This presentation was presented at the 37th International Scientific Conference on Economic and Social Development. Baku, 14-15 February 2019.

1. Azerbaijan State University of Economics (UNEC)
37th International Scientific Conference on Economic and Social Development -
“Socio Economic Problems of Sustainable Development”
14-15 February 2019
Building an Innovation Ecosystem in Azerbaijan
(on the basis of the study of Israeli practice)
PhD candidate Bahruz Babayev
Azerbaijan State University of Economics (UNEC)
14 February, 2019
Baku, Azerbaijan

2. BuildinganInnovationEcosystemin Azerbaijan Azerbaijan State University of Economics (UNEC)
37th International Scientific Conference on
Economic and Social Development -
“Socio Economic Problems of Sustainable Development”
Contents
Innovation and its forms
An innovation ecosystem
Robust innovation ecosystem
The case of Israel
Results of state policies of Israel
Recent innovation policy trends in Azerbaijan
Policy lessons for Azerbaijan

3. BuildinganInnovationEcosystemin Azerbaijan Azerbaijan State University of Economics (UNEC)
37th International Scientific Conference on
Economic and Social Development -
“Socio Economic Problems of Sustainable Development”
Innovation and its forms
‘Innovation is the conception, design, and implementation of new
products and processes or changes to existing products and processes
that create value for society’
(Avidor, 2011, p. 4).
High-order innovations:
the creation of new and disruptive technologies/solutions
Low-order innovations:
applications to improve the efficiency of the existed technologies
Innovations have always supported economic efficiency
societal development.

4. BuildinganInnovationEcosystemin Azerbaijan Azerbaijan State University of Economics (UNEC)
37th International Scientific Conference on
Economic and Social Development -
“Socio Economic Problems of Sustainable Development”
An innovation ecosystem
‘The term innovation ecosystem refers to a dynamic, interactive network
that breeds innovation’.
(Oksanen, Hautamäki, 2014, p. 4).
Parties of innovation ecosystem are universities, government, venture capital
funds etc.
Development of innovation ecosystem depends on the availability of skilled
labor, funding and collaboration among private sector, government, industry and
academia.

5. BuildinganInnovationEcosystemin Azerbaijan Azerbaijan State University of Economics (UNEC)
37th International Scientific Conference on
Economic and Social Development -
“Socio Economic Problems of Sustainable Development”
The availability of financial capital
Skilled human resources
Economic incentives
Access to information
Role of government
Robust innovation ecosystem

6. BuildinganInnovationEcosystemin Azerbaijan Azerbaijan State University of Economics (UNEC)
37th International Scientific Conference on
Economic and Social Development -
“Socio Economic Problems of Sustainable Development”
THE CASE OF ISRAEL
100M$ state investments in venture funds and early-stage funding of startups since 1992
Two important programs including Yozma and Inbal were launched for funding support
The Technological Incubators Program of the Israeli Innovation Authority in 1991
24 incubation centers were established under the Technological Incubators Program
The centers offered $500,000 to $800,000 for incubating early-stage ideas for 2 years
Multi-year RD grants for an academic institution to cooperate with an industrial firm to
produce innovative technologies/solutions under MAGNET Program
Innovation Authority of Israel’s participation in global operations to find global
opportunities for Israeli companies and cooperate with multinational corporations for joint
projects
Development of world-class education and research since 1970, including Hebrew
University in Jerusalem, and the Universities of Haifa and Tel Aviv

7. BuildinganInnovationEcosystemin Azerbaijan Azerbaijan State University of Economics (UNEC)
37th International Scientific Conference on
Economic and Social Development -
“Socio Economic Problems of Sustainable Development”
Recent innovation policy trends
in Azerbaijan
A decree on the establishment of the Innovation Agency under the
Ministry of Transport, Communications and High Technologies of the
Republic of Azerbaijan on November 6th, 2018
The Innovation Agency to be established in 2019 should be a
coordinating body to draft and implement an innovation roadmap of an
Azerbaijani ecosystem
What key lessons can be learned from Israeli policies to develop
an innovation ecosystem in Azerbaijan?

8. BuildinganInnovationEcosystemin Azerbaijan Azerbaijan State University of Economics (UNEC)
37th International Scientific Conference on
Economic and Social Development -
“Socio Economic Problems of Sustainable Development”
Policy lessons for Azerbaijan
Government active participation in development of venture capital fund industry
Government programs to foster international venture funds to enter Azerbaijan
Provision of incentives for the cooperation between industrial sector and universities
Rendering financial support to early-stage funding of startup projects
Supporting and facilitating international cooperation and linkages
Development of innovation infrastructure, hubs and technological/business incubators
Support the commercial and RD cooperation between start-ups and multinational
companies
Enhance quality of technical research, training and education at schools and universities

9. THANKS