The Main Problems of Building the Digital Economy of Azerbaijan

Abstract

In the article, the essence and main determinants of the digital economy, the methods of evaluating the level of digitalization, and the cross-country comparison of digitalization were made. The problems of creating a digital economy in Azerbaijan, and the current state of the main determinants of the digital economy in Azerbaijan were analyzed, and the role of ICT in the economy of Azerbaijan was evaluated in comparison with the countries of the region. The main result of the study is that the "production component" of the digital economy dominates in developed countries, while the "consumption component" dominates in developing countries. The increase in the share of both the "consumption component" and the "production component" of the digital economy in the total economy promotes the economic development of the country and the improvement of the welfare of the population. In Azerbaijan, the "consumer component" of the digital economy plays an important role in the development of the economy and in increasing the well-being of the population. However, there is a serious need to increase the necessary potential for the development of the "production component" of digital technologies and to increase the share of the digital economy in the country's economy at the expense of the "production component".