This article focuses on the mechanism of state regulation of innovative sector. The authors noted that despite
the increase in the number of innovative enterprises, the level of innovative performance is still very low and
constitutes only 8.1 % of total output. Therefore, government policy ought to create relevant conditions for
rising the scale of innovative performance of kazakhstani enterprises. It might also be significant to focus on
measures aimed at creating an enabling environment that spurs innovation. According to the authors, every
product manufactured incorporates the contribution of intellectual application of individual employees. Also,
this article highlights that Kazakhstan producers lack the experience of bringing scientific research to the
goods market and lacks highly qualified specialists in the field of project management. The authors further
highlights the institutional framework necessary for innovative performance such as legal factors, material
factors, financial factors, intellectual factors and state support. In the final section, a summary of the challenges
facing the institutional framework supporting innovation in Kazakhstan is presented and some recommendations
provided.
