Azerbaijan is demonstrating impressive progress in economic diversification and digital development. The country is actively investing in education, innovation, and startup ecosystems, laying the foundation for sustainable growth. Priority is given to integrating digital tools into traditional sectors such as energy, logistics, and agriculture. Regional cooperation enhances Azerbaijan's investment attractiveness and facilitates the exchange of best practices.

AZERTAC presents an interview with Lika Merabishvili, Regional Director for the Caucasus at the international analytical and consulting organization StrategEast, a recognized expert in economic development, regional integration, and the innovative economy in the Eurasian region.

-What key economic trends and initiatives do you see in the South Caucasus today that could have the greatest impact on Azerbaijan's sustainable growth?

-As a Regional Director for the Caucasus at StrategEast, I see that in recent years, the South Caucasus has entered a new phase of economic transformation, with Azerbaijan at the forefront of regional change. The country is increasingly prioritizing economic diversification, digitalization, and human capital development, which are essential pillars of long-term sustainability. Large-scale investments in non-oil sectors — particularly in technology, renewable energy, logistics, and education — signal a strategic commitment to building a more resilient and knowledge-driven economy.

At StrategEast, we see a growing alignment between national priorities and global innovation trends. Azerbaijan is taking deliberate steps to strengthen its knowledge-based economy and to integrate more deeply into the global digital ecosystem — positioning itself as a key player in shaping the future of the wider Central Eurasian region.

- What sectors and areas of innovation do you consider a priority for Azerbaijan in developing the new economy?

-For Azerbaijan, the most promising areas of innovation include digital transformation, renewable energy, artificial intelligence, and education technology. The development of a robust startup ecosystem is equally vital, as it nurtures local entrepreneurship and attracts global technology players.

Through our work at StrategEast, we place strong emphasis on the digital economy and IT education, which together form the backbone of a sustainable and future-oriented economic model. We have already implemented the IT HUB educational program, followed by an IT Job Fair — an initiative that not only provided high-quality digital education but also created real employment opportunities. The program was carried out in partnership with 4SIM and funded by the EBRD, and we are now continuing IT training activities in collaboration with IDDA.

Additionally, strengthening public–private partnerships and supporting cross-sector innovation — particularly in fintech, agritech, and energytech — will be decisive in shaping Azerbaijan’s new, diversified economy.

- What is the role of regional cooperation between the countries of the South Caucasus in stimulating economic growth and attracting investment?

-Regional cooperation is not just desirable — it is essential. The South Caucasus has tremendous potential to position itself as a connected and complementary regional market. Joint efforts in infrastructure development, logistics, and digital transformation can significantly enhance the region’s investment attractiveness and economic resilience.

At StrategEast, we actively advocate for deeper cooperation in the digital and educational sectors across the South Caucasus. By aligning regulatory standards, sharing best practices, and fostering a unified innovation ecosystem, the countries of the region can create a stronger platform for international investment. Such collaboration not only boosts competitiveness but also allows the South Caucasus to speak with a unified voice in the global digital and economic landscape.

- What are the prospects for the development of the digital economy in Azerbaijan, and what steps are needed to successfully integrate digital technologies into traditional sectors?

-Azerbaijan has already made remarkable progress in advancing digitalization, laying the foundation for a strong digital economy. The next crucial step is to ensure the deep integration of digital tools and technologies into traditional sectors such as energy, logistics, agriculture, and manufacturing — areas that remain central to Azerbaijan’s economic structure.

At StrategEast, we emphasize the importance of digital skills development and policy innovation to support this transformation. It is essential that both the public and private sectors be fully equipped to adopt and leverage emerging technologies such as artificial intelligence, data analytics, and blockchain. Strengthening digital governance frameworks and expanding international partnerships will further accelerate the integration process, helping Azerbaijan move confidently toward a sustainable, innovation-driven economy.

- How can new economic initiatives contribute to the diversification of Azerbaijan's economy and reduce dependence on the oil and gas sector?

-Diversification begins with strategic investment in education, technology, and innovation ecosystems — as demonstrated by many successful global models. By supporting IT startups, creative industries, and green technologies, Azerbaijan can build sustainable sources of economic growth that extend far beyond hydrocarbons.

At StrategEast, our experience across Eurasia shows that the right combination of policy reform, tech education, and strategic investment can transform economies traditionally reliant on natural resources. Azerbaijan is already making significant progress in this direction, and continued support for digital entrepreneurship and innovation-driven business models will further enhance the country’s economic resilience and inclusivity.

- What investment opportunities and risks do you see for foreign investors in Azerbaijan and the South Caucasus?

-Azerbaijan offers strong opportunities for foreign investors, particularly in digital infrastructure, technology services, renewable energy, logistics, and education-related sectors. Its strategic location between Europe and Asia, coupled with ongoing modernization and investor-friendly reforms, makes it an attractive hub for regional investment. The government’s focus on renewable energy, ICT, and start-up development provides unique entry points for investors looking to participate in the country’s growth story.

At the same time, investors need to be mindful of regional geopolitical tensions and evolving regulatory frameworks. While challenges remain, Azerbaijan has been steadily improving its business environment, including streamlining procedures and offering incentives for technology-driven projects. From StrategEast’s perspective, the country represents one of the most promising destinations in the South Caucasus, and we actively support investors in navigating opportunities and risks to maximize impact.

- How can international financial institutions and donors more effectively support sustainable economic development in Azerbaijan?

-International financial institutions and donors can play a transformative role in Azerbaijan by investing in human capital, supporting policy reforms, and funding digital and green infrastructure projects. Beyond financing, initiatives that build local capacity — particularly in digital skills, entrepreneurship, and innovation — are essential to ensure the long-term sustainability of economic reforms.

At StrategEast, we emphasize the importance of stronger collaboration between development partners and local stakeholders to co-create solutions tailored to Azerbaijan’s unique context. To contribute to the region’s sustainable economic development, StrategEast is organizing its Annual Forum, which will be in Baku this year, on November 4–5; the Forum serves as a platform for networking, matchmaking, and knowledge sharing. By bringing together the public sector, international donors, private sector leaders, and regional stakeholders, the forum aims to foster partnerships that drive economic growth in Azerbaijan and the broader Caucasus region.