2. Develop a supportive institutional framework for the digital uptake of firms

The wide-ranging impacts of the digital transformation on people, firms and governments raise challenges for policymakers as they develop and implement policies in response. Like other cross-cutting policy issues, digital transformation policies are relevant in many domains, which calls for a co-ordinated approach to policy-making. National Digital Strategies (NDS) have emerged in many countries as a crucial tool to address these challenges and to achieve policy co-ordination and coherence. Prominent overarching goals include making the country a digital front-runner, stimulating digital innovation, spurring productivity and growth, and enhancing well-being, including by bridging digital divides and increasing social inclusion. A comprehensive NDS enhances the awareness of, and attention to, digital policy issues across the government; facilitates the engagement of the multiple stakeholders required for broad-based support; and fosters co-ordination in strategy development and implementation.

In Uzbekistan, the lead ministry in charge of the NDS is the Ministry of Digital Technologies (MDT). This is in accordance with the Ministry-level strategic co-ordination of digital transformation policies (Box 2.2). However, the development, co-ordination, and implementation of the strategy with respect to digital skills is shared among various government entities and industries. This government-wide and within-sector fragmentation increases the costs of policy making and stretches already burdened administrative capacity. Private-sector stakeholders indicated that the MDT and Ministry of Higher Education, Science and Innovation’s roles and tasks were not clear to them. In addition, there is no dedicated SME agency in Uzbekistan, though the government recently drafted an entrepreneurship code and launched a working group to plan the creation of an SME strategy. The Agency for Working Mahallabay1 and the Development of Entrepreneurship, nominally an SME agency, focuses on bringing accountability to the regional and municipal levels of government rather than co-ordinating and collaborating with the private sector on SME development.

The co-ordination commission is tasked with ensuring the timely implementation of projects, roadmaps, and measures foreseen in the NDS, though OECD fact-finding interviews indicate that it mainly tracks the progress of the NDS rather than co-ordinating its implementation. The MDT, the leading NDS ministry, does not implement all aspects of the strategy: it is mainly responsible for the institutional design of the strategy, but it does not play a role in raising firms’ awareness and only partially provides digital tools (Box 2.1). It uses its offices throughout Uzbekistan as a lever to provide basic digital literacy and e-government awareness to individuals and SMEs who need it, but it does not develop tools itself. The regional and city-level hokimiyats2 help develop and implement the NDS on the regional level in a pilot format, where a few districts are selected for the initial stages before region-wide rollout, but they provide limited inputs to the lead ministry. The Chamber of Commerce and Industry, which represents the private sector’s interests, was consulted in the drafting of the digital strategy but is not involved in implementing it. of the Ministry of Preschool and School Education and the Ministry of Employment and Poverty Reduction are not mentioned as implementing or monitoring ministries for the private sector. Educational institutions are responsible for implementation through general schooling, dedicated computer classes, and IT and STEM courses and degrees. However, their high level of fragmentation and the duplication in education and skills development reduce positive outcomes because separate institutions are responsible for (pre)school-level learning, tertiary education, education quality and testing, qualifications, and labour market development (World Bank, 2018[1]). In particular, it is unclear why education policy is dispersed across two separate ministries.

The MDT and other government stakeholders are involved in the NDS. The Ministry of Higher Education, Science and Innovation, the Republican Council for Science and Technology, the Innovative Development Support Fund, the ICT Development Fund and the Ministry of Investments, Industry and Trade are all involved in contributing inputs to the NDS. The State Inspectorate Uzkomnazorat and the Advisor to the Prime Minister – the Head of the Department for the Development of IT Technologies, Telecommunications and Innovation are involved in monitoring implementation, along with the MDT. The Agency for Working Mahallabay and the Development of Entrepreneurship and the hokimiyats provide input into the regional NDS development.

However, private-sector stakeholders are involved to a limited extent, and this involvement is limited to non-systematic public-private dialogue. There is no mechanism in place to integrate into the NDS the issues raised and decisions taken as a result of this dialogue. Private firms are represented chiefly through the Chamber of Commerce and Industry of Uzbekistan, though some roundtables involving the MDT, as well as firms and entrepreneurs, were previously held. The Chamber of Commerce and Industry conducts frequent surveys, but digitalisation and private sector digital skills needs are not assessed. The Chamber’s surveys are limited to members and likely do not entirely reflect the needs of sole proprietors and SMEs, which are not part of the Chamber’s network. The Ministry of Public Education, whose role in digital skills development is essential, and which consults to an extent the private sector to identify skills gaps in the education system, is not involved in NDS implementation for the private sector.

