Impact case study database

Addressing the context-specific challenges of implementing LCP, Kalyuzhnova’s research has underpinned the development, refinement and adoption of LCP in resource-rich emerging economies. It has informed investment decisions by the EBRD and underpinned the teaching and training of business executives in LCP on a global scale. Importantly, the research has shown how the embedding of LCP within industrial strategies drives economic growth and development within a country. Professor Kalyuzhnova has therefore played a pivotal role in educating and influencing a diverse range of senior international stakeholders in the strategic development and deployment of LCP.

The long-term engagement of CEAS with Kazakhstan through the KBCC, and its facilitation through the British Council Institutional Links grant, gave the collaborative research a great deal of influence over the policy of the newly formed Kazakhstan National Agency on Development of Local Content (NADLoC) in November 2015. It facilitated the provision of timely KBCC policy briefs on how to adjust LCPs [source 2], and this coincided with Kazakhstan’s accession to membership of the Eurasian Economic Union and its accession to the World Trade Organization. NADLoC was later incorporated within the Kazakhstan Center for Industry and Export, which has confirmed that research-informed LC measures were adopted in the State Program of Industrial and Innovative Development of the Republic of Kazakhstan for 2020–2025 [source 1]. These measures included “stimulating the development of basic industries” and “technological development and digitalization of manufacturing industries” [source 1]. In particular, the research findings relating to the harmonisation of supplier requirements and the encouragement of certification systems for local engineering suppliers by local governmental agencies, have been adopted and implemented by the new state programme for the engineering of oil and gas machinery [Evidence 5].

In terms of facilitating development in the manufacturing industry, Kalyuzhnova has had a longterm engagement with the Kazakhstan Manufacturing Union. This has resulted in widespread uptake of the research findings across the engineering industries through its large membership (543 companies). The Union [source 5], following research findings, now provides training for its members on mentoring, health and safety standards, accounting and finance, and has collated individual examples of companies implementing the research findings [source 5]. As a result, there have been “measurable changes in mechanical engineering practice recorded over the past two years. It should be noted that in 2018 and 2019, Kazakhstan's mechanical engineering showed a steady increase in production volumes by 20 and 27%, respectively” [source 5]. The Almaty Fan Plant LLP, for example, moved away from process upgrades to management training, thus demonstrating a change in business strategy based on an awareness that it would be preferable to focus on management skills before making any investment in technical upgrades [source 5]. Since then the company has “managed to upgrade the technical processes, which has led to the expansion of its competitive range of the products”, as well as becoming an exporter [source 5]. Another engineering company has won a national prize for implementing LCP and developing new production technologies, while a further company has demonstrated a successful change in strategy and diversified to include engineering to supply the defence sector [source 5]. As a result of Kalyuzhnova’s “significant sustained impact on the shaping of local content development in Kazakhstan”, she has been invited to act as Special Adviser to the Association of Kazakhstan Machinery Industry [source 5].

Acting as an adviser, Kalyuzhnova has also used her research to inform the EBRD’s investment decisions with numerous clients and governments across central Asia [source 4]. As a multilateral developmental investment bank, the EBRD uses investment as a tool to build open-market economies while fostering sustainable and inclusive growth. In particular, risks such as corruption and inadequate indicators around quantitative targets for LCP are considered by the Bank, alongside the research findings in relation to the importance of investment in innovation, capacity-building and transparency around procurement as part of LCP [source 4]. Furthermore, the EBRD foresees the continued use of the research to inform “future discussions with clients in other Central Asian countries such as Uzbekistan” [source 4].

