2.2.1 Main Directions of Nazarbayev University

Nazarbayev University, created on the initiative of the President of the Republic of Kazakhstan Nursultan Nazarbayev, aims to become the first research and world-class university in Kazakhstan. The activities of the University are associated with the implementation of the main priorities of the country, including the development of advanced research capacity, innovation in technology and industry, and the transition to a system of education that meets the demands of a changing and globally integrated economy.

The academic process at the University is based on international educational standards, which contributes to the advancement of the education system of the Republic of Kazakhstan and takes it to the international level. This is the first university in Kazakhstan that is committed to working according to international academic standards and guided by the principles of autonomy and academic freedom. The University’s autonomous status was granted by the Law of the Republic of Kazakhstan of 19 January, 2011, “On the status of “Nazarbayev University”, “Nazarbayev Intellectual Schools” and “Nazarbayev Fund”.

The Main Directions of Nazarbayev University Development Strategy for 2012-2020 were approved on June 16, 2011 at the first meeting of the Supreme Board of Trustees. The University is creating graduates prepared according to the highest international standards in order to contribute to research, education, and the national economy.

The Strategy of Nazarbayev University defines the main strategic goals and directions for the development of the University toward the goal of becoming a leading model of higher education which will establish a benchmark for all higher education institutions of the country. The Strategy sets out the mission, vision, strategic goals, stages of development and the results of the joint efforts by administrative staff, faculty, students, and researchers of the University for 2013-2020.

The Vision is to give Kazakhstan and the world the scientists, academics, managers and entrepreneurs they need to prosper and develop. Mission is to be a model for higher education reform and modern research in Kazakhstan and to contribute to the establishment of Astana as an international innovation and knowledge hub. Strategic goals are as follows.

Goal I is the Educational reform leadership, to ensure that the lessons of Nazarbayev University’s experience are transferred and understood by other universities, schools, and research centers

Goal II is the Academic excellence to achieve Nazarbayev University’s mission by developing and maintaining academic excellence

Goal III is the Research excellence to develop a program of world-class research by partnering with the world’s best researchers and research institutions.

Goal IV is the Creating a model for healthcare services to establish a healthcare system that will provide a model for healthcare services throughout Kazakhstan

Goal V is the Innovation and translating research into production to become Kazakhstan’s main driver of innovation, leading the way for Astana to become a regional hub of innovation

NU has three centers such as Nazarbayev University Research and Innovation System(NURIS, former Energy Research Center), the Center for Life Sciences, the Centre for Educational Policy. Specific contents are as follows.

① The energy sector is the main driving force of the Kazakhstan economy. Nazarbayev University Research and Innovation System(NURIS) in NU will play an important role in the realization of the above program, and will stimulate research activities in the fields of the NURIS competences. The center will be a research base for the departments in the School of Engineering and the School of Science and Technology.

② The Center for Life Sciences (CLS) mission is to pursue fundamental and acquire new knowledge about the nature and behavior of living systems and the application of that knowledge to extend healthy life and to reduce the burdens of illness and disabilities. CLS strives to transform medicine and healthcare in Kazakhstan through innovative scientific research, rapid translation of breakthrough discoveries, educating future clinical and scientific leaders, advocating and practicing evidence-based, personalized, and predictive medicine to improve health and quality of life.

③ The Centre for Educational Policy(CEP) created on the basis of NU, will become a leading centre (‘think-tank’) for research on the issues and realization of the policies in the sphere of educational services for the Eurasian countries. The CEP is to promote development of NU as an unique educational model based on the international principles of educational policy.

NU plans to establish an R&D Center of Samruk-Kazyna (hereinafter R&D Center) which is engine for the innovation in the IIC(Innovative Intellectual Cluster) and Kazakhstan. New R&D Center has aim the creation and development of engineering competence in the field of new technologies in first. But later the concept of R&D Center is enlarge to constitute absorption and transfer of new technologies in economics and industries in the country. It will contribute an active participation in economy modernization in the country.

