Development of the digital economy in Uzbekistan

Development of the digital economy in Uzbekistan

Researchers at the Center for Economic Research and Reforms (CERR) Yuri Kutbitdinov and Bakhtiyor Ismailov prepared a study on the development of the digital economy in Uzbekistan.

Over the past four years, a revolution in the development of information technology has been made in Uzbekistan, which has contributed to the expansion of digitalization processes in many areas of the economy and the growth of its share, which is commonly called digital.

It is usual to include e-commerce, the Electronic Government system, the introduction of smart technologies into production processes in various sectors of the economy, service sectors, the creation of Smart City, Safe City systems and others in the components of the digital economy.

The development of the digital economy in the country which is directly related to the level of development of information and switching technologies (ICT), is usually assessed by various indicators. These indicators include: the share of the digital economy in GDP, the size of investments in the ICT industry, the speed of the Internet, its coverage of the country's territory and accessibility for use by the population, the level of development of e-commerce, the share of public services in the e-government system, the provision of organizations with specialists in the field ICT and etc. In addition, indicators that assess the development of information technologies are important.

For many of these indicators, Uzbekistan has made significant progress since 2016. Consequently, the gross value in the field of "information and communication" has doubled since 2016 from 4.4 to 8.8 trillion soums. And the volume of services has grown 2 times from 6.3 to 12.9 trillion soums.

Dynamics of growth in the volume of services in

"Information and Communication" in the GVA in 2016-2020 (trillion soums)

2016

2017

2018

2019

2020

GDP

242.5

302.5

406.6

510.1

580.2

Gross value added

220.1

267.7

361.1

464.9

535.8

Information and Communication

4.4

5.7

7.0

7.4

8.8

Source: State Statistics Committee

Dynamics of growth in the volume of services provided

"Information and Communication" in 2016-2020 (trillion soums)

2016

2017

2018

2019

2020

Total services

97.1

118.8

150.9

193.7

218.9

Growth rate in %

114.7

110.7

108.9

113.2

102.3

“Informatization and Communication"

6.3

8.2

10.3

10.9

12.9

Growth rate in %

114.6

121.3

115.9

108.3

115.3

Source: State Statistics Committee

The development of the ICT industry was facilitated by the volume of investments in fixed assets by the type of activity "information and communication". During the period 2016-2020 it increased by 4 times from 1.2 to 4.8 trillion soums, as well as the volume of foreign investments and loans increased 2.5 times from 0.8 to 2.0 trillion soums.

Uzbekistan in international rankings

It is worth noting the successes of Uzbekistan in international ratings for assessing the development of information technologies in the country. In these ratings, along with the place occupied, it takes into account several parameters at once.

One of such indices is the Telecommunication Infrastructure Index (TII), which is formed on the basis of the following indicators per 100 inhabitants of the country: the number of Internet users and fixed telephone lines, as well as mobile subscribers, wireless broadband and fixed broadband networks. Since 2016, Uzbekistan has improved its performance on this index from 0.246 to 0.472.

The ICT Development Index (IDI), which was compiled by the International Telecommunication Union at the end of 2017 among 176 countries of the world. The IDI index consists of 11 statistical indicators reflecting the availability of ICTs, the degree of their use and the practical skills of using ICTs by the population. A new methodology for compiling the IDI is currently being developed. In the latest ranking of the IDI index, Uzbekistan rose by 8 positions compared to 2016 and took 95th place (index - 4.9) among 176 countries of the world.

The Global Cybersecurity Index is also compiled by the International Telecommunication Union and assesses the level of government commitments in five areas: legal measures, technical measures, organizational measures, capacity development and international cooperation. Since 2016, Uzbekistan has improved its indicators in this rating from 0.1471 to 0.666 and rose from 93rd to 52nd place among 175 countries.

The mobile communications index is compiled by the international Association of Mobile Operators (or "Association GSMA"), which also includes all mobile operators in Uzbekistan. The index shows the level of development and the use of the mobile Internet. The index measures performance of 170 countries against the key drivers of mobile internet adoption: infrastructure, accessibility, consumer readiness, content and services.

2016

2017

2018

2019

Mobile index

36,9

40,7

44,5

46,8

Place in the ranking (out of 170 countries)

134

132

127

124

Source: GSMA Mobile Connectivity Index

Long-term plans for the development of the digital economy

On October 5, 2020, the presidential decree of “Digital Uzbekistan-2030” Strategy was approved, which provides for the implementation of over 280 projects for digital transformation of regions and sectors in the next two years.

To double the share of digital services in country’s GDP was highlighted as an emergency task in coming two years.

It is planned to attract about $2.5 billion investment for the development of digital infrastructure in the next two years. It is also targeted to launch three large new data centers in the cities of Tashkent (expanding by 5 petabyte and bringing up to 10 petabyte), Bukhara and Kokand (each by 50 petabyte). As a result, households will have access to the Internet with a speed of at least 10 Mbit/s in each settlement.

Training of IT specialists

There are more than 120 universities in Uzbekistan, which is introducing a digital learning module and opening incubation centers. A program for the development of IT education has been adopted to create a completely new system of vertical education. In 2020, the “one million” programmers’ programs were launched, which provided an opportunity for free training in programming skills and trained more than 130 thousand students.

Training IT centers are being created in the regions and provided a wide range of educational programs for mastering IT skills. More than 100 such centers have already been opened, along with more than 85 thousand students have been trained. In 2021, it is planned to open an additional 200 such centers. After training, graduates of the centers will be able to unleash their potential as startups, freelancers and even founders of IT campaigns in the network of branches of IT parks that open in every region of the country.

Conclusion

The past 2020 was declared as the “Year of the Development of Science, Education and the Digital Economy” and for the next 5 years, an active transition to the digital economy was identified as one of the main priorities.

The prospects and profitability of introducing digital technologies into the production of goods and services can be seen in various examples of successful business development. Eight of largest companies in terms of capitalization in the world: Apple, Microsoft, Alphabet, Amazon, facebook, Alibaba Group, Tencent, Visa Inc. are digital.

The experience of foreign countries shows that the digital economy is developing simultaneously in a wide range of areas and cannot be built by a limited number of companies, even if they are endowed with special powers and resources. Therefore, the main role in the digital economy should be played by private business with a strong entrepreneurial and innovative approach and the state should create conditions for private initiative.

The main thing while developing ICT in the country, affordable high-speed Internet should keep pace with the interest of businesses to introduce digital technologies into various production processes to increase labor productivity.

In Uzbekistan, the state is successfully coping with its role of creating the necessary conditions for the development of the digital economy, as evidenced by the results achieved and the ambitious goals set for the near future.


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