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9УДК 338.48
ECONOMIC JUSTIFICATION OF THE IMPORTANCE OF INTRODUCING MODERN TECHNOLOGIES FOR THE DEVELOPMENT OF THE TOURISM INDUSTRY IN THE REPUBLIC OF KAZAKHSTAN
ZHANADILOV OLZHAS ORYNBEKOVICH
Master's student of the Department of Economics and Construction, Karaganda Industrial
University, Temirtau, Kazakhstan
GELMANOVA ZOYA SALIKHOVNA
Professor of the Department of "Construction", Karaganda Industrial University
Annotation: This article explores the economic justification for the introduction of modern technologies to foster the growth of the tourism industry in the Republic of Kazakhstan. Despite its rich cultural heritage and diverse natural landscapes, Kazakhstan's tourism sector remains underdeveloped, contributing a modest share to the national GDP. This research analyzes how technological advancements, including digital marketing, artificial intelligence (AI), virtual reality (VR), big data analytics, and the Internet of Things (IoT), can enhance the competitiveness, efficiency, and sustainability of the tourism industry. By examining the direct and indirect economic impacts of these technologies, the paper provides a comprehensive assessment of their potential to increase tourism revenues, improve customer experiences, and streamline operations.
The study employs growth projection models and multiplier effects to estimate the possible financial benefits of adopting these technologies. The findings suggest that with modern technology implementation, Kazakhstan could significantly boost tourism-related revenues, increasing the sector's contribution to GDP. By 2029, the potential increase in tourism revenue could reach $1.48 billion, with a total economic impact of $2.22 billion. The research also highlights the challenges of digital transformation, such as high initial costs, infrastructure gaps, and workforce digital literacy, offering policy recommendations to overcome these obstacles. The paper concludes that embracing modern technologies is essential for Kazakhstan to unlock the full economic potential of its tourism industry, ultimately promoting sustainable economic growth and global competitiveness.
Keywords: tourism, modern technologies, Kazakhstan, economic development, digital transformation, GDP, AI, VR, IoT, economic, calculation, efficiency, economic potential, innovations, contribution, economic impact, resources, growth, transformation, investments, digital transformation.
Introduction
Tourism is an essential sector that contributes significantly to the economy of the Republic of Kazakhstan. With its vast natural resources, rich cultural heritage, and strategic location at the crossroads of Europe and Asia, Kazakhstan has immense potential to become a global tourist destination. However, for the country to fully leverage this potential, the introduction of modern technologies is crucial. This economic justification explores how technological innovations can enhance the efficiency, competitiveness, and sustainability of Kazakhstan's tourism industry.
Current State of the Tourism Industry in Kazakhstan
The tourism sector in Kazakhstan is still developing. The country has unique attractions, including the vast steppe, mountains, lakes, and historical sites along the Silk Road. However, it faces several challenges, including underdeveloped infrastructure, limited digital presence, and inefficiencies in service delivery. To overcome these challenges and increase the industry's contribution to the national economy, adopting modern technologies is essential.
To estimate the participation of tourism in Kazakhstan's GDP, we can use economic data and a few key formulas. Tourism's contribution to GDP includes both direct and indirect impacts such as tourism-related spending on accommodation, food, transport, entertainment, and other services, as
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well as the secondary effects through the supply chain and the induced spending from wages paid to workers in tourism.
To calculate tourism's contribution to GDP, we need the following data (all values are hypothetical for illustration purposes):
• Total GDP of Kazakhstan (GDP_total): This is the gross domestic product for the relevant year. For example, in 2023, the World Bank estimated Kazakhstan's GDP at $250 billion[1].
• Total revenue from the tourism sector (Tourism_revenue): This includes the sum of spending by international tourists and domestic tourism activities within Kazakhstan. Let's assume this is $6 billion.
• Tourism employment data: Information on employment in tourism-related industries to estimate indirect impacts. For simplicity, we'll assume that 5% of Kazakhstan's workforce is employed in the tourism sector[2].
• Multiplier effect (k): Tourism's multiplier effect quantifies how money spent by tourists circulates within the economy. For simplicity, we'll assume the multiplier is 1.5 (based on international standards for developing countries, meaning each dollar spent by a tourist generates an additional 50 cents of economic activity).
The direct contribution of tourism to GDP can be calculated as the share of tourism revenue in the total GDP:
Tourism revenue
Direct Contribution to GDP =- x 100
GDP total
Substituting the values:
б billion
Dircct Contribution to GDP = - 1 ШИ x 100 = 2.4%
250 billion
So, the direct contribution of tourism to Kazakhstan's GDP is approximately 2.4%.
