The Economy and Technology Sector of Modern Uzbekistan

1. Summary

The Republic of Uzbekistan has undergone a profound economic transformation since 2016, transitioning from a state-controlled, resource-dependent economy to one of the fastest-growing in Europe and Central Asia. Real GDP growth reached 6.5 percent in 2024, with the World Bank projecting 5.9 percent for 2026, far outpacing the regional average of 2.4 percent [1][2][3]. This growth has been driven by comprehensive reforms including currency liberalization, tax simplification, privatization, and a strategic pivot toward services and industrial sectors. The services sector, in particular, has emerged as a key engine for job creation and export diversification [4].

The technology sector represents the most dynamic component of this transformation. IT services and software exports have grown from approximately $170 million five years ago to $620 million in 2024, with the government targeting $5 billion by 2030 [5][6]. IT Park Uzbekistan, the central institutional vehicle for sector development, has grown to over 2,400 resident companies as of late 2024, with a target of 3,000 by end-2025 [7]. The sector has attracted significant international attention, with Uzum emerging as Central Asia's first venture-backed unicorn, valued at $1.5–$2.3 billion [8].

Uzbekistan's strategic ambitions are codified in the "Digital Uzbekistan – 2030" Strategy and the AI Development Strategy through 2030 (Presidential Decree No. PQ-358, October 2024) [9]. Key targets include $5 billion in IT exports, 300,000 IT sector jobs, 5,000 startups, $2 billion in venture investment, and inclusion among the top 50 countries in the Government AI Readiness Index [6][10]. The country has positioned itself as a regional technology hub, leveraging its strategic location along the Middle Corridor trade route, a young and increasingly educated population, and a favorable regulatory regime that includes zero corporate income tax for IT Park residents through 2040 [11][12].

The primary risks to this trajectory include external headwinds from a slowing Russian economy, the continued dominance of state-owned enterprises, infrastructure modernization needs, and a shortage of qualified technical talent relative to ambitious targets [13][14]. However, the available evidence suggests that Uzbekistan's technology sector is on a credible growth path, supported by deliberate government policy, increasing foreign direct investment, and a maturing startup ecosystem.

2. Contextual and Scientific Background

2.1 Historical Economic Context

Uzbekistan's post-independence economic trajectory was characterized by a gradualist, state-led development model under President Islam Karimov (1991–2016). The economy remained heavily dependent on cotton, gold, and natural gas exports, with limited private sector development and extensive state control over strategic industries. This model delivered moderate growth but failed to generate sufficient employment for a rapidly growing population or to integrate the economy into global value chains.

The reform era initiated following the accession of President Shavkat Mirziyoyev in 2016 marked a decisive break with this model. The government embarked on a comprehensive liberalisation programme including the unification and floating of the exchange rate in 2017, simplification of tax and customs procedures, partial privatisation of state-owned enterprises, and the easing of foreign exchange controls [15]. These reforms have lifted average GDP growth to 5–6 percent annually and reduced poverty to 8.9 percent, with a stated goal of 6 percent [15].

2.2 Scientific and Technological Foundations

The technological transformation of Uzbekistan rests on several foundational elements. First, the country possesses a relatively well-developed telecommunications infrastructure, with mobile broadband covering 99 percent of settlements and 5G networks operational in all regional centers as of 2024 [16][17]. International bandwidth reached 4,200 Gbps by end-2025, supporting higher connectivity demands [16].

Second, Uzbekistan has a young population with high rates of digital adoption. Internet penetration reached 93.3 percent of households in 2024, with mobile subscriptions at 36.3 million as of early 2025, representing 81.1 mobile lines per 100 people [18]. This demographic dividend provides a substantial base for digital service adoption and IT talent development.

Third, the government has established a coherent institutional framework for technology development, anchored by the Ministry of Digital Technologies (established in 2019), IT Park Uzbekistan (2019), and a series of presidential decrees that provide long-term policy certainty for investors and entrepreneurs [12][19].

3. Key Players or Stakeholders

3.1 Government Institutions

The Ministry of Digital Technologies serves as the primary policy-making and coordinating body for the technology sector. The Ministry oversees the implementation of the "Digital Uzbekistan – 2030" Strategy, manages the "One Million Uzbek Coders" program, and coordinates international partnerships in digital education and technology development [19][20].

