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Most countries face important economic, social and environmental challenges and are strongly committed to invest in research and development (R&D) activities to help support the long-run economic sustainable growth. This paper aims to extend the previous research on macro-economic growth models and introduces endogenous variables to determine the amount of investments in R&D activities.

The model considers four different criteria and six economic sectors and aims at finding the optimal allocation of labor across different sectors. The model also endogenously determines the amount of investments in pollution abatement activities together with energy-related R&D efforts. The paper presents an application to the case of Kazakhstan, an emerging Asian country, that aims to become one of the top 30 most developed countries in the world by 2050.

The model shows the limits of the Kazakh agenda that identified too ambitious goals as the country has to go through a sociotechnical transition that involves a range of modifications in institutional structures, together with changes in user practices and the technological dimension. Kazakhstan should invest more in R&D activities able to develop sustainable energy sources to face the current electricity consumption demand and to reduce the greenhouse gas emission in the future.

The paper provides valuable knowledge for researchers and policy makers interested in the impact of R&D on the long-run economic sustainable growth.