DEVELOPMENT OF THE VENTURE CAPITAL ECOSYSTEM IN UZBEKISTAN: SOURCES, PROBLEMS AND PROSPECTS

Abstract

This paper examines the emergence and development of the venture capital (VC) ecosystem in Uzbekistan, a transition economy in Central Asia striving to foster innovation and high-growth entrepreneurship. Drawing on theoretical frameworks related to innovation finance and entrepreneurial ecosystems, the study explores the current landscape of VC activity in Uzbekistan, identifies key structural challenges such as limited exit opportunities, low financial literacy, commercialization barriers, and legal-regulatory gaps and assesses the effectiveness of recent policy initiatives. The analysis integrates insights from the 2024 KPMG report on Central Asia and supplements it with comparative lessons from international case studies, including Israel’s Yozma program, Singapore’s co-investment incentives, and South Korea’s fund-of-funds model. The paper proposes a set of phased policy recommendations to strengthen the VC ecosystem, including legal reforms, investor tax incentives, co-investment mechanisms, and capacity-building initiatives. The findings suggest that while Uzbekistan’s VC sector is still nascent, targeted policy interventions can accelerate its evolution into a robust, globally integrated driver of innovation-led economic growth.