Nowadays the information technologies sector appears to be one of the most dynamically developing economy sectors in many countries, while the software industry and the market for software products are progressing even faster. The annual growth rate of global software market ranges from 10% to 20%, according to different estimates. The considerable part of this sector is taken by export oriented software development or so-called software outsourcing. This concept includes both custom software development and export of packaged software.

By the end of 2006 the total volume of global software export market has made more than $30 billion. The list of software exporters is headed by India with $10 billion in revenue per year, followed by Ireland with $4 billion in revenue per year and China with $3 billion in revenue per year. Russia that in 2006 exported software products worth $1 billion is on the fourth place that is quite comparable now to software exports from 3 leading countries considering high growth rates of Russian IT Market.

The development of software export industry is very important for Uzbekistan considering availability of highly skilled professionals and competitive prices for offered services. In order to receive a broad picture from expert point of view on volumes, structure and tendencies of software export industry in Uzbekistan and to develop recommendations on its further development, the UNDP’s "ICT Policy" project with assistance from Association of IT companies and organizations of Uzbekistan has initiated a research study on "Software export industry in Uzbekistan". The results of the research, which is the first of such type in Uzbekistan, have been received on the basis of the polling of companies and organizations representing the software industry in Uzbekistan. The polling results have provided the basis for the final report that includes the current status analysis and indentifies the problems in the industry.

The research has demonstrated that software export market in Uzbekistan is still in its infancy stage and relatively small. Nevertheless, the dynamics of its development is very positive and the market has a strong tendency to further growth due to high human resource potential, relatively good quality of developed products and provided services, rather low software development costs, quick response to market requirements and client expectations as well as other factors that attract foreign clients. There are also certain perspectives concerning the development of market supported by a good mood of software exporters to expand their businesses through development of new activities and extension of range of services.


At the same time, the research study has exposed serious problems experienced by software development companies and affecting their further development. First of all, it is the shortage of specialists caused by high market growth rates and insufficient quantity of prepared professionals – programmers, designers, system analysts, managers, and marketing experts. The shortage of specialists is aggravated with their outflow to foreign countries or so-called "brain drain" issue. Because of high quality labor scarcity situation, the development teams are forced to work in small groups, and this fact accordingly affects the software export volumes.

The specific limitations constraining the development of software export industry are imposed also by the necessity to further improve the taxation system, customs regulation, currency control, and to overcome the existing software export related administrative barriers. There is also a serious issue of absence of proper reputation of Uzbek companies at the international market caused by insufficient level of marketing support abroad.

Undoubtedly, the software export industry can become one of the most important industries in Uzbekistan. However it requires strong government support that is seen in perfection of administrative and legislative regulations; professional training development; maintenance and development of modern technical infrastructure; provision of marketing assistance to companies at foreign markets; provision of support for quality control certification; assistance for undertaking scientific research activities.

Along with the necessity of government support of software export industry, the research has also highlighted the special role of IT Association of Uzbekistan on protection and promotion of interests of software exporters and assisting them with their problems at state level.

The research results will be useful to local companies that plan in the near future both to increase their software exports and to make first steps in this direction. The research results will be also useful to foreign companies that intent to understand the software development industry in Uzbekistan, to learn the current situation, possible opportunities and problems, if they plan to take advantage of software development services in Uzbekistan and to import software products from Uzbekistan.

The online version of the research (in Russian) is available on ICTP project website at:
http://ru.ictp.uz/downloads/outsourcing_paper.pdf

UNDP’s project "Assisting the Government of Uzbekistan in the formulation and implementation of ICT for development policy" is aimed at supporting the development of ICT policy in Uzbekistan and facilitating use of ICT for achieving development goals.