Policymakers have a key role to play in promoting an efficient and inclusive digital transformation by ensuring that the necessary complementary factors are in place that enable SMEs to both benefit from emerging opportunities and cope with the challenges raised through digital transformation. This involves a range of policy priorities, from improving digital infrastructure and regulatory framework conditions over developing skills and training opportunities to providing targeted advisory and financial support services. This section provides a set of policy considerations that Azerbaijan could use to: (i) promote a whole-of-government approach to digitalisation, (ii) ensure that framework conditions are conducive to SME digitalisation, and (iii) foster the uptake of digital solutions by SMEs.
Promoting Enterprise Digitalisation in Azerbaijan
Way forward
Objective 1: Promote a whole-of-government approach to digitalisation
Recommendation 1: Leverage “Azerbaijan 2030 Vision” and corresponding mid-term strategies to boost SME digitalisation
The Azerbaijan 2030 Vision adopted in early 2021 provides a unique opportunity for the government to embed digitalisation among strategic policy priorities that can boost diversification, increase competitiveness, reduce inequalities and contribute to overall socio-economic development. Relevant mid-term policy strategies that will set the course for the policy actions until 2025 that are being developed by the line ministries should include a set of policy objectives and actions that will contribute to the creation of an ecosystem conducive to digital transformation of the private sector and its SMEs in particular.
Azerbaijan could galvanise its commitment to digital transformation by adopting a National Digital Strategy that would set priorities and objectives for digitalisation across policy areas and support it with appropriate budgetary allocations. The strategy should acknowledge that digitalisation is not only relevant for the ICT sector and should address policy priorities across a number of relevant policy areas (e.g. connectivity, education, entrepreneurship, public services).
It will be important that sectoral mid-term policy strategies prepared under the Azerbaijan 2030 Vision target the main challenges related to SME digitalisation in Azerbaijan such as connectivity, regulatory framework and cybersecurity, digital culture and skills, and uptake of digital solutions by SMEs. Policy recommendations outlined in this note could provide a general direction for policy-makers when setting-up objectives and designing policy strategies. Box 2 outlines five steps that could be followed to develop a digital transformation strategy.
Box 2. Five steps to develop a digital transformation strategy
Establish a governance approach that supports effective co-ordination
Set up an effective steering and co-ordination mechanism for digital transformation taking into account the country’s specificities, culture and institutions.
Assign clear responsibilities for strategic co-ordination and operational co-ordination for the development and implementation of a national digital transformation strategy (DTS).
Articulate a strategic vision and ensure coherence
Articulate a strategic vision that provides direction on identifying the main priorities and scoping of the main objectives of a DTS.
Ensure coherence between a DTS and other related domestic and international digital strategies and policy objectives.
Assess key digital trends, related policies and regulations
Monitor key digital trends, including by international benchmarking, to identify opportunities and challenges to be addressed by a DTS.
Evaluate the effectiveness of current strategies and/or policies, identify gaps and/or incoherence, and scope objectives for a DTS.
Develop a comprehensive and coherent strategy
Leverage the governance approach, the strategic vision, and insights from monitoring and evaluation to develop a comprehensive and coherent DTS.
Engage all relevant actors in developing a DTS, including different parts and levels of government, non-governmental stakeholders and international partners.
Implement the strategy successfully
Anticipate and address implementation challenges related to institutions and policy frameworks, social preferences and (lack of) administrative capacity.
Issue an action plan with specific measures, clear responsibilities, budget, timeframes and measureable targets to successfully implement the DTS.
Source: (OECD, 2020[23]).
To ensure that the mid-term strategies are effective in steering policy, it is important that they are accompanied by corresponding action plans that set out realistic and measurable objectives. It is crucial that the progress along each action can be assessed using process and result key performance indicators (KPIs). KPIs should be: (a) specific – it should be clear what the indicator measures; (b) measurable – the indicator should ideally be expressed in numerical terms (e.g. values, ratios, growth rates); (c) achievable – the indicator should be realistic; (d) relevant – the indicator should be closely linked to the objectives of individual measures; and (e) trustworthy – the indicator should be based on reliable and replicable data (OECD, 2019[38]).
