Page 48 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.73, # 2, 2016, pp. 42-61

Exhibit 3.1: Entrepreneurship model

Source: “Kuriakose, Smita. 2013. Fostering Entrepreneurship in Azerbaijan.
Direction in Development-Private Sector Development;. Washington, DC: World
Bank

There have been improvements in the process of registration of entrepreneurs,
customs declaration and other similar processes through the establishment of State
Agency for Public Service and Social Innovations (ASAN). Despite the
improvements in the legal environment, there is a need to strengthen the competitive
environment both in the product and factor market. Unlike in other CIS countries, in
Azerbaijan there is not an independent state agency which enforces legislation on
competition. Without such an agency it is hard to enforce antimonopoly legislation
effectively. In addition to enforcement of legislation on competition, enforcement of
intellectual property rights legislation must also be viewed as a priority in order to
stimulate innovative entrepreneurship.
Researchers are in consensus regarding the impact of the amount of
investment in R&D activities on a company's innovative capacity. Usually,
companies that spend more resources on R&D are more innovative than those that
do not spend resources on R&D. Analysis of the R&D activities of Azerbaijani
companies shows that gross expenditures on R&D have increased in Azerbaijan
between 2008 and 2011, however the share of these expenditures financed by the
business sector has decreased. Besides the amount invested in R&D, as table 3.1
shows, the number of organizations undertaking R&D has also declined between

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