Page 54 - Azerbaijan State University of Economics

Gulbaniz T. Aliyeva: The issues related to formation of competitive structure of industry in Azerbaijan

Although during the recent years there were significant improvements, the

Azerbaijani industry was not able to develop the highly efficient and ecologically

safe production process. The reason why competitive and scientific products are

not produced by the Azerbaijan industry is that there is not sufficient technological

innovations. It is connected with the low level of investments to this industry. As a

result it was not possible to involve the new technology in order to achieve the

competitiveness, cost reduction and efficiency.

Role of innovation in industrial structure

Current situation with optimization of industrial structure cannot be considered

as acceptable. The main reason for this is that low level of investment is

accompanied with the fact that technological processes do not affect the structural

changes. In 2012 the investment directed to the industry was equal to 5609 mln

AZN. 65% of this investment or 3651 mln AZN were directed to mining and 12.5%

or 700 mln AZN were spent for refinery sector. This amount exceeds the demand of

refinery industry in investment. In the industry innovation related expenditures

decreased from 53.3 mln AZn in 2005 to 32 mln AZN in 2012. However the newly

produced types of products accounted only for 0.04% of total produced volumes.

According to analysis performed by the World Bank and World Trade

Organization for 183 countries, although the oil and gas related products of

Azerbaijan has great competitive advantages, new products produced during the

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