Recommendation 2: Improve co-ordination among institutions responsible for digital transformation
While the Ministry of Digital Development and Transport has been the main institution responsible for policies related to ICT, such as the implementation of the ICT Strategic Roadmap, as overall policy plans are moving towards digital uptake by firms, digital training, and cross-border e-commerce, the need to involve other institutions is becoming apparent. However, a lack of co-ordination among relevant institutions is preventing existing policy initiatives from achieving their full potential. In this context, Azerbaijan could improve co-ordination at all levels of decision-making and policy implementation to promote policy coherence, boost the impact and effectives of existing policies, increase utilisation of digitalisation support programmes and infrastructure, and benefit from spill-over effects.
Azerbaijan could consider establishing a Digitalisation Commission – a co-ordination platform that would bring together all relevant stakeholders involved in the design and implementation of digitalisation related policies and support programmes. Such a platform should have a high-level mandate and could be established, for example, under the Prime Minister’s Office. It could have its own and independent technical secretariat providing the members with analysis and background documents (see Figure 25). The Digitalisation Commission should bring together all relevant public institutions, private sector representatives and academia. Its main objective should be to serve as a forum for dialogue and co-ordination on digitalisation-related policies, but could also have a mandate to recommend formulation of policies, provide comments on draft laws and regulations and provide recommendations for its members and non-members on policy initiatives related to the digitalisation agenda.
Figure 25. Example of the governance structure of the Digitalisation Commission
Source: Authors own work based on the project Working Group meetings.
Recommendation 3: Improve data collection on SME digitalisation to support evidence-based policy making
The limited availability of data measuring SME digitalisation is one of the main constraints to evidence-based policy making. Availability of statistical data is also important in the context of the preparation of the mid-term strategies in the context of Azerbaijan 2030 Vision as critical data are needed to define the right KPIs and therefore measure the impact and effectiveness of policy actions.
The State Statistical Committee of Azerbaijan currently collects only a small number of indicators related to digitalisation of the private sector, mostly relating to companies’ internet access. The State Statistical Committee in co-operation with relevant public and private sector authorities could consider expanding the range of collected SME digitalisation-related data. The data collection should focus on diffusion of digital technologies among SMEs, cybersecurity and cybercrime, but also on e-commerce and online payments penetration. Where possible and relevant, data could be disaggregated by the enterprise size class and sector. Adapted from the OECD Survey on ICT Usage by Businesses, Table 6 provides example of core indicators that could be collected by the State Statistical Committee (OECD, 2015[50]).
Objective 2: Ensure that framework conditions are conducive to SME digitalisation
Recommendation 1: Continue improving digital infrastructure
Access to high-speed and reliable internet is essential for digital transformation. Azerbaijan should focus on meeting its policy objectives of improving overall connectivity, addressing the regional gaps in access to technology and the internet. Azerbaijan could consider implementing policies in line with the OECD Recommendation on Broadband Connectivity1 and provide high-speed broadband at reliable prices by:
Promoting internet access for all and fostering the adoption of advanced broadband services at affordable prices;
Reducing barriers to broadband access through regulation and policies to enable investment, while safeguarding competition and investment incentives; and
Promoting measures to strengthen the resilience of communication networks, such as network diversity and redundancy, to reduce connection disruptions (OECD, 2021[51]).
To improve regional connectivity, Azerbaijan could implement policies that encourage investment in resilient infrastructure, which in turn would provide affordable network coverage and access to broadband internet. Azerbaijan can boost connectivity in rural and remote areas by investing in high-speed fixed networks or increasing private investment through measures such as competitive tendering, tax exemptions, low interest loans, public support or lower spectrum fees.
Azerbaijan could work to further promote competition in all markets for network infrastructures and services with non-discriminatory policies to expand and achieve user choice for access to internet at affordable prices. In this context, the government could implement measures to reduce administrative barriers to trade and investment.
