Mechanisms of Stimulation of Small- and Medium-Sized Entrepreneurship: The Experience of Kazakhstan

Abstract

This study aimed to investigate the prerequisites, factors, and mechanisms for stimulating economic growth in small and medium-sized enterprises (SMEs), using the manufacturing industry of the Republic of Kazakhstan as a case study. Econometric tools, including statistical methods, regression analysis, time series analysis, scenario development methods, and the decision tree method, were employed to analyze the data. This research employed a range of scientific and applied methods, resulting in practical outcomes that can be utilized by SMEs to model various development scenarios. The key factors influencing SME development, such as the costs of technological innovations, average monthly wages, level of innovative activity, and investments in fixed capital, were identified. Based on these factors and the diagnosis of the state, a mechanism for state stimulation of entrepreneurship, encompassing financial incentives, tax breaks, infrastructure support, and targeted training programs, was developed. This mechanism includes a system of incentives, goal-setting, and tool formation. This study also developed a model to evaluate the potential impact of measures at the regional level on production volume growth in the manufacturing industry, presenting three scenarios—pessimistic, realistic, and optimistic—for consideration, which are significant for policymakers, practitioners, and stakeholders in the field. Stakeholders, including investors and industry practitioners, can apply the recommended strategies to foster innovation and drive economic growth. This study provided actionable recommendations and a robust framework for stimulating SME growth, offering valuable insights for enhancing the economic resilience and industrial development of Kazakhstan.