Startup ecosystem development practices in Central Asia are creating an environment that supports the growth and success of new businesses. This process involves all ecosystem stakeholders and initiatives, such as developments in government policies, the creation of incubators and accelerators, funding and investment opportunities, and mentorship programs. The goal is to foster economic growth and create jobs, providing new businesses with the tools they need to succeed. Additionally, it aims to develop a culture of entrepreneurship and innovation within a community, region, or country.
Central Asia has enormous economic growth potential, with a growing population, increasing access to technology, and a wealth of natural resources. The region already has impressive startup ecosystem activity in countries like China, Pakistan, Kazakhstan, Kyrgyzstan, Uzbekistan, Turkmenistan, and Tajikistan. Central Asia’s startup scene is witnessing several successful startups growing and contributing to the further development of their local economies. Some examples include Owbike from Azerbaijan, HR Messenger from Kazakhstan, Mashina.kg from Kyrgyzstan, and many outstanding unicorns from China, such as Yixia and Zhaogang.
In this article, we will discuss the best practices in the region that have prepared the soil for successful startups to blossom.
- Central Asia Invests in Infrastructure
When we talk about infrastructure in the context of startup ecosystem development, it has two layers. The first one is the physical infrastructure, which includes transportation networks, energy systems, and communication systems, which provide the basic building blocks that allow businesses to operate and connect with customers and suppliers. The second layer is the organizational infrastructure, which includes coworking spaces, accelerator/incubation programs, and talent. With the physical infrastructure, it is easier to build an organizational infrastructure.
In this respect, in Central Asia, we witness advancements in the physical infrastructure. One noticeable example is the CAREC program that dedicated US$ 41 billion to establish multimodal transportation networks, increased energy trade and security, facilitated the free movement of people and freight, and laid the groundwork for economic corridor development.
What does this mean for startups? Firstly, an improved transportation network creates an opportunity to expand into new markets for startups, which can increase their customer base and potential for growth. Secondly, the program’s focus on energy trade and security can help create a more stable and reliable energy supply, which is essential for the functioning of businesses. In addition, emphasis on economic corridor development can spur economic growth by creating new opportunities for trade and investment. This stimulates job creation and economic activity, benefiting startups and new businesses.
For the organizational infrastructure, Central Asian countries are hosting several coworking spaces, accelerators, and incubation centers, which are safe grounds for startups to grow and expand their network. Moreover, Central Asian countries are in an advantageous position due to their bright talent. For instance, according to Caspian Policy Center (2018), STEM (Science, Technology, Engineering, and Mathematics) graduates in Azerbaijan, Georgia, and Kyrgyzstan represents more than 20% of Kazakhstan 25%, and in Uzbekistan, 35% of all university graduates. STEM talent is valuable for startup ecosystems as it is a key human resource for innovation.
- Central Asia Fosters Innovation and Entrepreneurship
Innovation is a driver of economic growth and development, and fostering innovation within the startup ecosystem is crucial for the success of new businesses. Entrepreneurs are often considered to be engines of innovation, as they bring new ideas and fresh perspectives to industries and markets, which can lead to increased competition and improved efficiency.
In the startup ecosystem, innovation can come in the form of new business models, products, or services, and it plays a critical role in the success of startups. By fostering innovation in the startup ecosystem, governments and other organizations can create an environment conducive to economic growth and development and support the growth and success of new businesses.
To foster innovation, the CAREC region is home to several tech parks, such as Astana Hub, Azerbaijan Hi-tech Park (HTc), the People’s Republic of China’s Zhongguancun Science Park, and the National Information Technology Park in Mongolia. These tech parks are more than spaces for entrepreneurs; they also offer such as simplifying the bureaucratic process and deregulating specific areas. For instance, in Astana Hub, residents are exempted from some taxes, can benefit from the simplified procedures of work visas for foreigners, and companies can prefer to follow international law in dispute resolution.
Another example of fostering innovation and entrepreneurship is hosting events for startups where they can network and learn. CAREC program initiated many online events and workshops that foster entrepreneurship and innovation, such as CAREC Digital Trade Forum 2022 and CAREC University Startup Generator 2023. In addition to the regional events, each country in the region has local events, including Startup Grind’s monthly events designated for entrepreneurs in Central Asia. Some cities in the area that hosts monthly events include Baku, Tashkent, Karachi, Beijing, and Tbilisi. Moreover, many ecosystems in Central Asia have a Meetup Community powered by the CAREC program in which ecosystem developers can connect through gatherings. Some examples of communities include cities such as Bishkek, Baku, Tbilisi, Karachi, and Ulaanbaatar.
- The Region Offers Access to Funding and Resources
With access to resources, startups can develop their products and services, reach customers and scale their businesses. Funding can come in the form of seed capital, venture capital, angel investment, or grants, and it helps startups to build their team, develop their product, and reach their target customers. Resources include office space, mentorship, and networking opportunities.
Central Asia’s startup scene has access to these resources and funding alternatives. Some organizations that provide funding and support resources for startups in the CAREC member countries include Ilmhona Skills Accelerator in Dushanbe, UMAY Angels Club in Almaty, Tajik Startups in Dushanbe, 500Global in Tbilisi, Brinc in Hong Kong and ChinaAccelerator in Shanghai. These organizations play a crucial role in funding innovative ideas and acting as mentors to ensure that startups follow the right path toward growth.
- Initiatives tailored for Central Asia Ecosystem
Each startup ecosystem is unique in its way and has unique needs. For instance, Central Asia’s startup ecosystem is characterized by many seed-stage startups, although China and Pakistan have more mature ventures. In this sense, ecosystems in Central Asia are frequently launching accelerator and incubation programs as well as tech parks to support startup growth. Furthermore, the CAREC program allows member countries to collaborate and build synergies. CAREC program invests in the development of young entrepreneurs. For instance, between 1 May – 14 June 2022, as a part of CAREC Digital Strategy 2030, “CAREC University Startup Generator” opens up the stage for young entrepreneurs to pitch their innovative ideas. This initiative is in line with Central Asia’s relatively younger population, with a median age of 27.6.
- Central Asia Takes steps to Promote its Ecosystem
Promoting a startup ecosystem involves creating awareness and interest in the resources and opportunities available to entrepreneurs. Various alternatives, such as highlighting success stories, social media presence, partnering with relevant ecosystem stakeholders, and attending global startup-relevant events, can be adopted.
From a regional point of view, the CAREC program highlights the variety of opportunities, resources, and success stories available in the region through the Startup CAREC portal. The portal acts as the database of startups and other ecosystem stakeholders in the area and a knowledge center on the incentives and initiatives available to entrepreneurs in CAREC member countries.
Moreover, ecosystem developers from the CAREC member countries know how to bring the spotlight to their country at global events like Web Summit. For instance, Pakistan has a national stall in Web Summit 2022, a real-life example of how a startup ecosystem can promote itself in a global event.
This article highlights four ways the Central Asian startup ecosystem is developing. Central Asia’s approach to ecosystem development includes investing in infrastructure, fostering innovation and entrepreneurship, offering resources and funding for growth, and promoting the Central Asian startup ecosystem.