More widely, acting as an invited specialist to the United Nations Economic and Social Council (ECOSOC), Kalyuzhnova has informed discussions on energy provision and sustainable development. Furthermore, In November 2018, Kalyuzhnova was invited to speak with the UNECE in Geneva, this time to the Team of Specialists on Innovation and Competitiveness, on reshaping policies in order to promote sustainable and inclusive growth [source 6]. “Her presentation was instrumental in shaping the Report of the Team of Specialists on Innovation and Competitiveness Policies on its Eleventh session. In particular, Section 29, p4, highlighted the main principles corroborated by Professor Kalyuzhnova’s book” [source 6] where “local content policies can achieve economic and social objectives if adequately designed, implemented and used in conjunction with innovation strategies” (ECE/CECI/ICP/2018/2). She has since become a peer-reviewer of policy recommendations of UNECE for SPECA (Special Programme for the Economies of Central Asia), with a specific focus on Georgia. “This series of UNECE Innovation for Sustainable Development Reviews is a flagship, demand driven policy advisory service under the UNECE sub-programme 4, with reviews including policy recommendations issued as official UN publications and forming the basis for future capacity building activities for the beneficiary countries” [source 6]. “Her contribution has been especially appreciated with detailed analytical commentary, leveraging her academic expertise on chapters on public procurement and financing as drivers of innovative development and innovation and growth dynamics in Georgian enterprises” [source 6]. In October 2019, she led a capacity-building event for SPECA countries related to LC development. It was jointly organised by UNECE, Henley Business School and the Moscow State Institute of International Relations (MGIMO) Business Incubator, and “Kalyuzhnova led on producing a guide for SPECA policymakers” [source 6].

The introduction of LC research into curricula has developed through Kalyuzhnova’s links between CEAS and many educational institutions and professional bodies across Kazakhstan, Russia and the Middle East. This has enabled the development of high-level executive training, master’s programmes aimed at professionals, and a range of industries aligning the advice on LC to their development strategies. Kalyuzhnova et al.’s book entitled Local Content Policies in Resource-Rich Countries [ref 2] (translated into Arabic in 2018, with extracts also translated into Russian) has been adopted as the key LC text by a number of universities (in, for example, Kazakhstan, Russia and Uzbekistan) [source 7]. For example, within Kyrgyzstan, the book formed part of the EC International Cooperation and Development project “Support to the Education Sector of the Kyrgyz Republic”, which aimed to guide the Kyrgyz government in the implementation of structural reforms in the education sector; case studies from the book were used in the training of entrepreneurs. In Kazakhstan, the Institute of Engineering and Information Technology, responsible for promoting the oil and gas industry, used the research to underpin training programmes across the sector, involving 550 participants in nine cities with “94% reporting the gaining of new skills” [source 7].

Within Russia, the SKOLKOVO Energy Centre at the Moscow School of Management used the research to “take a strategic direction in terms of encouraging new research initiatives and new engagements and collaborations with local industry” [source 8]. Adopting the core principles of the book, the Centre made evidence-based recommendations to policymakers for the oil and gas industry; these recommendations were subsequently adopted by the Ministry for Trade and Industry in formulating policy on localisation and import substitution. Further work undertaken by the SKOLKOVO Energy Centre on the performance of the Russian oil industry, based on the Reading research, has been presented by the Russian oil minister to President Vladimir Putin (2018) [source 8].

The findings of the research have now also impacted the Middle East (Kuwait). Supply chain companies in the Kuwaiti oil sector have changed their policies and invested in building the capacity of local suppliers by providing training on management, accountancy and finance. As a result, and in collaboration with the relevant government agencies, there is now a focus on upskilling and employing local Kuwaiti managers instead of recruiting talent from overseas [source 3]. These changes have been facilitated by Kalyuzhnova’s engagement, in an advisory capacity [source 9], with the Kuwait National Assembly (Parliament) since 2017 and the hosting of an international conference on LCP at the University of Reading in 2018. Since then, the Kuwait National Assembly has established a new department on LC, and is implementing the research findings by stimulating an increase in technology within the local supply chain for the oil and gas industry. “Already, by 2019 the rate of recruitment of expatriate workers in the private sector has decreased by 62% which is an indication of policy implementation to restructure the demographic balance in the country.” This is all part of a wider strategy on increasing domestic value added [source 9].

In summary, research at the University of Reading has addressed the challenges associated with implementing LCP in resource-rich countries as a driver for economic growth. It has demonstrated the importance of aligning LCP with country-specific industry and economic policies, thus creating the conditions for spin-offs and positive externalities. As a result, it has underpinned the implementation of appropriate LCP policy interventions with a reach across a number of resource-rich nations in Euro-Asia, as well as Kuwait. In terms of significance, the impact of the revised policies on local supply chain industries (such as manufacturing and engineering) are now being realised, with increased skills capacity, production and diversification, all of which play an important role in the overall aim of increasing economic growth more generally.