A Framework for Assessing Regional Innovation and Digital Capacity

Abstract

Kazakhstan has demonstrated specific progress in the innovation and digital development of regions and cities. Nevertheless, the level of digitalization and innovation varies significantly depending on the region's territoriality. This study presents a comprehensive framework for assessing Kazakhstan's regions' innovation and digital potential through a novel Innovation and Digital Potential Index. The proposed index evaluates five key dimensions: digital infrastructure, innovative activity, human resource potential, business digitalization, and cybersecurity. The authors employed a multi-criteria analysis approach using the Analytic Hierarchy Process for weighted indicators. The results obtained make it possible to analyze the territorial prospects of innovative and digital development based on indicators of regional innovation activity and digital infrastructure. The Republic of Kazakhstan's overall index of innovation and digital potential is 0.55 (from 0 to 1), the average indicator for the main criteria of innovation and digital development. The empirical findings highlight significant regional disparities in digital and innovation capacity, with major urban centers exhibiting the highest index scores. At the same time, less-developed regions lag behind due to gaps in infrastructure and policy. The results underline the need for targeted policy interventions, including enhanced broadband accessibility, fiscal incentives for digital transformation, and stronger cybersecurity measures. The results of this research contribute to the broader discourse on digital economy development and provide actionable insights for policymakers to drive inclusive and sustainable innovation ecosystems to realize the innovative anddigital potential, considering the territorial characteristics of the country.