Recommendation 2: Strengthen the regulatory framework for digitalisation
It is critical that Azerbaijan ensures that the recently established National Regulatory Agency for telecommunications sector under the Ministry of Digital Development and Transport is independent and has sufficient financial and human resources to fulfil its mission. The NRA should promote efficient competition, investment and consumer interests with development of electronic communications markets, services and networks. Recommendations provided by Gap assessment of Azerbaijan regulatory system in the field of electronic communications prepared under the EU4Digital project could be taken into account as good practices to follow when drafting the charter for the NRA (EU4Digital, 2020[52]).
Azerbaijan could also adopt a National Cybersecurity Strategy. The Strategy should set a clear objectives and actions to improve the security and resilience of national information infrastructures and services, and should include SME-specific targets and objectives. The European Union Agency for Cybersecurity2 provides an implementation guide, good practice examples and an evaluation framework for national cybersecurity strategies, on which Azerbaijan could draw (see Box 3).
To support adoption of security measures by SMEs, the authorities could also establish a national certification scheme for digital security. The scheme could provide a series of “best practices” that enterprises can implement in their own operations or in the design of their products and services. Upon completing the requisite steps, enterprises could receive a certification that can signal to consumers or business partners the level of digital security of the enterprise or its services.
As the low cybersecurity awareness among SMEs is (globally) one of the main barriers to wider use of protection measures, the Cyber Academy operating under the Ministry of Digital Development and Transport could strengthen efforts to increase awareness of digital security targeting, specifically SMEs. Those efforts should aim to provide guidance and examples of affordable solutions that, if adopted, would reduce SME digital security exposure and potential losses.
Box 3. Developing a cybersecurity strategy
1. Set the vision, scope, objectives and priorities: setting clear objectives and priorities is crucial for developing a cybersecurity strategy. During this step, the government should define the vision and scope of the objectives, and develop a roadmap for their implementation.
2. Follow a risk assessment approach: carrying out a national risk assessment and aligning the objectives of the strategy with national security needs allows to focus on the most important challenges with regards to cyber security.
3. Take stock of existing policies, regulations and capabilities: it is necessary to take into account international cybersecurity requirements. This will help align the cybersecurity strategy with international standards and identify important gaps.
4. Set a clear governance structure: a governance framework should define the roles, responsibilities and accountability of all relevant stakeholders. A public body or an interagency working group should be defined as the co-ordinator of the strategy.
5. Identify and engage stakeholders: public stakeholders ensure the safety and security of the nation’s critical infrastructures and services. Selected private entities should be part of the development process as they are likely the owners of critical information infrastructures and services.
6. Establish trusted information-sharing mechanisms: government should properly define the information-sharing mechanism and the underlying principles and rules that govern the mechanism. Owners of critical infrastructures could share with public authorities their input on mitigating emerging risks, threats and vulnerabilities.
Azerbaijan could work to improve the overall framework for e-commerce by increasing financial inclusion and the use of online banking, and by strengthening the logistics for e-commerce by further decreasing time needed for cross-border trade It could improve the logistics of parcel delivery by establishing consolidated central distribution networks with centralised warehouses. This would reduce delivery times for both domestic and cross-border delivery of commercial items, and allow for more efficient use of e-commerce (EU4Digital, 2021[35]).
Azerbaijan could also take measures to improve customer protection. For instance, based on the directives applied in the EU, Azerbaijan could require e-commerce platforms to inform their customers of their rights and label paid product placements when customers search for items. Implementing such measures could strengthen customer protection and improve trust in e-commerce platforms in the country.
Recommendation 3: Support the development of digital skills
Even though Azerbaijan is implementing a number of initiatives supporting digital skills development for students and the general population, a comprehensive policy framework to build digital skills from early childhood that would engage a wide range of relevant stakeholders is lacking. Azerbaijan could consider comprehensive and co-ordinated approaches driven by cross-governmental digital education strategies, with scattered initiatives implemented by different institutions and agencies. While such initiative could be led by the Ministry of Education, it essential that other institutions such as the Ministry of Digital Development and Transport and the Ministry of Economy are also part of the process.