IT Park Uzbekistan is the central institutional vehicle for sector development. Operating as a government-backed national hub, IT Park supports over 2,400 member companies (targeting 3,000 by end-2025) exporting to more than 90 countries, with a global office network and a $30 million venture fund focused on AI/ML, Fintech, EdTech, GreenTech, and Game Development [7][21]. The CEO, Abdulakhad Kuchkarov, has been instrumental in positioning Uzbekistan as an emerging IT hub [22].

The Central Bank of Uzbekistan has expanded its mandate to encompass fintech development, overseeing the implementation of a comprehensive fintech development strategy for 2025–2030 [23]. The Central Bank is responsible for the national instant payment system and the forthcoming digital regulatory sandbox [23].

3.2 Corporate Actors

Uztelecom, the state-owned telecommunications operator, holds an 83 percent share of the fixed internet market and plays a leading role in nationwide infrastructure projects, including 5G deployment [18][24]. The company has signed contracts with Huawei and ZTE (SZSE:000063) valued at $506.8 million for telecommunications infrastructure expansion [25].

Uzum is Central Asia's first venture-backed unicorn. Launched in 2022, the Tashkent-born fintech and e-commerce holding was valued at $1.5 billion following a $70 million funding round from Tencent (HKEX:0700) and VR Capital in August 2025, with valuation reaching $2.3 billion by early 2026 [8]. In the first half of 2025 alone, Uzum recorded $250 million in gross merchandise value, up nearly 1.5 times year-over-year [8].

Ucell, a mobile operator, has launched a standalone 5G network using Nexign's 5GC core, marking a significant step forward in 5G deployment [24].

3.3 International Partners

The World Bank and International Monetary Fund have provided extensive policy support and financing. The World Bank's Board approved a $250 million financing package in 2025 for municipal infrastructure improvements [26]. The EBRD has invested over €2 billion across 90 projects in Uzbekistan [15].

NVIDIA (NASDAQ:NVDA) has emerged as a key technology partner, with the government planning to procure two AI clusters with a total capacity of 1 MW and establish an AI educational center [27]. Coursera has partnered with Uzbekistan to translate 3,000 courses into Uzbek, significantly expanding access to international-quality IT education [20].

3.4 Venture Capital and Investment Ecosystem

The venture capital ecosystem has expanded rapidly, with 22 venture funds now operating with over $200 million in combined capital [21]. Seven new venture players entered the Uzbekistan market in 2025, including Yoshlar Ventures, X-Togo, United Ventures, SQB Ventures, Imkon Ventures, Sarmo Ventures, and Asaka Pharm Ventures [28]. Local investors account for 85 percent of venture capital, while international investments are primarily made through established foreign funds [28].

Plug and Play has operated its largest CIS office in Tashkent for three consecutive years, and DOMiNO Ventures opened Central Asia's first international private VC office in 2025 [21].

4. Technical or Operational Considerations

4.1 Connectivity Infrastructure

Uzbekistan's telecommunications infrastructure has undergone substantial modernization. The value of the telecom sector doubled from UZS 10.2 trillion to UZS 20.9 trillion between 2020 and 2024 [18]. Mobile broadband now covers 99 percent of settlements, and 5G networks operate in all regional centres [16]. Uzbekistan was the first CIS country to provide 5G coverage to all regional centres [16].

International bandwidth reached 4,200 Gbps by end-2025, supporting higher connectivity demands and digital growth [16]. The government aims for 100 percent broadband and fibre-optic coverage, full mobile coverage of national highways, and 5G availability in Tashkent, Karakalpakstan and all regional centers by 2030 [18].

The China Export-Import Bank provided a $500 million loan in June 2025 for telecommunications modernization, with implementation involving Huawei and ZTE [25]. These investments are expected to increase population coverage with communication services and improve service quality.

4.2 Data Centre Capacity and Cloud Infrastructure

Data center capacity remains a constraint on digital transformation, though the government has begun addressing this through the AI infrastructure program. The October 2024 AI Strategy allocates $50 million for infrastructure development, including high-capacity computing servers [9][29]. Comprehensive data on total data centre capacity and cloud service penetration is not publicly available, suggesting this remains an area requiring further development.

