In 2016 Uzbekistan was the most closed large economy in Eurasia: a non-convertible currency with a black-market premium, exit visas for its own citizens, a cotton sector run by state quota, and a private sector that survived by staying small. Less than a decade later it is the region’s most-watched reform story — currency liberalised, borders opened, a technology park with a zero-tax regime, a state program to train a million coders, universities multiplying and the first venture funds opening offices in Tashkent. This article examines what the opening has actually produced for founders, where the pipeline is real and where it is still a promise, and what a government that has done the hard first steps should commission next.
The idea in brief. Uzbekistan’s reformers did the sequence the evidence recommends, in roughly the right order: they cut the cost of entry and of doing business first, built skills at national scale second, and added a tax regime and technopark third. The result is the fastest-growing founder pipeline in Central Asia, fed by a young population of thirty-seven million, a higher-education system that has quadrupled its enrolment ratio, and a technology park whose export earnings have multiplied. The constraints are the ones a fast opening creates: capital that has not caught up with founders, programs concentrated in Tashkent, a state that is still the largest actor in most sectors, and no outcome measurement yet. The next phase is a pipeline phase — regional cohorts, mid-career founders, procurement as first customer, and honest metrics — and Uzbekistan is better placed to run it than any of its neighbours.
The opening, in sequence
Reform in Uzbekistan followed a recognisable order, and the order is the lesson.
| Step | Measures (from 2017) | Effect on founders |
|---|---|---|
| 1. Currency and trade | Liberalisation of the exchange rate and current-account convertibility (2017); tariff cuts; the resumption of WTO accession talks (2020) | Firms could buy inputs, pay foreign suppliers and price in a real currency for the first time |
| 2. Movement and information | Abolition of exit visas; visa-free entry for dozens of nationalities; loosened media and internet controls | Founders could travel, hire foreigners, and see what the world was building |
| 3. Entry and administration | Online registration, licence reform, a single-window portal, tax simplification and a lower tax burden on small firms | The entry barrier the transition-economy literature identifies as decisive (article 41) fell sharply |
| 4. Skills at scale | The one-million-coders program, launched with a Gulf partner; digital literacy pushes; a national digital strategy to 2030 | A supply of junior technical talent far larger than the economy could absorb — which is what export services need |
| 5. Tax regime and technopark | IT Park Uzbekistan (2019): exemption from corporate income tax and VAT and a flat, low personal income tax for residents, later extended for many years | An export-services industry appeared almost immediately; relocation of foreign firms and specialists followed |
| 6. Higher education | Rapid expansion of universities, private providers and foreign branch campuses; enrolment ratios rising from single digits to the high thirties | The founder-age population gained credentials and, increasingly, entrepreneurship exposure (article 48) |
| 7. State exit and capital | Privatisation programs, banking reform, the first state-backed venture instruments, Gulf and international capital in energy and infrastructure | Beginning, incomplete, and the phase where the next five years will be decided |
The comparison with Kazakhstan (article 42) is instructive. Kazakhstan built the capital and jurisdiction layers first and is now working backwards to a pipeline. Uzbekistan built the entry, skills and export layers first and is now working forwards to capital. Both have gaps; Uzbekistan’s are the more natural ones to fill, because the machinery it lacks is downstream of a pipeline that already exists.
The demographic engine
Uzbekistan is by far the most populous state in the region and one of the youngest large countries in the world. Its population has grown by roughly half since independence and continues to add several hundred thousand people a year; the median age is in the late twenties, and well over half the population is under thirty. Whatever else is true of its economy, Uzbekistan will need to create private-sector jobs on a scale that no state-led economy has ever managed — which is why its government has reached for entrepreneurship, skills and export services with such urgency.
Growth since the opening has been strong and, importantly, sustained through the pandemic and the 2022 shocks, in the range of five to seven per cent a year in most years according to World Bank and IMF estimates, with the recovery years exceeding that. The composition is changing: construction, services, textiles and — from a low base — information technology are growing faster than the resource and agricultural sectors that dominated the closed economy.
IT Park and the coders program: the supply-side machine
The two flagship instruments of Uzbekistan’s technology policy are best understood together, because one feeds the other.