To better understand education and training needs, Azerbaijan could conduct a skills needs assessment, accompanied by a skills anticipation exercise. Such efforts could help determine the existing supply of a digitally skilled labour force, assess skills demand from companies, identify skills gaps and develop policies to address digital skills requirements. In this context, International Telecommunication Union’s (ITU’s) Digital Skills Assessment Guidebook provides practical information on how to assess supply and demand for digital skills (ITU, 2020[54]).
Besides further developing programmes offering digital skills development for the general population, responsible institutions should increase awareness among SMEs and the population of the availability of such training and education opportunities. SMEs are often unaware of existing training options or consider them too costly. SMBDA could take the lead in informing SMEs of credible training options and help them find the best and most appropriate trainings or skills development initiatives.
Objective 3: Promote uptake of digitalisation among SMEs
Azerbaijan could put in place a digitalisation eco-system that would support adoption of digital solutions by SMEs by: (i) guiding them through an assessment of their digital maturity; (ii) developing sector-specific digital plans outlining a “digitalisation roadmap” from digital basic level to digital maturity; (iii) providing financial support to tackle the lack of resources; and (iv) facilitating access to quality training and advisory services (see Figure 26) (OECD, 2021[13]).
Figure 26. A policymaker’s blueprint to accelerate digital transformation
Source: (OECD, 2021[13]).
Recommendation 1: Promote digital culture and increase digital awareness among entrepreneurs
A lack of awareness among entrepreneurs about the benefits of digitalisation is one of the main barriers to more widespread use of digital solutions among SMEs. Therefore relevant public institutions, such as the SMBDA and the Innovation and Digital Development Agency, could implement programmes to promote digital awareness among SMEs operating in non-ICT sectors. The main objective of such initiatives is to communicate to entrepreneurs and managers the benefits (and risks) associated with adoption of digital solutions for their businesses and how digital transformation can help increase productivity.
The SMBDA could implement awareness-raising campaigns and organise awareness-raising events and competitions to boost the digital awareness of SMEs. The SME Friends and SME Development Centres should act as “SME digitalisation ambassadors” and use their networks and communication channels to increase interest in digital solutions among non-ICT SMEs.
Recommendation 2: Understand SME digitalisation needs
Developing a good understanding of SMEs’ digitalisation needs is a prerequisite for the delivery of tailored solutions that will have a positive impact on SME operations. A macro-analysis of the state of digitalisation for different sectors could be performed to establish a baseline and identify sectoral priorities for delivering state support programmes in a context of limited resources. To understand the level of digital maturity of an industry, surveys could be conducted to collect information on a series of indicators capturing both the depth of digital culture and the adoption of digital solutions in different business areas.
The SMBDA could deepen the scope of the survey it conducts among SMEs to find out about barriers to their operations and training needs and link findings of the survey to the delivery of support services provided by its business support network. Focus group meetings and formal consultations with the business community could also accompany the survey and support demand- and need-driven provision of support services. The surveys and focus group meetings should also enquire about the adoption of digital solutions by SMEs and barriers preventing SMEs from broader use of digital technologies.
The SMBDA could also design an online digital maturity self-assessment tool. The tool would enable companies to assess their digital maturity and identify their development needs and challenges. The platform could also recommend relevant actions that companies could take to improve marketing, selling, production, and administrative processes, and to undergo digital transformation. The tool could help the SMBDA (and SME Development Centres in particular) better understand needs of individual companies and devise appropriate training and mentoring programmes to target these needs. The digital maturity self-assessment tool should serve as the starting point for SMEs to begin a digital transformation tailored specifically to their needs. The adoption of a digital maturity self-assessment tool should also be designed according to the relevance of each sector, and should serve as a reference for SMEs to determine the level of digital maturity that their peer sectorial companies have. Box 4 describes a self-assessment questionnaire on SME digitalisation implemented by the Moldovan Organisation for Economic Co-operation and Development (ODIMM), the Moldovan SME Development Agency.
