows investments of only 15-20% of the necessary volume and this has caused the disorder seen in many enterprises. Since,1993, there are has been a large reduction of budget financing of the scientific and technical complex. The share of investment in scientific research has decreased from 1.08% of GNP to 0.72% in 1999: a fall around one quarter. Make a comparison, the share of financing of R&D is as follows: USA 27%, France 22%, Britain 19.5%.

So, in Kazakhstan the preservation of the technical potential of the Republic is the main task in the scientific and technical sphere. The priority is the development of key branches of the economy on a modern scientific and technical basis, with the use of both domestic and foreign capabilities.

1. Innovation can be a risky business. For instance, Ford lost about $350 mln on its ill-stared model Edsel model. What is the reason to invest such huge amount of money in R&D? Do you think that it is "waste of money"?

2. Express your opinion that "basic orientation of the innovation policy is the resolution of increasing quality of life of the people". Why or why not?

3. Do you think that shortage of financing of innovation has directly caused the disorder seen in many enterprises of Kazakhstan? Why or why not?

4. Corporations like General Motors have more ability for the financing of technological research. Does it’s mean that corporations are more efficient for the life of people than small firms?

5.What is it mean "technological change"?

6. Could you explain why some technological advance might be capital-saving rather capital- using? Why or why not?

7. Do you think that innovation and technological advance create barriers for entry into industry and therefore provide conditions beginnings of monopoly? Express your opinion.

8. What are reasons to increase financing of innovation support in Kazakhstan?