Samruk-Kazyna, officially known as the National Welfare Fund "Samruk-Kazyna", s a joint stock company in Kazakhstan which owns, either in whole or in part, many important companies in the country, including the national rail and the state oil and gas company KazMunayGas, the state uranium company Kazatomprom, Air Astana, and numerous financial groups. The state is the sole shareholder of the fund. It was created in October 2008 with the merger of two funds, "Samruk" and "Kazyna", by decree of the president of Kazakhstan, Nursultan Nazarbayev. Samruk-Kazyna controls $78 billion in assets, or nearly 56% of GDP. Kazakhstan’s government expects assets held by its sovereign wealth fund to reach $100 billion by 2015

Samruk-Kazyna is the very important role to support the new Center(R&D Center of Samruk-Kazyna) and their companies ask to R&D Center to solve their problems. R&D Center will be a linking pin and problem solver role between companies and Nazarbayev University. An innovative intellectual cluster is planned at NU(2012~2015) and the R&D Center is the one of the core components for the cluster.

It has been asked to undertake an in-depth study and to provide NU research-based recommendations on detailed strategies after benchmarking relevant the existing international engineering and applied research organizations.

It is our understanding that this research is focused on the effective R&D Center creation, development strategy and the operation for Nazarbayev University and Samruk-Kazina, regarding R&D functions for the industries in Kazakhstan and supply of modern engineers. The research objective is to create and develop the R&D Center on the basis of the “Nazarbayev University and Samruk-Kazina”.

This study has managerial implication as follows. R&D Center is to promote industrial innovations and national economic development by way of matching industrial and corporate needs and university research seeds which involve a variety of organizational forms, including research project, research lab, and research center in R&D Center. Aiming at advancing industrial technology innovations, the activities of matching seeds and needs include not only searching, identifying, and targeting of applied research needs of business enterprises and industry level, but also marketing, searching, and allying with academic and corporate researchers domestically as well as internationally in order to generate joint research activities. This results for the basic structure of R&D Center has a form in which the applied research functions (such as research project, labs, and affiliated centers), technology Platform, and technology transfer role will closely interact and collaborate one another.

2.2.2 The Role of Leadership to University

President Nazarbayev asked the NU and Samruk-Kazyna to progress for the national competitiveness as follows(Zhakupov, 2012).

"Around Nazarbayev University must be established intellectual innovative cluster that will enable transfer and promotion of new technologies". This is the message from the President of the Republic of Kazakhstan, N.A. Nazarbayev to the people of Kazakhstan(January 27, 2012)".

"I assign to «Samruk-Kazyna» jointly with Nazarbayev University to work out the creation R&D Center, working on orders of industrial enterprises." This is another lecture content in the President of the Republic of Kazakhstan, N.A. Nazarbayev, at Nazarbayev University, September 5, 2012.

Key success factors of international applied centers are several factors as follows(McGowen, 2012). University factors are IP policy, facilities, funding. Industry factors are the fit with center, center membership, outsourcing R&D power, and long-term research goals. And center factors are visibility/prestige, strategic planning, students, research area, caters to stakeholders, mission, funding, leadership, faculty, and technology transfer. It will review the I/UCRC and the early stage of KIST, Korea.

The I/UCRC(Industry/University Cooperative Research Center) Program in US, is designed to Industry to provide the means to leverage research and development (R&D) investments with multi-university centers renown for their innovative research capabilities. And I/UCRC is designed to University to provide opportunities to partner with other leading institutions to conduct industrially relevant research, receive seed funding and recognition as a National Science Foundation (NSF) research center with access to professional resources and guidance aimed towards enhancing global competitiveness(McGowen, 2012). This kind of mention and interest in NU is the key factor to the development of university and commercialization center for innovative custer.

3.1.1 The Basic Principles and Provisions of The Program

Program funding timeline is eligible for 5 years and an additional 5 years. I/UCRCs program develops long-term partnerships among industry, academe, and government.… and a plan to work toward self-sufficiency from NSF. NSF's investment in the I/UCRCs is intended to seed partnered approaches to new or emerging research areas, not to sustain the Centers indefinitely. The Foundation intends for I/UCRCs to become fully supported by university, industry, state, and/or other non-NSF sponsors(National Science Foundation, 2014)

After ten years, the Centers are expected to be fully supported by industrial, other Federal agency, and state and local government partners. Over 80% of the centers established under the I/UCRC program continue on as successful centers without NSF funding. That means the centers trying to make a sustainability for the future growth.

