On 17 April, the Director General of AzerTelecom LLC Fuad Allahverdiyev told the local media that reforms on building digital economy were underway in Azerbaijan, and large-scale public and private programs are being implemented, reported Trend. “A partnership is being created between the state and private owners to promote the country as a digital hub at the global level and apply digital technologies,” he said.
“The Azerbaijan Digital Hub program and various projects within this program are aimed at deepening the digitalization of the Azerbaijani economy and creating a stable technological infrastructure for building such an economy. Major content providers such as Facebook, Google, Netflix, Amazon, Alibaba, and Tencent attract Azerbaijan to meet the traffic needs of Asian countries, and, as a result, this creates an opportunity for Azerbaijan to become a digital center. Successful implementation of the program will ultimately create conditions for the formation of a digital ecosystem in Azerbaijan, the creation of a digital economy, and an increase in the share of the digital sector in the economy,” he added.
In 2016, a strategic Information and Communication Technologies (ICT) roadmap was approved by the Azerbaijani President Ilham Aliyev which outlined 3 key strategies and 10 priorities, with achievement targeted for 2020. The cost of implementing the road map has been budgeted at 585 million manat ($344 million). The 3 key strategies were: 1) improving governance structures and strengthening the ICT sector; 2) increasing productivity and operational efficiency of the business environment; and 3) digitize government and social environment in the country.
According to the Network Readiness Index, published by the World Economic Forum in 2016, Azerbaijan ranked 53rd amongst 139 countries in terms of its ICT potential. The country showed good results in the environment and readiness sub-indexes but performed poorly in the usage and impact sub-indexes.
According to a report from the Asian Development Bank (ADB) in 2019, Azerbaijan’s ICT sector generated revenue of 1.038 million manat ($610 million) in 2017, or 1.5% of GDP (2.2% of non-oil GDP). Although the sector has grown since 2010, the growth rate has been less than that of the overall economy; consequently, its share of GDP has declined. Telecommunication accounted for 88% of total sector revenue, suggesting that Azerbaijan has yet to exploit its existing hard infrastructure through a vibrant computer and information service industry.
The report highlighted the major areas where Azerbaijan still needs to work in order to improve its ICT sector, namely: 1) E-Government, 2) digital SME’s, 3) incorporating digital innovations in the education sector, 4) developing E-agriculture, 5) cross-border e-commerce, and 6) enabling an environment for the growth of digital economy in the country.
