BOSS MAGAZINE > Orkhan Mammadov: youth entrepreneurship in Azerbaijan

The youth is the most important and valuable asset of Azerbaijan, comprising about 27% of the economic active population in the country. Successful engagement of young people in the labour market and society is crucial not only for their own personal economic prospects and well-being, but also for overall economic growth and social cohesion.

The youth will need to have new tools, methods, and skills to actually be able to sustain their future. Basic business skills should be instilled in early ages of kids in order to be in the line with the demands of the business world which have changed drastically in the last 20 to 30 years and will continue to change in the foreseeable future. Complex Problem-Solving, Time Management, Critical Thinking, Teamwork Skills and Creativity are the top entrepreneurial skills that will help skyrocket children’s career in the job market of the future. Although, kids don’t necessarily have to be entrepreneurs but they should develop the ability to think like one. Teaching children to have an entrepreneurial mindset, not to mention leadership skills, helps prepare them better for the future. The more skills they have, the more valuable they are in any field.

The purpose of current education is not to prepare children to pass examinations. To succeed in the world of the 21st century, children need to learn to continuously reskill and reinvent themselves. It’s important for schools to nurture children to be ready for launching innovative, problems-solving start-ups as soon as they leave school.

Before the school, the first responsibility also lies with the parents. Parents, especially those with professional and business experience are the best teachers. They should encourage and mentor children to research and investigate ways and means to start business enterprises, however small. Those who created these inventions are the people trained by modern education models. In this regard, today’s graduates should meet modern requirements and prove themselves in the labor market.  

In Azerbaijan, special attention is placed on entrepreneurial learning of children through their lifecycle. In order to apply new educational models, «STEAM Azerbaijan» project was launched at the secondary-education facilities with the support of the Heydar Aliyev Foundation beginning from the 2019-2020 academic year. The main goal of the project is to improve the 21st century skills of students - creativity, development of cooperation, and the ability to use modern ICT equipment by applying various programming languages.

In order to increase the knowledge in the field of taxation and entrepreneurship among students studying in secondary education institutions a «Tax Olympiad» was also organized. Moreover, the «Entrepreneur student» II republic competition was held with the aim to form and develop the business and entrepreneurial skills of children and young people.

MiniBoss Business School branch in Azerbaijan is also one of the active player for creating a powerful new generation of entrepreneurs and leaders. Different completion and startup contests organized by the School provide a unique opportunity to realization of business capacity of children and youth. SME Development Agency also closely cooperates with the MiniBoss Business School. In overall, involvement of multiple stakeholders, including public agencies dealing with business environment, private companies, business society members and international development organizations serves as a useful platform for combining efforts aimed at stimulating and supporting youth entrepreneurship.

As a result of these support measures Azerbaijan students participated in the global competitions and got a high result. «RoboAgrar» project presented by our students in the «Business» category was one of the accepted projects at the «Genius Olympiad» competition that was held at SUNY Oswego University in New York, USA in 2019. Our student has been participated in the «ClimateLaunchpad» start-up accelerator program organized by «Social Innovation Lab» for the first time in our country. In the Azerbaijani final of the same program’s «startup green business» competition, “Rainergy” startup project won the «Audience’s favorite startup» award.

There are a number of incentives and mechanisms for stimulating and supporting youth entrepreneurship in Azerbaijan. We have thematic industrial parks in various areas, and their residents are exempted from profit, property and land tax for 10 years, as well as from VAT for imported machinery, technological equipment and facilities for 10 years, and customs duty for 7 years, starting from the reporting year of their registration. In general, at those industrial parks modern and extensive infrastructure supply is offered to residents on the basis of the «Plug&Play» principle. In addition, Alat Free Economic Zone, which has a favourable geographical location, transport and communication channels, special legal regulatory status and fiscal concessions, also creates a favourable opportunity for attracting youth entrepreneurs. Another important development for youth entrepreneurship in the country is the introduction of the largest benefits for ICT sector in the region from January 1, 2023. As a result, significant tax incentives will apply to companies operating in the field of ICT, and individuals working in these companies, including foreign specialist. The main purpose of the changes made is to stimulate the development of the ICT sector in Azerbaijan, attract new players to this field and turn our country into a regional ICT center.

In general, the development of a favourable business environment, improvement of the access of SMEs to financial resources, markets, knowledge and innovations, as well as increasing access to public and private sector services are the main directions of activity of Small and Medium Business Development Agency of the Republic of Azerbaijan (KOBIA). Our goal is to increase the role of SMEs in the economy, create added value, and increase their share in employment and export. 