In addition, there does not seem to be a digital SME coalition spearheaded by one ministry. Several government agencies, such as the Agency for Working Mahallabay and the Development of Entrepreneurship and the MDT are involved in supporting SME digital development. Both public and private structures, such as large industrial actors, public-private intermediaries such as the IT Parks, and educational institutions, provide a range of educational services to SMEs and the wider population to advance their digital skills (Table 2.1). However, there is no single co-ordinating body to enhance co-operation and promote the exchange of best practices among actors who contribute to improving the labour force’s access to relevant skills. Upskilling efforts are scattered among different entities, which do not co-ordinate closely. This can result in a duplication of upskilling initiatives and is not user-friendly.

The government could further clarify mandates and integrate stakeholders for the design and implementation of the NDS, under the leadership of the MDT. For digital skills to be an integral part of the NDS, more stakeholders need to be involved. The Ministry of PreSchool and School Education and the Ministry of Employment and Poverty Reduction are likely appropriate ministries to include in the design and implementation of the NDS. In addition, systemic public-private dialogue with the private sector and academia should be initiated, creating a mechanism to integrate their feedback into the NDS. This should be adapted to each sector’s needs and account for the existing and forecasted skills gaps. The mandates of government entities involved should be clarified and expanded to incorporate a digital skills component. This should include specifying how the entities will collaborate to design and implement the NDS and their responsibilities to raise awareness, diffuse relevant knowledge, and create tools to upskill Uzbekistan’s labour market. Better co-ordination, a clearer allocation of tasks and a wider involvement of public and private stakeholders engaged in the NDS would contribute to increasing the effectiveness of the NDS in the most economically important sectors of the economy such as agriculture, energy, manufacturing, and the growing BPO and e-commerce industries.

Collaboration between the private sector and educational stakeholders could support digital literacy through the education system, lifelong learning opportunities and the ability to measure and forecast such skills. Administrators, teachers and professors could contribute to digital skill strategies and frameworks to reduce the skills mismatch. Educational institutions play an important role in digitalisation, as the right curriculum prepares a generation with the necessary soft and hard skills for personal and professional development. On the other hand, the private sector can help provide digital devices and tools to schools and universities. Collaboration can thus help adapt technologies to the needs of the population and adapt curricula to enhance the uptake of digital technology (Box 2.3). Representatives of the economically important and growing private sector industries could be useful stakeholders to provide inputs to the government. The latter can work with education and training providers, as well as Massive Open Online Course (MOOC) platforms, to harmonise and recognise local and international skills certifications. Uzbek-language training initiatives such as the launch of the Uzbek version of the Khan Academy educational platform or co-operation with Coursera could be pursued with other international education providers.

The government could also expand its partnerships with international tech firms and key domestic players to further support the acquisition of digital skills. Large firms such as Microsoft, Google, Amazon, and Alibaba offer platforms where smaller companies operate (OECD, 2021[5]). Partnerships can be established with such platforms to incentivise them to provide practical digitalisation training to SMEs, including advice on how best to leverage the digital services they offer. This is a win-win for both SMEs, which expand their reach and sales opportunities, and the platforms, which can increase use, availability and the offer of their services (Box 2.4). Initiatives are already underway, such as the Coursera Workforce Recovery Initiative, which was launched in 2020 in Uzbekistan to help the government provide unemployed workers with free access to 3 800 online courses. This public-private partnership’s goal was to help impacted workers develop the knowledge and skills to become re-employed (Coursera, 2020[6]). National commercial banks and financial industry associations also appear as important stakeholders to enhance the financial skills of SME owners and managers, as OECD interviews revealed that the banking sector is one of the most digitalised sectors in Uzbekistan, making these players crucial stakeholders in upskilling citizens and firms (OECD, 2018[7]). The government should engage these best-in-class digital players to both provide input to the NDS and develop tools to respond to private-sector digital needs.

