Orkhan Yolchuyev, Director and Co-founder of the CASPIA Center for Strategic Policy and International Studies, spoke with Bakinskiy Rabochiy newspaper about Azerbaijan's digital transformation, the growing role of artificial intelligence, the development of the country's innovation ecosystem, and Azerbaijan's place in the emerging global knowledge economy.

According to Yolchuyev, digitalization has long ceased to be merely about adopting new technologies. Today, it represents a fundamental transformation of governance, economic management, and decision-making processes.

"If, in the past, a country's development was determined by the size of its natural resources, today the strategic asset is knowledge, digital platforms, and artificial intelligence. National competitiveness is increasingly measured not by oil or gas reserves, but by the quality of digital governance and the ability to export intellectual products," he said.

The expert noted that Azerbaijan has made significant progress in digital transformation over the past several years. Among the country's most successful initiatives, he highlighted the ASAN xidmət platform, the development of e-government services, and the large-scale digital transformation taking place across the liberated territories.

According to Yolchuyev, Karabakh and East Zangezur have become laboratories for Azerbaijan's future, where smart cities and smart villages, modern energy infrastructure, and innovative models of governance and logistics are being implemented.

"The liberated territories are serving as pilot areas where not only advanced digital technologies are being tested, but also entirely new approaches to public administration, energy policy, and transport infrastructure," he explained.

Yolchuyev emphasized that digitalization should not be limited to simply moving government services online.

In his view, genuine digital transformation begins when public institutions exchange data in real time, make evidence-based decisions, and organize their services around citizens' needs rather than bureaucratic procedures.

Artificial intelligence, he argued, is becoming the principal driver of this transformation.

"Artificial intelligence is emerging as the engine of digital transformation. Azerbaijan's next stage of development should involve integrating AI directly into public administration and decision-making. State institutions must evolve into a unified intelligent system," Yolchuyev said.

He also pointed out that the global innovation model is undergoing profound changes. While the traditional innovation ecosystem was built around the interaction of government, universities, the private sector, venture capital, and global markets, a sixth pillar has now emerged—artificial intelligence.

Discussing innovation ecosystems, Yolchuyev challenged the widespread perception that they are synonymous with start-ups.

"Start-ups are the final product of an innovation ecosystem, not its foundation. The real priority is creating a sustainable system of cooperation between government, academia, business, and education that continuously generates new knowledge and technologies," he noted.

According to the expert, Azerbaijan should transition from being a consumer of innovation to becoming a producer and exporter of technological solutions.

He believes that knowledge, software, engineering solutions, algorithms, and intellectual property will increasingly become the world's most valuable export commodities.

Yolchuyev is convinced that Azerbaijan possesses all the prerequisites necessary to build a globally competitive innovation economy.

"A strong engineering tradition, a strategic geographic location, advanced transport infrastructure, and successful experience in implementing major international projects provide Azerbaijan with an excellent foundation for developing a knowledge-based economy," he stressed.

At the same time, he argued that the country should no longer limit its ambitions to regional leadership.

"Azerbaijan has outgrown competition confined to the South Caucasus. Today, it should benchmark itself against innovation leaders such as Singapore, the United Arab Emirates, Qatar, Saudi Arabia, and Estonia. That is the level of competition that attracts global investment," Yolchuyev said.

The expert also highlighted the recently signed U.S.–Azerbaijan Strategic Charter, describing it as an important signal of growing American interest in expanding cooperation with Azerbaijan in artificial intelligence, digital technologies, and data-center infrastructure.

He further emphasized that international investors today evaluate far more than a country's geographical location. They increasingly consider the quality of institutions, the ease of doing business, digital infrastructure, cybersecurity, energy costs, and the availability of highly skilled human capital.

Concluding the interview, the Director of CASPIA underscored the importance of reforming Azerbaijan's education system.

In his view, universities should become the country's primary centers of innovation, research commercialization, and technological entrepreneurship.

"Within the next decade, knowledge will become the world's most valuable commodity. That is why Azerbaijan must invest first and foremost in education. Universities should not simply educate professionals—they should become platforms for creating new companies, breakthrough technologies, and intellectual property. This is how a modern innovation ecosystem is built," Orkhan Yolchuyev concluded.