4.3 Cybersecurity

The regulatory framework for cybersecurity is still evolving. The AI Strategy identifies the establishment of a regulatory framework and standards as a priority [29]. The government has harmonized 68 regulatory acts with WTO requirements and international standards during 2025, which includes data protection and cybersecurity provisions [30]. However, independent assessments of Uzbekistan's cybersecurity posture are limited, and the country's cybersecurity capacity likely lags behind more developed digital economies.

4.4 Talent Availability

The shortage of qualified IT personnel is a significant operational constraint. While the "One Million Uzbek Coders" program has made substantial progress, with over one million learners completing IT courses and obtaining certifications; over 20,000 graduates have entered IT professions [31]. The Ministry of Digital Technologies attracted more than $35 million in grant funding from over ten foreign states and international organizations to support IT education development [20].

The sector faces a shortage of qualified personnel in fintech specifically, with limited access to global payment services such as Google Pay and Apple Pay cited as a constraint [14]. The government's target of creating 300,000 IT jobs by 2030 implies a substantial acceleration in talent development [10].

5. Economic and Market Dynamics

5.1 Macroeconomic Context

Uzbekistan's economy has demonstrated robust growth since 2016. Real GDP reached approximately $105 billion in 2024, with growth of 6.5 percent, and the World Bank projects 5.8–6.2 percent for 2025 and 5.9 percent for 2026 [1][2][3]. This places Uzbekistan among the fastest-growing economies in Europe and Central Asia, significantly outpacing the regional average of 2.4 percent [15].

Growth has been fueled by rising remittances, which jumped 27 percent year-on-year in H1 2025 to $8.2 billion, and record foreign direct investment of approximately $10 billion in 2024 [15]. The services sector, including IT and financial services, has been a key driver of growth and job creation [4].

Fiscal consolidation is continuing via energy price reforms and reduced state-owned enterprise financing [26]. The World Bank and IMF assess Uzbekistan's risk of external debt distress as low, with debt carrying capacity strong. Public and publicly guaranteed external debt is projected to decline from 30 percent of GDP in 2024 [32].

5.2 IT Sector Performance

The information and communication technology sector has been the standout performer in Uzbekistan's economic transformation. ICT services exports reached $619 million in 2024, representing a 40 percent increase year-over-year [5]. This compares to approximately $170 million in exports five years prior, implying a compound annual growth rate exceeding 30 percent.

In the first quarter of 2025, exports to the EU and the UK alone reached $31.4 million, compared to $91.6 million for the entire year of 2024, indicating continued strong growth momentum [33]. The United States remains a primary export destination, with 353 ITeS companies focused on the U.S. market, employing 10,343 specialists. First-quarter 2025 export volumes to the U.S. reached $68.8 million [22].

IT Park resident companies numbered 2,400 at the end of Q3 2024, with total revenue from software products and services expected to reach 20 trillion soums by year-end. The government targets 3,000 residents by end-2025, including at least 250 export-oriented companies and 50 with foreign capital [7].

5.3 Venture Capital and Startup Ecosystem

The startup ecosystem has experienced explosive growth. Uzbek startups raised over $308 million in 2025, up 344 percent year-on-year, bringing total ecosystem value to $4.3 billion by Q1 2026 [21]. The venture market reached $99.3 million in 2025, including Uzum's mega-round of $65.5 million. Excluding this deal, the figure was $33.8 million; 11.3 times higher than in 2022, when the market was estimated at $3 million [28].

E-commerce and marketplaces dominate capital raised, accounting for 40 percent, followed by fintech (13 percent) and enterprise software (12 percent). Enterprise software leads in deal volume (24 percent), indicating strong early-stage activity in the B2B sector [28].

The investment environment primarily focuses on early-stage funding, with 83 percent of deals up to $200,000 [28]. This concentration at the Pre-seed and Seed stages suggests the ecosystem is still in its formative phase, with limited later-stage capital availability.