The government could nurture the emerging ecosystem supporting the digital transformation of the private sector and harmonise existing initiatives. The relevant agency could co-ordinate all levels of digital upskilling: recognising the skill gaps in the market, developing initiatives to address it, and to raising awareness. By co-ordinating the entire ecosystem, it could support the one-stop-shop principle for digital skills, reducing duplication of online training portals, training centres, and training materials. An SME portal with clear information on the various initiatives in place would allow for greater clarity. In addition, enhanced co-ordination would help equip SME managers and employees with relevant skills that enable them to assess their businesses’ shortcomings, to navigate the tools and technologies available, and choose the best digital solutions to improve their businesses. A set of specific measures targeted towards digital skills development can also be taken into account by relying on local ecosystems and communities. SME agencies are not the sole actors supporting SME development: both public and private structures can provide a range of services or education to SMEs seeking to advance their digital skills. Key partners in industry (banking, telecommunications, digital multinationals, larger firms, and other more digitally advanced SMEs), intermediaries (IT Parks and their regional clusters, digital innovation hubs, sectoral associations, chambers of commerce and industry), education providers (primary, secondary, tertiary and continuous learning facilities) and the public sector can enhance their co-operation to help SMEs to access relevant skills and promote the exchange of best practices (Table 2.1). In Uzbekistan, the Chamber of Commerce appears to be particularly suited to the role of harmonising digital skills initiatives considering its close collaboration with both the private sector and IT Parks and its advocacy role with the government.

In order to better leverage these structures and maximise their impact, Uzbek policy makers could consider better co-ordinating the existing network to avoid duplication of initiatives and inefficient use of resources. The MDT should be able to identify and share any successful initiatives on digital skills provision from the public and private sector and from educational institutions. The Chamber of Commerce and Industry with a renewed mandate could monitor and keep abreast of the initiatives available for SMEs in the ecosystem on one platform as well as facilitate joint activities, peer-learning and general knowledge spill-overs. The SME agency could also perform this function, though it is less suited in its current format to do so. In either case, the dedicated agency would deal with SMEs specifically, but would have access to and knowledge of what is going on in terms of digital literacy education. The MDT, the Chamber of Commerce and Industry, or even the SME agency could lead such an ecosystem, map the players and initiatives; co-ordinate trainings; provide funding for ecosystems to finance expert exchanges; and develop public-private collaboration (Box 2.5). The entity could further develop mechanisms for knowledge exchange between international tech companies, domestic private and public sector firms, and government officials, such as business forums, industry fairs, cross-cutting conferences etc, to build awareness of industry needs and possibilities to address them.

A successful NDS requires a comprehensive digital skills component for SMEs (OECD, 2022[10]) to promote the use of digital technologies by businesses and ensure that all workers can adapt to and excel in the digital economy through the use of ICT and other technologies. Such strategies most commonly target SMEs and also account for varying levels of skills, to ensure that people in low-skill occupations can also benefit from the opportunities brought about by digitalisation (OECD, 2017[11]). Enhancing digital skills, in turn, requires public and private sector inputs to create the institutional strategy, to raise awareness among civil servants and SME employees and managers on the benefits of digitalisation, and to develop and provide tools to increase digital literacy.

Whilst Uzbekistan seeks to improve digital literacy and digital technology uptake among the public administration and general population, the government has not set targets and objectives to improve the digital literacy of the private sector specifically. A holistic strategy to co-ordinate the public, private, and population-wide digital training is lacking, resulting in an overall siloed approach without objectives and tangible targets for digital literacy improvements within the private sector. Without an integral digital literacy component or a national digital competencies framework such as Switzerland’s DigiComp (DigiComp, 2022[12]), a country cannot fully realise its digital transformation potential. Uzbekistan would need to conduct a baseline assessment of the private sector to determine progress made. Without such visibility, digital literacy will remain on the side-lines for the private and public sector. While governors and many public employees will benefit from the current NDS, private sector employees, managers, and non-included public employees will lack full information on the use and benefits. Without a competencies framework or component for the private sector, it could prove hard to agree on baselines for measurement and associated indicators, as well as how to best adapt policies and programmes to private sector needs.

OECD countries tend to implement policies related to the development of specific digital tools focused on specific sectors. Given the diversity of industries in which the private sector operates, targeted sectoral policies allow to account for cross-industry and geographical differences in digitalisation adoption (OECD, 2021[15]). Upgrading productivity in a large population of small businesses across important and growing sectors, but also including traditional segments and the informal economy, can help governments achieve both economic growth and social inclusion objectives (OECD, 2017[16]). Digital skills are required for a growing number of jobs, including in traditionally manual sectors like agriculture and construction. As digital applications and technologies are making inroads, a corresponding need arises for a certain level of digital literacy (ITU, 2020[17]). While a sufficient supply of a digitally skilled cohort is necessary at a national level, skills demand can differ significantly from industry to industry, as can the identified skill gaps and required policies to address future digital skills requirements (see the chapter below) (ITU, 2020[17]).

