ICT Industry Leader Predictions for the Tech Sector of Central Asia in 2024

Interested in learning even more about the trends that will shape the IT sector of Central Asia in 2024? Register for our Feb 29th webinar with Alexander Gorny, Ashot Arzumanyan, and Askar Aituov here.

2024 promises to be a year of growth in the tech sector of Central Asia for a number of reasons.

For instance, as internet penetration becomes more widespread throughout the region, we can expect digital commerce to continue growing, driving Central Asia’s e-commerce software market forward at a rate of 3.2%/year.

The financial services industry is also growing as mobile banking and other digital financial services become more widely available, serving people who were previously unbanked and connecting them to the global economy.

New advancements in tech will spur on these developments and the solutions they present for local communities. For example, as Central Asian cities develop, the Smart Cities market — powered by the Internet of Things (IoT) — is expected to grow at a CAGR of 10-15 percent between 2024-2028.

All in all, it’s an exciting time to be living and working in the tech sector of Central Asia. To find out what the future holds for the region, we asked local industry leaders from Kazakhstan, Georgia, Armenia, Uzbekistan, and Azerbaijan for their 2024 predictions.

Here’s what they had to say.

Regional predictions

“Adapting existing successful models and fostering original creations.”

Samat Galimov,
Co-Founder of Fedya and Samat and host of Launch Tomorrow, a podcast by Libo Libo

“The region, particularly Armenia and Georgia, is experiencing a significant influx of skilled software developers, with Kazakhstan, Azerbaijan, and Uzbekistan also witnessing a similar, albeit smaller, trend.

These developers primarily work remotely for European and US companies. Although they do not directly compete in the local development talent market, their presence undeniably influences the tech landscape in these countries. 

Furthermore, a number of tech startups and companies have relocated to these regions. Some of these entities are focusing on serving the local market, which could yield intriguing outcomes. This trend suggests a potential shift in the tech sector dynamics within these countries.

In 2024, I anticipate a continued effort to adapt and launch internationally successful products, particularly those from the US, to local markets in the Central Asia region.

However, there are always precious few companies striving to innovate and develop unique products with the ambition of penetrating the global market. This dual approach—adapting existing successful models and fostering original creations—will likely shape the local tech/ICT sector in the upcoming year.”

“There won’t be significant growth in AI/ML research.”

Askar Aituov,
Founder of devscentral.asia community and productscentral.asia conference

“Tech unemployment for junior specialists will soar. There is a growing number of computer science university graduates and IT schools (“shifters”). In 2024, a minimum of 4,000 new graduates will be job hunting in Almaty (Kazakhstan) and other major cities of Central Asia, such as Bishkek (Kyrgyzstan) and Tashkent (Uzbekistan).

I have talked to junior engineers, university professors, and IT school executives. Although there are plenty of open positions for middle/senior employees, for junior engineers/managers the situation is different. For every vacancy in Central Asia, there are ten junior candidates.

Despite some startups maturing and raising funds on the local stock market — for instance, Citix.me recently issued shares on Astana International Exchange and raised investments from Tim Draper — these cases are rare, and there is no evidence of a significant increase in the number of employees.

There won’t be significant growth in AI/ML research since there is only 1 research institute in Central Asia that produces AI/ML research and possesses its own servers dedicated to AI training, and it has a relatively small staff headcount compared to European and US research institutions (ISSAI at Nazarbayev University).

Developer communities will continue to self-organize and aspire to export IT services and products to foreign markets. But they face the challenge of low English language proficiency and high competition.

In terms of new business models, several startups will deploy solutions to tackle water problems in Kazakhstan and Uzbekistan.

There will be further growth and investment into marketing in the region by such companies as Yandex (B2C and B2B services), Ozon tech, VK cloud, and others.”

Kazakhstan

In 2024, revenue in the Kazakhstan IT services market is expected to reach $1,187 million, and the average spend per employee in the IT services market will be $130.10 — representing huge opportunities for Kazakhstani IT service providers.

“The Eurasian Development Bank expects Kazakhstan’s GDP growth to reach 5% in 2024.”

Alexander Gorny,
Co-founder of Mo: Meditation and Sleep

“The venture sectors of Kazakhstan and Uzbekistan will continue to see exciting growth in 2024, as global institutions predict growth and stable development for the economies of these countries.

For example, the Word Bank’s projections for Uzbekistan highlights the country’s role and significance in the regional economic progress with its forecasted 5.6% economic growth in 2024. Substantial state support focused on promoting technological innovation and entrepreneurship, increasing international educational base, and growing trade has created a favorable outlook for development of the venture sector.