IT Park Uzbekistan, established in 2019 in Tashkent with a network of regional branches, offers registered residents exemption from corporate income tax and value-added tax and a flat, low rate of personal income tax on their employees, alongside incubation, an accelerator, relocation support and a reporting framework. Residency is a tax status, and the numbers the park reports — residents in the thousands, employees in the tens of thousands, service exports that have grown from tens of millions of dollars to several hundred million within a few years — describe an export-services industry built at speed. The park was also the vehicle through which Uzbekistan absorbed a share of the 2022 migration of Russian technology firms and specialists (article 45), with a dedicated relocation program that has become a case study in its own right.
The one-million-coders program, launched in 2020 in partnership with a Gulf foundation, set out to give a million Uzbeks basic programming skills through online courses, and was followed by a national digital-strategy document setting targets for digital government, infrastructure and skills through 2030. Whatever the completion rates — and mass online programs everywhere complete at low rates — the program’s effect was to make software a recognised career for a generation, and to supply the junior talent that the park’s export-services residents hire in volume.
The design lesson is the one article 42 drew for Kazakhstan, with the sign reversed. Uzbekistan’s supply-side machine is working: it produces coders, services firms and exports. What it does not automatically produce is product companies with ambitions beyond services, because a tax regime rewards exports and a skills program produces employees. The next phase needs the selection, training and capital machinery — founder programs, pre-seed instruments, demand-side connections — that convert a services industry into a venture pipeline.
The pipeline that is emerging
Four developments since 2020 suggest the pipeline is real, if young.
- Foreign branch campuses and private universities have brought international curricula, English-language instruction and, in several cases, entrepreneurship programs to Tashkent and the regions — and their graduates are the first cohort of Uzbek founders trained in the vocabulary of the global startup economy.
- Relocated firms and returnees. The 2022 arrivals brought experienced product managers, engineers and founders from Russia’s technology industry; a growing number of Uzbek professionals educated abroad have returned to a country that now offers a career.
- First institutional capital. Regional venture funds have opened Tashkent offices or made their first Uzbek investments; state-backed venture and grant instruments exist; angel activity, often led by successful services entrepreneurs, has begun.
- Domestic platforms. Local marketplaces, payments, logistics and education companies have reached scale in a market of thirty-seven million with rapidly rising smartphone penetration — the domestic demand that services exporters never had.
The honest caveat is measurement. As with every ecosystem this series has examined, Uzbekistan’s reporting is dominated by inputs — residents registered, coders enrolled, universities opened — and almost no program reports ventures operating at 24 months by cohort. The pipeline is visible in anecdote and in the number of foreign investors visiting Tashkent; it is not yet visible in data that would survive the audit described in article 32. Building that data is cheap and would put Uzbekistan ahead of every neighbour in the argument it will soon need to make to its own finance ministry.
Textiles, cotton and the first export founders
Uzbekistan’s most instructive entrepreneurship story is not in software. It is in cotton. For decades the crop was grown under state quota, picked with forced and child labour that led international brands to boycott Uzbek cotton, and exported raw. The reform program abolished the quota system, ended the mobilisation of pickers, invited international monitoring, and — crucially for founders — allowed private clusters to integrate growing, ginning, spinning and garment manufacturing. The boycott was lifted in 2022, and Uzbek textile exports, increasingly of finished garments rather than raw fibre, have grown into one of the country’s largest non-commodity export lines. The founders of the clusters are the region’s first large cohort of export entrepreneurs: mid-career managers and traders who built companies of hundreds or thousands of employees inside five years, financed largely by retained earnings and state-backed loans, selling to Turkey, Russia, Europe and, increasingly, the Gulf. They are exactly the domain-experienced, mid-career founder profile that article 40 describes, they have almost no contact with the technology ecosystem, and they are the customers and investors that Uzbek software and logistics ventures need. A founder program that connected them to the technopark’s product teams would join the country’s two most dynamic private sectors, which currently do not speak.
The regional branches: what a branch can and cannot do
IT Park’s network of regional branches is the most valuable piece of infrastructure the ecosystem has outside Tashkent, and the most under-used. A branch provides the tax status, a building, connectivity and a point of contact — the conditions for a services firm to operate in Samarkand or Namangan rather than move to the capital. What a branch cannot do on its own is produce founders: it has no selection process, no curriculum, no mentor bench and no capital, and its staff are administrators rather than program operators. The distinction matters because the regional branches are the natural hosts for the regional cohorts this article recommends; a founder program delivered through them turns a registration office into a pipeline node at marginal cost, with the branch’s resident services firms as the partners, employers and — for their senior engineers — the recruiting ground.