The Uzbek NDS focuses on a limited number of sectors and does not encompass important segments of the economy. The NDS is segmented into sectors, with roadmaps for the digitalisation of agriculture, healthcare, public administration and education. Energy and tourism are priority sectors within the NDS, but are not included in the skills section of the strategy. The NDS foresees the introduction of a digital literacy assessment to discover the types and levels of digital skills required civil servants, but it is unclear whether this will be available for private sector firms with a segmentation by sectors, nor if it will be able to identify the skills gaps that exist between individuals and labour market needs.

Scarce data and measurement hinder the efficient development of digital skills in Uzbekistan. OECD interviews with officials indicate that there has been no systematic assessment performed to collect data on the private sector’s digital skills needs. The Chamber of Commerce and Industry conducts surveys on SME needs, but digitalisation questions are not part of the questionnaire. The MDT has expressed its intention to survey businesses on the level of digitalisation in Tashkent, Samarkand, and Bukhara, but has not yet done so at the time of writing. In general, the data collection and management could be improved – labour market and educational data are not collected systematically, nor is there a gender component. The lack of public-private dialogue limits the government’s visibility on the digital skills gaps within the overall labour market and specific industries. Unless the authorities have an accurate understanding of the gaps, it is difficult for initiatives to raise awareness and reach the target sectors to achieve the desired results.

Uzbekistan’s digital skills development is also hampered by a lack of forecasting. Market need forecasting and anticipation exercises can help policymakers estimate the evolving needs of the labour market. In function of these identified needs, governments can more effectively and efficiently implement policies to enhance digital upskilling and ensure a better match between employee skills and firm requirements. Information on future jobs requires skills needs anticipation surveys. Without such surveys, governments risk suboptimal investment in education initiatives and skills mismatches in the labour market. Astrum IT Academy for instance recently reported an oversupply of Java stack developers on the labour market, which has resulted in several education institutions closing their Java courses. Uzbekistan does not implement regular national-level quantitative nor qualitative digital skills forecasting. The OECD did not identify one-off or systematic labour force surveys to analyse skills provision of the workforce compared to labour demand. The government does not seem to systematically integrate qualitative mechanisms involving sectoral or educational experts to assess labour force needs either. Rather, ad-hoc initiatives have been undertaken to identify skills needs, mostly in the public sector. The University of Westminster in Tashkent for instance opened a master’s degree programme in business intelligence and analytics following a skills needs survey it conducted among certain governmental agencies. Overall skills intelligence, and industry and education institutional involvement in the definition of skills and labour force needs can be strengthened. With accurate forecasts of future labour market needs, the government and other stakeholders can adapt educational policies to anticipate future demand. To do so, a systematic approach to measuring and forecasting digital skills is required, as Estonia does on a rolling basis (Box 2.7).

The NDS should place a stronger emphasis on promoting ICT generic and specialist skills to ensure that everyone can engage in, and benefit from, the digital economy and adapt rapidly to new occupation and skills needs, education and training systems. This should incorporate ICT-complementary skills too, including foundational skills, digital literacy, higher-order critical thinking skills, and social and emotional skills. Greater efforts are needed to raise the skills of those adults and segments of society with weak literacy, numeracy and digital skills to enable them to fully participate in the digital economy and society (OECD, 2017[11]). This should encompass explicit objectives on improving digital skills, including private sector-specific, quantitative targets and key performance indicators (KPIs) such as the number of trainings conducted by firms in a specific sector or the percentage of employees with basic or standard digital skills.

