Kazakhstan is once again talking about supporting large players. The logic is easy to follow. Strong companies, scale, resources, access to export markets. But in the global economy, this model has already started to fail. Large corporations do not pull growth forward. They tend to lock it in place. The main lesson of modern industrial policy sounds blunt. Supporting old players almost never creates new technology.
The world has moved on from the idea that size decides everything. Today, speed matters more. The ability to change products and markets matters more. The willingness to take risks matters more. These qualities are rarely found in large organizations. Especially when they receive support from above. A different logic takes over. Protect your position. Defend your market share. Minimize risk. In that environment, innovation becomes a side effect, not a goal.
This is not theory. It is what we see in real economies. Where governments focused on specific companies, results were weak. Where they created space for new players, growth was stronger. The difference is not in how much money was spent. The difference is where it went. In Kazakhstan, the idea of national champions comes up regularly. It is built around concentrating resources. Pick the strongest. Give them access to financing. Help them expand abroad. In the short term, this looks reasonable. In the long run, it works against the economy.
A large company that receives support starts to behave differently. It does not fight for the market the way a new entrant does. It already has a position. It already has access to resources. The incentive to take risks gets weaker. This slows down change inside the company. At the same time, it makes it harder for new players to enter. The result is a crowding-out effect. New companies do not appear. Old ones do not evolve. The economy stops renewing itself. This is the main risk that is often underestimated.
Modern industrial policy follows a different logic. It does not try to pick winners. It creates conditions where winners can emerge on their own. This is a key difference. The state does not bet on a specific company. It lowers entry barriers. It supports early stages. It finances risk.
Why early stages? Because that is where markets fail. A new technology always looks risky. Private capital comes later, when it is clear that the model works. Until then, projects need a different source of funding. This is where the state steps in. Large economies have been doing this for years. They build dedicated programs. They fund research. They support startups. They connect science and business. Not every project succeeds. But a flow of ideas is created. New companies grow out of that flow.
The key point is that scaling happens in the market. The state does not keep companies inside its system. It gives them a start. After that, competition takes over. This keeps the system dynamic and filters out weak ideas. In Kazakhstan, this mechanism is still weak. Early-stage funding is limited. The link between science and business is fragile. New companies face barriers. Access to resources is restricted. In this situation, betting on national champions looks like a convenient solution. But it does not change the structure of the economy.
There is another issue. Large companies tend to focus on traditional sectors. They operate where demand is already clear. Where the business model is known. Where uncertainty is lower. This makes sense from a business perspective. But it does not move the economy forward.
Industrial policy in the twenty-first century is about something else. New industries. Emerging technologies. Markets that are still forming. This is where growth comes from. This is where future competitiveness is built. If resources go into old sectors, the economy locks in its current structure. It does not move to the next level. It secures its place in the global system. And that place is rarely a leading one.
There is also a timing factor that is often missed. Technological development depends on when you enter. If a country misses the entry point into a new sector, catching up becomes much harder. This is not a linear process. It is about building capabilities over time. Those who start earlier gain an advantage. Betting on national champions makes this gap wider. Resources go where there is already a base. But no new base is created. As a result, the country risks missing the moment to enter future industries.
Global experience shows a different pattern. Success stories are not about protecting large players. They are about building ecosystems. Where new companies emerge, competition grows. Competition speeds up development. It raises overall productivity. In this model, the state does not step back. It remains an active player. But its role changes. It does not distribute resources between companies. It creates conditions. It builds infrastructure. It supports risk.
This requires a different style of governance. Less control over outcomes. More tolerance for failure. Not every project will succeed. But without failure, there are no breakthroughs. Large organizations struggle in this kind of environment. They are built for stability. In Kazakhstan, stability is highly valued. This is understandable. The economy depends on external factors. Risks are high. But too much focus on stability blocks development. It makes the economy less flexible.
National champions fit well into this model. They create a sense of control. They are easier to manage. They are predictable. But this is an illusion of stability. In the long run, it weakens competitiveness. There is one more important point. Large companies often shape the institutional environment around them. Rules start to adapt to their needs. This reduces transparency. It limits access for new players. It increases concentration.
In such a system, industrial policy starts working against itself. It does not create growth. It distributes rent. This effect is not visible at first. But over time, it changes how the entire economy behaves.
The question is not whether large companies are needed. They are. They can play an important role. But they should not be the center of industrial policy. They should compete under the same rules as everyone else. The focus should shift to new players. To those who are not yet established. To those who bring new solutions. This changes the structure of the economy. It creates a foundation for long-term growth.
Kazakhstan is now at a crossroads. It can continue strengthening existing structures. This will bring short-term results. It will support jobs. It will preserve the current model. But it will not change the trajectory. Or it can shift the focus. Redirect resources to early stages. Open access for new companies. Lower barriers. This path is harder. It requires changes in governance. But it is the only way to move to a different kind of economy.
Global competition is intensifying. Technology is becoming the main driver of growth. Countries are competing not for output volume, but for their position in the value chain. In this race, those who create new things win. Not those who protect the old. National champions do not solve this problem. They can secure the present. But they do not build the future. This is the key lesson that is often ignored.
Kazakhstan can repeat this mistake. The logic is understandable. Pressure to deliver results. Demand for quick solutions. But the cost of the mistake is high. It is not just about money. It is about lost time.
In economics, time works against those who do not change. The later the transformation starts, the more expensive it becomes. And the harder it is to catch up with those who moved earlier. Betting on national champions may look like a strategy. In reality, it is a refusal to choose. It is an attempt to preserve the current model. In a fast-changing world, that is the riskiest position of all.
Alen Serik, expert of the portal EconomyKZ.org