Remittances as latent capital
Uzbekistan is, after Tajikistan and Kyrgyzstan, the region’s third remittance economy: transfers from Uzbeks working abroad, mostly in Russia, have run at between a tenth and a fifth of GDP depending on the year, and they finance a vast small-business sector — shops, transport, construction, services, farms — that is almost entirely informal and entirely outside the ecosystem’s field of vision. The research on remittances and enterprise, reviewed in article 44, is clear that this money is invested when the household can see a return and a route; the design task is to build the route. Matched-savings schemes for business formation, diaspora-linked angel networks, mobile-money rails that turn transfers into working capital, and — most simply — founder programs that recruit from remittance households in the regions rather than from computer-science graduates in Tashkent, are the instruments that would connect the country’s largest pool of private savings to its most promising pipeline.
The state’s double role
Uzbekistan’s state is both the ecosystem’s builder and its largest competitor. It owns the banks that dominate lending, the enterprises that dominate energy, mining, transport and much of manufacturing, and — through privatisation programs that have begun but not finished — the assets that will define which sectors open to private entry. The transition-economy evidence is unambiguous about what this does to founders: a large state sector depresses growth aspirations even where it does not block entry, and state banks lend to state firms. The reform program’s next chapters — banking privatisation, the sale of state enterprises, competition law — are therefore entrepreneurship policy as much as macroeconomic policy.
The state is also, however, the ecosystem’s largest potential customer, and this is the lever that policy has used least. Uzbek ventures in payments, logistics, education, health and government services have their natural first buyers in ministries, state enterprises and the state banks; procurement set-asides, pilot budgets and regulatory sandboxes would give them the first revenue that founders everywhere find hardest to secure, and would do so without a single new fund.
Finance: the layer that has not caught up
Uzbekistan’s founders are financed, overwhelmingly, by family, savings, remittances and the retained earnings of services businesses. Bank credit is expensive and oriented to state and established firms; policy interest rates have been high throughout the reform period as the central bank fought inflation; equity culture is new. The development banks — the EBRD, the ADB, the IFC and the World Bank — are the most active financiers of small business and the sponsors of most women’s and youth programs, and Gulf capital has arrived at scale in renewable energy and infrastructure rather than in ventures. The financing ladder article 46 describes is missing its lower rungs: pre-seed and seed capital in volumes matched to the pipeline the skills machine is producing. A fund-of-funds that backs private early-stage managers, a pre-seed grant instrument tied to program milestones, and a deliberate effort to convert the region’s largest remittance-financed savings pool into angel capital are the three instruments the next phase needs.
What to commission next
- A national founder program with regional cohorts. Tashkent holds a fraction of the country’s founders. Samarkand, Bukhara, Namangan, Andijan, Fergana, Nukus and Termez have universities, industry and diaspora links; a program delivered in Uzbek and Russian across six or eight cities, with the technopark’s regional branches as hosts, addresses the whole pipeline.
- A mid-career track. The engineers and managers of the state enterprises, the banks and the textile and construction industries are the founder profile the evidence favours (article 40) and are entirely unreached by programs designed for coders.
- Procurement as first customer. Set-asides and pilot budgets at state enterprises and ministries; a sandbox for fintech and health.
- A pre-seed instrument attached to the program. Milestone-released grants for ventures that clear the program’s gates, feeding the venture funds now arriving.
- Cohort measurement from the first intake. Consent at intake, follow-up at 12, 24 and 36 months, verification against tax and registry data — the evidence base the finance ministry will eventually demand.
- Diaspora and corridor links. Uzbeks in Russia, Turkey, Korea, Europe and the Gulf as mentors, angels and returnees; paired cohorts with Gulf and Indian ecosystems through the corridor programs article 49 describes.
A composite case: the coders who became a services industry
A composite from several regional engagements; details altered.
A regional technology-park branch had, within three years, registered several hundred residents and reported export revenues that had grown tenfold. A visiting delegation asked to meet the park’s product startups and was introduced to services firms — excellent ones, staffed by graduates of the national coding program, building software for clients in Europe and the Gulf. Asked how many residents had a product of their own, the park’s director could name a handful, all in Tashkent.