Box 4. Digital maturity self-assessment questionnaire in Moldova
In June 2020, ODIMM (Moldovan agency for development of small and medium-sized enterprises) launched the SME Digitalisation Programme to support the digital transformation of SMEs. Under this programme, SMEs can benefit from the following types of support: 1) digital maturity test; 2) based on the results of the test, targeted capacity building and trainings in 5 different modules, tackling 19 topics such as strategic planning, online marketing and customer support; 3) access to business vouchers for further advice and consulting up to Moldovan Leu (MDL) 20 000 (EUR 960), and 4) grants up to MDL 200 000 (EUR 9 600 to cover expenses related to digitalisation (most often costs related to hardware purchases).
SMEs begin by taking a self-assessment questionnaire in order to determine their level of digital maturity. The test evaluates an SME’s level of online presence, e-commerce, transport and logistics, client services and process digitalisation. Each of the topics contain specific questions and sub-questions to find out more details on an SME’s use of platforms, what type of customers they have and what information they rely on. Based on the results of the questionnaire, SMEs are classified as either low/beginner in their digitalisation process, medium/intermediate or advanced. The results of the assessment allows SMEs as well as ODIMM to determine which areas of business require more intervention and would benefit from business vouchers and training.
By spring 2021, 466 companies had received training and 180 had been financially supported through grants and business vouchers.
Source: (ODIMM, 2021[55]).
Recommendation 3: Reinforce the provision of non-financial support services
While digitalisation-related training and advice is embed into existing training modules, Azerbaijan could consider expanding non-financial support for SME digitalisation. SMBDA (through its network of SME Development Centres) could implement programmes focusing on boosting SME ability to implement digital solutions. The Agency could consider providing dedicated programmes focusing only on SME digitalisation that could cover the following aspects of digitalisation (OECD, 2021[13]):
Strategy and digital culture. The digital transformation should be addressed at the core of the SME’s business objectives and strategic planning, as well as its culture and organisational values.
Customer Relationship. Business should exploit digital tools to improve customer experience, knowledge and engagement.
Organisation and talent. Enterprises should embrace new ways of work offered by digitalisation. The main benefits of the digitalisation of the enterprise’s organisation and developing digital talents are increased employee engagement, agility, lower employee turnover rate, improved company culture and better preparedness.
Technology. Digital technologies are a centrepiece of a successful digital transformation. Digital devices and instruments can simplify employees' work and reinforce the potentials of business operations. The main benefits of adopting digital technologies are reduced costs, greater flexibility and innovation, improved service levels, improved resilience to external threats.
Products and services. Digitalisation brings novel techniques of doing business or refining business models, adding value to the customer based on new knowledge acquired through digitally collected data.
To maximise the impact of digitalisation support services and benefit from spill-over effects, SMBDA could consider implementing a complex financial and non-financial support programme combining digital self-assessment (see previous recommendation), digital skills and capacity development and financial support instruments (see the following recommendation). Box 5 describes “SME Go Digital”, a programme implemented by Singapore’s Infocomm Media Development Authority (IMDA), which combines various forms of support.
Box 5. “SME Go Digital” programme in Singapore
In 2017, IMDA established the SMEs Go Digital programme to help Singapore’s SMEs build their digital culture and fully reap the potential of digital technologies. It also aims to raise awareness amongst SMEs about the potential that digital technologies bring, and the growth opportunities in digital economy.
The programme works through providing support through sector-specific Industry Digital Plans (IDPs), which guide SMEs with a step-by-step guide on digital solutions to adapt, and provide relevant training for their employees, tailored for their specific skill levels at different stages of their growth. The IMDA supports SMEs in adopting recommended digital solutions and increases awareness about the benefits of digitalisation. SMEs that are part of the programme also have the option to apply for the Productivity Solutions Grant (PSG) through the Business Grants Portal set up by the IMDA in order to receive funding of up to 80% of the costs associated with adopting digital solutions.
