Technology
Brief market overview. Technology sector is one of the first priorities for the Uzbekistan government strategy. The Ministry of the Development of Information Technologies and Communications was created by presidential decree in 2015. According to our estimation, for the last five years, the country had invested $7.125 bn in the technology sector to improve overall infrastructure. The market size at the end of 2016, is estimated at $2.75bn. Nearly 54% of the market is supplied with domestic products and services. Country’s IT market in 2017, grew by 6.9% mainly due to its internal economic growth.
Infrastructure. Uzbekistan has a solid infrastructure in terms of fiber optic networks. By 2021, the government is aiming to lay more than 277 thousand km communication lines. As of 2017, the overall speed of using international information networks reached 65.7 Gbit/s, which is more than double than the previous year. Over the last few years, the government had started initiatives to offer local data center services, which hosts locally generated contents and e-learning platform. The country is a leader in the CIS region, for its car manufacturing, chemical plants, agriculture and aircraft maintenance.
Government Initiatives. ICT sector has special importance within the government strategy and ICT State Program has four major components covering: 1. Telecommunication and Internet, 2. IT-Software, 3. E-Government, 4. Television, where each of it has with sub-master plans and planned budgets and stakeholders with varying implementation timeframe till 2020. The legal environment is being formalized as the sector moves forward and 12 laws are in place regulating government’s electronic services, digitalization of documents, electronic signature and protecting information in the banking system.
Internet Penetration. As of 2016, there are 2.7 million broadband internet subscribers and internet penetration is 46.8%.
E-Government. Leveraging its infrastructure, the government started modernizing public services. The E-Government Program consists of 12 subsystems and with more than 50% implementation as of today. Within the automation of public services, there are registration, tax, licensing, healthcare, education and justice services. National data centers to support these systems are with more than 60% of implementation. We do see that one of the main importance of E-Government system is to act as a catalyzer through a fast-paced change that country is experiencing today. With the implementation of E-government, it will enable citizens and private businesses an environment where state services are delivered within less time with more efficiency. South Korea is one of the primary partners to achieve this system.
Technology and OBOR. Uzbekistan is the heart of ancient Silk Road and we could witness it from its rich historical sites and multi-ethnicity in the country. The Silk Road was the main passage for trade, pass of knowledge, technology and innovation of that time. We do believe that One Belt and One Road initiative (modern Silk Road), will not only transport products but will bring opportunity for regional collaboration of private sectors and ease for technology transfer.
Potential Growth. We do expect at least two-fold potential growth in the tech industry as the country needs digitization within the public and private services. Especially in Public Services Automatization, Anything as a Service, Private Sector ERPs and Systems Integration. If we relate this to the consumer market and private sector performance, this sector holds exciting potential for unprecedented growth.
On the other hand, agricultural sector holds enormous potential for modernization and needs R&D and innovation. The disrupting technologies are yet to come to the domestic market, as it is preparing its ecosystem for it.