Similarly, the macroeconomic factors in Kazakhstan are also seen as positive, promising stable growth and favorable conditions for business growth and economic development. The Eurasian Development Bank expects Kazakhstan’s gross domestic product (GDP) growth to reach 5% in 2024 which is one of the fastest growth rates in the region. This is sustained by an inflow of entrepreneurs and IT-specialists from other Central Asia countries, who have widely chosen Kazakhstan as a relocation destination.”

“I expect more unicorns from Central Asia.”

Yersagi Altynov,
Senior Developer at Beeline

“It’s getting more and more challenging and competitive in the tech market for juniors and interns to get started. I expect more unicorns from Central Asia, even if launched from US or EU markets. I also expect several local apps that have proven product market fit in Kazakhstan to expand into the US market this year.”

Azerbaijan

There will be many exciting developments in the Azerbaijani tech sector in 2024. For instance, the country will achieve 100% internet penetration by the end of the year, partly in thanks to the government’s deal with SpaceX.

“Significant investments into innovation, solution creation, and education are set to transform the lives of citizens in 2024”

Loukas Tzitzis,
Managing Director of International Business at the Innovation and Digital Development Agency

“Azerbaijan has embarked on a journey to digitize society as well as transform its economy. Currently the contribution of ICT to the GDP of Azerbaijan is 1.4%, and the Government has adopted an ambitious agenda establishing ICT as a critical enabler for Azerbaijan to increase exponentially CT GDP contribution as well as create a business and innovation ecosystem.

Critical sectors where investments and efforts are transforming the country are digital platforms (G2G/G2B/G2C); renewable/alternative energy, banking/fintech, cybersecurity, cloud, AI/ML, system integration, communications, and IoT, with a focus on smart solutions benefiting society (smart city, smart homes, and resource management, such as water).

In particular, digital platforms, banking/fintech, energy, and cybersecurity are already areas where significant investments into innovation, solution creation, and education are set to transform the lives of citizens in 2024.”

Georgia

“Starting from 2019, the Georgian IT market has been steadily growing by 29-32% annually, gaining massive support from internal investors”

Akaki Davlianidze,
Country Director for Georgia at SoftTeco

“The tech sector in Georgia continues to go from strength to strength, growing by 49.9 percent in 2022. Meanwhile, the Georgian digital commerce market is expected to hit $1 billion in value in 2024, driven by high internet penetration and high uptake rates of digital financial services.

Starting from 2019, the Georgian IT market has been steadily growing by 29-32% annually, gaining massive support from internal investors. Such growth is reasoned by the advancement of education in the IT industry and by the increasing interest of young professionals that recognize the benefits and potential of working in the Information Technology sector.

As for the technological trends, the most preferred framework of Georgian developers, as per 2022-2023, is React and the most popular programming language to learn and use is JavaScript. Also, in 2023, the first AI Association was created in Georgia with an aim to help businesses adopt the technology and disseminate it across the private sector. In this way, Georgia is now actively cultivating the IT segment and is gaining more recognition as a provider of high-quality software development services.”

“Local agencies like us have made strides in exporting IT services.”

Gaga Darsalia,
CEO of Redberry

“Georgia is quickly becoming a key IT outsourcing hub in Eastern Europe. In the past two years, the IT sector here has grown impressively, more than five times its previous size.

This growth isn’t just recent; even before the recent influx of IT professionals, Georgia’s IT sector had already tripled between 2019-2021.

Looking ahead to 2024, with global interest rates expected to fall, there’s likely to be a turnaround in the tech market. This change should boost the demand for IT outsourcing, especially in Central and Eastern Europe, with more companies willing to build new products but mindful of its costs.

And thanks to its recent growth and development, Georgia is more than prepared to meet this demand. Due to the lenient local IT outsourcing taxes, major IT consultancy players have already entered the market in Georgia, and local agencies like us have made strides in exporting IT services.

We’ve tripled in size over the last two years and are now focusing on expanding our client base in the EU, the UK, and the US.

The popularity of tech-related professions will likely keep growing as well, with the demand to either enter or switch to a career in tech on the rise. We’ve seen this trend first-hand with the application numbers for our development bootcamp increasing with each cohort.

Overall, as Georgia becomes more recognized for IT outsourcing, both by operational maturity and the level of expertise aggregated in the country, Georgian IT companies like Redberry are well positioned to capitalize on these new opportunities.”

Uzbekistan

The Uzbek tech sector is thriving and is expected to reach $1,568 million in value in 2024, while the average IT services spend per employee will be $96.51 by the end of the year.

“Uzbekistan is poised to become a hub for technological innovation.”

Farkhod Ibragimov,
CEO of IT Park Uzbekistan

“In 2024, we anticipate a transformative shift in Uzbekistan’s tech landscape, with a focus on industries such as fintech, e-commerce, and agritech witnessing substantial investment.

The government’s commitment to fostering a conducive environment for innovation is propelling the growth of locally founded startups, and we expect to see these ventures making waves on the global stage.

