Competetivness and development of kazakhstani SMEs

Abstract

This paper explores the current condition of the small and medium enterprises in Kazakhstan and their competitiveness. Theories of competitive advantage have been discussed and the data obtained from the Agency of Statistics of the Republic of Kazakhstan, The World Bank and the "Fund Damu" joint stock company surveys related to Kazakhstani small and medium enterprises were analyzed. It was found that Kazakhstani small and medium enterprises are mostly concentrated in the trading sector and small and medium enterprises' structure of developed countries such as United Kingdom and Denmark is more diversified than in Kazakhstan. In addition, it was determined that contribution of Kazakhstani small and medium enterprises to gross domestic product of the country is very low compared with high income countries. Analysis of the sources of competitive pressure showed that most Kazakhstani enterprises do not experience high pressure from foreign competitors. The weakest identified indicators in Kazakhstani small and medium enterprises development are low rate of real annual sale growth, low share of companies obtained international certification, low share of companies using websites, low percentage of companies investing in research and development activities. As the main obstacles of running business-high tax rates, corruption and access to finance were determined. The suggestions for raising the level of competitiveness of Kazakhstani small and medium enterprises were provided in the conclusion of this article.