3.1.2 Rules and Amount of Funding

Each I/UCRC is expected to maintain at least the minimum amount of industrial support through membership fees derived from at least the minimum number of members outlined in the current solicitation. Each Center is also required to develop a plan to work toward self-sufficiency from NSF. Over 80 percent of the centers established under the I/UCRC program continue on as successful centers without NSF funding(Gray and Walters, 1998).

NSF supports these Centers through a cooperative leveraging mechanism. NSF's financial contribution to the Centers is relatively small—about $15 million in FY 2011. Funding from sources other than NSF is much larger, totaling more than $68 million in FY 2000. Currently, the Centers have well over 1,000 memberships. Of these, about 85 percent are industrial firms, with the remaining 15 percent including State governments, National Laboratories, and other Federal agencies. Research at each center is formulated, selected and executed in close partnership with the center's membership. Center research is supported via a partnership between the center's universities and members through which membership fees are pooled and assessed just 10 percent indirect by the performing universities. Individual industry members are able to highly leverage their membership investment while universities build trusted relationships across entire industry sectors yielding return on investment across their mission areas.

For instance, CIMS(Center for Innovation Management Studies) supported from NSF, represents a synergistic network that is greater than the sum of its parts. This network includes industry-leading companies, world-class researchers and scholars, and the nation’s top universities for science, engineering, entrepreneurship, and business. When the allied forces of CIMS join together, the product is a powerful web of connections and resources supporting a tremendous amount of knowledge. As part of the CIMS network, member companies share best practices, researchers collaborate on ideas, data and projects, the status of innovation management is elevated among potential funders and subject matter experts. Without the sustaining support of its member companies, CIMS would be unable to carry on its mission. The arrangement is mutually beneficial, membership in CIMS comes with many valuable benefits, including the access to academic and industry fellows and their research/contacts, member networking, industry-segment exclusivity, unique assessments and tools, opportunities to participate in member sponsored and custom research, custom training, classes and workshops, a subscription to the CIMS newsletter and access to research publications(NC State University Center for Innovation Management Studies, 2014)

3.1.3 History of The Realization by Stages

An I/UCRC often begins with a small collaborative planning grant to a group of university faculty members able to demonstrate the scientific, organizational, and entrepreneurial skills necessary to form a team and initiate and run a successful Center. If the prospective Center can obtain commitments of strong support from industry and the affiliated university or universities, it may submit a proposal to NSF describing the progress that has been made and documenting the team's potential to operate successfully as an I/UCRC. Two or more universities are required to propose a multi-university Center. Following successful merit review of the proposal, NSF may make an initial five-year I/UCRC award for Phase I operation of between $80,000 and $90,000 annually to the lead site of a multi-university Center and $60,000 annually to each Center site. When the initial five year grant expires, NSF funding may be extended for funding for two subsequent five year periods for Phase 2 and Phase 3 operation at a reduced level.

Currently there are approximately 60 I/UCRCs, all administered by the Industrial Innovation and Partnerships (IIP) Division of NSF's Engineering Directorate. More than 900 faculty members, along with some 1,500 graduate students and 300 undergraduate students, carry out the research at these Centers annually, which encompass almost the entire spectrum of current technological fields. A primary purpose of the I/UCRC Program is providing high-quality interdisciplinary education. The Centers have produced several thousand M.S. and Ph.D. graduates, who can be found throughout American industry and academe.

3.1.4 The Factors that Determined The Success or Failure of The Program

Across the program, these Centers have established an extraordinarily effective partnership with industry. This partnership takes full advantage of the strength of each participant. University faculty contribute their skills in research and their understanding of the knowledge base; industrial researchers contribute their knowledge of both the technical needs of industry and the challenges associated with competing successfully in the marketplace. The partnership is formalized in each Center's Industrial Advisory Board (IAB), which advises the Center's management on all aspects of the Center, from research project selection and evaluation to strategic planning. It is important to note that all IAB members have common ownership of the entire I/UCRC research portfolio; however, individual firms can provide additional support for specific "enhancement" projects under separate arrangements with the respective university.

