Something unusual happened in Berlin recently. Executives from some of Europe's oldest financial institutions sat in a room and listened — carefully, and with something approaching humility — to people from Kazakhstan, Azerbaijan and Uzbekistan explain how business gets done. Not as a charitable exercise in intercultural understanding. As a business necessity.

The occasion was the Inmerge Innovation Summit, a platform born in Baku five years ago and making its European debut in the German capital, co-hosted by Pasha Financial Group and Plug and Play, the global accelerator with 60 offices worldwide. The speakers were supposed to be from the "emerging markets," from the backwaters of Central Asia to boot. But the markets the developed world spent decades calling emerging are emerging no more. In several critical respects, they have already arrived — and in some cases they have overtaken the countries that were supposed to be showing them the way.

This is not the classic upstart Eurasian David slaying the tech giant Goliaths of the west with stone. Goliath has not been slain. What is happening is stranger and more interesting: Goliath is realising that David has something he needs. The question being asked in rooms like this one across Europe is whether the realisation has come in time.

Running beneath the day's conversations was a single animating thesis: the next decade does not belong to the largest companies or the largest markets. It belongs to the most connected ones. The countries best positioned to win that race are not necessarily the ones with the deepest pockets or the longest histories — they are the ones that arrived late enough to build without the burden of what came before.

Europe's belated awakening

European banks have spent four years scrambling to replace Russia with the markets they spent three decades ignoring. The numbers reveal how much ground they are making up — and how much they still have to lose.

For most of the post-Soviet era, the flow of capital between Europe and Central Asia ran in one direction and through one country. Russia was the conduit, the counterparty and, for many European institutions, the entirety of the regional story. Then came February 2022, and the architecture of three decades collapsed almost overnight.

"Before the Russian invasion of Ukraine, our most important market in this region was Russia," said Susanne Franz, head of international banking sales at Oddo BHF, a European financial group with roots stretching back more than 180 years. "This situation has changed dramatically. We had to refocus our business."

The scale of the refocus is remarkable. In 2022, Franz's team had relationships with two banks in Azerbaijan. Today that number stands at nine. Across the wider region her portfolio now encompasses eight banks in Armenia, six in Georgia, sixteen in Uzbekistan, eight in Kazakhstan and three each in Tajikistan and Kyrgyzstan. What took decades to construct with Russia has been substantially rebuilt across an entire region in three years — not out of strategic vision, but out of competitive necessity.

That distinction matters. Europe did not pivot to Central Asia because it recognised the region's potential. It pivoted because it had no choice. And that means the opportunity was already there, waiting, while European institutions looked elsewhere.

The cost of that inattention is now visible in the competitive landscape Franz described with striking candour. "You have big players like China who have regional connections, the economic system of Russia which are still there, and the US influence, especially now going to be stronger and stronger," she said. "We as Europeans, if we want to bring our goods, our industry and our investment to the region and buy from it, we have to wake up. This is my message."

The world is now waking up to the rapid growth of Central Asia, back at the strategic crossroads between East and West in a way it has not been since the Great Game was played across its steppes a century ago. Uzbekistan — closed to the outside world until 2016, and still widely underestimated in European financial circles — drew investors from across the global economy to its fifth Tashkent International Investment Forum in June. Clean energy projects can now access long-term financing under OECD consensus rules for up to 22 years plus construction time, and this year senior delegations from the UK, led by the British Minister for Investment Lord Stockwell, and Germany, led by President Frank-Walter Steinmeier, attended for the first time. The country is booming.

Then there is the South Caucasus, where the geopolitical weather has shifted in ways that are only beginning to register in European boardrooms. "We had more than 30 years of open conflict in the region," Franz said. "Since last year we saw a peace agreement signed. Azerbaijan is now sending fuel to Armenia. Flights are being restored." She allowed herself a moment of quiet emphasis. "The best connecting nations will win." It was not a conference platitude. It was a description of something already happening — and a warning about the cost of arriving late to a race that has already begun.

The leapfrog advantage - arriving late gives you the lead

Central Asia did not inherit the infrastructure, the regulation or the institutional habits of the developed world. That used to look like a disadvantage. It no longer does.

The financial pivot toward Central Asia would be a story about opportunism if that were all there was to it — European banks filling a Russia-shaped hole with whatever was geographically adjacent. What makes it something more interesting is the nature of what they are finding when they get there.

The countries of Central Asia did not industrialise in the 19th century. They did not digitise in the 20th. They arrived in the modern economy carrying almost none of the legacy infrastructure, institutional inertia or regulatory sediment that now makes innovation so expensive and slow in the markets that got there first. All five of the so-called Stans saw their economies collapse entirely and have been building from scratch ever since. And in a world being remade by artificial intelligence, that turns out to matter enormously.

