The Digital Uzbekistan: Difficulties Vincible
“Where there is little innovation, there will be little development and competition,” says President Shavkat Mirziyoyev and creates all the conditions for the innovative development of key areas of social and economic processes.
One of the latest trends in this direction was the adoption of the Presidential Decree on the approval of the Strategy for Innovative Development of Uzbekistan for 2019-2021. A special role in the document is assigned to the promotion of the domestic software development industry by creating a technology park for start-up projects, as well as ensuring full digitalization of the State Cadastre sphere by 2021 and simplifying the procedure for registering property.
How will the document be implemented in practice? We’ve talked about this with Farrukh Juraev, head of department at the Institute for Strategic and Regional Studies (ISRS) under the President of the Republic of Uzbekistan.
- What led to the adoption of this Strategy?
- In 2018, in the framework of the Year of Support for Active Enterprise, Innovative Ideas and Technologies, a number of decrees and resolutions of the President of Uzbekistan were adopted aiming at the development of digital economy. These documents laid the legal foundation for the introduction and development of crypto assets, smart contracts and blockchain. Large-scale measures are being taken to develop the digital sector of the economy, electronic document management systems are being introduced, electronic payments are being developed, and the regulatory framework in the digital economy is being improved. In particular, concept of the development of “Digital Uzbekistan” through to 2030 is being elaborated currently, providing for the further development of this industry.
- It turns out that Uzbekistan is already actively working in this direction, but I would like to know whether the implementation of the Strategy’s provisions has begun and what is the contribution of the analytical framework to this process?
- To develop new proposals for the development of startupecosystems and digital economy, the Institute for Strategic and Regional Studies organized a round table at the International Westminster University in Tashkent entitled “The Role of Digitalization in the Development of Socio-Economic Relations in the World and Uzbekistan”.
The venue was not chosen accidentally. We understand how important the young generation is to be involved in this process. Therefore, along with the leadership and experts of our institute, representatives of the relevant ministries and departments, members of the Young Analytics Club of the Institute of Physical Education and Information, as well as more than 100 students of WIUT, Tashkent State University of Law, Tashkent State Institute of Oriental Studies, the University of World Economy and Diplomacy, among others, took part in the roundtable discussion.
After all, the younger generation has a huge interest in start-up initiatives and projects, and the state, in turn, is ready to support their implementation.
In this regard, Director of ISRS, Vladimir Norov, voiced the urgent need to develop a special state program for the development of a startup ecosystem in Uzbekistan. It will focus on supporting and stimulating start-up projects, attracting investment in the field, and the active participation of young professionals in major international startup forums.
- Do you mean technology conferences held in different countries of the world?
- Yes, for example, in Finland there is a technological conference “Slush”, in Germany they have “TechCrunch Disrupt”, in India it is “UnPluggd 2018 Tech & Startup Conference”. Every year from 15 to 60 thousand representatives from different countries of the world participate in each of these forums.
The purpose of their participation is the exchange of ideas and experience in the field of start-up projects, the search for investors and large companies, the signing of agreements on the implementation of business plans in the field of innovation, the digital economy and startups.
- To be sure, this sounds very affirming, but the way to signing agreements is probably full of difficulties, because this is a completely new direction in the development of our country?
- Of course, there is no difficulty. This was discussed in the speeches of the management of the International Westminster University in Tashkent and the Inha University in Tashkent, experts from the Ground Zero Chilanzar co-working center, as well as members of the Club of Young Analysts of the ISRS.
But I am glad that serious work is being done to overcome these difficulties. The head of the coworking center “GroundZero” Chilanzar Anastasia Danilova said that “start-up startups, especially young people, face various difficulties in creating start-ups. To help them solve many issues, our center has created a school for startups that will support projects from the moment the idea was conceived until the product entered the market. The activity of the school, which has recently begun to function, will be directed to specialists in the field of IT technologies. ”
- Considering the extremely active involvement of individuals and corporate entities in the digital space, the digitization of socioeconomic relations is now in focus. Whose experience in this field is useful to our country?
- According to the participants of the round table, conceptual documents are adopted in foreign countries for the development of the digital economy, large Internet companies are being created (for example, Alibaba in China, Amazon in the USA, among others), ministries are being created (in the UK – the Ministry of Digital Technologies, Culture, Media and Sports, in Russia – the Ministry of Digital Development, Communications and Mass Communications, in Thailand – the Ministry of Digital Economy and Society) and major international forums are held in order to attract investment.
It was about global trends in the development of a startup ecosystem. According to experts, according to experts, in 2017, the capital investments of global enterprises in startups reached $ 140 billion. From 2015 to 2017, the total cost of creating a global start-up economy reached $ 2.3 trillion.
In the US, a startup ecosystem is being developed through the creation of venture capital funds and business accelerators. The largest of them are “Y Combinator” (accelerator for small companies offers conditions for participation – 7% share in the company in exchange for investments of 120 thousand dollars), “500 Startups” offers conditions – 6% in the company in exchange for investments of 150 thousand dollars), “Plug and Play” participation is free, the accelerator does not take a percentage of the company and invests only in the companies you like), etc.
Particularly high rates of startup ecosystems are developing in China, which is the world leader in terms of venture capital – in the first ten months of 2018 it amounted to 94 billion dollars, in the rest of the world – 54 billion (almost half as much as in China). During the same period, startups from China received 47% of all venture capital investments, startups in the USA and Canada secured 35%.
- Well, China’s positive experience is perhaps of particular significance for Uzbekistan, isn’t it?
- Yes, sure, but not only for Uzbekistan, but also for other countries, primarily China’s partners in the SCO. Taking into account the advanced foreign experience, the participants of the round table proposed to develop relevant legal acts regulating the creation of venture funds and business accelerators, as well as publishing scientific and educational literature on the startup ecosystem.
Following the results of the round table, the participants developed a number of proposals, as well as a plan of practical measures for the further development of start-up ecosystems in Uzbekistan with the participation of young specialists of universities and youth organizations of Uzbekistan together with youth organizations of foreign countries, primarily the SCO member states.
Thus, today we can state that the processes of innovative development of Uzbekistan have reached a new level, with new ideas and initiatives. The measures taken with the active participation of young professionals, especially students, will contribute to strengthening the scientific potential and effectiveness of research and development, attracting foreign investment in promising start-up projects, as well as integrating domestic start-up initiatives into international economic projects.
The specificity of the Chinese venture capital market is that the major investors are technology companies (Tencent, Alibaba, Baidu and the like). In 2018, startups from China are expected to attract more than 80-100 billion dollars of investment.