The indirect contribution includes the impact of tourism on other industries like food supply, transport, and manufacturing (i.e., industries that benefit from tourism but are not directly tourism-oriented).
We calculate this using the multiplier effect:
Total Contribution to GDP = Tourism, revenue x к
Substituting the values:
Total Contribution to GDP = 6 billion x 1.5 = 9 billion
This means that the total economic impact of tourism, considering both direct and indirect effects, is approximately $9 billion.
Now, to find the percentage of GDP that tourism contributes (including both direct and indirect effects), we can use:
Thus, the total contribution of tourism to Kazakhstan's GDP (direct, indirect, and induced) is approximately 3.6%.
Tourism directly contributes about 2.4% to Kazakhstan's GDP, and when considering the indirect and induced impacts, the total contribution rises to about 3.6%. These numbers highlight the significant but still growing role that tourism plays in Kazakhstan's economy. With the introduction of modern technologies and targeted investments, this contribution could increase substantially in the coming years.
Impact of Modern Technologies on Tourism
Modern technologies such as digital marketing, e-tourism platforms, artificial intelligence (AI), virtual reality (VR), big data, and the Internet of Things (IoT) can revolutionize the tourism sector in the following ways:
Increased Efficiency and Cost Reduction: Technologies like AI and automation reduce the need for human labor in certain areas, which lowers operational costs for businesses. For example, automated booking systems and customer service chatbots enable businesses to handle large volumes of queries efficiently, improving customer satisfaction without significant increases in costs[3].
Improved Marketing and Global Reach: Digital marketing tools and social media platforms enable tourism businesses and Kazakhstan's national tourism boards to reach a global audience at a fraction of the cost of traditional marketing. Targeted advertising based on data analytics helps attract the right tourists, increasing conversion rates and revenue[7].
Enhanced Customer Experience: AI-driven personalized recommendations, virtual tours using VR technology, and mobile apps enhance the customer journey from planning to booking and travel. This leads to higher satisfaction, better reviews, and increased tourist loyalty[9].
Data-Driven Decision Making: Big data allows businesses and government agencies to collect and analyze vast amounts of information on tourist behavior, preferences, and market trends. This data can inform strategic decisions, optimize resource allocation, and ensure that tourism development aligns with market demand[5].
Infrastructure Development and Smart Tourism: IoT and smart technologies can help improve infrastructure such as smart hotels, transport systems, and digital signage. For instance, smart transportation systems can improve logistics, reduce travel time, and provide real-time information to tourists, improving their experience and efficiency.
Economic Benefits.
Increased Revenue and GDP Contribution: The integration of modern technologies will make Kazakhstan a more attractive destination, boosting tourist arrivals and increasing overall spending. This, in turn, will contribute to higher revenues from tourism-related sectors such as hospitality, transportation, and entertainment, adding to the country's GDP.
Although automation might reduce jobs in certain areas, the growth in the tourism sector driven by technological innovation will create new jobs in tech-related fields, customer service, and infrastructure development. Moreover, tourism-related small and medium-sized enterprises (SMEs) will benefit from technology platforms, expanding their market access and creating employment.
Technological advancements in the tourism industry will also make Kazakhstan more attractive to international investors looking to develop hotels, resorts, or digital tourism services. This will lead to a significant inflow of FDI, contributing to economic growth. Modern technologies can enhance the sustainability of tourism by optimizing resource use, reducing carbon footprints, and promoting eco-friendly practices. For example, AI and IoT systems can help manage tourist flow to prevent overcrowding in sensitive ecological zones and promote responsible tourism[4].
Challenges to Implementation.
Introducing advanced technologies requires substantial investment, particularly for small and medium-sized businesses. Government support and incentives will be necessary to encourage widespread adoption.
A lack of digital skills among business owners and workers in the tourism sector may hinder the effective use of technology. Investment in digital literacy and training is essential to ensure that the workforce is equipped to operate and maintain new technologies[14].
In many rural and remote tourist destinations, the necessary technological infrastructure, such as internet connectivity, is either inadequate or non-existent. Addressing these gaps is critical to ensure that all regions can benefit from tourism development[12].
Government Role and Policy Recommendations.
To fully realize the potential of modern technologies in tourism, the government of Kazakhstan should play a proactive role. Key policy recommendations include:
Incentives for Technology Adoption: The government can offer tax incentives, grants, or low-interest loans to tourism businesses that invest in modern technologies.