With a burgeoning ecosystem made up of organizations like IT Park at the forefront, Uzbekistan is poised to become a hub for technological innovation. We foresee a rise in the prominence of homegrown apps expanding beyond national borders, contributing to the country’s emergence as a key player in the global tech arena.

This exciting trajectory is not only reshaping the tech industry but also positioning Uzbekistan as a dynamic and competitive force in the international innovation landscape.”

Armenia

The Armenian government is prioritizing its Digitalization Strategy for 2021-2025, which is expected to propel the tech sector forward at a rate of 20 percent per year.

“There will be increased attention from international investors and acceleration programs.”

Ashot Arzumanyan,
Partner at SmartGateVC

“The supercomputer at Yerevan State University is a major advancement, significantly enhancing Armenia’s research and technological development capabilities in AI.

There’ll also be more emphasis on science, and hosting the World Congress for Information Technologies, themed around ‘Science As A Means Of Fulfilling The Promise Of The Digital Age,’ reflects Armenia’s strong commitment to advancing science and its link with tech.

The ServiceTitan and Picsart IPOs were delayed with the 2022 crisis but might happen towards the year’s end, playing a crucial role in shifting Armenia’s startup ecosystem to the next phase of maturity.

A number of Armenian startups in the Series Seed to Series B stages will likely achieve exits this year.

There will also be increased attention from international investors and acceleration programs, drawn by Armenia’s emerging tech potential and innovative environment.

Finally, there will be an intensified exchange of expertise and ideas between the Armenian Diaspora and local talent, fostering new deep tech ventures and enhancing research and development initiatives.”

“Growth will be driven by web development & design, SEO, and mobile app development.”

Astghik Mkrtchyan,
Team Leader at LinkyJuice

“Armenia has faced a considerable improvement in tech and IT for the last few years. The IT industry is growing by approximately 20% each year, and that growth is mainly driven by web development, web design, SEO, and mobile app development. Other trends that have picked up momentum recently and will continue to grow are artificial intelligence, machine learning, and data science.

In addition, freelancing and working for foreign companies has become popular. Various organizations outsource to the Armenian IT industry for jobs like software and hardware engineering, SEO services, video editing, and graphic design.

The abundance of talented developers and designers and the high English fluency of the workforce create fertile ground for US and EU companies that need to outsource.

Regarding technology, several world-known companies have opened laboratories and local industry associations in Yerevan, Gyumri, and Vanadzor. Among those companies are Microsoft, National Instruments, and IBM.”

“AI will be the fastest-growing sector.”

Vardan Hayrapetyan,
Technical Lead at Flair HR

“In 2024, international businesses will start looking more at Armenian tech. The salaries in Armenia compared to Europe and the US are much lower, but the quality is of the same standard, making it an attractive outsourcing prospect. 2023 was the year of big companies setting up branches in Armenia and hiring local talent; this will continue in 2024.

AI will be the fastest growing sector, and Wirestock.io is one startup to watch in this space. Wirestock is a stock image company that has integrated AI for generating images, and they are seeing a huge amount of local hype right now that will eventually spill out onto the international stage.”

“Capable, dependable tech partners continue to remain in demand.”

Gayane Melkonyan,
Director of Marketing at VOLO

“IT is one of the fastest-growing industries in Armenia, responsible for a large chunk of the country’s economic growth. 2023, like its predecessor, was a tumultuous year for the tech sector, and the Armenian IT market was no exception.

Nevertheless, we remain hopeful that in 2024, Armenian-based apps and startups like Krisp and Service Titan will continue to fortify their influence globally.

The past couple of years were also rough on software outsourcing companies, driving many of them out of business and forcing others to resort to layoffs. In the current survival-of-the-fittest conditions, the companies that remain standing are the ones that continue to serve their clients’ needs best. In other words, capable, dependable tech partners continue to remain in demand. Additionally, the WCIT event is set to return to Yerevan in 2024, once again bringing additional focus to the Armenian tech scene.”

“I see Armenia as a competitive player in the global technology arena.”

Karen Hovhannisyan,
CEO of BeeWeb

“As the CEO of BeeWeb software development company, I see Armenia as a competitive player in the global technology arena. I can say for sure that Armenia’s tech landscape looks promising in 2024, given the exciting advancements in place.

With an increasing focus on innovation and technology, I anticipate huge investments in industries like artificial intelligence, cybersecurity, and robotics.”

Ride the Wave of Digitization in 2024

As these insights from industry experts highlight, the conditions are ripe for Central Asia’s tech sector to flourish in 2024.

As more countries in the region develop infrastructure and regulations that favor tech companies while investing in education and research, key markets like the US and Europe will continue to outsource and invest in the region — opening up a world of opportunities for local tech companies.

Will your business be part of the Central Asia tech boom?

For more actionable insights on navigating this shift, register for our webinar on Feb 29.