As reported by MiddleAsianNews, Ulaanbaatar has impressively digitized government services. Creating an export-oriented IT sector is a whole different matter.
Mongolia has achieved a remarkable result: it has made a direct leap to digital governance without first establishing the necessary technological sector that one might expect to precede such a transformation.
Since the launch of the E-Mongolia platform in 2020, residents have gained access to 181 government services through a mobile app and website, with plans to add another 492. This platform integrates systems such as E-Barimt (VAT simplification) and E-Halamj (social services), and facilitates the implementation of the "Vision Mongolia 2050" strategy by reducing bureaucracy. A significant role in these reforms is played by the Agency for Regulation of Government Digital Services, established in 2022. Mongolia has risen from 74th to 46th place out of 193 countries in the UN e-Government Development Index for 2024, which is a significant achievement for a landlocked country with a population of 3.3 million, located between Russia and China.
However, upon closer examination, it becomes clear that Mongolia's digital transformation is more complex than it may seem at first glance. In the StartupBlink ecosystem ranking, the country ranks 80th in the world, having moved up one position, but with a negative annual growth rate of five percent. Mongolia has 75 registered startups, placing it fifth in East Asia. In the field of educational technology, Mongolia ranks 57th globally and fifth in the region with 13 startups, accounting for 17 percent of the total. From 2017 to 2025, Mongolia attracted only $14 million in startup investments—a sum that barely allows for one Series A funding round in other countries.
Government initiatives are not limited to e-government. The "Digital Nation" program aims to improve transparency, reduce bureaucracy, and support businesses.
Efforts to develop e-commerce, financial services, and programs for youth entrepreneurs, such as Youth Business Mongolia, are creating some infrastructure; however, compared to more developed ecosystems, they are still in the early stages.
In the Reinvantage IT sector competitiveness index, Mongolia ranked 26th out of 32 countries, surpassing Albania by 0.56 points but trailing Moldova by 0.87 points. The sector shows good results in terms of economic impact (12th place) but weak performance in the business environment (30th place), indicating that the sector creates limited value despite challenging regulatory conditions.
Analysis of key indicators shows that the IT sector is virtually indistinguishable from telecommunications. The average salary in ICT in 2024 was €673—81 percent higher than in 2020—but still one of the lowest among the sectors studied. Interestingly, the average salary across the economy reached €636, resulting in only a 6 percent difference—one of the smallest gaps among all countries, indicating the low value of ICT compared to other industries.
The number of workers in the ICT sector in 2024 exceeded 21,000 compared to 17,500 in 2020, representing a growth of 20.8%, although this figure is below average. The share of those employed in ICT in total employment rose from 1.4% to 1.6%, which is about half of the average figure of nearly 3%.
From 2020 to 2024, the number of students studying ICT specialties increased by 44.7 percent, and the number of graduates rose by almost 39 percent, indicating growing interest, albeit from a low base. The export of ICT services accounts for only 0.26 percent of GDP, significantly lower than the average of 2.3 percent (excluding Cyprus). The added value in the sector is 2.02 percent, compared to an average of 4.59 percent. These data confirm that telecommunications dominate in Mongolia, rather than information technology.
"Mongolia has successfully digitized public administration. However, creating an IT sector capable of exporting services requires entirely different capabilities, which have yet to be demonstrated," emphasized Emerging Europe.