The response was a founder program layered on the park’s existing network: cohorts in three regional branches, recruited from the services firms’ senior engineers as well as from universities, with a curriculum built around customer discovery inside the state’s own digital-government and health procurement pipelines, a trial task at intake, and a small pre-seed grant released against milestones. The services firms became the program’s partners rather than its competitors — their engineers formed teams, their clients became pilot customers, and two of them incubated ventures internally. Two years on, the branch reported its export figures as before and, in a new section, its first cohort’s 24-month outcomes: a dozen ventures operating, three with external investors, one acquired by a Tashkent platform. The numbers were small. They were also the first of their kind in the region.
What could go wrong
- Reform fatigue. The hard phases — banking and enterprise privatisation — stall. Antidote: sequence them as entrepreneurship policy, with the private-sector job numbers the government already tracks as the justification.
- Tashkent capture. Antidote: regional cohorts through the technopark’s branches.
- Services counted as ventures. Antidote: separate the metrics (article 42).
- Capital that arrives before the pipeline can absorb it. Antidote: fund-of-funds discipline and pre-seed instruments tied to programs.
- Inflation and interest rates. Expensive money keeps founders in debt-averse, small-firm mode. Antidote: equity instruments and grants at the bottom of the ladder.
- No outcome data. Antidote: cohort accounting from the first intake.
Questions ministers and investors actually ask
“Is the reform real?” Yes, and it is the most consequential in the region since independence. It is also incomplete in exactly the areas — banking, state enterprises, competition — that determine whether founders can grow.
“Is Uzbekistan a market or a talent base?” Both, which is rare. A domestic market of thirty-seven million with rising incomes and connectivity, and the region’s largest supply of young technical talent.
“Where does Uzbekistan compare with Kazakhstan?” Kazakhstan has deeper institutions and capital; Uzbekistan has the larger, younger pipeline and the stronger reform momentum. Regional strategies use both.
“What is the role of the Gulf and India?” Capital, program operators, market access and — from India — the experience of building skills and founder pipelines at scale on limited budgets. Uzbekistan’s coders program was itself a Gulf partnership.
“What is the one program to commission?” A national founder program with regional cohorts, a mid-career track and a pre-seed instrument, measured by cohort. The supply-side machine exists; the conversion machinery is the gap.
Methodology & data notes
Population and growth figures are approximate World Bank, IMF and United Nations estimates; Uzbekistan’s statistical system has improved markedly since the opening but revisions are common. Descriptions of IT Park, the coders program and other institutions reflect their own public reporting and government documents as of 2025 and should be verified with the institutions; tax terms and program names change. Statements about emerging capital and platforms describe well-reported patterns rather than a single dataset. The composite case combines several engagements with details altered. Companion articles cover the regional map (41), Kazakhstan (42), the 2022 migration (45), finance (46), campuses (48) and program design (50).
References & further reading
- World Bank Open Data and World Bank — Uzbekistan country data and economic reports
- International Monetary Fund — Article IV consultations and regional outlooks
- State Statistics Agency of Uzbekistan — official statistics
- IT Park Uzbekistan — resident, employment and export reporting; relocation program
- EBRD — Uzbekistan country strategy and Transition Report
- Asian Development Bank — Uzbekistan country partnership and CAREC program
- OECD — Eurasia Competitiveness Programme reports on Uzbekistan
- UNESCO Institute for Statistics — higher-education enrolment ratios
- Djankov, S. et al. (2002) — The Regulation of Entry, Quarterly Journal of Economics
- Klapper, L., Laeven, L. & Rajan, R. (2006) — Entry regulation as a barrier to entrepreneurship, Journal of Financial Economics
- Estrin, S., Korosteleva, J. & Mickiewicz, T. (2013) — Which institutions encourage entrepreneurial growth aspirations?, Journal of Business Venturing
- McKenzie, D. & Woodruff, C. (2014) — What Are We Learning from Business Training and Entrepreneurship Evaluations around the Developing World?, World Bank Research Observer
HexGn designs and runs founder programs, campus pipelines and ecosystem measurement for governments — and works with agencies across Central Asia, the Gulf and India on the corridor that now links them.