The partnership is given even greater strength by the direct involvement of industry representatives in research projects. Each project in the Center has a principal researcher (typically the project's research professor) and in many cases also has one or more mentors from industry (who may be a IAB representatives or engineers or scientists assigned from an IAB member company). The principal researcher maintains close oversight of the progress of the research by the student(s) and briefs the industrial mentor on a regular basis. The mentor can, and often does, have direct input into the direction of the research.

This extensive industrial involvement in research planning and review leads to direct technology transfer, bridging the gap that traditionally has kept U.S. industry from capitalizing fully and quickly on the fruits of research at American universities. The close involvement of industry in the Centers also eliminates the perennial problem of "Not Invented Here"; in the cooperative research model, all Center developed research products are owned by all the members.

The participation of NSF, although small financially, nevertheless sets the tone for the I/UCRCs. Strong program management ensures that each of the Centers continues to follow the I/UCRC model and this helps each to build strong and successful centers. With such extensive industrial support and participation, NSF's role is crucial in influencing industry to take a more long-term view of its needs, with appropriate attention to research quality. This ensures that the fundamental research conducted in the Centers continues to add to the knowledge base that will be vital for solving the problems and meeting the needs of the future.

In addition to the basic I/UCRC award, Centers and Center researchers can compete for other NSF support for research and education projects. At any point—even at the end of its life cycle—NSF may provide funding to the Center under special arrangements involving joint participation by other NSF program offices. NSF supplemental support may include collateral programs such as a Cooperative Opportunity for Research Between I/UCRCs (CORBI) project, whereby two or more Centers and their industrial members engage in a cooperative research project of interest to all parties (with NSF and industry sharing costs). Through programs such as GOALI (Grant Opportunities for Academic Liaison with Industry), fellowships are offered to Center faculty, whereby the faculty member can spend time in a corporate research lab or factory, again with NSF sharing the cost. Other supplements to I/UCRC awards may be made in the form of joint sponsorship of projects with other federal agencies, Research Experiences for Undergraduates, Teachers and Veterans and other educational activities, workshops, and other purposes consistent with the goals of the Program.

NSF also helps to ensure high standards among the I/UCRCs through a mechanism that is unique to this program: Independent professional Evaluators are engaged to study the industry university interaction onsite, both qualitatively and quantitatively, to determine (1) the quality and impact of Center research, (2) the satisfaction level of faculty who participate in the program, and (3) the degree of satisfaction of industrial participants. A historical profile of each Center is maintained; and annual assessments are conducted of Center processes and results, finances, and structural issues. One indication of the high quality of I/UCRC research is that faculty publish their work in the most prestigious journals. I/UCRC faculty as well as students regularly garner awards from their respective professional societies for their innovative research.

3.1.5 The Findings for The R&D Center

There are very important considerations to establish the new R&D Center in Korea as follows; Initial government role of grant, industry membership, center capacity(faculty and graduate students), board’s role for partnership, leadership of professor, cooperative research model, long-term view of industry needs.

In the spring of 1965, Korean President Park, Chung-hee and U.S. President Lyndon Johnson had met to discuss the challenges and opportunities for education and economic development in Korea. There the idea of U.S. support for establishing an industrial research laboratory was suggested, leading to the establishment of KIST(Korea Institute of Science and Technology) in 1966. The creation of KIST, then, was a product of science diplomacy, a product of the strong alliance between the United States and the Republic of Korea, and a product of the shared belief that science is essential to the progress of any nation(http://eng.kist.re.kr).

Founded in 1966, KIST is a premier multi-disciplinary research institute in Korea. KIST's goal is to research, develop, and transfer creative, original technologies that are necessary to advance our nation’s science and technology base. Specifically, KIST focus on fusion technologies that will power Korea’s economic growth, especially in the areas of the environment, energy, health, security, and materials(KIST, 2007).

The establishment of KIST in 1966 created a national interest in science and technology. It was also followed by the foundation of other institutes and organization for the development of science and technology. The construction of research institutes boomed and some journalists and scientists started raising issues over the administration for science and technology, human resource management, and research environment(Boffey, 1970).

