Now it is possible not only to assess the level of development of startup ecosystems but to see problem areas, points of growth, and to provide recommendations for improving the innovation potential. All this is presented in the Report "Startup Ecosystem Ranking for Central Asia: Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan." The report is a joint product of the International Telecommunication Union and the Startup Central Eurasia platform.
The main goal of the report is the creation of a full-scale rating system for startup ecosystems in the Central Eurasia region, based on the ITU methodology for assessing ICT-oriented ecosystem innovations and startups.
The document analyzes the ecosystems of Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, to show what are the strengths and main challenges of the region and what steps should be taken to improve the development of innovation ecosystems. The data for the report was provided by government organizations and the private sector, as well as through open-source research and interviews with key players in the field of development of Central Eurasia countries' start-up ecosystems, and questionnaires. The level of development of start-up ecosystems of countries was determined according to the ITU methodology (link to the methodology) and included 6 blocks: entrepreneurial interest, access to finance, access to infrastructure, productivity, education and human development, and development strategy.
Startups are the engine of growth. They solve problems that no other sector solves, using innovative thinking, thereby moving society forward - all while creating jobs, stimulating the economy and attracting foreign investment.
The first place in the ranking was taken by Kazakhstan.
Many startups see Kazakhstan as an entry point to the Central Asian market, taking into account tax preferences. The main driver for the development of the startup ecosystem on the part of the state is Astana Hub. According to experts, thanks to the Astana Hub, the country is approaching the point where the market begins to develop itself, thus the growth of the ecosystem and startups occurs more organically. An effective tool that promotes the development of a startup ecosystem, both in Kazakhstan and in the region as a whole, is the Astana International Financial Center. The AIFC (Astana International Financial Centre) is a special centre that applies a special legal regime in the financial sector. AIFC Fintech has supported more than 135 startups (as of the end of 2021) from all over Central Asia.
Uzbekistan got the second place in the ranking.
In Uzbekistan, startups are mainly focused on domestic and regional markets. Most Uzbek startups (62%) are developing their product for the Uzbek market, while 21% of the founders plan to scale to the regional market and the rest to international markets. To date, the characteristic features of the startup ecosystem of Uzbekistan are the potential for scaling and the dynamic growth of ecosystem elements, the prospects for a strong human resources potential. As internal reports show: “Uzbekistan’s young population, diversified economy, and centuries-old entrepreneurial mentality are playing an important role in the next phase of the country’s startup community.”
Kyrgyzstan ranks third.
The startup ecosystem of Kyrgyzstan is at an early stage of formation. Even though this area of the country has been developing since 2011, having mainly a vector for outsourcing, outstaffing and export, this vector of the country is mainly based on the activities of the High Technology Park. This specificity of the field of activity is due to the small market and the size of the country. Startups in Kyrgyzstan are mainly focused on the global and regional markets. Based on the data of our study, the majority of startups and potential founders of startups (52%) are focused on the global market, and 48% of the founders are planning to scale to the region and neighbouring countries.
The fourth place in the ranking was taken by Tajikistan.
The startup ecosystem of Tajikistan is at the stage of formation and at the moment at many levels of building blocks, there is no understanding of the separation of technological and classical entrepreneurship in terms of support, investment of resources and educational programs. Investment opportunities in Tajikistan are also limited. Despite this, the investment ecosystem of the region is gradually integrating into the global venture capital market and the first active startups are appearing. Moreover, in Tajikistan, they are working on the creation of the first IT Park in the republic, which will be a joint project of the executive body of Dushanbe and SUE "Smart City".
The Startup Central Eurasia Ecosystem Ranking report will be published every year and cover more and more countries. It will serve as an analytical document for countries of the region wishing to improve their performance in the development of start-up ecosystems and the competitiveness of the country as a whole. Recommendations for improving the innovative potential will allow the countries of the Central Eurasia region to assess the level of development of startup ecosystems, identify problem areas, identify growth points, and make decisions aimed at the consistent development of innovation and startup ecosystems, as well as the digital development of countries and the region as a whole.
