Innovative transformations taking place in the educational sector of Azerbaijan cause legal, organizational, economic, social, technical and technological problems that need to be solved. This article also examines innovative didactic methods, and their advantages are compared with the possibilities of information technology in the educational process. The purpose of the article is to investigate various technical and economic indicators of higher education in Azerbaijan and to study the innovative transformations in the higher education system of Azerbaijan during the 2005/06 - 2022/23 academic years. The objectives of the research are as follows: 1) the study of legal, organizational, socio-economic and technological aspects of higher education in Azerbaijan; 2) expert evaluation of innovative policy of higher education in Azerbaijan. The research methods are the analysis of statistical data, their grouping and comparison, and expert assessment of external (PEST analysis) and internal factors (SWOT analysis) that influence innovative transformations in the higher education system of Azerbaijan throughout 2005/06 – 2022/23. The conducted PEST analysis of political, economic, social and technological factors demonstrated the presence of both positive and negative evaluations of the use of ICT in the Azerbaijanian higher education system. The SWOT analysis identified the strengths, weaknesses, opportunities and threats of innovative educational processes in the universities of Azerbaijan. The basis for the analysis was the statistical data of the State Statistics Committee of Azerbaijan, electronic pages and posts of the AGORA and Edu.az organizations on Facebook. To identify the role of the higher education system in the national economy of Azerbaijan and analyse the current situation, the author used data for 2005/06 – 2022/23. As findings of the conducted research, it has been concluded that Azerbaijan has not created its own model of higher education development yet, and this problem needs a scientifically grounded solution. The problems of Azerbaijan’s higher education have been described. These are as follows: many teachers who are over 45 years old cannot successfully use innovative teaching methods, do not update the curriculum, and they have been working with old training programs for more than 10 years; there are no teaching methods using students’ mobile gadgets; students’ responsibility has been deteriorating over the years, so lecturers, mentors and trainers must remind students several times about the deadlines for submitting the necessary documents, chapters of theses and dissertations etc. Taking into consideration the research findings, the author has recommended the following: creating joint information resources for higher educational institutions, which will contribute to the development of educational technologies and the introduction of electronic learning; building up online interaction between students and the professional community; more widely introducing ICT for the organization of interaction in social networks, establishment of social contacts in distance learning, working with electronic sources; forming interuniversity laboratories as centres of collective activity, which will ensure the elaboration of academic cooperation; constantly updating and improving educational programs, plans and study content; establishing a system for assessing knowledge and testing students’ competencies, forming a unified national system for assessing knowledge; creating an information base of specialists who have obtained degrees abroad in order to make teams for the implementation of scientific projects of an international level; developing scientific and technical cooperation in the direction of elaboration of joint training programs with post-Soviet countries.