Uzbekistan Quality Job Creation as a Cornerstone for Sustainable Economic Growth

Figure 4.7: Small Business Exports and Imports, Uzbekistan,
2003–2018
$ billion
2004
2006
2008
2010
2012
2014
2016 Q3 2018
Small business imports ($ billion)
Small business exports ($ billion)
Small business exports of total (%)
Small business imports of total (%)
Percent
0
10
20
30
40
50
60
70
0
1
2
3
4
5
6
7
8
9

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Uzbekistan Quality Job Creation as a Cornerstone for Sustainable Economic Growth
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4.1.3. Technology, innovation, and business competitiveness 
The rapidly changing global business environment, accelerated by the fourth 
industrial revolution,
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will create diverse opportunities for small businesses, 
but appropriately designed policy support is needed for such opportunities to 
materialize. In 2018, the Government of Uzbekistan established its Strategy 
for Innovative Development of the Country for 2019-2021, supported by 
the United Nations Development Programme (Government of Uzbekistan 
2018). The strategy promotes the use of global best practices in scientific and 
innovative achievements, including in areas of infrastructure development, 
green energy, public health care, agribusiness, and information technology. 
New technology, as an enabler of innovation, is a key survival tool for growth-
oriented SMEs, including seed and start-up companies. But the fourth industrial 
revolution will also have negative impacts on some of the workforce. It may 
affect large and established firms by reducing their workforce while generating 
more tech-based SMEs that create good quality jobs. Tech-based SMEs can 
play an important role in increasing national productivity with innovation, by 
benefiting from foreign direct investment and active participation in global 
value chains. 
However, tech-based SMEs face challenges to achieving that role: research 
and development (R&D), product quality control, skilled labor, market access, 
logistics, business literacy, networking, and access to finance. In particular, 
financial constraints directly and negatively affect innovation capability 
and business development. Thus, tech-based SMEs are seeking long-term 
financing options to invest in R&D, raise the quality of their human capital, and 
transfer and commercialize technologies to maximize their ability to innovate. 
Some successful innovative SMEs could obtain finance from the lead firm of 
a relevant global value chain, venture capital firms, and business angels; but 
most early stage firms unavoidably use their own funds or retained profits to 
develop their business.
In Uzbekistan, the number of enterprises producing innovative goods and 
services is still small but has been increasing sharply, from 289 in 2010 to 
2,373 in 2016 (Uzbekistan Statistics 2017b). However, most of the costs of 
technology adoption and innovation are financed by the firms’ own funds, 
which amounted to SUM1,180 billion ($365 million) in 2016 or 46% of the 
total financing for innovations.
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The fourth Industrial revolution is “an age in which scientific and technological breakthroughs are disrupting 
industries, blurring geographical boundaries, challenging existing regulatory frameworks, and even redefining 
what it means to be human.” Schwab (2017).

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