Public-Private Partnerships: Collaborations between the public and private sectors can facilitate infrastructure development, such as expanding internet access to remote areas, building smart cities, and modernizing tourist facilities[13].
Training and Education Programs: To improve digital literacy, the government should invest in training programs for tourism industry workers and entrepreneurs. These programs could focus on technology use, digital marketing, and customer service enhancement[6].
Sustainable Tourism Policies: The government should ensure that technology adoption aligns with sustainability goals, promoting eco-tourism, conservation efforts, and responsible tourism practices[8].
To estimate the potential increase in Kazakhstan's tourism industry profits by 2029 due to the introduction of new technologies, we will use a growth model that incorporates expected tourism growth rates, technology-driven efficiency gains, and the multiplier effect. We will project potential growth based on historical trends and the expected benefits of technology adoption[15].
To perform these calculations, we need to make several assumptions and input values:
• Base tourism revenue (2023): $6 billion (assumed value from the previous calculation).
• Annual growth rate of tourism without new technologies (g_base): Historical growth rate of Kazakhstan's tourism industry is around 5% annually.
• Additional growth from new technologies (g_tech): With the introduction of modern technologies (such as digital platforms, AI, VR, and IoT), efficiency gains and enhanced marketing can boost tourism growth. We assume an additional 3% annual growth due to these technologies.
• Tourism multiplier (k): A multiplier effect of 1.5 will be used to account for indirect and induced contributions to the economy.
• Forecast period: From 2023 to 2029, which is 6 years[10].
First, we calculate the expected growth in tourism revenue without the introduction of new technologies, using the compound annual growth rate (CAGR) formula:
Revenue in 2029 = Tourism revenue x (1 I c/base)"
Where:
• Sbase = 5% = 0.05
• n = 6 years
• Tourism revenue — 6 billion USD
Revenue in 2029 without tech = 6 x (1 I 0.05)fi = б x 1.3401 = 8.04 billion USD
Without any technological intervention, tourism revenues would grow to $8.04 billion by 2029.
Now, we estimate the growth with the additional boost from new technologies. The total growth rate will be:
fftotai — JTbase I <?Lech = 0.05 H 0.03 = 0.08 or 8% annually
Using the same formula, we calculate the revenue in 2029 with the new technology-driven growth rate:
Revenue in 2029 with tech = 6 x (1 I 0.08)° = 6 x 1.5869 = 9.52 billion USD
With the introduction of new technologies, tourism revenues could increase to $9.52 billion by
2029.
The potential increase in tourism revenues due to the adoption of modern technologies by 2029 can be calculated as:
Increase in revenue = Revenue with tccli Revenue without tech
Substituting the values:
Increase in revenue = 9.52 8.04 = 1.48 billion USD
Thus, the introduction of new technologies could lead to an additional $1.48 billion in tourism revenues by 2029.
Considering the multiplier effect (k =1.5), the total economic impact of this increase would be: Total economic impact = Increase in revenue x k
Substituting the values:
Total economic impact = 1.48 x 1.5 = 2.22 billion USD
This means that the total economic impact from the adoption of new technologies in the tourism sector by 2029 could result in an additional $2.22 billion in economic activity.
Let's calculate how much this additional revenue could contribute to Kazakhstan's GDP:
• Estimated GDP of Kazakhstan in 2029: Assuming a conservative GDP growth rate of 4% annually, we project the country's GDP in 2029.
GDP in 2029 = 250 x (1 + 0.04)° = 250 x 1.2653 = 316.33 billion USD
Now, the total tourism revenue (including the impact of new technologies) in 2029 is $9.52 billion. To find the percentage of tourism in the 2029 GDP:
9 52
Tourism Contribution to GDP = — x 100 = 3.01%
316.33
So, tourism could contribute approximately 3.01% to Kazakhstan's GDP by 2029, with the adoption of new technologies.
By introducing modern technologies in the tourism industry, Kazakhstan could see a $1.48 billion increase in tourism revenues by 2029, leading to a total economic impact of around $2.22 billion when considering the multiplier effect. As a result, the tourism sector's contribution to GDP could grow to 3.01% by 2029, reflecting the significant potential of technology to boost the country's tourism and broader economic performance.
Conclusion
The introduction of modern technologies into Kazakhstan's tourism industry is not just a luxury, but a necessity for the country's economic development. By embracing digital tools and innovations, Kazakhstan can boost its competitiveness, attract more tourists, and ensure that the sector contributes meaningfully to economic growth. While challenges exist, with the right government support and strategic investments, modern technology can be a game-changer for the country's tourism industry.
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