Digital hub: Azerbaijan builds the economy of the future Review by Khazar Akhundov

In recent years, the world's leading economies have accelerated efforts to build resilient digital ecosystems that support the advancement of the Fourth Industrial Revolution (4IR). These trends are equally relevant for Azerbaijan, which has made notable progress in achieving the UN Sustainable Development Goals (SDGs) aimed at narrowing the digital divide and strengthening human capital.

In particular, Azerbaijan is actively implementing international best practices in e-government and cybersecurity, expanding the use of artificial intelligence (AI), and developing its data infrastructure as part of its ambition to transform the country into a regional digital hub.

These strategic priorities were at the centre of the inaugural meeting of the Digital Development Council, chaired by the First Vice-President of the Republic of Azerbaijan, Mehriban Aliyeva.

In her address to the meeting, Mehriban Aliyeva noted that, in February this year, a meeting chaired by President Ilham Aliyev was held to discuss Azerbaijan's new digital development strategy. Following the President's instructions, an Action Plan for Digital Development was approved, together with a detailed Roadmap outlining priorities for the next three years.

The First Vice-President also outlined the Council's key responsibilities, stressing that its primary tasks include coordinating the activities of various government institutions, establishing a unified approach, and ensuring the timely and effective implementation of adopted decisions.

"Our goal is not only to introduce new technologies but also to give a strong impetus to the country’s economy, build a modern innovation ecosystem, attract local and foreign investment, support local startups, and create a more efficient public administration system," Mehriban Aliyeva stated.

The First Vice-President stressed that artificial intelligence is no longer a matter of the future but a defining driver of development today. At the same time, she noted, AI is playing an increasingly important role in safeguarding national security and has already become central to this domain.

"It is no secret that in the world’s leading countries, the development of artificial intelligence is advancing faster than previously forecast. This, in turn, creates both new opportunities and new threats. We must be prepared to address emerging challenges, particularly the risks associated with cybersecurity and information security," Mehriban Aliyeva said.

According to the First Vice-President, transforming Azerbaijan into one of the region's leading countries in digital development and artificial intelligence will require active and effective cooperation across all government institutions.

"Our goal is to transform Azerbaijan into one of the leading countries in the region in the fields of digital development and artificial intelligence. We must study international experience and adopt successful models. At the same time, all decisions must be based on Azerbaijan’s national interests and address the country’s specific needs," Mehriban Aliyeva stated.

Notably, to accelerate these strategic priorities, Azerbaijan adopted the Digital Development Concept and the Artificial Intelligence Strategy of Azerbaijan for 2025–2028 last year at the initiative of President Ilham Aliyev. The overarching objective of these policy documents is to drive the digital transformation of the national economy, including through the adoption of Fourth Industrial Revolution (4IR) technologies.

In parallel, Azerbaijan has taken significant steps in recent years to expand its Government Cloud (G-Cloud) platform and strengthen its Big Data infrastructure and network of data centres. Meanwhile, the Centre for Analysis and Coordination of the Fourth Industrial Revolution (C4IR Azerbaijan), operating under the Ministry of Economy, has been actively fostering the country's AI ecosystem.

Another major milestone in enhancing the nation's digital connectivity was the Online Azerbaijan programme. As part of the initiative, the Fibre to the Home (FTTH) project was completed by the end of 2024, bringing high-speed fibre-optic connections directly to households across all regions of the country.

As a result, according to the International Telecommunication Union (ITU), Azerbaijan now ranks among the regional leaders, having achieved 100 per cent broadband Internet coverage of its population.

To further strengthen the country's digital connectivity, the final phase of the TransCaspian Fiber Optic (TCFO) project, being implemented in partnership with Kazakhstan, is expected to be completed by the end of this year. The project involves laying a 380-kilometre fibre-optic cable across the floor of the Caspian Sea, providing high-speed Internet connectivity with a capacity of approximately 400 terabits per second and ensuring the reliable transit of digital traffic from China and other Asian countries.

The TCFO project will therefore become an integral part of the international Digital Silk Way initiative, serving as a key driver of Azerbaijan's ambition to establish itself as a regional digital hub.

Addressing the meeting of the Digital Development Council, Minister of Digital Development and Transport Rashad Nabiyev noted that the Action Plan for Accelerating Digital Development for 2026–2028 comprises 58 initiatives spanning digitalisation, artificial intelligence, the innovation ecosystem, and cybersecurity.

"In cooperation with 40 government institutions, roadmaps have been prepared, 13 of which have already been approved or are currently undergoing the approval process," the minister said.

He also announced the establishment of a National Data Center, noting that work is continuing on migrating government information systems to the G-Cloud platform and constructing a new data centre. In addition, as part of efforts to strengthen the country's innovation ecosystem, the creation of the Azerbaijan Resilience Cluster has been launched to bring together companies operating in sectors that reinforce the country's technological sovereignty.

An equally important task is the unification of various digital platforms and applications developed in recent years by different ministries and government agencies. The objective is to ensure the delivery of public e-services through a single platform, MyGov, from a unified centre. This approach is expected to significantly simplify technical processes and software updates, while also delivering substantial benefits for citizens.

In this regard, Minister Rashad Nabiyev noted that over the past three months, the range of digital services on the platform has been expanded, with the number of users increasing from 2.7 million to 3.5 million. He also added that several applications have already been integrated into MyGov, while services from seven additional government bodies are expected to be made available to citizens by the end of the year.

A key priority of the new digital strategy is also the development of cybersecurity mechanisms. According to Nabiyev, work is underway to establish a National Security Operations Center, a National Cyber Incident Response Center, and a Digital Forensics Center. In addition, the formation of a unified national cybersecurity platform has been launched to ensure the rapid exchange of information between the public and private sectors.

The Council’s activities are also aimed at accelerating legislative reforms in the digital sphere. In this context, Assistant to the President of the Republic of Azerbaijan and Head of the Department for Economic Affairs and Innovation Development Policy at the Presidential Administration, Shahmar Movsumov, noted during the meeting that the comprehensive reforms underway in the country to establish a modern legal framework for digital development are among the most extensive and fundamental in the post-Soviet space.

According to him, the objective is to draw on the most advanced international practices to ensure legal certainty, create a competitive tax environment, secure financing for innovation and the promotion of scientific research, attract talent, expand opportunities, and simplify market access for start-ups and IT companies, among other priorities.

Alongside addressing technological, legislative and organisational issues, Azerbaijan must focus on a key priority: the development of human capital as a central driver of innovation-led transformation. In recent years, the country has already established an educational and scientific foundation aimed at preparing young people and equipping all citizens for a future labour market shaped by artificial intelligence.

In this context, Minister of Science and Education Emin Amrullayev provided information on ongoing school initiatives, including the “Digital Skills” and “STEAM Azerbaijan” programmes. He also outlined issues related to connecting educational institutions to a unified internet network, developing the “Digital School” project, digitalising education-related data across all levels, and converting educational documents into digital format.

Thus, relevant state agencies and companies face a critical task of ensuring tangible progress in the strategic directions identified at the Digital Development Council meeting in the near future, as the global economy increasingly sees digital systems overtaking traditional ones.

The stakes are enormous: according to global analytical centres, the added value generated in the artificial intelligence sector alone is projected to reach approximately $16 trillion by 2030.