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Uzbekistan's Tech Frontier: From Silk Road Legacy to Central Asia’s Silicon Valley Challenger

Explore how Uzbekistan, with its young, tech-savvy population and government support, is emerging as Central Asia's Silicon Valley, fostering innovation and tech advancements.
Uzbekistan's Tech Frontier: From Silk Road Legacy to Central Asia’s Silicon Valley Challenger

The Silk Road opened a dynamic commercial and cultural corridor between East and West which has in many ways defined the modern world. Uzbekistan stood at the centre of a global network of scholars, inventers, craftsmen and merchants, whose contact advanced our collective understanding of everything from science and medicine to philosophy and theology.

With the rise of its first tech unicorn – digital services ecosystem Uzum – Uzbekistan is once more establishing itself as a key outpost in a global quest for innovation and technological advancement. To those unfamiliar with this country, the emergence of a burgeoning tech scene in Uzbekistan might come as a surprise. However, to those immersed in Uzbek society, and schooled in its fundamental strengths and economic potential, the country’s status as Central Asia’s answer to Silicon Valley figures.

Uzbekistan’s promise as a tech hub is underpinned in part by important demographic strengths: hosting half the population of Central Asia as a whole, Uzbekistan’s is an overwhelmingly young population, 60% of which is under 30 years of age. Moreover, this dynamic population is generally highly educated and often multilingual – with a near 100% literacy rate. An emphasis on STEM fields persists in Uzbekistan, the legacy of a rigorous Soviet curriculum, and the government has demonstrated its willingness to invest into further expanding education, particularly tertiary. Not only did the Higher Education Ministry’s budget increase by 44% in 2023, authorities have also declared their intention of educating 50% more high school graduates – particularly in technical disciplines – by 2030, a target which will involve the building of 30 new universities in the country.

Compounding the educational advantages enjoyed by Uzbeks, the country boasts the highest rates of internet access in the region (with 31 million network users and 99% coverage) and a strong culture of technological proficiency. The popularity of IT education has been borne out by the success of the “One million Uzbek Coders” initiative, a free distance learning programme emphasising Data Analytics, Android Development, FrontEnd Development and FullStack Development.

A young, tech-literate population has combined with a government agenda focussed on economic liberalisation to spur rapid and dramatic growth in Uzbekistan’s IT sector. The sheer rate of this sector’s expansion borders on the exponential: for example, where the country hosted 14 foreign IT companies in 2020, within three years the figure stood at 300. Through the IT Park scheme established in 2019, whereby entrepreneurs are incentivised to establish their tech operations in Uzbekistan via generous tax breaks as well as streamlined administration and financing options, this central Asian nation has emerged as the region’s pre-eminent start-up haven, with more than 1200 thriving startups and counting.

Uzum’s success – most recently highlighted by its successful $52mn fundraise – reflects the opportunity presented by the Uzbek market. An ecosystem which combines e-commerce, fintech and banking services for individuals and small and medium-sized enterprises, Uzum launched in 2022 and by the following year ranked as the country’s most downloaded app with 10 million users every month. More widely, according to KPMG, Uzbekistan’s e-commerce market has the potential to grow seven-fold by 2027. Uzbekistan has asserted itself as a market in which demand for tech services and products is high and well-informed.

“The Uzbek market has enormous potential, and Uzum’s case confirms this. According to our forecasts, the volume of online payments in the country will increase by 6 times by 2026, the e-commerce market will grow by 8-9 times over the same period, and the fintech market will grow by 8 times. Such growth is made possible by the increasing internet penetration in the country, and today, the cost of mobile internet in Uzbekistan is one of the lowest in Central Asia, as well as, of course, government support for small and medium-sized businesses, the development of educational programs, and the emergence of convenient national digital services”, said Nikolay Seleznev, Uzum chief strategy and business development officer.

But the growth of Uzbekistan’s tech sector cannot be achieved in splendid isolation: foreign investors and corporates have a pivotal role to play, both as financiers and mentors. This reality is well-understood by Uzbek authorities, who are working hard to court international investment with a slew of economic liberalisation and privatisation measures. Discussing the upcoming Tashkent International Investment Forum (TIIF), Uzbekistan’s Minister of Investment and Trade Laziz Kudratov, declared his expectation that “digitalization and the attraction of investments to this country’s IT sector will be an essential theme for discussion at the forum – tech is in many ways the big opportunity we present to the world”.

Though proof of the country’s successful modernisation efforts, Uzbekistan’s tech prowess also reflects its population’s old identity, as people of the Silk Road who actively engaged in the spread of modernising technologies and ways of thinking. Where many national histories are tales of efforts to isolate and secure regions from outside influence and innovations, Uzbekistan’s outlook has been forged by a centuries-old desire to welcome the novel – and tech is this nation’s newest frontier.

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