5.4 Fintech Sector

The fintech sector has expanded from 24 companies in 2018 to 103 in 2025, a 4.3-fold increase [14]. Payment services hold the largest market share (53.8 percent), followed by accounting (12.5 percent), installment-based trade (11.5 percent), and cryptocurrency services (7.7 percent) [14]. Key players include 44 payment providers such as Humo and Uzcard, three digital banks, and two microfinance organizations [14].

Digital payments via mobile apps nearly tripled over three years, from 114 trillion soums in 2022 to 346 trillion soums in 2024 [14]. Uzbekistan accounts for 22 percent of all digital payments in the region, equivalent to $6.3 billion [14].

The national payment systems Uzcard and Humo have reported strong growth, with Humo's profits jumping 87.7 percent in the first nine months of 2025 to 224 billion soums ($18.7 million) [34]. These domestic schemes cover approximately 90 percent of the market [34].

6. Regulatory Landscape

6.1 IT Park Incentive Regime

IT Park Uzbekistan residents enjoy a comprehensive package of tax and customs incentives. Member companies are exempt from corporate income tax, VAT, social tax, and turnover tax through 2028, and from 2028 through 2040 these exemptions (except VAT) are extended for qualifying residents [12][35]. For export-oriented members, the dividend tax rate for foreign founders remains at 5 percent until January 1, 2040 [12][35].

These incentives are among the most generous in the region and provide long-term policy certainty for investors. The extension of benefits through 2040 signals the government's commitment to sustaining the sector's growth trajectory.

6.2 Digital Startups Program

The Digital Startups Program, capitalised at $50 million, offers co-investment matching, accelerator reimbursements, and access to a regulatory sandbox [21]. The program is designed to stimulate early-stage startup formation and reduce the risk for early-stage investors.

6.3 Enterprise Uzbekistan Special Legal Regime

Established by presidential decree in 2025, Enterprise Uzbekistan adds a special legal regime and independent commercial court designed for global technology firms [21]. This regime aims to provide international investors with greater legal certainty and dispute resolution mechanisms aligned with international standards.

6.4 Fintech Regulatory Framework

The Central Bank has developed a phased fintech development strategy for 2025–2030. A digital regulatory sandbox for testing fintech solutions is scheduled for introduction in Q1 2026, followed by hackathons, incubation and acceleration program, and a fully operational innovation hub by Q3 2026 [23]. The strategy envisions more than 20 fintech hackathons, testing of over 100 ideas, engagement of more than 500 students, and incubation of over 100 startups over five years [23].

However, the sector faces legislative barriers concerning personal data processing and limited API integration capabilities [14]. The Central Bank plans to empower fintech companies to offer selected banking services and support the development of Islamic finance [36].

6.5 Data Protection and Intellectual Property

The regulatory framework for data protection and intellectual property is still developing. The government has harmonized 68 regulatory acts with WTO requirements and international standards during 2025, which includes provisions on data protection [30]. The AI Strategy identifies the establishment of a regulatory framework and standards for AI as a priority, including international cooperation [29].

7. Geopolitical or Strategic Dimensions

7.1 Regional Technology Hub Ambitions

Uzbekistan has positioned itself as a regional technology hub in Central Asia, leveraging its central location, large population, and improving business environment. The Tashkent ecosystem is described by Startup Genome as "Central Asia's definitive startup capital," with government policy described as "deliberate and layered" [21].

The country's ambition to become a regional IT hub is supported by its strategic location along the Middle Corridor (Trans-Caspian International Transport Route), which connects China, Central Asia, and the Middle East with Europe. Between 2021 and 2025, the Middle Corridor's share in Uzbekistan's international freight transport rose from 12 percent to 28 percent [37]. Uzbekistan is seeking to position itself as the "digital command center" of the Middle Corridor, leveraging digital technologies to enhance trade facilitation and logistics [37].

7.2 Great-Power Relationships

Uzbekistan maintains a multi-vector foreign policy that balances relationships with major powers. The United States remains a primary export destination for IT services, with 353 ITeS companies focused on the U.S. market [22]. Major American companies including Boeing (NYSE:BA), Visa (NYSE:V), SpaceX (NASDAQ:SPCX), Morgan Stanley (NYSE:MS), HP (NYSE:HPQ), and GE Healthcare (NASDAQ:GEHC) have engaged with Uzbekistan through investment forums [22].