In 1971, KIST’s first director, Dr. Choi, Hyung Sup was appointed the Minister of Science and Technology in recognition of his distinguished service at KIST. He served for 7 years and 7 months, which was the longest term for any minister in Korean history. He formulated the first-ever systematic policies for the national science and technology in the 1970s that included the construction of Daedeok Science Park. He had experience as a director at both national and GRI. The balanced experience helped him to have a firm stance on the strengths of GRIs. Therefore, his leadership was the most active in supporting and extending the mandate for GRIs. During the his ledership, he promoted the establishment of a research complex and the switchover of AERI into a non-profit private organization, KAERI(Moon, 2011).

3.3.1 Suggested Concept of R&D Center

Such evolutions of GRIs and Daedeok Innopolis by the Korean government offer diverse lessons for Kazakhstan’s eager to emulate the Korean experience. The following points are worth noting (Yim and Kim, 2005; Kim, 1997).

First, Korea’s experience indicates that in the early stage of industrialization, GRIs can be a most powerful tool for both technological development and human resource training. For example, KIST covered a broad spectrum of industrial R&D and helped find solutions for simple and practical problems arising from industries in the absence of research in industries and universities. KIST also played an important role of training center for researchers who would be needed at corporate R&D centers in the following stages of economic development.

Second, it is also important for the governments to offer various program for promoting linkages among industry, academia and GRIs. This program include national R&D program sponsored by the government that can act as a seed for cooperative researches among innovative actors in technology development.

Third, as industrialization progresses, it becomes necessary to move its paradigm from a GRIs-centered to an industry-oriented purpose. Although GRIs are useful in the early stage of industrialization, it tends to generate inefficient bureaucracy at later stages. The Korean experience indicates that though GRIs centered S&T policies were very effective early on, but later, in the 1980s, GRIs led to serious inefficiencies through research duplication and their bureaucratic behavior.

Fourth, it is important to recognize that there is no one best way for GRIs at all times. That is, the configuration of GRIs regarding their strategy, structure, and funding and management systems should fit into the national S&T and social environment. The Korean GRIs case shows that a centralized structure with an efficiency-oriented strategy by the central government can be very effective in an early stage. But as industrialization progresses, the feature worked as a bottleneck, requiring empowerment to the individual institute level and competitive funding system.

Fifth, there is a need for constant evaluation and reforms for GRIs. They tend to become bureaucratic and inactive organizations over time. Therefore the evaluation system and activity itself is very important because it provides the momentum to think over their performance and future direction at both GRIs’ and individual researchers’ level. Moderate reforms can also expedite active learning by constructing creative crisis. Koreangovernment had introduced performance-based system, such as, annual salary and Project based performance system.

3.3.2 Dual Technology Development Strategy

We suggest two kind of technology development strategy, the first one is catch-up strategy based on the national innovation vision and the other one is technology transfer strategy, localization from the advanced country.

In the 1960s and 1970s when the local technological base was very primitive, Korea first acquired and assimilated mature technologies to undertake duplicative imitation of existing foreign products with their skilled but cheap labour force. Then the accumulation of technological capability through learning by doing, together with the quality upgrading of the educational system, enabled these countries to undertake creative imitation in the face of rising labour costs and increasing competition from the second tier NIEs. Singapore also underwent a similar process, producing mature foreign products at a lower cost under foreign direct investment. In contrast, other countries such as coastal China and some of the East European economies may not evolve from the duplicative imitation to the creative imitation and to the innovation stages, as they have a longer history of technological accumulation and have already reached the duplicative imitation stage before they opened their economies. Some of the sectors in these economies may have enough capability to enter the intermediate technology stage at the outset. If they evolve from the mature technology stage, the speed of evolution to the intermediate technology stage is expected to be faster than that of others(Kim, 2003) as

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] Technology Development Process: A Model for a Developing Country with a Global Perspective

According to the ‘Concept of creating intellectual and innovative cluster of Nazarbayev University for 2012-2015, the Engineering Center will play an important role in Catch-up Technology Development. The objectives of the Engineering Center should be development of engineering skills in areas such as machine building and instrument engineering, materials science, chemical engineering, etc. And the center's role is the absorption and transfer of new knowledge and technologies from advance technological countries including Korea. It involve from professor, researchers and students of the University of Nazarbayev to the solution of practical problems of the industry. It will be the generation of new high-tech spin-off companies.

