World Bank Identifies Key Challenges Impeding Growth in Uzbekistan’s Services Sector
The World Bank (WB) has identified three significant challenges that Uzbekistan’s services sector must address to ensure sustained economic growth and create higher-quality jobs. These challenges involve enhancing productivity, strengthening integration with other industries, and prioritising global innovative services.
Limited integration with other sectors
A critical issue is the need for more connections between the services sector and other industries, particularly manufacturing. Currently, only 9% of services are utilised as inputs in Uzbekistan’s manufacturing sector, far below the 30-40% seen in advanced economies such as those in the European Union (EU). Enhancing these links could drive productivity in both sectors and support economic diversification.
Low contribution of global innovative services
Global innovative services, including information technology and financial services, are key drivers of productivity and economic growth. In Uzbekistan, however, these services account for only 10% of total services exports. Expanding this share could stimulate the development of high-value sectors, foster skilled employment opportunities, and underpin sustainable economic growth.
Productivity gaps in low-skill services
Although low-skill services provide considerable employment, they remain among the least productive segments. Globally, digital technologies have significantly enhanced productivity in similar sectors. However, in Uzbekistan, just 20% of firms in low-skill services utilise basic digital tools. Expanding digitalisation across these industries is essential to improve productivity and job quality.
The World Bank’s report recommends a policy agenda centred on digitalisation, stronger sectoral integration and the promotion of global innovative services to tackle these challenges effectively.