China has provided substantial infrastructure financing, including a $500 million loan for telecommunications modernization [25]. Chinese corporations Huawei and ZTE have signed contracts worth $506.8 million for telecommunications infrastructure projects [25]. Uzbekistan's relationship with China is characterized by infrastructure investment and technology cooperation, though it maintains strategic autonomy.

The European Union has emerged as a significant partner, with the EBRD investing over €2 billion across 90 projects [15]. IT Park has signed a memorandum of understanding with the Slovak Investment and Trade Development Agency, and European companies are increasingly engaging with Uzbekistan's IT sector [22].

Relations with Russia remain important, though the Russian economy's slowdown poses external risks. Remittances from Russia, while still substantial, are vulnerable to economic conditions in Russia [13].

7.3 WTO Accession

Uzbekistan is pursuing accession to the World Trade Organization, with the target of full membership by 2026 [30]. The government has harmonized 68 regulatory acts with WTO requirements and international standards during 2025 [30]. Uzbekistan has reached agreements with more than 30 countries, including the United States and India, on reciprocal tariff concessions [30].

WTO accession would require further liberalization of trade and investment regimes, potentially enhancing Uzbekistan's attractiveness as an investment destination and integrating its economy more deeply into global value chains. The completion of remaining bilateral negotiations with two countries (Chinese Taipei and Kazakhstan) is scheduled for end-2026 [30].

8. Structured Risk Matrix

9. Strategic Recommendations

9.1 Recommendations for Technology Investors

Priorities early-stage investment in B2B enterprise software and fintech. The enterprise software segment leads in deal volume (24 percent), indicating strong early-stage activity, while fintech accounts for 13 percent of capital raised [28]. The concentration of 83 percent of deals at under $200,000 suggests significant opportunity for investors willing to provide larger early-stage cheques [28].

Leverage the IT Park incentive regime. The zero corporate income tax, VAT exemption, and customs duty waivers through 2040 provide a compelling cost advantage for establishing development centers or regional headquarters in Uzbekistan [12][35]. The 5 percent dividend tax rate for foreign founders of export-oriented members is particularly attractive [12][35].

Monitor the regulatory sandbox development. The fintech regulatory sandbox provides a controlled environment for testing innovative financial products [23]. Early participation in the sandbox could provide first-mover advantages in Uzbekistan's rapidly growing digital payments market, which is projected to reach $259.6 billion by 2030 [34].

Assess talent availability carefully. While the "One Million Uzbek Coders" program has trained over one million learners, only over 20,000 have entered IT professions [31]. Investors should conduct thorough due diligence on talent pipelines and consider investing in training program to build the workforce they require.

9.2 Recommendations for Corporate Strategists and Operational Decision-Makers

Establish Uzbekistan as a regional delivery hub. The combination of favorable tax treatment, improving connectivity, competitive labor costs, and government support makes Uzbekistan an attractive location for nearshoring IT services to serve European, Middle Eastern, and Central Asian markets. The country's position as the "digital command centre" of the Middle Corridor offers additional logistics and trade facilitation opportunities [37].

Engage with IT Park and the Ministry of Digital Technologies proactively. The government has demonstrated a strong commitment to the technology sector and is responsive to investor needs. The IT Park's global office network and the Ministry's international partnerships provide channels for collaboration [22][19].

Plan for WTO accession. Uzbekistan's expected WTO accession in 2026 will align regulations with international standards and potentially open new market access opportunities [30]. Corporate strategists should monitor the accession timeline and prepare for the associated regulatory changes.

Diversify technology partnerships. Uzbekistan's multi-vector foreign policy provides access to technology from the United States, China, the European Union, and other sources [22][25]. Corporate strategists should consider how to leverage this diversity to build resilient supply chains.

Invest in talent development. The shortage of qualified IT personnel is the most significant operational constraint [14]. Companies should consider partnering with local educational institutions, participating in the "One Million Uzbek Coders" program, and leveraging the Coursera partnership to build the talent they require [20].

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