In 2019, IMDA in partnership with Enterprise Singapore (ESG) launched the Start Digital Initiative to help newly incorporated SMEs adopt digital solutions. The agency also works to increase awareness about the benefits of digitalisation, working with SMEs to identify their specific digitalisation needs and tailor recommendations such that it fits the digitalisation priorities of the client company.
Since the programme’s launch in 2017, more than 75 000 companies have adopted digital solutions from the programme.
Source: (SMEs Go Digital, 2021[56]).
Recommendation 4: Boost financial support for SME digitalisation
Azerbaijan could boost the adoption of digital solutions by SME by improving their ability to access external financing. The Entrepreneurship Development Fund and SMBDA could consider expanding their existing financial support programmes or launch new initiatives targeting SME digitalisation specifically. For example, the Entrepreneurship Development Fund could provide loans with preferential interest rates for SMEs that aim to purchase digital software and hardware and SMBDA could provide small grants for companies that want to establish an online presence. Box 6 outlines the grant scheme provided by Enterprise Estonia to boost adoption of digital solution by Estonian SMEs.
Box 6. Financial support for SME digitalisation in Estonia
Enterprise Estonia
Enterprise Estonia established a grant programme, aimed specifically for manufacturing and mining firms to boost adoption of digital technologies. This is an application-based grant, which supports digitalisation activities such as staff training, purchase and implementation of materials necessary for automation, implementation of cyber security and protection systems, and many others. Only firms with annual sales of over EUR 200 000 are eligible for the grant.
The grant programme provides digitalisation diagnostic grants amounting to EUR 15 000, digital roadmap grants of 15 000 EUR and digitalisation grants of 20 000 EUR to successful applicants. The programme works directly with SMEs to identify gaps in their digitalisation that need to be addressed, and employs experts to list technical solutions to eliminate gaps in the supply chain. The goal is to make the process more efficient, and support the technical needs of the companies. Selected SMEs receive support from the programme for the next 3 years.
There is no strict criteria in order to qualify for the grant, however, SMEs need to demonstrate that they have been active in the last 2-3 years prior to application, meaning they have active operations and interact with customers. In 2018 and 2019, the programme received approximately 130 applications for the grant. This number decreased in 2020, largely due to the pandemic-related measures interrupting operations. By September 2021, the programme had received almost 150 applications.
Source: (Enterprise Estonia, 2021[57]).
Azerbaijan should also continue improving SME access to non-government sources of external finance. In the context of SME digitalisation, it should address challenges related to using intangible assets as collateral and address banks’ negative bias towards digitalisation projects. The government should also create a regulatory framework for alternative providers of external financing and continue improving financial literacy of SMEs.
Recommendation 5: Ensure the quality of the support services provided
Azerbaijan should ensure that the support programmes provided by public institutions fulfil requirements on their quality, impact and effectiveness. Systematic monitoring and well-planned evaluations of support programmes, especially those providing continuous training and consulting services, can provide decision makers with necessary evidence and feedback on the quality and impact of provided support services. It should be based on measurable indicators and on the level of satisfaction. It will provide information on the impact of the services and can also serve as a change-management tool in the context of future support.
During the implementation of support programmes, service providers should keep records on process indicators such as: (i) number of self-assessment reviews completed, (ii) number of SMEs provided with support, (iii) number of participants attending each training session, (iv) level of satisfaction of participants with trainings and consulting sessions.
Monitoring and evaluation should start before the implementation of each programme and would continue after its delivery against a set of KPIs. KPIs should measure the outcomes for the beneficiaries and assess the effectiveness of the programme in supporting adoption of digital solutions by programme beneficiaries. Table 7 provides examples of KPIs evaluating digitalisation support programmes.
Table 7. Example of KPIs for digital support programmes
Note: selection of KPIs depends on a type and scope of the evaluated support programme and its objectives
Source: Author work based on the project Working Group meeting.
