A recent report by the Asian Development Bank (ADB) has highlighted the notable growth of technology-based startups in Uzbekistan in recent years. However, the majority of these startups are still in their early stages, exploring new concepts and taking initial steps into the market.
The report emphasizes that these startups could benefit from a supportive ecosystem encompassing aspects such as financing, mentorship, incubation, and talent development. Much like the startups themselves, this ecosystem is also in its nascent phase of development. The report, titled "Uzbekistan’s Ecosystem for Technology Startups," was released on August 25.
Dilshod Zufarov, an ADB consultant and co-author of the report, stated that the government has initiated comprehensive market reforms since 2016, which include fostering technological innovation and entrepreneurship. These reform efforts are ongoing and aimed at adapting swiftly to the rapidly changing environment.
However, one of the challenges these startups face is financing. Similar to many other countries, startup founders in Uzbekistan primarily rely on personal savings, income, and support from family and friends. Yet, external financing is crucial for their scaling up. The report points to the promising development of angel investment and venture capital, further boosted by the establishment of the National Venture Fund by the government.
Fintech and e-commerce constitute the dominant segments within Uzbekistan's tech startup landscape, mirroring trends in other nations. The report specifically delves into other segments with significant developmental impacts on the economy, including healthtech, agritech, edtech, and cleantech (also known as greentech). Although startups in these segments are fewer, they are growing. For instance, the demand for edtech solutions expanded due to the COVID-19 pandemic, and the trend is likely to persist given the surge in educational enrollment across levels.
To foster innovation and startup demand, the report suggests that the government can play a more active role in promoting adoption through procurement, particularly in sectors like agritech. Additionally, universities have a pivotal role to play as generators of new technology and avenues for commercialization. Collaboration can extend beyond borders, exemplified by initiatives like the Innovation Summer Bootcamp organized by the CAREC University Innovation Exchange Program.
Paul Vandenberg, an ADB economist and co-author of the report, emphasized the importance of nurturing domestic innovations through homegrown startups, rather than solely relying on imported innovations.
The report underscores the role ADB plays in pursuing prosperity, inclusivity, resilience, and sustainability in Asia and the Pacific, all while striving to eradicate extreme poverty. Established in 1966, ADB is owned by 68 members, with 49 hailing from the region.
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