TASHKENT, UZBEKISTAN (25 August 2023) — The number of technology-based startups in Uzbekistan has grown considerably in recent years, but many are still at a preliminary stage as they test new ideas and take initial steps into the market, according to a new report by the Asian Development Bank (ADB).
These startups can benefit from a supportive ecosystem in terms of finance, mentorship, incubation, and talent development. Like the startups themselves, that ecosystem is also in the early stages of development, according to the report, Uzbekistan’s Ecosystem for Technology Startups, released today.
“The government has launched a broad range of market reforms since 2016, including promoting technological innovation and entrepreneurship,” said Dilshod Zufarov, ADB consultant and co-author of the report. “The reform efforts are continuing, which is important to respond timely to the fast-changing environment.”
Financing remains a constraint. Like in other countries, the founders of startups depend on personal savings and income, as well as support from family and friends. However, external financing is needed for scaling up. Angel investment and venture capital need to be developed further. The government’s creation of the National Venture Fund is promising.
Fintech and e-commerce make up the largest segments of the tech startup landscape in Uzbekistan, as they do in other countries. The report focuses on other segments, which have strong development impacts for the economy. These include healthtech, agritech, edtech, and cleantech (or greentech). Startups in these segments are sparser but growing. Demand for some, such as edtech, expanded due to the COVID-19 pandemic and should remain strong given the increases in educational enrollment at all levels.
The report recommends that the government play a greater role in supporting demand for startup innovation through procurement, and by promoting the adoption of agritech innovations through its extension services in the farm sector.
”There are many innovations being developed by startups in other countries, and some are being imported,” said ADB economist Paul Vandenberg, co-author of the report. “It would be better if Uzbekistan could also develop its own innovations via homegrown startups.”
In addition to government and financiers, universities have an important role to play given their involvement in generating new technology and the opportunities to commercialize. Interaction can extend across national boundaries. A good example is the Innovation Summer Bootcamp held July 16–29 by the CAREC University Innovation Exchange Program (UIEP). This initiative brought together pre-seed startup teams from universities across the Central Asia Regional Economic Cooperation (CAREC) region. Organized by ADB, the CAREC Secretariat, and leading universities—Almaty Management University (Kazakhstan), Westminster International University in Tashkent (Uzbekistan), State University of Economics (Azerbaijan), and Georgian American University (Georgia)—the UIEP facilitated workshops, site visits, pitching sessions, mentoring, and networking events.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.