"Being classified as an emerging market is both a curse and a blessing," said Tughra Musayeva, head of innovation at Pasha Financial Group and the architect of the Inmerge platform. "The curse is that there are a lot of things that are missing and we need to catch up. But the blessing is that we do not have the legacy of established systems. Changing things is always way more difficult than creating something new."

The implication is more radical than it might first appear. Countries that built their banking systems in the age of mainframes are now trying to bolt digital wallets onto systems that were never designed for them. Countries that wrote their financial regulations in the 1980s are now trying to retrofit them to accommodate cryptocurrency, AI-driven credit decisions and real-time cross-border payments. Central Asia faces none of those constraints.

Nowhere is that more visible than in AI regulation, the arena in which the decisions being made today will shape competitive landscapes for decades. In Brussels, writing AI rules means navigating decades of competing interests — incumbent industries, privacy advocates, member states with divergent priorities and technology companies with expensive lobbying operations. "When it comes to AI legislation, it is so new that you can write it any way you want," Musayeva said. "You can write it in a way that will put you forward. You can write it in a way that will put you back. It is a choice." In Astana, that choice is being made by governments with a much shorter list of constraints and a much stronger incentive to get it right.

The leapfrog advantage does not come for free. "Our technical debt is nowhere near what you see in Western markets," a speaker from the financial services sector on the Innovation Bridge panel said. "But the two biggest challenges are access to talent and access to tools. Microsoft, Google, AWS — these are simply not available due to export controls and other barriers. Which means before we can use these services, we have to build them." The region's freedom from institutional legacy coexists with a tools deficit that forces improvisation daily. What that improvisation produces, over time, is a depth of practical capability that no amount of cloud subscription can replicate.

"For centuries, caravans crossed our land, carrying silk, spices and other goods between East and West," said Azerbaijan's Ambassador Nasimi Aghayev. "Today those caravans have become fibre-optic cables, data flows, venture capital, research partnerships and neural ambition. The caravan has changed. The mission hasn't."

Goliath needs David

The old model — large companies build, small companies watch — is breaking down. What is replacing it is a relationship that neither side yet fully understands.

If the leapfrog advantage explains why Central Asia is interesting, the corporate-startup relationship explains how that interest gets converted into actual economic activity. And here the picture is considerably more complicated — because connection is not just about infrastructure and regulation. It is about trust, contracts and the willingness of large institutions to take a chance on small ones.

The dominant model of innovation in large companies — build internally, protect the IP, scale through acquisition — is not just expensive. It is, Musayeva argues, actively counterproductive in markets moving at the speed Central Asia is now moving at. "Whatever is not a company's core strategic product should be outsourced to startups," she said. "No matter how much we are investing in startups, if they do not have partners and they do not have clients, we assume they will be testing and co-building their product. It is not going to work." The result is a market failure with two victims: startups with genuine capabilities that cannot get the contracts needed to prove them, and large companies spending ten times more than necessary to build things that already exist.

"It is always cheaper, easier and faster to do with startups than internally," Musayeva said. "With the budget that a large company could spend on building one product internally, they could spread it out, make more bets and let the startups build." Some of those bets will fail — that is built into the model. "An experiment failure is unavoidable. Some of these will not happen, but some will, and those that succeed turn out to be a big win."

Where the relationship does not happen organically, government has to create the conditions for it. Tax redemptions for companies that partner with startups have proven effective in parts of the world where the dynamic does not arise naturally. "In that part of the world where it is not happening," Musayeva said, "the huge role of government is in how to incentivise it. And that is where we see a lot of impact."

That, too, is a leapfrog opportunity. The countries writing their innovation policy now, the institutions building their governance frameworks from scratch rather than retrofitting them onto systems designed for a different era — all of them have a chance to get this right in a way that the incumbents, burdened by what they already have, will find considerably harder. The most connected economies will not just be the ones with the best fibre or the most open borders. They will be the ones that built the right rules while the page was still blank.

The caravan moves

The connectivity thesis, stated plainly, is a provocation: that the competitive advantage of scale — of being large, established, deeply resourced — is being eroded by the advantage of connection. That a country with smart regulation, a young population willing to build from scratch and nothing to dismantle before it starts can outmanoeuvre a country with centuries of institutional capital but decades of institutional debt.

Whether that is true in its strongest form remains to be tested. The data from the banking corridor shows European institutions scrambling to build in three years what should have been built in thirty. The analysis of the legacy-free advantage shows why the scramble is justified. The corporate-startup dynamic shows how hard it is to turn that justification into actual commercial relationships.

What the Inmerge summit in Berlin represented, stripped of the speeches and the panels and the networking breaks, was something simpler: a room in which Goliath was paying attention. That is not nothing. Whether it is enough depends on how quickly the attention turns into action — and whether the caravans, ancient mission intact, can agree on new terms of trade.