SOLUTION OF SOCIAL PROBLEMS IN
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International scientific-online conference
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INSTITUTIONAL LOCK-INS AND INNOVATION FAILURE IN
TRANSITION ECONOMIES: EVIDENCE FROM UZBEKISTAN’S
EXPORT INFRASTRUCTURE
Mukhammadyaminova Shakhzoda
Assistant at the Department of Transnational
Programs IMC Krems, TSUE
ORCID: https://orcid.org/0000-0002-9547-3892
https://doi.org/10.5281/zenodo.16537475
Annotation.
Despite significant investment in innovation infrastructure,
Uzbekistan shows limited progress in export diversification and innovation
outcomes. This study attributes the gap to institutional lock-ins—centralized
governance, poor inter-agency coordination, and weak collaboration
mechanisms. Using Institutional Theory and the Triple Helix framework, case
studies from the textile, logistics, and agro-processing sectors reveal that
innovation barriers stem not from lack of resources, but from systemic rigidity.
The paper recommends institutional reforms, sector-specific innovation hubs,
and the adoption of RegTech tools to enhance adaptive capacity and foster
export-oriented innovation.
Keywords:
Transition economy, institutional lock-in, innovation policy,
export infrastructure, Triple Helix, public-private partnership, RegTech, digital
integration, Uzbekistan, export-oriented innovation.
In transitional economies such as Uzbekistan, the disconnect between
investment in innovation infrastructure and actual innovation outcomes has
become increasingly apparent. Despite significant public funding, the country
continues to underperform in global innovation rankings. In 2023, Uzbekistan
was positioned 82nd out of 132 countries in the Global Innovation Index,
showing only marginal improvement from previous years and still trailing
regional peers such as Kazakhstan
1
. The national budget allocated over UZS 1.5
trillion between 2019 and 2023 to develop digital platforms, support start-ups,
and modernise export logistics, yet productivity and export diversification
remain limited
2
.
This paradox can be traced to institutional lock-ins: entrenched governance
structures, overlapping mandates, and the limited adaptive capacity of public
agencies. Drawing on Institutional Theory
3
, the concept of path dependency
4
,
1
WIPO. (2023). Global Innovation Index 2023. World Intellectual Property Organization.
2
OECD. (2022). Enhancing SME and Entrepreneurship Finance in Uzbekistan. Organisation for Economic Co-operation
and Development.
3
DiMaggio, P. J., & Powell, W. W. (1983). The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality
in Organizational Fields. American Sociological Review, 48(2), 147–160.
SOLUTION OF SOCIAL PROBLEMS IN
MANAGEMENT AND ECONOMY
International scientific-online conference
124
and a critical reading of the Triple Helix framework
5
, this thesis explores how
these systemic constraints hinder innovation. Rather than focusing solely on
firm-level deficiencies, the paper analyses innovation as an outcome of broader
institutional architecture, using case studies from Uzbekistan’s textile, logistics,
and agro-processing sectors.
Evidence reveals that fewer than 25% of export-oriented enterprises
(EOEs) accessed more than one form of state support in 2022
2
. Initiatives such
as the establishment of IT Parks and the digitisation of customs procedures have
yielded partial benefits. For example, TransAsia Logistics reported reduced
paperwork but continued to face delays averaging 11 days in customs clearance
due to the incomplete integration of digital platforms
6
. GERMES TEKS
implemented ERP systems in collaboration with international donors, yet lacked
access to certified textile testing infrastructure and sector-specific R&D.
UzAgroExport expanded traceability systems in its supply chains but reported
insufficient engagement with university researchers, citing outdated academic
outputs and weak incentives for applied collaboration.
These examples highlight a deeper systemic issue. The innovation
ecosystem in Uzbekistan functions through a top-down model where ministries
often operate in silos, with limited data interoperability or co-financed
mechanisms. R&D spending reached 0.31% of GDP in 2023, yet remains below
regional benchmarks and continues to favour fundamental research with limited
industrial relevance
7
. Public-private-academic partnerships are mostly
transactional, lacking the feedback loops and accountability necessary for co-
evolutionary governance.
Unlocking innovation potential in Uzbekistan’s export sector thus requires
institutional transformation. Policy recommendations emerging from this
analysis include the creation of inter-ministerial digital innovation coordination
units with shared metrics; piloting sector-specific innovation hubs co-governed
by industry and academia; and revising funding criteria to prioritise
demonstrable collaboration outcomes. Furthermore, regulatory technologies
(RegTech), including AI-based risk profiling in customs and blockchain in export
certification, could help address bureaucratic inertia while enhancing
transparency.
4
North, D. C. (1990). Institutions, Institutional Change and Economic Performance. Cambridge University Press.
5
Etzkowitz H., & Leydesdorff, L. (2000). The Dynamics of Innovation: From National Systems and "Mode 2" to a Triple
Helix of University–Industry–Government Relations. Research Policy, 29(2), 109–123.
6
ADB. (2023). Uzbekistan: Trade Logistics Assessment. Asian Development Bank.
7
UNDP. (2023). Uzbekistan Digital Economy and Innovation Landscape Assessment. United Nations Development
Programme.
SOLUTION OF SOCIAL PROBLEMS IN
MANAGEMENT AND ECONOMY
International scientific-online conference
125
The findings reframe innovation failure in Uzbekistan not as a result of low
ambition or weak entrepreneurship, but as a reflection of institutional inertia
and misaligned policy design. These institutional lock-ins, though often
embedded within administrative routines and fragmented legal frameworks,
substantially reduce the absorptive capacity of EOEs. Only by shifting toward an
adaptive, participatory, and learning-oriented governance model can the
country realise its export-led innovation ambitions. This perspective aligns with
international assessments of innovation in transitional economies and offers a
conceptual basis for benchmarking innovation system reform across the post-
Soviet space
References:
1.
ADB. (2023). Uzbekistan: Trade Logistics Assessment. Asian Development
Bank.
2.
DiMaggio, P. J., & Powell, W. W. (1983). The Iron Cage Revisited:
Institutional Isomorphism and Collective Rationality in Organizational Fields.
American Sociological Review, 48(2), 147–160.
3.
Etzkowitz H., & Leydesdorff, L. (2000). The Dynamics of Innovation: From
National Systems and "Mode 2" to a Triple Helix of University–Industry–
Government Relations. Research Policy, 29(2), 109–123.
4.
North, D. C. (1990). Institutions, Institutional Change and Economic
Performance. Cambridge University Press.
5.
OECD. (2022). Enhancing SME and Entrepreneurship Finance in
Uzbekistan. Organisation for Economic Co-operation and Development.
6.
UNDP. (2023). Uzbekistan Digital Economy and Innovation Landscape
Assessment. United Nations Development Programme.
7.
WIPO. (2023). Global Innovation Index 2023. World Intellectual Property
Organization.