Young people, more precisely, young entrepreneurs, are of particular importance in achieving the set goals. In this regard, the development of entrepreneurship among young people, as well as the promotion of business thinking, is one of the priority areas of action of KOBIA. Surveys and analysis conducted show that access to information, lack of business skills, limited access to financial resources, and lack of sales opportunities are the most common areas that are required support for young entrepreneurs.

Taking into account the above, a number of support mechanisms were created by KOBIA in the past years. Thus, in order for young people to start and expand business activities, the Agency provides training and advisory services, offers grant program, supports their participation at national and international exhibitions, facilitates access to large trade networks, conducts internal market research, issues «Startup» certificate and etc. Hence, in the last year, up to 9.000 entrepreneurs benefited from training and consultancy services delivered free of charge by specialists of SME Development Centers of KOBIA, majority of them being the youth.
SME Houses operating under the structure of KOBIA are one-stop-shop centres facilitating access of entrepreneurs, including the youth to G2B and B2B services over 4 major cycles of their operation for planning, starting, running and developing business activities. Currently, 3 such facilities are existing and their number is going to be increased in coming years. Moreover, SME Friend networks covering more than 40 regions of the country are also another important tool supporting and liaising cooperation between public agencies and businesses.

Currently, the young people have a natural advantage to create or develop new businesses using modern technologies, digital economy and innovative approaches. In the past period, 39 entrepreneurs were benefited from the Grant Program and 94 entrepreneurs were given a «Startup» certificate, which exempts them from profit and income tax for 3 years. The youth are active participants of those tools managed by KOBIA.

KOBIA also supports the participation of the young entrepreneurs in various specialized exhibitions in order to market and promote their products. To date, about 1,300 business entities have benefited from up to 50 exhibitions organized by KOBIA, and more than 50% of them were young people.

KOBIA implements special projects and programs aimed at young entrepreneurs through its own resources, as well as with the participation of other government agencies, private sector, business associations and international organizations. Hence, the Youth Business Workshop project was launched in 2021 the aim of which is to develop business skills and promote entrepreneurship among young people receiving vocational education and support new business initiatives. Within the framework of the project, young people receiving vocational education are involved in business trainings, they are provided with mentoring support, training and internship visits to other enterprises. Young people who successfully complete the training are getting appropriate equipment in their chosen field of activity.  

The networking of and getting organized by the youth in the field of business is also very important. We supported the arrangement of 1st, 2nd and 3rd Forums of the Young Entrepreneurs in Azerbaijan. Also, in 2022 we organized the Azerbaijan Investment and Youth Entrepreneurship Forum in partnership with the Islamic Cooperation Youth Forum. We also signed a Memorandum of Understanding for cooperation with the Young Entrepreneurs Network Public Union back in 2019.
Since the first day of its operation, KOBIA has been carrying out «SME Volunteers» program aimed at increasing public and social responsibility. This program supports young people, especially those studying at management and business fields, to increase their knowledge and skills, outlook, and work habits, as well as prepare them as future entrepreneurs. So far, about 600 young people have benefited from the «SME Volunteers» program.

Working with education facilities are one of the priority directions of our activities. For us, students of universities are important from three important aspects: i) think-tanks that is better poised to improve and invent new business processes, ii) productive workers who will contribute to the development of businesses and iii) entrepreneurs who will create businesses themselves. We are in the process of establishing a Model Factory at the Baku Engineering University that will be a flagship Project bringing together public, private and scientific-research communities for the development of SMEs.

Another important driver for the development of businesses and especially, young entrepreneurship in coming couple of years will be Karabagh region of Azerbaijan. This area was under occupation by Armenia for about 30 years and liberated in 2020. With the combination of its advantageous geographical location, natural resources and the strategic restoration vision of the Government, Karabagh will offer development opportunities for businesses not just at local, but also regional level. Green and SMART development concepts conceived for this region will make it exceptional and attractive hub for new innovative businesses.

At the end of last year, a new law «On the development of micro, small and medium enterprises» was adopted in our country. The main goals and directions of the state policy in the field of development of micro, small and medium entrepreneurship are determined in the document, where the provision of state support for the promotion of young entrepreneurship is reflected as a special direction. It should be noted that, «Azerbaijan 2030: National Priorities for socio-economic development» was approved by the Decree of the President of the Republic of Azerbaijan dated February 2, 2021. The «competitive human capital and modern innovation space» realizing in the mentioned document is defined as one of the five National Priorities. The document indicates that special importance should be given to «lifelong education» based on harmonious development of competence, social habits and skills. There is no doubt that the mentioned documents will serve to accelerate the development of entrepreneurship, including youth entrepreneurship, in the country.