Digital transformation of Azerbaijan: problems and prospects for the development of the digital economy

The current state of the main determinants of the digital economy in Azerbaijan has been analyzed in this article, and the role of ICT in the Azerbaijani economy has been assessed in comparison with other countries in the region. This research reveals that differences in the ‘consumption–production’ structure of the digital economy are closely linked to the level of development of countries: in developed countries, the 'production' component dominates, whereas in developing countries, the 'consumption' component prevails. An increase in the share of both the “consumption component” and the “production component” of the digital economy in the overall economy contributes to economic development and an improvement in the population’s welfare. In Azerbaijan, the “consumer component” of the digital economy plays a significant role in economic development and in enhancing the well-being of the population. However, there is a pressing need to strengthen the necessary potential for the development of the “production component” of digital technologies and to increase the share of the digital economy in the national economy through the “producer component”.