“Growth in the crisis": Why 2022 was the best year for IT Uzbekistan
While a geopolitical crisis was unfolding in the world, Uzbekistan was experiencing an IT boom.
The foundation was laid a few years ago, but in 2022 Uzbekistan became one step closer to the title as the Central Asian hub.
Speaking more precisely, at the beginning of the year, the goal was to bring IT services export to $100 million, but the results turned out to be even better making up $140 million.
The number of IT exporters surged as well. In 2021, 104 exporters were functioning and this figure was planned to double in a year. But turned out that the results tripled.
The United States well known for its top quality standards became the main export market accounting for 81% of the total.
Similarly, the number of both local and overseas IT companies has increased in 2022, so has the startups, investors, educational and other initiatives.
One might ask quite logical questions: “What is the reason for such a rapid growth?”, “Why now?” Well, the answers are obvious.
“Crisis is a time for opportunity”
Back in 2019, IT Park, an extraterritorial free economic zone for IT companies was established in Uzbekistan.
Just as a pear begins to bear fruit in its fourth year, IT Park’s extensive work started giving results.
The geopolitical crisis that unfolded in the world not only did not slow down this process, but, on the contrary, accelerated the development.
For instance, in the spring of 2022, IT Park launched TashRush, a program for relocating IT professionals to Uzbekistan.
The initiative had been in the works for several months, but its active phase coincided with the beginning of the Russian-Ukrainian conflict, which caused many Russian IT professionals decided to relocate.
TashRush is not just a welcome program, but a whole range of free services for those who are looking for a new home.
The initiative made it possible for 3 000 foreign IT professionals to move to Uzbekistan, that brought new knowledge, companies, teams, and investments.
In many ways, due to this, the total number of IT companies with foreign capital in Uzbekistan increased by 89.8%.
Considering the trade companies figures that come 2nd in rank, increased by only 27.4%, the 89.8% is an impressive result.
In parallel with TashRush, IT Park launched IT Visa, which gives the right no-hassle entry and exit to the territory of Uzbekistan for up to three years.
At the end of 2022, 229 visa recommendations were issued. By the way, among the applicants were not only developers, but also managers and investors.
Furthermore, the “Virtual Office” service that has appeared allows working remotely without falling into the category of companies with a high tax risk.
Over 100 companies had an opportunity to use OneStopShop turnkey registration service. By the end of 2022, the number of IT Park resident companies exceeded 1 000 for the first time.
151 of them are engaged in business process outsourcing (BPO). But that’s a room for another topic.
BPO – a potential new cotton of Uzbekistan
Several countries have tried to become an IT nation. However, only those who have realized that blindly copying Silicon Valley can hardly be the key to success have achieved success.
These ones developed all areas while attempting to concentrate on a single area that would give them a competitive edge.
So, for instance, Israel today is known for its medtech startups, India for coders, Belarus for game developers, Russia for fintech products.
In Uzbekistan’s case, this pillar has evolved into BPO.
The service, which can become the “new cotton”, has already brought in $65.1 million last year. This, by the way, makes almost half of all IT exports.
Here are some more numbers to look at: in 2022, 17 BPO centers were established in Uzbekistan employing over 450 people.
Since developing BPO is justified, IT Park is now working on the Uzbekistan Digital Inclusion project jointly with the World Bank.
These measures are expected to present Uzbekistan to the world as a new outsourcing location.
An ambitious task, to achieve which IT Park continues to expand IT education. And here, in 2022, a historic event took place.
First Online University and IT4Women
With the beginning of reforms in Uzbekistan, the number of universities has increased drastically, adding up the premier online university last year.
IT Park University so to speak. A higher educational establishment initiated jointly with EPAM, one of the world’s leading custom software developers, a member of the S&P 500.
In 2022, the University admitted 399 students, 84% enrolled for a bachelor's degree. The remaining 16% decided to start by learning the basics.
In 2023, IT Park University plans to launch an international internship program by sending the first group of the best students to Lithuania, Latvia and Poland.
Developing IT education, Uzbekistan faced gender imbalance, an issue that many states are familiar with.
IT Park launched several initiatives in 2022 in order to tackle the issue:
● IT Women - Karakalpakstan: A joint educational training program with USAID for females in Karakalpakstan that initiated free training in graphic design and SMM for 60 women and girls.
● Skills4Girls: A joint IT training project with UNICEF for girls aged 12 to 18, including girls with various disabilities. The program trained 214 participants, including 70 girls with disabilities.
● GAP: A club for women that is growing into a communication platform for women where members can exchange opinion, build network and find like-minded people to collaborate with.
● Digital Internship Program: an internship for female IT graduates and entry-level young professionals. As part of the program, 23 women got employed.
It is expected that these and other programs will allow involving more female representatives to IT, eliminating the stereotype about the notion that IT is a male profession.
“Success comes to those who try”
A lot has been accomplished in 2022, but there are even more challenges ahead in 2023. IT Park’s plans for next year are as follows:
● increase the volume of exports of residents to $300 million;
● organize training for 1.2 million people on the Coursera platform;
● introduce a program to stimulate educational institutions;
● and more.
One of the most important changes will be the expansion of residents’ activities.
For instance, the demand for graphic, web, 3D and motion design professionals is growing in the market, so the creative industry will appear on the list for development.
Since Uzbekistan is aspiring to become a regional hub, the state puts a priority to create a Financial Technology Center for overseas companies.
Furthermore, this year, for the first time, the President Tech Award startup contest with $1 000 000 total prize fund will take place. These initiatives are the priorities to be implemented for the next 10 months.
In 2022, Uzbekistan made a breakthrough in such uncertain circumstances.
2023 will be the year where the state has to prove that this was not just a lucky coincidence and that task is even more challenging.
Author: Timurmalik Elmuradov
Information about the article’s author:
Timurmalik Elmuradov — analyst, R&D specialist, Msc of the Research University Higher School of Economics.
Author of "Skartaris Peak (https://t.me/skartariss)" - the leading Telegram channel about business, market and technology in Uzbekistan.
He was responsible for development at the “Univer Club Family” group of companies (Russia), online publication Daryo.uz. Co-founder and former CEO of Spot.uz.
2023-03-06