Page 47 - Azerbaijan State University of Economics

Odiljon Abdurazzakov: Role of technology transfer catalysts in stimulating
innovation: how to apply finnish experience to emerging economies

Moreover, they are important for enabling domestic research organizations and firms
to tap into knowledge generated abroad and to cooperate internationally in R&D and
commercialization (United Nations Economic Commission for Europe report on
Fostering Innovative Entrepreneurship, 2012).

3. Innovation and Technology Transfer System in Azerbaijan
Emerging economies in the post soviet region view economic growth based on
innovation as an important condition of ensuring sustainable growth in the 21st
century. In light of this, governments of developing economies have adopted state
programs on stimulating innovation among small and medium businesses. The
government of Azerbaijan is trying to develop new technology based firms (NTBF).
According to findings of a study conducted by the World Bank in 2013, only 12
percent of businesses in Azerbaijan which participated in the study indicated that
they have introduced new or substantially improved product or service in the past
three years (Kuriakose, Smita, 2013). This shows a need for a system which
encourages more innovative activity among small and medium businesses.
One way to succeed in developing the non-oil sector is supporting innovative
entrepreneurship. The Development Concept of Azerbaijan Republic approved by
the President in 2012, “Azerbaijan 2020: Look Into the Future” emphasizes the
establishment of market infrastructure network that serves to develop the non-oil
sector. For instance, Ministry of Information and Communication Technology has
recently launched two projects: Regional Innovation Zone and High-Tech Park.
High-Tech Park of Azerbaijan was established in 2012 to serve as a seedbed for new
technology based startups. It currently serves as a business incubator and provides
organizational and some financial support to startups. The government of Azerbaijan
is planning to expand this project by building a High-Tech City in capital city Baku.
Developing economies like Azerbaijan are trying to establish an environment
supportive of innovation and technology transfer. This requires establishing a legal
framework and financial infrastructure for effective functioning of technology
transfer mechanisms. To speed up the transfer of technology and innovation it is
important to create an ecosystem which supports innovative entrepreneurship.
Because, like other determinants of entrepreneurial performance, regulatory (legal)
framework impacts the development of innovative entrepreneurship (Exhibit 3.1).
Legal systems which shorten bureaucratic procedures associated with registration of
businesses, licensing, simplified taxation help foster innovative entrepreneurship.
Moreover, strong competitive environment act as a stimulus to innovation based
entrepreneurship.

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