The government should break down targets by sectors involving industry representatives and academia to set these objectives. Digital maturity levels as well as the business case to adopt specific digital technologies will vary across sectors; for these reasons, it is necessary to develop objectives and collect segmented information on digital needs by sector of activity. Uzbekistan should develop a monitoring and evaluation mechanism to evaluate and adapt policies depending on their impact. This also involves conducting a baseline assessment of the digital skills per sector against which policies can be benchmarked (see the chapter below). The assessment can assist in prioritising sectors. Industry roundtables, focus groups or subject matter expert interviews can be carried out with strategic stakeholders, such as major industry leaders, sector skills councils, sector bodies, policy stakeholders and leaders from universities and technical schools to discover the types and levels of digital skills required by different sectors and the skills gaps that exist. Both traditionally important sectors and emerging high-growth sectors should be included, based on a sector’s share of GDP, share of employment, or growth potential (ITU, 2020[17]). Once objectives are set out per sector, the government can implement a series of initiatives to upskill the labour force for the private sector especially (OECD, n.d.[20]). Targeting individuals considering their employment status could also be considered (upskilling programmes can be provided to unemployed individuals, and reskilling programmes proposed for employed ones).

Accurate and up-to-date data on the skills of the labour force could better inform the next segment of the NDS and foster the efficient development of digital skills in the broader population. To ensure that future digitalisation programmes efficiently support the digital uptake of firms, data needs to be collected regarding skills development. The government should consider performing a skills assessment of its labour force and extract insights to make informed policy decisions on the type of support needed. This requires commitment from policymakers and a clear co-ordinating authority, expert engagement, stakeholders’ training and available financial and human resources to implement nationwide surveys (OECD, 2021[18]). Data collection and skills assessment would also make it possible to forecast the digital skills needs of the future. This could provide the opportunity for Uzbekistan to perform a systemic skills assessment of its workforce (Box 2.8). Forecasting could then feed into informed investment in education initiatives and contribute to addressing the skills mismatch on the labour market. A mixture of analogue and digital tools can be useful in collecting such information, to account for the relatively limited uptake of digital technology among certain types of firms. Data collection can further feed into the selection of priority sectors to integrate in the NDS.

The lack of gender-disaggregated data is another roadblock to inclusive policy. The move towards data-driven, innovative, and digital government, also accelerated by the COVID-19 crisis, offers a window of opportunity to expand the availability of reliable and timely data on gender equality. Uzbekistan will need to anticipate the risks that new technologies pose to gender equality, such as the transfer of existing gender biases from the analogue to the digital world and the emergence of new digital divides. It will need to ensure the effective collection and use of gender-sensitive data and to improve the quality of gender impact assessments, stakeholder engagement tools, and accountability and transparency mechanisms (OECD, 2022[21]).

Regulatory gaps also need to be addressed in order to stimulate investment in digitalisation. According to an upcoming OECD survey assessing the business climate in Uzbekistan, data security was the second topic in IT infrastructure after the speed and quality of internet quoted by respondents as an area which can be improved to help firms digitalise more effectively. The 2021 amendment of the personal data law was frequently mentioned during interviews, as it strengthened the liability for breaching the law and now requires data residency, meaning that owners or operators of personal data must ensure the collection, treatment and storage of Uzbek citizens’ data only through technical means located in Uzbekistan (Lex-UZ, 2021[24]). Uzbekistan’s regulation pertaining to personal data protection and the use of modern cloud technologies is stricter than that of its Central Asian peers, as violations of personal data law can result in criminal charges. OECD interviews revealed that at least some multinational corporations opted not to enter the Uzbek market due to uncertainties surrounding existing laws, some of which remain incomplete.

The government may therefore consider clarifying the new provision of the law on personal data protection. The latest version of the law requires firms to store data in Uzbekistan and in a selected list of countries, but the list of eligible countries has not been published yet, creating uncertainty for firms. Data being an important source of insights for business operations and development, clarifying such a requirement would reduce legal uncertainty for firms. In addition, efforts could be pursued to develop competitive and secure local data storage capacity, as Uzbekistan only recently opened its first data storage and processing centre in Tashkent region. Finally, while companies are encouraged to make use of online services, there still seems to be a requirement to keep hard copies of documents in case of potential inspections. A gradual move from paper requirements would reduce duplication of efforts and encourage domestic firms to move online.


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[2] OECD (2019), Going Digital: Shaping Policies, Improving Lives, OECD Publishing, https://doi.org/10.1787/9789264312012-en.

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← 1. The word “mahalla” refers broadly to a neighbourhood or local community. Mahalla are residential community associations that were once common throughout the Islamic world but are now relatively uncommon outside Uzbekistan. Promoting it as a "traditional institution," the Uzbek government has embraced mahalla as a "fundamental unit" of society, and it is expected to play a role in, inter alia, reducing poverty and solving employment problems.

← 2. The word “hokimiyat” refers to a city or district-level administration in Uzbekistan.

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