Mission of R&D Center is to promote industrial innovations and national economic development by way of matching industrial and corporate needs and university's research seeds which involve a variety of organizational forms, including research project, research lab, and research center in R&D Center as

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] Mission and roles of R&D Center

R&D Center’s roles and main activities are as follows. Fostering R&D capabilities and systems in corporations. Educating and training R&D personnel to advance R&D capabilities of industries. Providing technological support and solutions for industries via successful R&D outputs. Providing consulting for government for formulating R&D policy and technology policy. Serving as a bridge of international technological cooperation. Serving as a center of diffusing foreign-imported technologies for domestic corporations. Serving as a incubator of research activities, such as joint research projects, research labs, and spin-off centers, in order to expand the scope of new research fields and explore into frontier researches. Educating and providing on-the-job training to the coordinator who will perform matching between university seeds and industrial needs. Forming close collaboration with Engineering Department of the University in order to form joint research projects and develop an effective education program for graduate students

The operational and business model of the R&D Center has to be composed by the mission and service of the Center as we proposed before. The mission, in other aspect, the functions of the Center are said to be (1) coordination, (2) applied research, (3) education and training. And the five services of the Center are (a) technological planning and R&D management, (b) upgrading innovation capability through joint R&D, (c) industrial technical manpower development, (d) formation of technological infrastructure, (e) commercialization support(

Kazakhstan’s President Nazarbayev tried and approved the new R&D Center for the intellectual innovation cluster (IIC) in the Republic of Kazakhstan. The goal is to form the state’s new economic development infrastructure through the applied R&D Center, with the focus on achieving the stable development of Kazakhstan by means of collaboration between Nazarbayev University and Samruk-Kazyna, industry(Zhakupov, 2012).

The missions of the R&D Center are as follows: (1) to promote industry innovation through collaboration with foreign countries; (2) to enhance the technological competitiveness of the Samruk-Kazyna companies; and (3) to develop Kazakhstan’s national economy through knowledge transfer and diffusion. These missions will be accomplished by means of matching industrial and corporate needs with university research seeds, which involves various organizational forms including research projects, research labs, research centers, joint labs, spin-off centers and spin-off companies in the R&D Center.

Regarding the fostering of the R&D capabilities and systems of the Samruk-Kazyna companies in Kazakhstan, the details of the five services provided by the R&D Center include the mentioned five activities and achievements:

The R&D Center should have a functional structure that provides the technology platform and facilitates applied research and technology diffusion. These functions are carried out by various organizations such as research project teams, labs, and affiliated institutes, which will interact and collaborate closely with each other.

Many economists consider that the role of government in economic, social and political issues has been effective and brought about an economic miracle. One of the main Korean policies was science and technology infrastructure development. The KIST is a good example for the R&D Center in Kazakhstan in this respect. KIST was established in 1966 under the auspices of the Korean and US governments. The mission of KIST was to assume a central role as the first comprehensive research center for the promotion of the nation’s economic growth and the modernization of engineering fields. KIST was an integrated technical center designed to support the industry's technological learning. As Korea's first multidisciplinary research center, KIST covered a broad spectrum of activities in applied research ranging from project feasibility studies to R&D for new products and processes. KIST spent a large proportion of the nation's total R&D expenditure in its early years. To keep pace with increasing sophistication and diversity, the government established several GRIs as spin-offs from KIST. Each was designed to develop in-depth capabilities in areas of high industrial priority such as shipbuilding, electronics, telecommunications, energy, machinery, and chemicals.

The R&D Center’s organization includes these five areas of industry, and can be broadly categorized into three development stages during next the fifteen years. The purpose of the first stage is to develop industrial problem-solving capability. The second stage will involve catching up with the industrialized economies and producing creative imitations of imported technologies. The third stage will consist in securing advanced knowledge creation capability. Accordingly, the R&D Center’s organization should be aligned with this development strategy.

The business model will consist of Smaruk-Kazyna’s support, R&D project revenue, general companies’ membership, training and education, technology planning and consulting, laboratory analysis and testing, and technology transfer revenue and so on.

We expect that the R&D Center will serve as an integrated technical center to support Kazakhstan industry's technological learning and capacity, like the Korean precious experience, in the near future.