During ICT Week Uzbekistan held in October 2023, Farhod Ibragimov, the head of IT Park, delivered a presentation titled ‘Empowering Excellence of Outsourcing: Unveiling initiatives and opportunities in Uzbekistan.’
The IT Park chief commenced his presentation by emphasizing the substantial potential inherent in the country. Uzbekistan, with a population of 36 million, represents roughly half of Central Asia’s total population. Of this, 20 million people are of working age, and a significant 60% of the population is under 30. The nation boasts 99% internet coverage, robust global connections with direct flights to 22 destinations, and visa-free arrangements with 86 countries.
Education a key focus
Education takes center stage in Uzbekistan, with near-universal literacy, over 650,000 school graduates annually, and more than 125,000 university graduates each year. There are approximately 210 universities, including 65 dedicated to IT education. Major cities have a widespread use of English, with a total of about 5 million English speakers nationwide. Furthermore, the country has over a million Turkish speakers, half a million German speakers, and reasonably widespread usage of Korean, Chinese, and Arabic.
Looking towards the future, IT Park has laid a strong foundation. Currently, there are 14 regional IT Park branches covering 6.3 hectares. The One Million Uzbek Coders program saw 1.2 million graduates in its first stage (2019-2022), and the second stage in 2023 had 293,000 participants.
IT Park taking off
The number of IT Park resident companies has quadrupled between 2019 and 2023, surpassing 1,500 companies. Similarly, companies with foreign capital have increased sixteen-fold during the same period, reaching 250 companies in 2023. The volume of exports by IT Park residents surged 48 times to approximately $300 million in 2023. Of these, 87% were IT-enabled services, with 22% dedicated to business process outsourcing (BPO), and the remaining 13% attributed to IT products. The workforce employed by IT Park companies grew five-fold to around 26,000 professionals.
This remarkable growth is fueled by attractive incentives for resident companies, such as 0% VAT, corporate, social, and property tax, and a reduced personal income tax rate of 7.5%. Participants in IT Park’s “Zero Risk” program enjoy benefits like free office space in regions for up to a year, coverage of up to 15% of employee salaries, reimbursement of HR expenses, free technical equipment for up to 100 employees, and grants up to $5,000 for staff training. IT Park serves as a comprehensive platform, facilitating legal entity registration, supporting bank account opening, and handling tax authority registration. The relocation support includes no work permit requirements, IT Visas for investors, programmers, and founders valid for up to three years. Lastly, soft-landing services from IT Park assist in selecting office space and housing, as well as allocating places in schools and pre-schools.
Vision 2030
IT Park’s vision for 2023-2030 revolves around elevating IT exports to a $5 billion industry by the end of the decade. The strategy focuses on nurturing local companies for global expansion and attracting foreign companies to Uzbekistan. By 2030, Ibragimov envisions over a million square meters of infrastructure, more than 10,000 companies, and hosting at least 300,000 IT professionals.
A new strategic approach, initiated in 2023, centers on two programs: Zero Risk and Local 2 Global. The Zero Risk program offers free office space for the first year outside Tashkent, covers up to 15% of salary payments for up to 100 employees, provides $500 in HR expenses reimbursement, and offers free technical equipment and training grants. The Local 2 Global program includes free Coursera courses for certain users, sponsored travel to Uzbekistan for clients, coverage of export consultancy services, provision of an export mentoring program, and compensation for overseas business trips. Specific criteria must be met for participation in each program.
In Conclusion
In conclusion, Uzbekistan, as highlighted during the ICT Week, stands at the cusp of a transformative journey in the field of information technology, led by the initiatives of IT Park and the Ministry of Digital Innovations. The nation’s strategic focus on education, coupled with a burgeoning young population and robust connectivity, sets the stage for substantial growth. IT Park’s achievements in fostering a conducive environment for IT development, marked by a surge in resident companies, exponential export growth, and an expanding workforce, underscore the success of their incentive-driven model. The “Zero Risk” and “Local 2 Global” programs further exemplify their commitment to nurturing local talent and attracting global partnerships. Looking ahead to 2030, IT Park’s vision outlines a formidable trajectory, aiming to position Uzbekistan as a major player in the global IT industry. The nation’s commitment to innovation, coupled with the attractive incentives offered by IT Park, paints a promising picture for the future of Uzbekistan’s IT landscape, solidifying its emergence as a key destination for technological excellence and collaboration.
Emily Price is a San Francisco Bay Area-based freelance writer who covers the technology industry.
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