For services provided by public institutions, but outsourced to consultants and external providers, responsible institutions should ensure that selected external providers meet qualification criteria to deliver the tasks in required quality. For example, the SMBDA is entirely outsourcing management and delivery of support services provided by SME Development Centres. Moreover, providers of the Centres have relative autonomy in identifying type and scale of provided services. While this gives them flexibility to react to local specificities and SME needs, it calls for the SMBDA to ensure that services provided by SME Development Centres are aligned with national SME and digitalisation policy priorities. The SMBDA could also provide SME development Centres with methodological guidelines what should be covered by training programmes and, if relevant, provide them with training materials and know-how. To ensure that services in the SME Development Centres are provided according to high-quality standards, the SMBDA could impose minimum quality requirements for consultants delivering services in the Centres.3 Box 7 outlines the quality assurance system for consultants implemented by Austrian SME Development Agency.
Box 7. Consultants assurance system and certification in Austria
In 2017, the Federal Ministry of Digitalisation and Business Location (BMDW) in co-operation with the Austrian Chamber of Commerce established the Austrian Institute for SME Research (KMU) Digital initiative: a programme designed to support SMEs’ digitalisation. The programme provides financial support for consulting services and investments in digitalisation projects for SMEs. KMU Digital is funded by the federal government. The Austrian Chamber of Commerce (WKO) is responsible for implementation of advisory funding.
KMU Digital promotes individual consulting for Austrian SMEs. Analyses and strategy consultations may only be carried out by certified consultants, and consultants are required to comply with content-related quality criteria and formal regulations. Further, KMU Digital digitalisation consultants are required to have a certification tailored to the respective topic:
Digital Consultant (focus on business models and processes (including resource optimisation))
E-Commerce & Social Media Consultant
E-Commerce & Social Media Expert
Data & IT Security Expert (CDISE)
Digital Public Administration Expert
KMU Digital provides webinars and trend cards for its consultants with information on the programme and current trends. The agency does not provide funding for training or certification for consultants, however it does provide them with information about grants available for further professional development in digital skills. Consultants are required to document their completed consultations online in a structured report, which should contain further recommendations for the client.
The EU Commission positively highlighted KMU Digital in its “Country Report Austria 2019”, noting its positive impact on SMEs in Austria.
Source: (KMU.Digital, 2021[58]).
Recommendation 6: Leverage existing business and innovation support infrastructure to create an eco-system conducive to digitalisation
Since 2016, Azerbaijan has significantly expanded its business and innovation support infrastructure by establishing and consolidating relevant agencies (e.g. SMBDA, Innovation and Digital Development Agency), and building a network of business incubators, high-tech and industrial parks, and other business innovation agents. In addition, the Ministry of Economy has promoted the establishment of business associations bringing together companies operating in the similar sectors. Policy-makers should try to maximise the impact of this eco-system by improving co-ordination among innovation agents and promote spill-over effects.
The SMBDA could monitor all existing initiatives and not only help SMEs to navigate in the existing support eco-system and direct them towards relevant programmes and events, but also actively participating in their design and encourage co-operation. For example, SME Development Centres, which are responsible for digitalisation training and consultancy services, could closely co-operate with Electronic Security Centre operating under the Ministry of Digital Technologies and Transport when delivering training or advice on cybersecurity.
The SMBDA agency should engage in close co-operation with all the relevant business associations operating in Azerbaijan to better understand sector-specific needs of SMEs, design demand-driven support programmes, increase confidence among SMEs regarding the benefits of the support programmes and benefit from these communication channels with SMEs.
Public support programmes should also be provided as a way to unlock demand for privately-provided consulting services which go beyond the scope of the SMBDA in terms of depth and sophistication. In this context, the SMBDA should be cautious with free-of-charge provision of support services. While providing free services can boost the demand and interest among SMEs in training and mentoring services, it can also distort the private sector consultancy market and obstruct its development.
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Notes
← 2. https://www.enisa.europa.eu/topics/national-cyber-security-strategies/national-cyber-security-strategies-guidelines-tools
← 3. Currently, the SMBDA surveyes the entrepreneurs to identify their needs. On the basis of the information collected, the Agency determines the scope of work and the terms of reference for the activities, and a tender is held. The winning operator companies are selected to organize the activities of SME Development Centers.