In order to strengthen the innovation ecosystem in Azerbaijan, a state‑level policy framework and regulatory mechanisms are being developed, creating favorable conditions for startups to operate effectively, Fariz Jafarov, Chief Executive Officer of the Center for Analysis and Coordination of the Fourth Industrial Revolution (C4IR), said on the second day of Baku ID 2026 (Baku Investment Day).
According to Report, Jafarov noted that global experience shows governments mainly assume the role of providing regulatory frameworks and favorable conditions:
"Currently, Azerbaijan has a regulatory base for the operation of venture funds and attracting financial resources. The Artificial Intelligence (AI) Strategy, the Digital Economy Development Strategy, and other strategic documents have been adopted. Thus, policy directions and regulatory mechanisms are already taking shape. Governments create an environment where, even if they do not act directly as investors or startups, conditions are provided for all participants to operate. SABAH.HUB is a vivid example of this. On this platform, startups, higher education institutions, laboratories, the private sector, and state bodies work together, creating a synergy effect."
The CEO particularly emphasized that for startups working in energy technologies (energy tech), the creation of testbeds and access to data through APIs is of crucial importance:
"The energy sector is highly capital‑intensive (CAPEX) and involves critical infrastructure. It is not easy for a startup to test its product directly on SOCAR's platform or at a refinery. Such startups need testbeds where they can trial their initial products. In some cases, the first customer is more valuable than the first grant. Startups must validate their products in the domestic market to gain access to international markets. If an energy tech startup has not tested its solution with local companies, it will struggle to prove success internationally. In addition, the government should build infrastructure through APIs and open data platforms so that startups can benefit from this data."