Uzbekistan Looking to Become Own Silicon Valley

Officials in Uzbekistan are looking into ways of developing a domestic innovation sector and create the country’s own version of Silicon Valley.

Russian state-run news website Sputnik has cited an official with the IT and Communications Development Ministry as saying an innovation center could be set up within a free economic zone at the Inha University in Tashkent — an affiliate of South Korea’s Incheon-based Inha University, eurasianet.org reported.

The new center would serve as a hub for high-tech and locally developed IT products, according to the government official.

“Our idea is for Inha University in Tashkent to become the birthplace of a Silicon Valley in Uzbekistan,” Sputnik’s source said.

Uzbekistan is drawing on the experience of Belarus as a model. Reuters news agency reported last year that high-tech companies based in Minsk, the capital of Belarus,  employ around 24,000 people and in 2015 exported technology worth $700 million. One notable famous Belarusian software export is the World of Tanks game, which is played by millions of people around the world.

There is little sense in thinking about developing innovation without the financial means in place. 

Limitations on the movement of money in and out of Uzbekistan — not to speak of within it — make the creation of a new export commodity from thin air a de facto impossibility.

Sputnik’s source said developers in Uzbekistan working with foreign clients currently circumvent restrictions by using payment systems based outside the country and then cash out through third parties.

 Call for Generous Wages 

“We need to make it so that our programmers can work within the law and not in the grey sector,” the source said.

Tashkent-based programmer Arifa Lutfullayev said salaries in the IT sector would have to be generous if any dream of creating a domestic software boom is to bear fruit.

“Ninety percent of IT experts are based in Tashkent, the rest are out in the regions working in industry or as freelancers. We have a shortage of qualified personnel. If we can address the issue of talent-poaching and training, that is a start, but when it comes to quality assurance specialists and project managers, it is a disaster. 

“Many leave the country because of low salaries and low demand,” he added. This would not be the first attempt to kickstart the IT sector in the CIS country.

The late President Islam Karimov in September 2013 passed a decree freeing software developers of tax requirements through to January 2017. And the idea of an innovation center is not a new one either. In October 2012, during a meeting of an Uzbek-British business council, it was announced that Tashkent would host a high-tech center to be created in conjunction with Cambridge University. The idea never left the drawing board, however.